Banananomics: Critical Geopolitical Trends

The world is divided into teams with the BRICS (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the U.A.E.) and G7 (U.S., U.K, Canada, France, Germany, Italy, Japan, and mostly the E.U.) being at the forefront.

Inputs that matter: With a few exceptions, countries from the BRICS and G7 are locked in proxy wars, soft conflicts, and economic competition.

• The U.S. and India are aligned against China.

• Japan and the U.S. are aligned economically in competition with China.

• Russia is receiving military support from Iran and North Korea in return for nuclear capabilities.

• Paris is hosting the 2024 Olympics with restrictions only on Russia.

The opportunity: The United Nations 2030 Agenda includes 17 goals around poverty, equality, and climate that most nations are scrambling to achieve.

• Russia is providing South Africa with nuclear power generation.

• China is the leading supplier of electric vehicle batteries, partnering with most of the world's auto manufacturers, including Tesla, Ford, and G.M.

• The U.A.E. and Egypt face challenges to move from fossil fuels to renewable energy.

Zoom in: Economic sanctions are the weapons of choice between BRICS and G7 countries.

• The U.S. is currently sanctioning Russia and China.

• The G7 is placing price limits on Russian oil exports.

Between the lines: Countries outside of the BRICS and G7 have to compete with the entire group of their BRICS and G7 neighbors.

• Venezuela, The Bahamas, and El Salvador seek cryptocurrency to boost their economy.

• Ghana and the Ivory Coast are losing the cocoa trade to Brazil.

• Taiwan is fighting for its independence as China is claiming the country.

• U.S. President Biden has agreed not to support Taiwanese independence but insists on sanctions with China.

Follow the money: Space is the new frontier for geopolitical power.

• In 2019, the U.S. created the Space Force, an entirely new military branch "focused solely on pursuing superiority in the space domain."

• Russia, China, India, and the United States have tested anti-satellite missiles, and several major world powers have developed technology meant to disrupt signals in space.

• Recently, the U.S. officially tasked NASA with establishing a time standard for the moon, Coordinated Lunar Time (L.T.C.).

• At a time when the U.S. and China are locked in a new race over Global positioning satellites that serve as clocks in the sky.

As the world prepares for UN Agenda 2030, clean energy and rising food costs rule the headlines.

Inputs that matter: While technical and engineering jobs are being removed, health care, government, hospitality, and construction are leading new job growth.

• Full-time work fell by 6,000 in the U.S., while part-time work increased by 691,000.

• Including a 5.2% increase in the number of multiple job holders.

The opportunity: Clean energy and commodities are the strongest performers.

• The global renewable energy market size was USD$1 trillion in 2023 but will grow over the next few years to reach UN Agenda 2030 goals.

• Cocoa prices have more than doubled (+143%) since the beginning of the year.

• Sugar is settling from weather-related crop reductions, but rising oil ensures that more sugar will be diverted to ethanol production, which will raise the cost of the commodity.

• ICICI Bank sees oil reaching $90/bbl to $95/bbl, and Bloomberg confirms that $100/bbl is not out of the question for 2024.

Zoom in: China is fiercely competing with the G7 on electric vehicles.

• The March Caixin Global manufacturing survey showed that China's factory activity expanded at its fastest rate in 13 months.

• China's CATL provides EV batteries to most auto manufacturers, including Tesla, Ford, and GM. Still, U.S. lawmakers are tightening their grip on the battery industry to prevent China-produced minerals or Chinese battery companies from winning electric vehicle tax credits.

• The main driver for EV growth is battery technology, which provides a more extended range between charges.

• Norway, with 79.6%, Iceland, 58.4%, and Denmark, 44.9%, are the leading EV consumers.

Between the lines: The world is pushing against fossil fuels, but not without a dead cat bounce.

• Barchart reports that conflicts in the Middle East with production curbs by the OPEC+ are pushing prices higher.

• LPG export restrictions by the U.S. are raising costs.

• As the immediate cost of green energy increases, U.S. dollars for renewable energy are going toward cleaning up fossil fuel production.

Follow the money: Sugar, oil, and uranium will grow strongly in 2025.

• The Brazilian real has fallen to a five-month low against the USD due to limited gains in sugar.

• Canada's carbon price increase officially took effect on April 1, 2024, and is expected to raise gas prices by 350% before 2030.

• In 2025, nuclear power generation is poised to reach an all-time high due to increased investments in reactors to facilitate the transition to a low-carbon global economy.

• Uranium prices have settled but have surged since 2023.