MID-2011 INTELLIGENCE UPDATE - How We Got Here and Where Are We Going? -

1. MID-2011 INTELLIGENCE UPDATE - How We Got Here and Where Are We Going? -

2. Geopolitical Risk is Back…

3. Geopolitical Update • Outline • STRATFOR Method: Geopolitics + Intelligence = Forecasting • Political Risk in 2011: • EUROZONE CRISIS • “ARAB SPRING” • U.S. foreign policy post-OBL

4. STRATFOR STRATFOR keeps you aware of… • What is important • What is NOT important. Our methodology is: GEOPOLITICAL INTELLIGENCE

5. STRATFOR Methodology • Geopolitics: • The 20 Year Rule • Geography • Demographics • Intelligence: • Old Methodologies • New Technologies • Forecasting: • Annual + Decade Forecasts

7. Eurozone Crisis • U.S. Hegemony; • U.S. Distraction in the Middle East; • Russian Resurgence in Eurasia; • Chinese Rise + Eventual Fall; • Germany’s Rise and Europe’s Distraction. • Rising powers? Brazil, India, Turkey, Mexico (?).

8. U.S. Hegemony • Geography facilitates capital accumulation; • Lack of security competition; • Time/space/security to incubate free market capitalism; • Post World War II: hegemony by default; • Bretton Woods; • U.S. Navy;

9. U.S. Hegemony

11. Geopolitical Threat #1: Persian Gulf • U.S. initiated destabilization; • Iran as geopolitical pivot; • Potential war with Iran; • Effects on oil prices + economy.

12. Energy Scenario 2:Persian Gulf Conflict -Any conflict will be initiated by the United States -Israel cannot achieve its aims alone -Iran knows that a war would leave it devastated and initiating mining would cost Tehran its international position

13. Geopolitical Threat #2: Russian Resurgence • Geopolitics of Russia; • Resurgence post (2004) 2005; • Politics of energy embargoes; • Budding German-Russian relations; • Moscow’s interest: reliable source of energy (believe it or not).

15. Geopolitical Threat #2: Russian Resurgence

16. Geopolitical Threat #3: China’s Rise/Fall • Geopolitics of China; • History of Internal Discord; • Chinese Financial System and Beijing’s Spending Spree; • The Inevitable Chinese Crash.

18. Geopolitical Threat #3: China’s Rise/Fall

19. Geopolitical Threat #4: Germany’s Rise • Geopolitics of Germany; • European Union identity crisis; • NATO identity crisis; • German-Russian growing links.

21. Rising Powers • Brazil – searching for external focus; • India – searching for internal coherence; • Turkey – acting upon its internal/external focus.

22. Geopolitics and Business • Unknown Opportunities • Ignore the Rhetoric • Emerging Risks • Context • Non-Ideological

23. Example: Constraints of Geography

24. Through the prism of geography and power, geopolitics distinguishes the eternal from the prolonged and the prolonged from the transitory. What it finds frequently runs counter to common sense.

25. Risk can be overstated and understated.

26. STRATOF is your personal CIA STRATOF is your investment’s Offensive Left Tackle