Fighting A War On Too Many Fronts
Welcome to the Real Estate Espresso Podcast, a morning shot of what’s new in the world of real estate investing, with your host, Victor Menasce. On today’s show, we’re looking back at history for the lessons of failed conquests.
Napoleon sought to economically cripple Great Britain by closing European ports to British goods, expecting this would destroy Britain’s trade and force its surrender. Britain’s powerful navy and widespread smuggling operations actually undermined the blockade. This system hurt the economies of France and its allies, leading to resentment and, the desire to trade with Great Britain.
To enforce this system, Napoleon was drawn into costly conflicts, most notably the Peninsula War and invasion of Russia. These conflicts tied down a significant portion of the French army, diverting troops and resources from other fronts. This ultimately weakened Napoleon’s military power and led to the collapse of his empire.
There are many powerful lessons to be found in history. When a nation confronts a single adversary, it can trigger a cascade of alliances which the aggressor did not anticipate. This happened in the Austrian-Hungarian Alliance in WWI. History offers numerous examples of historic adversaries uniting against a common threat.
The global alliances can and do shift. We had thirty years of globalization promoting the theory that if countries were economically dependent, the risk of global conflict would be vastly reduced. This notion was disrupted with the recent war in Ukraine, which led to the first considerable fracture of the global order. The U.S. dollar, which is still the world reserve currency, is unlikely to be displaced in a single event. However, I believe we will witness the adoption of multiple reserve currencies and eventually the replacement of the dollar as the main reserve currency.
Recent trade actions by the White House have hastened the formation of new alliances. If transacting business with the U.S is complicated, countries that are export dependent will likely seek new markets elsewhere. The current global response might, in fact, be to isolate rather than embrace the U.S. As you reflect on these points, have an excellent rest of your day and go make some great things happen. We’ll talk to you again tomorrow.
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