One major lesson of history is that when countries become as indebted as most western countries are, there are a variety of societal and political trends that begin to develop. First, currencies are systematically debased/devalued in order to inflate the debt away. This practice has been relied upon from the Romans to the 18th century French. The 20th century included many examples, with the German Weimar Republic being the most prominent and ultimately tragic. As we've seen in the past decade, the US is now firmly on a path of currency debasement, with the British, Swiss, Japanese and now broader Europe joining the printing party.
Once excessive levels of debt result in economic stagnation and the evisceration of the middle class, several other things typically develop. Bankers/speculators are typically blamed for causing all the financial and economic ills. Anti-immigrant and anti-semetic movements usually blossom, and ultimately war becomes a rallying point for politicians to deflect the attention of voters. The US has certainly seen its share of these kinds of issues developing.
Grassroots political movements in each major political party are now deeply entrenched as anti-immigration and anti-banker/Wall Street. This crystalized for me personally this week, as I had an NYPD policewoman recommend as I left the New York Stock Exchange building Wednesday that I remove the NYSE security badge I had innocently left on my lapel. While I don't consider myself a banker or "of Wall Street", obviously a protestor may think otherwise! And as was seen with a lady in the Coast Guard being spit on by protestors in Boston, the acrimony appears to be growing.
The other big news this week related to an alleged Iranian plot to murder a Saudi diplomat on US soil and highlights other "playbook" and growing risks. I've seen all kinds of US politicians saber rattling on TV and even the President has had very stern words. While I used to discount that OUR politicians could be so cynical, I no longer think so. While I am certainly not accusing anyone at this point, I believe an honest assessment of history suggests that politicians facing the kind of economy and electorate we have in the US (i.e. VERY anti-incumbent) may be more motivated than usual to be hawkish when it comes to foreign policy.