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Why is “International Political Uncertainty” the fourth factor in your Uncertainty Index?

Bob Wiedemer
May 18, 2017
Video Transcript

Bob Wiedemer: The fourth factor in my Uncertainty Index is international political uncertainty. There certainly is a lot of that right now. Just look at the news and you can see. Probably, right now, it's North Korea and I don't think that's going away, but that's a big issue because this affects China. As I've said many times before, China is obviously the most important part of the growth story in the world economy. It affects Japan. It affects us. Certainly, if you can put a submarine launched nuclear missile out there, that's a big deal, especially if the guy or the kid behind it, well is sort of a kid and that's a little scary. So, that's clearly part of our geopolitical international uncertainty. I think this is going to be an increasingly important part of uncertainty going forward. I still think domestic political uncertainty is key, but international uncertainty, obviously, can rear its head and quick. Something like North Korea could be absolutely quiet and then Boof! Pop up in a few weeks and it's big. Same thing with France or Europe. We've seen those areas can rumble along, almost like a volcano, and they do find here a few rumblings and then they explode. I think, we're going to find that's more the way international political uncertainty works even more than domestic. You're going to have events out there, something in the Middle East, something in North Korea, something in Europe, something where we aren't really expecting it. That's why it's an important part of my Uncertainty Index and I think going to be another part of the overall issues we're facing as investors... is how are we going to deal with all this. Again, we want to put a number on it. We want to get an Index that keeps all of these factors that I've talked about and creates one number that's easy to understand.

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