Geopolitical tensions have helped US economy historically, Zerodha co-founder says

Zerodha co-founder Nikhil Kamath on Tuesday said the United States is still by far the biggest game around. Kamath said historically geopolitical tensions have helped the US economy. He then asked what will happen to the economy amidst the current tension between Russia-Ukraine.  

Data uploaded by Kamath on his Twitter account showed that among G20 countries, the US holds a 33% share of the global equity market cap followed by China which holds 10.97%, European Union holds 6.24%, while Japan held 5.20%, and Saudi Arabia holding 3.12%.

These five countries account for a 58.53% share of the global equity market cap.

India is at the sixth spot – accounting for 3.11% of the global market equity cap followed by Canada accounting for 3.03%, while France and the UK hold 2.82% each.

Further, among G20 nations, China and India hold a major share of the global population at about 17.67% and 17.12% respectively. The US accounts for 4.16% of the global population, European Union holds 5.59%, and Japan accounting a 1.57% share of the global population.

Kamath said, “All said and done; the US is still by far the biggest game around. Historically geopolitical tensions have helped the US economy.” adding “what’ll happen this time around?.”

According to a Bloomberg report, US Secretary of State Antony Blinken plans a candid discussion about the war in Ukraine with his Chinese counterpart during an upcoming summit in Bali. A top Biden administration official earlier urged Beijing to stop spreading Russian “lies” about the Kremlin’s invasion of its neighbor.

Further, the report said, Blinken does not plan to meet Russian Foreign Minister Sergei Lavrov during the Group of 20 ministerial gathering in Bali this week. President Joe Biden has called for Russia to be removed from the G20 over the invasion and diplomats have previously walked out of a Lavrov speech in protest of the Kremlin’s war.

Global markets have taken a massive hit since February last week when Kremlin carried out an all-out invasion of Ukraine. Since then, crude oil prices have spiked to multi-year high along with other commodity prices escalating inflation pressures that led to monetary policy tightening. The pandemic and supply chain disruption has further added to the global economy’s woes. Concerns of a possible recession ahead have fuelled fears among investors that have pushed markets into a deep bearish tone since May. The uncertainty around the Russia – Ukraine conflict continues.

G20 is a strategic multilateral platform connecting the world’s major developed and emerging economies. Notably, G20 members represent more than 80% of world GDP, 75% of international trade, and 60% of the world population.

G20 countries are – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.

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