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Powerful people pay millions to get George Friedman’s take on world affairs. Even the CIA pays attention to his intel.
These days, the 65-year-old chairman of Austin-based Stratfor Global Intelligence is giving them food for thought that’s apt to cause acid reflux.
Rising fascism in Europe poses a greater threat to world peace than the Islamic State or the Middle East.
Investment and manufacturing capital are flowing out of China.
Falling oil prices may topple Vladimir Putin.
And for a bit of irony, America, once criticized for being a lousy exporter, is now considered astute.
“We maintained a domestic economy,” Friedman says in an interview. “What appeared to be brilliant economic policy [in Germany and China] — export orientation — turned out to be a trap. For all of the noise, the United States remains the most attractive place to invest.”
Friedman was at the SMU Cox School of Business on Thursday, giving the keynote speech at an investment conference hosted by Commerce Street Capital LLC.
Stratfor, which has 130 geopolitical experts in Austin and several hundred contract employees gathering data overseas, will bring in more than $10 million this year from Fortune 500 companies, nongovernment organizations and government agencies wanting to know whether the globe’s axis is about to shift.
Stratfor, a condensation of Strategic Forecasting Inc., is owned by Friedman and a small group of private investors.
More than 300,000 subscribe to its online briefings. That’s a world apart from the daily freebie email Friedman started sending out to 20 friends nearly 20 years ago.
He and his wife, Meredith, who heads international operations, launched the company in Baton Rouge, La., in 1996 as an offshoot of his academic career.
“I decided if I stayed with professors one more year, I’d die of boredom,” says Friedman, who founded the Center for Geopolitical Studies at Louisiana State University in 1994.
Watching for trends
The Internet was brand new and had made information gathering far less costly. He figured he could add value by making it meaningful through his analysis. But he didn’t have any idea how to make money doing that.
Within a year, the Friedmans moved to Austin, nixing any notion of setting up shop in the nation’s capital.
“Washington is an incestuous place that’s not about the world at all. The level of gossip is so high that you can’t hear yourself think,” he says. “I love Austin because it’s not a foreign policy city where everyone is trying to one-up you. It’s a place that’s open to new businesses.”
In 2000, Stratfor started a website in the wake of the Kosovo war.
“We covered the Kosovo war and did pretty well,” Friedman says. “We did it for free, but we were noticed. So we started charging. And to my delight and amazement, people paid.”
Friedman’s sales pitch is that geopolitics is predictable if you forgo the moment-by-moment events and concentrate on larger trends. Nearly three years ago, he accurately predicted that Ukraine would become a battlefield between Russia and the West.
“That was logical and hard-wired,” he says. “Right now, I’m arguing that the most dangerous place in the world is not the Middle East or the Ukraine. It’s Europe.”
Why?
Europe’s economic crisis has become a social and political one, he says. Unemployment in southern Europe is 20 to 26 percent. That compares with 25 percent in the United States during the Great Depression. “So southern Europe is in depression, not recession.”
Many of the people in distress are middle-class professionals, including doctors, who’ve lost government jobs or taken severe pay cuts.
Friedman, who is already a two-time New York Times best-selling author, has a book, Flashpoints, coming out in late January that will focus on the impending crisis in Europe.
“You have a very embittered middle class who’ve lost just about everything and are angry at the European Union, angry at their governments and angry at the Germans,” Friedman says.
“There’s been a massive rise of right-wing fascist parties, you might call them, in Europe. In Hungary, a right-wing, anti-Semitic, anti-Islamic party [Jobbik] is now the second-largest party in the country. This is an explosive situation.”
Britain will undoubtedly abandon the European Union, and other nations will follow, he says. “There will be a return to nationalism and competition in Europe that we haven’t seen since 1945. Europe is historically a place where wars break out. This is dangerous for us, because that is the scenario that has led us to trouble all through the 20th century.”
Germany desperately needs the EU to survive because 50 percent of its GDP comes from exports, he says. “The question is: Who’s going to buy them? Germany is sitting on a volcano. How this plays out could destabilize the entire world.”
Friedman is less worried about the warring factions in the Middle East. Civil war in the Syrian and Iraqi region is a serious threat to Turkey, Friedman says, but should have limited impact on the U.S.
But what about ISIS?
“ISIS is just one of the many Sunni factions. But it beheads people so it gets a lot of publicity. It’s very good at really scary PR.”
Following the money
The economy of China is not collapsing, he says, but it’s under severe pressures — banking problems, a real estate bubble and inflation.
Manufacturers are moving factories to Latin America, Africa and poorer countries in Europe where labor is cheaper.
Investment capital is headed out of China, too. A Chinese insurance company is paying nearly $2 billion to buy New York’s iconic Waldorf Astoria.
“Remember, whenever you see money leave a country, always assume that the people moving the money out of the country know something you don’t,” he says.
“What we do know is China is not a great place to invest in right now.”
As for Putin, the Russian president is one blow away from ouster. He had a foreign policy disaster with Ukraine and the Russian economy is weakening, independent of the falling price of oil.
“If the price of oil goes down another $10, $20 [a barrel], it will be a third hammer blow to him,” he says.
Does he see a likely Putin replacement?
“If you go back to successions during the Soviet periods, the person who will come up in charge will be someone like [Mikhail] Gorbachev who was not well-known outside the Kremlin.”
George Friedman
Title: Chairman, Stratfor Global Intelligence
Age: 65
Grew up: In the Bronx after immigrating as a baby with his parents from Hungary.
Education: Undergraduate degree in political science from City College of New York, 1970; Ph.D. in government from Cornell University, 1974.
The most dangerous spot in the world? Europe, not the Middle East | Dallas Morning News
These days, the 65-year-old chairman of Austin-based Stratfor Global Intelligence is giving them food for thought that’s apt to cause acid reflux.
Rising fascism in Europe poses a greater threat to world peace than the Islamic State or the Middle East.
Investment and manufacturing capital are flowing out of China.
Falling oil prices may topple Vladimir Putin.
And for a bit of irony, America, once criticized for being a lousy exporter, is now considered astute.
“We maintained a domestic economy,” Friedman says in an interview. “What appeared to be brilliant economic policy [in Germany and China] — export orientation — turned out to be a trap. For all of the noise, the United States remains the most attractive place to invest.”
Friedman was at the SMU Cox School of Business on Thursday, giving the keynote speech at an investment conference hosted by Commerce Street Capital LLC.
Stratfor, which has 130 geopolitical experts in Austin and several hundred contract employees gathering data overseas, will bring in more than $10 million this year from Fortune 500 companies, nongovernment organizations and government agencies wanting to know whether the globe’s axis is about to shift.
Stratfor, a condensation of Strategic Forecasting Inc., is owned by Friedman and a small group of private investors.
More than 300,000 subscribe to its online briefings. That’s a world apart from the daily freebie email Friedman started sending out to 20 friends nearly 20 years ago.
He and his wife, Meredith, who heads international operations, launched the company in Baton Rouge, La., in 1996 as an offshoot of his academic career.
“I decided if I stayed with professors one more year, I’d die of boredom,” says Friedman, who founded the Center for Geopolitical Studies at Louisiana State University in 1994.
Watching for trends
The Internet was brand new and had made information gathering far less costly. He figured he could add value by making it meaningful through his analysis. But he didn’t have any idea how to make money doing that.
Within a year, the Friedmans moved to Austin, nixing any notion of setting up shop in the nation’s capital.
“Washington is an incestuous place that’s not about the world at all. The level of gossip is so high that you can’t hear yourself think,” he says. “I love Austin because it’s not a foreign policy city where everyone is trying to one-up you. It’s a place that’s open to new businesses.”
In 2000, Stratfor started a website in the wake of the Kosovo war.
“We covered the Kosovo war and did pretty well,” Friedman says. “We did it for free, but we were noticed. So we started charging. And to my delight and amazement, people paid.”
Friedman’s sales pitch is that geopolitics is predictable if you forgo the moment-by-moment events and concentrate on larger trends. Nearly three years ago, he accurately predicted that Ukraine would become a battlefield between Russia and the West.
“That was logical and hard-wired,” he says. “Right now, I’m arguing that the most dangerous place in the world is not the Middle East or the Ukraine. It’s Europe.”
Why?
Europe’s economic crisis has become a social and political one, he says. Unemployment in southern Europe is 20 to 26 percent. That compares with 25 percent in the United States during the Great Depression. “So southern Europe is in depression, not recession.”
Many of the people in distress are middle-class professionals, including doctors, who’ve lost government jobs or taken severe pay cuts.
Friedman, who is already a two-time New York Times best-selling author, has a book, Flashpoints, coming out in late January that will focus on the impending crisis in Europe.
“You have a very embittered middle class who’ve lost just about everything and are angry at the European Union, angry at their governments and angry at the Germans,” Friedman says.
“There’s been a massive rise of right-wing fascist parties, you might call them, in Europe. In Hungary, a right-wing, anti-Semitic, anti-Islamic party [Jobbik] is now the second-largest party in the country. This is an explosive situation.”
Britain will undoubtedly abandon the European Union, and other nations will follow, he says. “There will be a return to nationalism and competition in Europe that we haven’t seen since 1945. Europe is historically a place where wars break out. This is dangerous for us, because that is the scenario that has led us to trouble all through the 20th century.”
Germany desperately needs the EU to survive because 50 percent of its GDP comes from exports, he says. “The question is: Who’s going to buy them? Germany is sitting on a volcano. How this plays out could destabilize the entire world.”
Friedman is less worried about the warring factions in the Middle East. Civil war in the Syrian and Iraqi region is a serious threat to Turkey, Friedman says, but should have limited impact on the U.S.
But what about ISIS?
“ISIS is just one of the many Sunni factions. But it beheads people so it gets a lot of publicity. It’s very good at really scary PR.”
Following the money
The economy of China is not collapsing, he says, but it’s under severe pressures — banking problems, a real estate bubble and inflation.
Manufacturers are moving factories to Latin America, Africa and poorer countries in Europe where labor is cheaper.
Investment capital is headed out of China, too. A Chinese insurance company is paying nearly $2 billion to buy New York’s iconic Waldorf Astoria.
“Remember, whenever you see money leave a country, always assume that the people moving the money out of the country know something you don’t,” he says.
“What we do know is China is not a great place to invest in right now.”
As for Putin, the Russian president is one blow away from ouster. He had a foreign policy disaster with Ukraine and the Russian economy is weakening, independent of the falling price of oil.
“If the price of oil goes down another $10, $20 [a barrel], it will be a third hammer blow to him,” he says.
Does he see a likely Putin replacement?
“If you go back to successions during the Soviet periods, the person who will come up in charge will be someone like [Mikhail] Gorbachev who was not well-known outside the Kremlin.”
George Friedman
Title: Chairman, Stratfor Global Intelligence
Age: 65
Grew up: In the Bronx after immigrating as a baby with his parents from Hungary.
Education: Undergraduate degree in political science from City College of New York, 1970; Ph.D. in government from Cornell University, 1974.
The most dangerous spot in the world? Europe, not the Middle East | Dallas Morning News
), that China will overtake the USA at best in several generations (several = at least 2 so at least 50 years...Something which no single bank would agree with) and all kinds of other complete nonsense.
