Afterword (Marco Vironda & Ramon Spano Azimut Group)

Vladislav's thesis is an interesting excursus of one of the most interesting historical periods of
the last centuries.

Since the end of the Second World War, humanity has experienced a very close connection
between capitalism and science. Science and capital have allowed a growth in wealth and eco-
nomic power that has led to the birth of economic superpowers that with their influence have
been able to direct, from a geo-political point of view, the macroeconomic scenario of the last
century.

The world of the last five hundred years has been dominated by some clear revolutions: the
philosophical revolution of the Enlightenment which was the basis for the scientific revolu-
tion and the industrial revolution. However, the last 80 years will be remembered for the
emergence of an equally powerful and disruptive revolution: the financial revolution. If from
the end of the Second World War until the beginning of the 90s of the last century the influ-
ence of finance on markets was a phenomenon exclusive to Western economies since the fall
of the Soviet empire the mantra of financial sophistication has reached most financial systems
worldwide.

The financialization of Western economies found vital lymph with the fall of the Bretton
Woods agreements starting in the 1970s, which led to an amplification of deficit spending
policies financed by government debt; this has allowed for an ever-wider interference of gov-
ernments in economies and on the other hand has led to an ever more marked fluctuation in
exchange rates. The fluctuation of exchange rates in an increasingly dollarized global system
in conjunction with the increase in financial leverage has caused a strong self-reference on the
value of financial assets that has attracted international capital. These elements, in their ex-
cesses, have led in sequence to dozens of financial crises, among which the Tequila Crisis
(Mexico 1995) is the most important; Asian crisis (1997), Russia (1998) Brazil (1999), Ar-
gentina 2001; Dot com bubble 2000/2003; real estate bubble 2007/2008; European periphery
debt 2010/2012; Chinese crisis 2015.

It goes without saying that in recent decades geo-political influence has been driven by a clear
concomitant financial hegemony. The United States, starting with Bretton Woods, dominated
the geo-political picture until at least 2008. Despite the attraction of strong international capi-
tal in Japan in the 80s, in the Asian tigers in the 90s, in the Europe of the after the Euro no one
has ever managed to undermine the economic (and financial) hegemony of the USA since the
post-war period. Since the 2008 crisis we are witnessing the emergence of a new power, a
new empire, within the world chessboard: China.

work allows us to retrace, in a splendid path of detailed synthesis, what have been
the main geo-political events of the last century, and how these events have been closely cor-
related with precise financial dynamics that have contributed to de-regulation of trade, the
globalization of capital markets and flows, the acceleration of progress and the growth of ag-
gregate wealth.

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I would like to consider this work as a starting point that can be used as trampoline for further
investigations. Financial sophistication after the 2008 crisis has had new life thanks to a new
phenomenon: the extremely accommodative monetary policies of central banks with zero (or
sub-zero) interest rate policies and the systematic purchase plans for treasury securities, cor-
porate bonds and some cases of equities have become the new mantra for global economic
and financial stability, impacting in a disruptive way on the value of financial assets.

Marco Vironda
Portfolio Manager (Azimut Investments S.A.)

Ramon Spano
Director and Portfolio Manager (AZ Fund Management S.A.)

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