In a blog post from August 16, 2022, War in Ukraine: The Long-Term Impact, I made an economic and investment forecast. It was not a prediction, but it a directional framing of consequences under tension based on my observations on market drivers.
Capital allocation is national security. Venture’s edge isn’t alpha—it’s foresight operationalized under uncertainty.
Thinkstorm Thesis
As a result of my analysis:
- I moved from “technology arbitrage” toward “sovereign capability” as an investable thesis.
- My emphasis on internalizing externalities and ethical stability before scale became explicit in my operating principles.
- My industrial lens sharpened: Viability of defense-critical production facilities dominated investment decisions (over product features and technology leadership).
But let’s revisit my claims and see what happened.
1. Bifurcation of Economies
CLAIM: thinly‑veiled cold war; Russia isolated; sanctions only narrowly lifted; Europe moves to energy independence; many EMs stay “comically” neutral; deeper Russia–China alignment hurts trade/growth.
Where I was right:
- Europe did cut Russian gas to a fraction of pre‑war levels and moved to LNG and conservation; Russia’s gas share fell from >40% in 2021 to ~11% of EU pipeline imports in 2024; <19% when including LNG.
- EM “neutrality-as-leverage” showed up in energy flows: after EU oil bans/price caps, Russian barrels re‑routed to India/China at discounts; IEA and Treasury document the mechanism.
What I got wrong:
- I projected broad trade damage. In reality, global trade re‑routed more than it collapsed: after a weak 2023, world trade grew in 2024. Gladly, markets seem to find opportunities in market disruptions.
Where I was right .. but for the wrong reason:
- I framed EM neutrality mainly as fear of repercussions. In reality, it was more opportunism (cheap energy arbitrage + refined product exports) than passivity (IEA tracking shows Russia→India/China shift; policy pieces underscore redirection rather than retreat.)
2. Return of Regional Networks and Economies
CLAIM: investors/LPs shocked by asset freezes; expect re‑allocation by geography/industry; supply‑chain diversification, transparency, localization.
Where I was right:
- Freeze risk became structural: ~$280–300B of Russian state assets immobilized; EU set a framework to channel windfall proceeds to Ukraine.
- Friend‑shoring/de‑risking entered the policy mainstream. (Yellen’s “friend‑shoring”; IMF on geoeconomic fragmentation steering trade/FDI)
- Supply chains did regionalize at the margin. (e.g., Apple’s India ramp as emblematic of risk diversification)
What I got wrong:
- I implied a potential broad reopening (“unfreeze”) of sanctioned markets like Iran/Venezuela/Cuba; in practice the sanctions stance zig‑zagged (temporary easing in late‑2023; re‑tightening in April‑2024). I over-estimated sourcing demands
Where I was right .. but for the wrong reason:
- I tied diversification or on-shoring to Ukraine … but it was significantly co‑driven by US‑China tech decoupling and pandemic aftershocks as much as by the war. (IMF/central‑bank research points to US‑China tension as a primary axis of fragmentation)
3. Strong US Dollar
CLAIM: The US Dollar remains the only scalable, liquid reserve asset for long‑horizon allocators; gold likely edges higher.
Where I was right:
- Dollar dominance endured: ~58% of disclosed global FX reserves in 2024 (COFER/Fed). FX transactions still touch the dollar ~88%.
- The USD was exceptionally strong post‑invasion (DXY peak in Sept 2022), and policy institutions warned EMs accordingly.
What I got wrong:
- I called gold “slightly up to keep in line with inflation.” Gold ripped well beyond that —multiple record highs in 2024–25 amid central‑bank buying >1,000t/yr. I assumed gold as an inflation hedge. That’s true in the long run, but the bigger 2022–25 story was geopolitical hedging: The Russia sanctions made many sovereigns question: “If USD assets can be frozen, what’s safe?” — something I should’ve foreseen, given my interpolation from Russia to the Middle East and Asia! I also missed the official sector’s asymmetric power: Central banks can move hundreds of tonnes in aggregate — much larger than ETF flows or retail sentiment. Once they collectively pivoted, the price reset higher. Lastly, policy volatility and bifurcation mattered more than CPI (The U.S. Fed tightening cycle, USD volatility, and persistent sanctions risk gave gold a non-inflation bid).
Where I was right .. but for the wrong reason:
- There was no real substitute for USD liquidity, but I underweighted how policy volatility would drive both dollar swings and official‑sector gold accumulation as a sanctions hedge. I framed gold through a macro-investor lens (inflation correlation), but the driver was a sovereign risk lens (reserve diversification + sanctions hedge).
4. Bifurcation of Energy Markets
CLAIM: Europe sticks to decarb; first‑world hoards best clean‑tech; EMs become testbeds while quietly ramping fossil fuels; old hydrocarbon actors “innovate” under the banner of independence.
Where I was right:
- EU executed REPowerEU to cut Russian dependence and accelerate diversification; US became the dominant LNG supplier to Europe.
- Price‑cap regime + shipping/insurance restrictions redirected Russian oil to Asia at discounts, sustaining supply while limiting revenues.
What I got wrong:
- I implied a clean break on all Russian energy; LNG lagged—EU Russian LNG imports actually rose as a share through 2024 before tighter measures on trans‑shipments. That, of course, is a denominator effect: Oil was the easy lever. Crude and refined products could be sanctioned, capped, or rerouted relatively quickly. Europe had diversified sourcing options (Middle East, U.S., West Africa) and storage buffers. Gas — especially LNG — was the hard lever. Germany and parts of Central Europe had structural dependence on Russian pipeline gas pre-2022 (~40% of EU gas). That disappeared quickly, but it left a hole. To bridge it, Europe grabbed whatever molecules it could — including Russian LNG.
- My original framing (“clean break on all Russian energy”) was too absolute. The reality was a sequenced decoupling: Oil first (sanctionable, substitutable). Gas later (infrastructure-dependent, politically harder).
Where I was right .. but for the wrong reason:
- I framed energy bifurcation leading to weaker global growth. The more precise read: flows re‑mapped rather than shrank (Europe off Russia; Russia to India/China), muting the growth hit.
5. Increased Military Investments
CLAIM: Euro‑NATO to 2% of GDP; hardware heavy; autonomy/uncrewed systems; cyber gets mainstreamed.
Where I was right:
- NATO spending surged: 23 Allies at ≥2% in 2024 (vs 3 in 2014). Germany finally hit 2% in 2024; EU defense spend set records in 2023/24.
- The emphasis is indeed on munitions, air defense, ISR, autonomy, and digital enablers—consistent with my “modern warfare” call. (NATO summit materials and EU data sets reflect that mix)
What I got wrong:
- The speed of turning budgets into fielded capability was slower than implied; procurement bottlenecks and industrial capacity constraints persisted. I didn’t think deep enough through second and third-level impact (fielded capabilities requires production!
Where I was right .. but for the wrong reason:
- I emphasized a “cyber comeback.” The spend uptick happened, but the binding constraint proved to be industrial mobilization (ammo/air defense production) more than cyber line‑items per se: Cyber rose, but ammo and air defense absorbed the oxygen because without shells and interceptors, the alliance credibility itself was at risk. The urgent operational gaps in Ukraine and NATO were in high-volume munitions and air defense. That forced ministries to prioritize industrial ramp-up — new production lines, secure supply of propellants, chips, explosives.
What Did I Miss 3 Years Ago?
What emerges in hindsight: I systematically undervalued adaptive capacity of political and market systems when existential stakes are present. Cynicism about inertia was a bias — understandable given decades of EU under-delivery! — but wrong in the face of shock. Conversely, I over-indexed on the uniformity of sanction logic, assuming all frozen-asset cases would rhyme. And I under-credited opportunism in the Global South, mistaking it for passivity. Ironically, this does align with my operating principles: “Default to small, true signals. Ignore hype”: In 2022, the signals I weighted most (bureaucratic inertia, sanctions rigidity) turned out less true than the latent capacity for strategic acceleration.
1. I underestimated speed, scale, and political will of European industrial/defense realignment.
- EU reduced Russian energy imports by over 90%, replacing with LNG terminals, North African pipelines, and nuclear restart programs.
- German arms spending increased 3x over pre-war baseline; France and Poland saw similar growth.
- EU launched the European Defence Fund and initiated joint arms procurement.
2. I over-generalized equivalence of sectoral asset freezing.
- While geopolitical asset exposure risks are real, not all sectors faced equivalently high sanction risk.
- Cannabis assets were more exposed to regulatory arbitrage and U.S. banking restrictions than foreign policy entanglement.
- Blockchain Layer-2s were affected more by regulatory enforcement (e.g., SEC, CFTC) than by foreign policy–based asset freezes.
3. Neutrality of emerging economies was much more strategic than farcical.
- Rather than “comically passive,” many pursued multi-alignment with strategic calculus. India negotiated fighter jet tech transfers from France while buying discounted oil from Russia. Brazil advanced climate and food sovereignty talks with China, while courting U.S. agtech FDI. I saw a non-alignment trend but underappreciated its strategic sophistication.