The Shanghai Co-operation Organisation summit in Tianjin today crystallised an emergent counter-order. President Xi promised a “Global Governance Initiative,” while Vladimir Putin urged joint SCO bonds and a new payments system to bypass the dollar. With members representing 42 % of the world’s people and posting 5 % collective GDP growth in 2024, the bloc now wields the scale—and the intent—to challenge U.S.-centric rules. (reuters.com, jp.reuters.com)

Yet scale masks strain. Most SCO states depend on Western export markets or finance; India alone drew $32 bn in U.S. FDI last year and cannot afford secondary sanctions. History warns: the 1955 Bandung Conference also promised “Third-World solidarity” but fractured over rival security interests within a decade. Absent concrete enforcement tools or shared democratic norms, today’s lofty rhetoric could meet a similar fate.

Still, the economic offer—cheap energy from Russia, infrastructure money from China—may prove irresistible to sanction-weary governments from Tehran to Minsk. If Brussels and Washington respond only with tariffs and scolding, they risk accelerating the very monetary fragmentation they fear. “The era of a single superpower is over; we are entering a G-Zero world.” — Ian Bremmer, 2012.

The Gist AI Editor

Fed Under Fire, Gold Surges

President Trump’s move to oust a Federal Reserve governor has sent ripples through global markets, fueling a surge in gold prices. Bullion reached a record high, with futures climbing 0.8% to over $3,543 per troy ounce, as investors seek safe-haven assets amidst escalating concerns over the U.S. central bank’s independence (FT, Bloomberg). An FT survey of economists reveals deep-seated fears that political pressure could cause long-term damage to the U.S. economy, potentially leading to higher inflation and diminished investor confidence in U.S. debt. Our perspective is that any erosion of central bank independence is a dangerous precedent, substituting political whim for predictable monetary policy.

Europe Navigates Transatlantic Tensions

In Europe, political crosscurrents are evident. German Defense Minister Boris Pistorius publicly rebuked European Commission President Ursula von der Leyen for suggesting the deployment of EU troops to Ukraine, labeling the idea “fundamentally wrong” before peace negotiations (Politico.eu). Meanwhile, European Council President António Costa acknowledged the war in Ukraine was a factor in the EU accepting a contentious trade deal with the U.S. (Politico.eu). Costa’s candor signals a pragmatic, if reluctant, approach to transatlantic relations, prioritizing stability even at the cost of a less-than-ideal trade framework. This highlights the delicate balance EU leaders must strike between security imperatives and economic sovereignty.

Global Shifts: Demographics and Development

Two developments underscore significant long-term shifts. For the first time, more first-graders in Israel are enrolled in religious schools than secular ones, a demographic tipping point with profound implications for the nation’s social fabric and tech-dependent economy (Bloomberg). In Africa, Kenya is set to auction 10 oil exploration blocks this September, its first such licensing round in six years under a new petroleum law (Bloomberg). This move to attract foreign investment signals a renewed focus on leveraging natural resources for economic growth, a classic development path that champions market-based solutions.

Innovation’s Growing Pains

The tech and health sectors face their own disruptions. Meta’s much-touted AI superintelligence lab is experiencing a “brain drain,” with several high-profile researchers departing shortly after being recruited, some returning to rival OpenAI (Wired). In the pharmaceutical world, Novo Nordisk is struggling to protect its valuable GLP-1 weight-loss drug patents from pharmacy compounders, who create alternative versions of the medication (FT). These episodes reveal the intense competition for talent and intellectual property, key drivers of innovation that can be stifled by both corporate instability and inadequate legal protections.

Stay tuned for the next Gist—your edge in a shifting world.

Gold surges after Trump’s Fed pressure
— Financial Times

Investors underestimate Trump’s threat to the Fed, economists warn
— Financial Times

WIRED Roundup: Meta’s AI Brain Drain
— Wired

How Novo Nordisk failed to protect its GLP-1 patent
— Financial Times

Religious Pupils Now Outnumber Secular in Israel’s First Grade
— Bloomberg

Kenya Plans to Auction 10 Oil Blocks in September Under New Law
— Bloomberg

EU Trade Ambitions Falter

The EU’s long-stalled free-trade agreement with Mercosur (a South American trade bloc) is facing renewed turbulence, revealing deeper fractures in Brussels’ global trade strategy. While proponents champion the deal for its potential to open markets and diversify supply chains away from single points of failure, powerful domestic lobbies, particularly in agriculture, are pushing back over environmental and competitive concerns. This internal conflict is forcing a broader rethink of the EU’s commercial diplomacy, especially as it seeks a coherent path between the US and other global partners. My read is that this paralysis on a major trade file signals a victory for protectionist sentiment over the principles of open cooperation, potentially costing European consumers and exporters in the long run.

Gas Prices Signal Winter Worries

European natural gas futures, a key indicator for energy costs, edged higher, with contracts on the Dutch TTF (Title Transfer Facility) benchmark climbing 0.6% to settle around €31.84 per megawatt-hour. (Ansa) While a minor daily move, the uptick is a subtle yet crucial reminder of the continent’s persistent energy vulnerability as autumn approaches. Markets remain hyper-sensitive to any shifts in supply, demand, or geopolitical stability. This slight increase keeps the pressure on policymakers to ensure energy security and avoid the kind of price shocks that have previously crippled industries and squeezed households, underscoring the delicate balance of Europe’s energy transition.

Catch the next Gist for the continent’s moving pieces.

Antrittsbesuch Merz bei Wüst
— ZDF

Treccani, ‘agli esami di riparazione ripassiamo con le strade’
— Ansa

Toyoake: The Japanese city that wants to limit cell phone use to two hours a day
— El Pais

Aktuelles zum Krieg in der Ukraine
— ZDF

Mercosur: EU ringt um neuen Kurs
— ZDF

Future sul gas risalgono a 31,8 euro al megawattora
— Ansa