In this future, Washington seeks to block Beijing’s ascent. China’s strategy to present itself as the new guarantor of global peace and prosperity — anchored in trade, production, and green energy — threatens U.S. primacy. Facing decline at home and political turmoil, American leaders turn outward, manufacturing crises abroad and at home to delay or disrupt China’s rise. The decade becomes one of confrontation by design, where escalation risks, even up to direct military conflict, are used as political instruments.
What an Engineered Crisis scenario looks like
This pathway assumes that U.S. institutions remain fragile but functioning, that global markets remain integrated enough for sanctions and disruptions to matter, and that flashpoints in Taiwan, the South China Sea, and the Panama Canal can be used for leverage without sparking immediate global war. It also assumes the U.S. retains the will and capacity to manufacture crises domestically, through deployments of agencies like ICE, and internationally, through naval patrols, arms sales, and sanctions. The scenario is most sensitive to U.S. domestic politics and its willingness to escalate foreign flashpoints into systemic crises. For the detailed probability estimates across all scenarios, see the master assumptions table.
The decade unfolds
By the mid-2020s, American leaders deliberately provoke crises to consolidate domestic support. ICE deployments in Portland symbolise the use of policing as political theatre. Overseas, U.S. naval patrols in the South China Sea intensify, while arms sales to Taiwan accelerate. The Panama Canal, Venezuela, and Iran become flashpoints, with shipping disruptions and sanctions engineered as strategic levers.
Into the late 2020s, escalation risks deepen:
- Currencies and finance: the dollar remains dominant but strained by sanctions wars, while gold surges as investors hedge against systemic conflict.
- Alliances and governance: Europe and India attempt neutrality but are drawn into crisis diplomacy, while BRICS and the SCO expand as counterweights.
- Commodities and technology: cyberattacks on ports, sudden spikes in insurance costs, and commodity shocks become routine.
- Markets and investors: volatility dominates, with defence, cyber, and logistics gaining while trade-exposed industries falter.
By the early 2030s, confrontation is institutionalised. Washington uses crisis as strategy, while Beijing insists on its narrative of stability and prosperity. The danger of miscalculation — even a direct conventional or nuclear clash — overshadows markets.
TL;DR: in 2035, the U.S. is locked into permanent confrontation with China, using engineered crises to disrupt Beijing’s ascent, at the cost of global stability and investor confidence.
How do we position capital in an Engineered Crisis scenario?
Volatility becomes the baseline. Defence contractors and cybersecurity firms benefit from rising budgets. Gold and other hedges remain essential. Shipping and logistics firms profit from crisis spikes but suffer extreme volatility. Trade-dependent industries underperform, while neutral players such as India and ASEAN attract inflows as alternatives.
In the early years, watch for politically motivated deployments at home, naval patrols abroad, and rising arms transfers to Taiwan. By the late 2020s, systemic signals include sanctions wars, cyber disruptions, and shipping volatility. By the 2030s, the key marker is the normalisation of escalation risk — crises engineered not as accidents, but as a permanent tool of U.S. strategy. For positioning detail, see our Scenarios overview and the Core Investment Hypotheses.
References
Guardian (2020). Federal agents deployed to Portland amid protests. Available at: https://www.theguardian.com/us-news/2020/jul/17/portland-ice-federal-agents-protests
Reuters (2023). US warship conducts freedom of navigation near South China Sea islands. Available at: https://www.reuters.com/world/us-warship-conducts-freedom-navigation-near-south-china-sea-islands-2023-01-20/
U.S. Department of Defense (2023). Possible Foreign Military Sale to Taipei. Available at: https://www.defense.gov/News/Releases/Release/Article/3542975/state-department-approves-possible-foreign-military-sale-to-taipei-economic-and/
World Gold Council (2024). Gold Outlook 2024. Available at: https://www.gold.org/goldhub/research/outlook-2024
Chatham House (2023). What BRICS means for the global order. Available at: https://www.chathamhouse.org/2023/08/what-brics
Schoemaker, P. J. H. (1995). Scenario Planning: A Tool for Strategic Thinking. MIT Sloan Management Review.
Schwartz, P. (1996). The Art of the Long View: Planning for the Future in an Uncertain World. Doubleday.
Shell (n.d.). Shell Scenarios. Available at: https://www.shell.com/energy-and-innovation/the-energy-future/scenarios.html