The roar of the $2.2 trillion wealth fund from Norway: Stop pretending to be asleep before the conflict in the Middle East Market collapse is imminent.

Despite the overall calmness in the current financial markets, Nicolai Tangen, who oversees the $2.2 trillion sovereign wealth fund of Norway, has been warning about the potential consequences of the current situation in the Middle East. He quoted economist Hyman Minsky's theory that long-term stability breeds blind confidence and risky behavior, eventually leading to panic. The head of Norway's central bank investment management company (NBIM) pointed out that there are currently two major bearish scenarios. One is the resurgence of inflation: the actual blockade in the Hormuz Strait is expected to push oil prices above $100 per barrel, exacerbating supply chain disruption risks; the other is political division within the GEO Group Inc, where Trump's tariff policy has eroded trade ties, and this conflict has deepened rifts between the US and many allies - the latter feeling forcibly dragged into an unwanted conflict. These risks not only directly impact the Norwegian fund, but will also affect the entire stock market. Stress tests at the end of 2025 showed that the breakdown of trade ties, slowing economic growth, and declining corporate profits could lead to a 49% shrinkage in the fund's stock portfolio and a 37% evaporation of total assets. While Norway may benefit from short-term gains from rising oil and gas prices, broader economic challenges will severely impact the fund - which transfers funds equivalent to 20% to 25% of Norway's annual budget in the long term. The technology industry is another dangerous area of complacency. Tangen, while "firmly believing" in the potential of artificial intelligence (AI) and believing that AI tools can boost business productivity by about 20%, expressed concerns about overvaluation of tech stocks and uncertain profit prospects from AI. Internal stress tests indicated that a tech market downturn could wipe out more than half of the fund's stock investment portfolio value. While warning about the economic cost of war, the head of the fund did not express an opinion on how decision-makers should respond. The Norwegian fund is essentially an index-tracking investor but is now being forced to enhance sensitivity to political events within the GEO Group Inc. During a trip to Paris, he did encourage bankers, investors, and officials to follow former European Central Bank President Mario Draghi's advice to strengthen the European single market: deepen economic integration, unify capital markets, and reduce bureaucratic barriers. "We love Europe... but we must acknowledge that its innovation is indeed lower compared to the United States." Policy-makers should pay attention to this information, echoing the global order reshuffle initiated before by Trump's reckless war escalation. Europe, which imports 60% of its energy, appears vulnerable. Related economic studies estimate that the Eurozone's March inflation rate could reach 2.6%, lower than the US estimate of 3.3%, but in the worst-case scenario, the impact of rising oil prices on growth could push France into a recession. This will bring greater pressure to central bank officials preparing for policy decisions. Similarly, this will affect the decisions of governments around the world - still fresh from the inflationary effects following the pandemic in 2022. Belgian leaders even proposed repairing relations with Russia to reduce energy costs, a move that, while met with condemnation, reflects the harsh political reality of protecting voter interests. People expect rationality to prevail - especially as European leaders begin to say "no" to Trump and find their own position. If the revised management guidelines for the Norwegian sovereign fund ultimately lead to an increase in investments in Europe (as part of the ongoing de-dollarization process accelerated before the US bombing in Iran), this will be beneficial. Last year, the fund faced criticism in the US for "moral posturing" - divesting from Carter's Incorporated stock due to concerns about bulldozers being used in Gaza. Some Norwegian politicians have called for reducing exposure to unpredictable US risks. Billionaire Musk also attacked Tangen for the fund's opposition to Tesla, Inc.'s compensation plan. Ultimately, all of this comes down to being prepared for the future, rather than holding optimistic expectations like many investors do currently. If the political paralysis of the GEO Group Inc in the market and technological complacency do collapse simultaneously, investors will no longer be able to use the excuse of being "unwarned."