This week, the North Korean cyber attack on the US via Sony Pictures, as well as the collapse of the Russian rouble, reveal to us just how the world has changed and how the threats to countries’ interests and stability can come from strange, unpredictable places. It also underscores quite how inter-related the world has become.

In both cases, it laid bare the inadequacies of old power. Both Russia and the US spend billions of dollars on their nuclear arsenal. This demands massive resources and infrastructure and is supposed to make the countries secure, yet both the cyber warrior and the foreign exchange speculator only need a laptop and a decent internet connection to wreak havoc.

In both cases, the retaliation of the large countries has been ineffective and raises the stakes for further developments that larger, more powerful countries are bound to lose.

In Russia’s case, hiking interest rates to 17pc damages the economy and makes speculative attacks on the currency more likely. In terms of the cyber attack by North Korea, the US retaliation appears to have been the shutting down of the country’s internet. However, in a country where only a handful have access to the internet, does the US retaliation hurt? And while US hackers can turn the lights out in Pyongyang, what does that prove? If, in contrast, North Korean hackers can turn the lights out in New York City with another successful attack, I suspect there’s only one winner in that scrap . . . and it’s the odd dictator with the funny haircut!

In only a few days we have seen that much of what we regarded as powerful – the hard stuff of armies and weaponry – is less important than before. Today, the soft links of money and technology are what binds the world together and makes it vulnerable.

If you want to see what these links look like, consider possibly the most important international speech made in recent years, delivered yesterday by Ali al-Naimi, the Saudi oil minister, who said that he would not cut production if the oil price fell to $20.

He went on the say: “We want to tell the world that high-efficiency producing countries are the ones that deserve market share” and “if the price falls, others will be harmed greatly before we feel any pain.”

This is an extraordinary statement, because what he is saying is that the high-cost oil producers like the US with its fracking and shale, Russia with its expensive Siberian fields and Iran with its outdated machinery, may not survive as oil players.

This shows another weapon of diplomacy being deployed: energy.

The Persian Iranians and the Arab Saudis have been foes for years, not only because of sectarian Sunni and Shia differences, but also because of geo-strategic rivalry in Iraq, Syria, Egypt and Lebanon.

Saudi Arabia has wanted to torpedo Russia and its ally in the Gulf, Iran, for years. As long as the US was treating Iran as a pariah, Saudi was happy to let the Yanks do its bidding.

Now that the US is making overtures to Iran while Russia and Iran’s ally, Assad, is still in power in Syria, Saudi has decided to act by expanding oil supply. This has caused oil prices to halve in a matter of weeks. Oil prices are now at $40 a barrel and Saudi is still competitive at $10 a barrel.

The collapse in the oil price destroys the Russian economy, as it is a massively inefficient but huge oil producer. The Saudi move prompted the ruble’s slide and Russia, for all the might of its military and resources, is quite powerless in the face of a speculative attack on its currency.

As all these geo-political developments are playing out, what does it mean for us economically?

The first issue is whether an escalation of the US/North Korean spat impacts on US business confidence. This is crucial for Ireland, because the US is our biggest trading partner. It is growing at 5pc, which is phenomenal, and the dollar is rising.

We do well when the US is growing and the dollar is rising because a rising dollar makes Ireland’s cost base more attractive for dollar investors, like the multinationals.

It is unlikely that things will escalate so much between Uncle Sam and Pyongyang as to scupper the US growth rate, however, the drop in the oil price might have a negative impact on the US due to the possible default on energy-related company debt.

Remember, the shale gas and fracking boom was based on high energy prices, which led to massive investment, all financed by debt; if the Saudis keep oil prices down, that debt bubble goes up.

In the longer-term, lower oil prices benefit US consumers massively because they use so much energy.

Similarly here, lower oil prices have an unambiguously positive impact on people’s spending power.

Interestingly, a crisis in Russia could similarly have a positive effect on this country through the impact on European interest rates.

It is sometimes overlooked that there are 6,000 German companies registered in Russia with a combined turnover of €40bn and employment of around 270,000 people.

In Germany, 350,000 jobs are estimated to depend on business with Russia. German firms that have invested in excess of €22bn in Russia are household names, with Siemens, Volkswagen, BASF, Metro and Henkel among the leading players.

A crisis in Russia would mean German business confidence falls. This will make the weak EU economy weaker and will keep eurozone interest rates at zero for a long, long time.

This is positive for Ireland because we are still hugely indebted and lower mortgage rates can only help indebted homeowners. In addition, the weaker euro makes us more competitive against our major trading partners the US and the UK.

It is a measure of how interconnected the world is that people’s disposable income here is affected by America’s cosying up to Iran; or that the crisis in the ruble could have a materially positive impact on the average person’s debt burden here.

But this is how the new world works and the combination of technology and money will make this level of connectivity more, not less, intense.

But as the North Korean cyber-attack indicates, the consequences of the nexus of technology and money is not always healthy, nor desirable.

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