Overview
Palanor: Geopolitical Stress is a single 0–100 read of how much geopolitical danger the world is carrying: what the press is reporting about war and threats of war, how much organized violence is actually happening, and what markets are paying for fuel, safety and defense. High readings mean all three are elevated. When the press and the ground disagree, or prices run ahead of both, that disagreement is the story.
Why these components
The Caldara-Iacoviello Geopolitical Risk index (35% with its threats sub-index) is war in the press: the share of articles in ten major newspapers about war, military buildups, nuclear threats and terrorism. The UCDP event count (15%) is war on the ground: every event of organized violence with at least one death, worldwide, coded by the Uppsala Conflict Data Program. Oil (Brent and WTI, 20%) is the most geopolitically priced commodity. Defense industrial production (10%) is the supply-side response. Gold (the GLD ETF), VIX, the dollar and natural gas (5% each) carry the safe-haven, equity-market, capital-flight and European-energy channels.
Methodology
Every component rises when stress rises. Each is a z-score over 24 months, except defense industrial production, which uses its 12-month change because it is a level index. GPR and UCDP are monthly; everything else is daily. The weighted sum maps through a logistic to 0–100. UCDP counts events, not deaths: deaths are dominated by a few mass-casualty wars, and a single one (Tigray, 2021–22) sets the baseline so high that new wars barely register against it.
How to read it
Above 65: meaningful geopolitical risk, in the press and in prices. Below 35: a comparatively settled world. Compare the GPR contribution with the oil contribution in the component breakdown — when they disagree, that disagreement is the story.
Revision — 23 September 2026
Until this date the index had no war data: it read geopolitical stress entirely from market prices, and 20% of its weight sat on a FRED series labelled gold that is in fact a gold export price index. The revision adds the Geopolitical Risk index and its threats sub-index, replaces the export-price series with the gold price itself (GLD), and trims oil from 40% to 25%. All history since May 2026 was recomputed under the new weights, so the chart is consistent. On the revision date the old weights read 77 and the new weights read 63: oil sat three standard deviations high on the Hormuz disruption while war coverage in the press ran below its two-year average.