Geopolitical issues could have major consequences for the global economy, the head U.S. private equity firm The Blackstone Group Inc. is warning.

“My own sixth sense is that geopolitical issues are the great unknown, which could have very substantial consequences,” Stephen Schwarzman, the firm’s co-founder and CEO, told BNN Bloomberg’s Amanda Lang. 

He cited Iran, China and North Korea as countries he sees posing a risk, but noted the ultra-low interest rate environment is of greater concern to him.  

“The conventional economic cycle with overproduction of certain types of goods that lead to economic slowdowns doesn’t appear to be what’s really the risk to me,” he said. “What happens with interest rates, which are now so low that it’s almost unnatural? What happens if they reverse, if we get some inflation.” ßdoes the last sentence need a question mark as well?  

“There are always risks to economies, but at the moment, the low interest rates have stimulated the world enough that it just seems to be rolling along.”

However, while Schwarzman notes we’re not in a “conventional cycle” he doesn’t see the global economy “falling off a cliff.”

And when it comes to doing business in a low-rate environment, Schwarzman said from the perspective of the banks and the financial system, things are “quite safe.”

“The risk is actually what the return will be,” he said.

“It’s a little like playing hockey. In a normal game, you get 30-35 shots on goal. That’s a normal environment – that’s when interest rates were a little different. Now we have a different environment, we only get like five shots on goal.”

“Now, if we pick those shots right and if we’re open, we can still score three goals a game – and we have a really good shot of winning.”