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Musings Report #10 3-5-16 Nobody Predicted This
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For those who are new to the Musings reports: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
Nobody Predicted This
It's difficult to recall the absolute incredulity that would have met anyone who predicted in 1985 the U.S.S.R. would collapse in a mere five years (i.e. in 1990). To my knowledge, not even one person predicted this outcome in 1985.
Recently, we've had other reminders of our feeble powers of prediction: nobody (that I know of) predicted oil's collapse from $100+/barrel in mid-2014 to $27/barrel in February 2016. It wasn't just the mainstream experts who were wrong; alternative blogosphere analysts completely missed this as well.
Technology can play a role in transforming what's expected--for example, fracking technologies have produced a bonanza of natural gas that (for as long as it lasts) has pushed natty gas to lows nobody thought possible: $1.67/M. It's hard to imagine, given that natural gas was $5/M in early 2014.
But many of these "nobody saw this coming" events have little to do with technology. The collapse of oil is the result not of technology but of credit/finance, geopolitics and the deliberate production strategies of Saudi Arabia and other major producers.
The seemingly unstoppable political trajectory of Donald Trump is another "nobody predicted this." The entire political establishment of talking heads, pundits, PR flacks posing as media, etc. saw a Jeb Bush/Hillary Clinton contest as inevitable a year or so ago.
The alternative media was equally dismissive of the Donald; I don't know of a single analyst/commentator (there might be a few) who correctly predicted the rise of Trump (I certainly didn't).
The establishment has been predicting his demise for months, and their failure to understand the rage of the public that is propelling Trump infuriates and mystifies them. In response, their denunciations of Trump are becoming ever more hysterical: failed Republican candidate Mitt Romney was wheeled out to accuse Trump of leading America down the path to fascism.
Allow me to make a prediction: if Trump is elected, he will not lead the nation down the dark path to fascism. His power to control the structural forces we discuss here will be limited. But since he is an outsider, he might be able to shake up some of the protected Establishment, and dial back Imperial over-reach. But these would be the equivalent of 1980s Soviet-era reforms that leave the rotting core untouched.
There appears to be a chance that Hillary Clinton will be indicted for copying secure State Department emails to her private email server, which is (by the way) against the law. This would be another "nobody predicted this" event.
Have we crossed the Rubicon from Republic to Imperial state? If Hillary escapes prosecution (because she is an Insider and thus untouchable) and Trumps is derailed by the Status Quo that so fears him, then it would seem, yes, the Republic exists in name only.
Can we see five years ahead with any clarity? obviously not. Nonetheless, I continue to believe there will be a reckoning of structural forces by 2022-25, for the simple reasons that "everything's connected" and artifice/propaganda cannot be substituted for reality without grave consequences.
I will be very surprised if we're not seated at our banquet of consequences by 2022.
Summary of the Blog This Past Week
America's Ruling Classes: No Fear, No Caution, No Prudence 3/3/16
Could Donald Trump Be a New Kind of Transactional President? 3/1/16
What If There Are No More Googles, Facebooks or AirBnBs? 2/29/16
Best Thing That Happened To Me This Week
David Stockman's complete dismantling of phony-capitalist Mitt Romney. Mitt Romney Is The Real Super-Fraud: Here’s The Proof, Chapter And Verse
Market Musings: USD's Next Big Move
Everything's connected, in often confusing ways: energy, debt, foreign exchange, geopolitics, capital flows, interest rates, risk, policy, etc.
The markets reflect all these feedbacks and links. In some cases, a single market can consolidate many trends into one: oil's 2/3 decline, for example, or gold's recent $200 run-up.
The U.S. dollar has been noodling around in a trading range for months. But the fact that the Bollinger bands are tightening tells us a major move in one direction or another is coiling up.
Many pundits expect the Fed to follow other central banks to NIRP, negative interest rates, to keep the dollar from soaring as every other currency weakens.
If these pundits are right, then the dollar would make a big move down.
I see a move higher--much higher. I see no reason for capital to flee USD and plenty of reasons for capital to continue to flow into USD based assets. This capital flow alone will suppress interest rates, even if the Fed does nothing.
I see global turmoil on the horizon, and a 20% gain in the USD as the inevitable consequence. That this move higher will only exacerbate emerging market turmoil is also baked in, as "everything's connected" in feedback loops that can never be completely controlled by central authorities--though they like to think they control everything.
From Left Field
Australia’s Housing Bubble: In the Grip of Insanity
Gigging In the Current Music Environment -- firsthand report
Radical Decentralization Ensures Sovereignty of the People -- Switzerland as the ideal model for a decentralized Republic...
The Scold: Mr. Money Mustache’s retirement (sort of) plan -- hey, he pulls in $400K/month in product referrals...now that's a retirement plan!
Why Globalization Reaches Limits -- Gail T. connects the dots in ways nobody else does...
Trump and the Rise of the Unprotected -- Insider Peggy Noonan states the obvious: there's the protected class, and the rest of us...
It Shouldn't Matter Who the President Is -- what I've been saying...
Death and Despair in China's Rustbelt -- here's the problem with China switching to a "consumer economy"--everybody with income already has everything--it's already a society of overconsumption...
The other side of the global crisis: entropy and the collapse of civilizations
Bill Gross says capitalism, like the sun, is dying -- financialization is eating its own tail...
Biggest Wave Yet of U.S. Oil Defaults Looms as Bust Intensifies (via Joel M.)
Art Berman Sees Oil Heading To $16, Will Lead To "Banking Bloodbath" -- smart guy, knows the sector...
"Grasp the subject, the words will follow." Cato the Elder
Thanks for reading--
charles |
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