2024 Predictions - Part 2

In previous years, I've limited my annual predictions to focus more narrowly on the industry I serve. This year, I've indulged myself and I will venture into geo-politics, partly because global events have an impact on the market, but mainly because it's going to be such a historically significant year I simply can't resist.

This is Part 2, Part 1 is available here:

11.? The War in the Ukraine will rage on, the war in Israel will not:

Western powers will begin to divide into two camps over the war in Ukraine; those who seek escalation and those who seek appeasement but no camp will win the argument ahead of the US election in Nov 2024. Through the Summer, there will be increasingly strong sentiments between those who think Ukraine should be enabled to ‘win’ and those who want to withdraw/limit support and push for peace. This debate will give comfort to Russia and will encourage them to continue their strategy of grinding attrition as they continue to wind up their military industrial manufacturing base.

Despite this being a major political talking point, particularly in the US elections, the conventional war will continue through 2024 largely as it has done through 2023 with strong but not decisive support from Western powers.?

Conventional fighting in Israel/Palestine will come to an abrupt halt and there will be little further escalation in the middle east.? However, a new generation will be radicalised by the war and we will see a wave of anti-semitism giving way to indiscriminate terror attacks in Europe.?

12.? Political Division in Europe & Brussels as Europeans turn to the right:

2024 has a lot of elections; The looming UK and US elections dominate our press but there are European elections in Jun and 2024 will also see elections in Austria, Belgium, Portugal, Lithuania and Croatia.? A wave of centre right nationalist sentiment has been sweeping through Europe and we will see more nationalist and Euro-sceptic governments popping up across the continent, dividing, disrupting and weakening the EU.?

This divide will be exacerbated by growing disagreement over the EU nations policy on Ukraine; Eastern European countries in particular will be the most vocal in opposing appeasement.

Whilst on the subject of elections, the Russian Presidential election is in March, Putin will win naturally. There will be no coup or serious plot to unseat him in 2024, the Russians are hoping the West will drop support for the Ukraine after the Nov US elections and the Russian people will endure another year of attrition without an uprising.

13.? US Election - Farce, violence, assassination attempts & madness:

The US elections will do nothing to further the cause of democracy as the US election descends into a farce.? It’s most probably going to be fought between Biden and Trump - Trump will win. There will be violence and disorder but this time, we will see mischief and disobedience spreading into official channels of local state government with individual states stretching the limits of the constitution as they rebel against a candidate they dislike or even against federal government itself. This will not end in revolution but there will be revolutionary acts and legal wrangling as the US constitution is tested. There will be an assassination attempt against one of the candidates, probably Trump.?

14.? Asymmetric Warfare and Destabilisation:

Back in the Ukraine/Russian war, with limited movement on the conventional front line and both sides trying to influence European and US appetite to support the war, the conflict will increasingly spread to other areas as each side attempts to gain advantage and destabilise the other. Russia will make considerable efforts to de-stabilise and disrupt Western interests both economically and politically, we can expect Russia to invest great efforts in damaging Western economies and in causing mischief abroad, using allies in Africa and the middle east as proxies though they will steer clear of Chinese interests in Asia and parts of Africa. Ukraine for their part will focus on headline grabbling wins and damaging Russian domestic war support in Russia, we can expect to see more daring ‘SOE’ style operations and Ukraine willing to take the conflict onto Russian territory - using deniable assets or proxy ‘militias’ where they are unable to use it’s own troops. Ukraine will also begin to invest heavily in domestic defence production as it fears losing support from the West, it’s even possible we may see Japan stepping in to fill any vacuum left by the US to support Ukrainian defence manufacturing as a vehicle to dissuade Chinese expansion plans and a way of legitimately up scaling their own defence industry.?

15.? China continues to circle Taiwan:

China is watching Russia’s humiliating national act of self harm in Ukraine carefully, and more importantly, watching the Wests reaction to it. They will not make the same mistakes as Russia but their designs on Taiwan and desire to challenge the US in the South China Sea have not gone away.? China’s economic foundations don’t go as deep as many think, it has it’s own problems with an ageing population, debt and a stagnating economy, China has been spending an incredible amount of money on weapons and its armed forces, that’s not there to fend off an attack, it’s there to project power outside of its own borders. China may have have a window in which to make it’s move and if the political winds look favourable and the US looks war weary or weak in the Ukraine, China might just decide the odds are acceptable and role the dice of war. It’s likely that this will be preceded by a series of ‘salami slice’ tests followed by a false flag act to justify a response. However, China will not act in 2024, if China smells a weak west, it will continue to build its military power and de-risk its economy ready to strike in 25 or 26. However, it will only do this if it thinks the US is unable or unwilling to oppose them, if the West doubles down in the Ukraine, the Chinese will push their plans back for a decade or more. It’s worth adding that it’s not totally inconceivable that North Korea might use a Chinese attack on Taiwan in 2026 as a cover for an attack or even full invasion attempt on South Korea, whilst that’s conceivable and may even be coordinated by China as a means to overwhelming the US, it’s unlikely as North Korea has too much to lose and not much to gain. These apocalyptic events are unlikely but the probability of them taking place at all will change based on what happens in 2024.?

16.? Japan and other Asian powers will invest heavily in Defence:

Debates in the Senate over ‘America first’ policies and dimming support for the Ukraine will rattle Japan and other Asian powers who will build up their armed forces and defence capability in the face of an increasing perceived threat from China and a weakening resolve from their US protectors.

17.? Trump Card:

Whilst the most likely outcome of a Trump president at the end of 2024 and early 25 is the scaling back of US support in the Ukraine, it’s conceivable that Trump will do the opposite and may escalate and even threaten Russia with direct US involvement as a means to bringing the war to and end. This is unlikely but not inconceivable.?