World on the Brink: 19 Predictions And the Conditions that Will Trigger or Prevent Them

This is going to be my last weekly article post on LinkedIn. For two reasons. The first is that it falls behind on my metrics for measuring progress. The second and more important reason is that things are getting worse. Researching and writing these things does not give me joy. It makes me considerably sad and concerned.

And I can't do anything about it. At least, writing an article about it here doesn't do anything about it. I'll rather focus on something that gives me joy when I do it.

The world has a bleak future in the near term. In fact, the world might see a major conflict or collapse in 18 months according to Ray Dalio. And I don't think he is wrong.

More than 50% of my investing philosophy is shaped by Ray Dalio . My first impression of him on a panel interview on Bloomberg TV many years ago wasn't so impressive. In fact, I disagreed with his point then. But when I met him again through a Tony Robbins book, I started to pay attention to other things he says that I found very profound.

We share the same thinking in a lot of things. He certainly has more perspective and depth. And I still listen to him on things we disagree on.

But I think we both agree right now that the world is on the brink. I heard high-profile rumors that the weapons used in the riots in France were traced to those sent to Ukraine. That was a facepalm moment. Sigh.

So, I am just going to let out 19 predictions and the conditions attached to those predictions:

1. China takes Taiwan before the next US presidential election.

Condition 1: If the Taiwan government is smart and negotiates well, China may not need to use force. And to the ordinary person, they may not feel much difference.

Condition 2: If China stalls and Trump wins the presidency in the US back, China might be forced into an unfavorable deal. Or they might just stall all the way through Trump's second term. China is known to be very patient with these strategies and they might actually be willing to let the situation linger for years, moving closer inch by inch.

2. New global reserve currency emerges - backed by oil

Condition 1: If the West gets severely weakened, this outcome is more likely. China, Russia, and the Middle East will have more say. And they will screw the West by not using gold. China's lack of oil will be compensated by transactions happening in yuan

Condition 2: If the West emerges stronger (which is highly unlikely), the use of the US dollar as the global reserve will continue

3. The USA gets divided into separate countries

Condition: Many (including myself) don't want this but it seems more likely going forward. If the military becomes divided and the intelligence community breaks up, there is a high chance of this happening. As long as the military is united, a division is very unlikely.

4. Hyperinflation of the US dollar

Condition 1: If the US dollar stops being the global reserve (meaning that there is a replacement that other countries accept), the US dollar will be in serious trouble. It will shrink the US economy significantly if the Fed successfully fights against the hyperinflation of the dollar

Condition 2: If the US government defaults on its interest payment, this might also happen. If the next president of the USA does not show strong economic confidence, the debt-to-GDP ratio will cause the system to implode.

5. India rises over all European countries in GDP

Condition 1: If India keeps up its production run and keeps creating capacity for innovation within its borders, it will surpass all European countries (but not the EU as a single block). However, the abject poverty of a large population in India might remain for a much longer time. To a long stretch, that is cultural and religious.

Condition 2: If Europe goes populist (intelligently), they can recover before damage too deep has been done. But this is unlikely. They probably won't go populist in time. And if they do, they probably won't be intelligent about it and it will just be raw emotion.

6. Tax increases for middle-income people everywhere

Condition: "Tax the rich" will never happen. The middle class will hold that bag. As government debt grows through money printing, tax burdens will be increased. If the people continue to be gullible, this will keep happening.

7. Lower-quality goods

Condition: As the wealth gap increases, it is either you buy luxury or you buy low quality. The middle ground will begin to erode more and more. The only rebuff to this is if the affordable luxury class becomes much bigger than expected

8. China will not become the world power

Condition: China will certainly influence key aspects of the world if the US loses world power status. But world power will not go to one country anymore. To a large extent, it will be unfairly distributed among BRICS. And any country whose president is not "leader-material" will suffer.

China will only become the world power if they directly wage war with the US and win. But if they wage such a direct war, they will probably lose (or suffer too many casualties to call it a win). And that would be giving the US everything necessary to unify the country. The best option for China is to watch the US implode by their own hands

9. Nigeria will deliver the best emerging market return for the next 4 years

Condition: The new president already shows that he is in for business. While the life of the average person in the country may not improve by much over the next 4 years, the country's economic data will be significantly better. This will be in time for the president's reelection campaign where he will need to toot his achievements.

10. The Russia-Ukraine war will end inconclusive

Condition: If US citizens stand up to fight against money printing by the Fed, the crisis will end very sharply with a lot of "fleeing" on both sides. Otherwise, it will keep running until the American military complex has another project that is just as financially demanding.

The war stops when the funding stops. As long as the funding continues, the war doesn't stop.

11. The EU will throw the USA under the bus if things break up

Condition: If America should go down, the EU will tilt towards Meloni (Italy's PM) and would hang the USA dry.

12. More things will be subscription based so that they can remain affordable

Condition: Not everything will be subscription based. But a lot will be. Wages cannot catch up to inflation for now, so fewer people will be able to buy things. This will also allow more ease of mobility. People are going to be more mobile than ever in the next 10-20 years. Inflation just has to keep going up.

13. Commercial real estate properties will be converted

Condition: It is not just the Work From Home trend. Businesses are needing less to function due to tech (especially AI). Most companies will review their lease agreements the moment they can. Demand will keep falling. Someone visionary can snap up all that space now that it has much less worth and do something revolutionary with it. But that thing better be really good otherwise, it will be a mass waste of money.

Luxury residential complex is one of the ideas that could work. But the success of that depends on a lot of factors.

14. Stock market wipeouts

Condition: If the US dollar loses global reserve suddenly and it explodes the FX swaps. Add the derivative market to that mix and you will have a stock market wipeout.

Now, this is not a recession or depression, or downtrend kind of situation. This is a wipeout. A person sleeps with money in his stock account and wakes up with zero money there because the assets he owned were actually derivatives that got wiped out overnight.

15. More internal conflicts

Condition: I disagree that an external conflict like the World Wars will bring the world to its knees this time. Instead, it is multiple internal conflicts. Countries warring within themselves. The moment one country goes down like that, the intensity is going to go wild in other parts of the world. As long as the crazy wealth inequality via money printing exists, internal conflicts will continue.

16. No nuclear war

Condition: A nuclear war has too many severe ramifications that everyone knows so well. And it has to take place as an external conflict. Even the Russia-Ukraine war is an internal conflict if you take a deep look. No conflict will warrant nuclear weapons. No country will be stupid to announce such a conflict.

And people are more circumspect today than ever. Nobody wants to shed their blood fighting for any country. They realize patriotism is just some form of manipulation. People get into the military to have jobs. Not because they actually believe in fighting. So, it will be hard to get any country united for an external conflict.

Just because people can't speak their minds doesn't mean they agree. And if you put the Gen Zs on the battlefront, they'll probably start texting their counterparts of the other country on how they will fool their respective governments and avoid killing each other.

Maybe Netflix should make a movie about that. Or make it a series.

17. Independent news outlets become bigger than MSM

Condition: This is already imminent. But the reason MSM is still in business is because of distribution. Public spaces (such as airports, banks, etc.) still run on MSM. The moment independent journalism cracks that distribution code, mainstream media will become alternative media.

18. The US will rather starve the population than stop money printing

Condition: If the intelligence community ever gets genuinely broken up, it could end money printing. But as long as the military-industrial complex still exists (along with the intelligence community it serves), money printing will likely not stop until hyperinflation or severe wealth inequality destroys everything. It is gone too far now - if the military won't stop it, it won't stop.

Most economists do not know it yet but the choice is narrowing to just two options - severe wealth inequality or hyperinflation. (Just so you know, if it comes down to those two, you better pray it is hyperinflation).

19. AI hype dies very fast and affordable luxury remains the huge money maker under the radar

Condition: Employment will get better. More people will be self-employed. And AI will enable lots of self-employed people to compete and beat established companies. This will then trigger a reverse. The AI hedge will fizzle out. Chasing the newest tech to stay ahead of the curve will gradually become unattainable for small businesses and the self-employed. This will cause many of them to run out of business/work and likely go to work for an established company.

Meanwhile, businesses that stay in the boring stuff and tap into the affordable luxury market will keep booming under the radar for a long time.

Conclusion

Don't take these predictions too seriously. Many of them will stand the test of time. A few will probably fall flat. The point here is to note those conditions and see where the world is leaning towards.

Here is something you should keep at the back of your mind in all of these:

The present will continue indefinitely until someone with power decides to do something different

Will I write about these things again? Well, maybe. But for now, I'm out. Don't expect this weekly anymore.

I rest my case,

David O.