FI Special: the British general election and a 1st round French presidential election forecast

 

General-election-2017-Theresa-May-why-June-8-903869

Last year I warned of the possibility that Prime Minister Theresa May would go for a snap general election in either the spring or autumn of 2017 prior to the beginning of the serious Brexit negotiations. As it happens, the logic of calling an early general election has clearly become overwhelming for the Conservative leader, with the general election to be held on Thursday 8 June.

On the face of it, the outcome appears to be a forgone conclusion. The opinion polls all show that the Conservative Party has a strong and consistent lead over the Labour Party, with a Yougov poll showing the Tories with a massive lead of 48%, versus a second place Labour party, at 24%. As long standing readers of this blog know, surface polling should be read in conjunction with deeper underlying polling of the electorate to get an accurate sense of the public mood. What does the underlying polling data tell us?

According to the Yougov polling data, the Tories have a commanding lead on the critical issue of economic competence, with a 24% lead on this issue. When it comes to leadership, 54% of the electorate think that Theresa May makes the best Prime Minister compared to only 15% for Jeremy Corbyn, the leader of the Labour party. On the two most critical issues for the average voter, perceptions of economic competence and leadership calibre, the Conservatives are massively ahead in the polls.

The underlying polling data provides little to no comfort to supporters of Jeremy Corbyn and would indicate that the Conservative lead in the polls is durable and not a mirage. However, there are a number of factors that could contain any potentially huge increase in the Conservative majority. The first is low turnout by soft Tory voters who may feel that there is little point of turning up at the ballot box since Labour has no realistic chance of winning the election. This would be amplified if they voted Remain during the Brexit referendum as Theresa May has embraced the Brexit cause since coming to power.

The Liberal Democrats are likely to see a revival in their fortunes since their electoral drubbing in the 2015 general election. The Liberals have become the go to option for those voters angry about the Brexit result and who wish to attempt to reverse the decision to exit the European Union. The Liberals are likely to regain seats from the Tories in London as well as the south-west. Tactical voting by Remain voters, some of them soft Tory’s, could impact seats in the affluent south of the country.

The Conservatives hope to gain dozens of Labour marginal seats where majorities voted to leave the European Union. Considering the dire state of the Labour party this is likely and will compensate for the potential loss of seats to the pro-European Liberals. The anti-EU UKIP party is crumbling in the polls as its supporters defect to the pro-Brexit Tories. The combination of the return of UKIP voters and Leave voting soft Labour voters should be sufficient to turn a considerable number of Labour seats blue on 8 June.

Whilst the possibility of a Labour government is not impossible, it seems highly unlikely as a political outcome, taken the above factors into consideration. My forecast is a Conservative victory with an enlarged majority but it is too early to predict how big the majority may be.

Should Jeremy Corbyn perform better then expected during the campaign, the current talk of a landslide victory of over a 100 seats will look increasingly out of touch should the polls start to narrow. A major gaffe by the Labour leader could lead to a further collapse in Labour support (down to 20%) and push the Tories close to or above 50%, leading to the possibility of a 1997 style defenestration of the Labour party.

I will provide an updated forecast of the British general election result as the campaign develops.

1st round French presidential election forecast

The 1st round of the French presidential election race is nearing this Sunday 23rd April and the polls indicate that all four main candidates have a reasonable chance of getting into the second round.

I recently wrote that the reader should prepare for the unexpected and I consider this still to be the case. At the beginning of the year I warned that there was a possibility that Marine Le Pen (“Le Pen”) may not get to the second round, which was one of the reasons why I only gave a 60% probability chance of Le Pen winning the French presidency.  This is one of a number of possible scenarios, including Melenchon getting into the final two or Fillon performing better then expected which could happen this weekend.

I wasn’t planning to forecast the likely winners of the 1st round due to the extraordinary volatility of the French electorate and the difficulty of picking out the winners of a crowded four horse race. This remains the case.

However, my reading of the French electorate does indicate to me that on a balance of probabilities the most likely outcome of the 1st round will be Le Pen winning with Fillon coming second. Please note that this is a very tentative forecasting prediction and all four main candidates, Le Pen, Fillon, Macron and Melenchon have a plausible chance of getting into the second round.

The reason why I think that Le Pen and Fillon may have the edge is that France profonde, conservative, patriotic and the backbone of French society, will turn out in force for both Le Pen and Fillon. Both candidates have committed supporters and for different reasons feel deeply alienated and angry about the direction the country is going.

The Bloomberg article on the provincial town of Donzy may prove to be a canary in a coal mine.

Of course, I may be wrong and if I am honest, this has been the toughest forecast to make to date since launching the FI blog. We will find out on Sunday if my forecast turns out to be correct.

Whatever happens, I recommend preparing for the unexpected.

FI Special: the British general election and a 1st round French presidential election forecast

Expect the unexpected

The truth is that nobody knows what the results will be in the 1st round of the French presidential elections due next Sunday 23rd April 2017. The single most salient fact in this extraordinarily volatile election is that approximately 40% of the French electorate are undecided. Significant swings could happen on the day of the election which should be taken into consideration when reviewing the polling data.

I would therefore recommend that readers should treat with skepticism the predictions of anybody, including myself, on what the outcome will be.

Given the huge numbers of undecided voters and the political upheavals within the Republican and Socialist party primaries, I would not be surprised if further unexpected electoral shocks will be dealt by an angry and anti-establishment minded French electorate.

I will therefore outline a number of potential electoral shock scenarios which could happen in the 1st round, based on my reading of the presidential race to date.

Francois Fillon (“Fillon”)

The French conservative candidate has survived a series of bruising corruption scandals and is currently around 18% in the polls, behind both Macron and Le Pen. As Ambrose Evans Pritchard argues in the Telegraph, Fillon is an experienced, solid and presidential candidate who may yet see a revival of his political fortunes as the French public turn to a safe pair of hands. Fillon is from the political mainstream, is tough on security and is clearly the most statesmen-like of the candidates in the contest.

It is plausible that centre-right voters who are flirting with voting for Macron will return to the Republican fold, ensuring that Fillon does better then expected on election night.

Marine Le Pen (“Le Pen”)

Le Pen has consistently polled around 25% of the vote and has the most committed support base of all the candidates. Most pundits, including myself, consider it likely that she will end up going into the second round.

One possibility is that Le Pen will under perform on the night as traditional National Front voters, who dislike her anti-Euro/EU views, defect to Fillon. Fillon’s pro-business, socially conservative and pro-Euro stances could resonate with elements of the National Front electoral base. The Dutch populist politician Gert Wilders found that the centre-right Mark Rutte’s hard-line policies on security leached voters away from his own party. Fillon’s own strong positioning on the rising threat posed by Islamic fundamentalism could have a similar role in the French elections.

The other shock scenario is that Le Pen will out-perform expectations, hitting close to or above 30% in the 1st round. The bellwether town of Donzy in Burgundy has a record of accurately reflecting the national vote and informal polling suggests that Le Pen will do considerably better then the national polling suggests in the 1st round.  It is clear in the Bloomberg article that not everybody is comfortable with admitting that they plan to vote for Le Pen, which suggests a potential shy Le Pen vote, in force. One has to wonder if some of the “undecided” voters don’t want to admit to a pollster that they plan to vote for the National Front.

There is some evidence to suggest that this is a real trend. Polling during the US elections which asked voters who they thought their neighbours and friends would vote for was more accurate then the official polling data, suggesting that there was a “shy Trump” force at work which manifested itself on election night, as I predicted before the election. A similar poll recently conducted in France “…asked voters who they believed their friends and neighbours are supporting, and voters revealed Le Pen was their choice.”

A strong performance by Le Pen does not mean she will necessarily win in the sound round. Indeed, the article on Donzy suggests that a Le Pen versus Fillon contest will lead to a narrow Fillon victory. However, a strong performance by Le Pen would electrify the country, the financial markets and provide the National Front with massive momentum going into the second round.

Emmanuel Macron (“Macron”)

The independent centrist Macron is the golden boy of the Parisian elite, the media and the financial markets. It is clear who the bulk of the French establishment would like to see winning on 7th May. However, the French are in a rebellious mood and are deeply unhappy about the economy, security and the state of the country. It is questionable whether Macron, an inexperienced politician, can persuade the French population that he is ready to be head of state.

Polling suggests that around 40% of the Macron vote is undecided whether to vote for him, by the far the softest support of all the leading candidates. There is a real risk that Macron has peaked too soon and will see a fall in his numbers on election night to around 18%, knocking him out of the race.

The alternative is that Macron will do better then expected, with voters signalling a readiness to rally around a centrist, pro-European and reformist candidate after flirting with the radical fringes on the Left and Right.

Jean-Luc Melenchon (“Melenchon”)

The hard-left Melenchon has been a surprise hit during the two presidential debates held and has seen his poll ratings jump to around 18%, just ahead of Fillon. It is clear that the hard-line socialist has the momentum going into the 1st round.

Melenchon is a Euro-sceptic, hostile to globalisation and a “soak the rich” candidate of the Left. The mere possibility that he could get into the second round is causing alarm bells to ring in trading rooms and boardrooms in Paris, London and New York.

I consider the possibility that Melenchon could get into the final two a real possibility assuming he is able to further consolidate the Left vote. The Socialist candidate Benoit Hamon is seeing his poll rating slump as socialist voters get on-board the Melenchon train. The truth is that voting for Hamon is a wasted vote, if you are a socialist, whilst Melenchon now has a realistic chance of getting into the second round.

Should Macron and Fillon both get approximately 20% of the vote, Melenchon could sneak into second place assuming he can get a further fraction of the Socialist party vote in the coming 10 days. A Le Pen versus Melenchon contest would be the ultimate nightmare for the French and European political establishments and would trigger violent upheavals in the financial markets. Whilst I do not consider it likely, it is not improbable, taking into consideration the trends within the polling data.

Conclusion:

We will soon find out who will be the winners of the 1st round and I will publish a Forecasting Intelligence (FI) blog post on the outcome, the implications and whom I think is most likely to win the second round.

Expect the unexpected

Populist politics and the Dutch elections

Le Pen

“All politicians should be populists”

Netherlands Prime Minister Mark Rutte

A leading Dutch politician declares in an open letter to the Dutch population that immigrants who don’t integrate should “act normal or go away”. You, the reader, may think that this is just one more incendiary statement from the populist firebrand politician Gert Wilders, except, your wrong. The open letter was in fact signed by the current centre-right Prime Minister of Netherlands, Mark Rutte, who won the most seats in the elections, held this week.

The media and political elites of Europe, the Pundocracy, have hailed Gert Wilders failure to come first as a defeat of populism. Gert Wilder’s is a highly provocative right-wing populist politician who advocates, in a one page manifesto, the banning of the Koran, the shutting down of mosques and the withdrawal from the European Union (“EU”).  Wilders shows little interest in actually taking power or accepting the inevitable compromises which come from governing a nation. Comparisons between Wilders and Marine Le Pen should thus be treated with caution. Even Le Pen’s harshest critics accept that she is a formidable, charming and intelligent foe with a ruthless hunger for power.

The real story of the Dutch elections was the embracing of nativist, nationalist and populist rhetoric and policies by the centre-right parties, including most notably, the Prime Minister Mark Rutte. The key to Rutte’s electoral success was his hard-line position with Turkey in the days running up to the election which was intrinsically populist and played well with the voters.

What we are actually seeing is the start of the mainstream-isation of populism in centrist politics, which is why populist politicians are struggling, in both the UK and parts of the Continent. UKIP has seen its vote share drop in by-elections since the centre-right governing Conservatives embraced whole chunks of their manifesto, including grammar schools, immigration controls and exiting the EU.

The Telegraph notes that the anti-immigrant parties of the Right now command 45% of the overall vote, almost half of the Dutch electorate. Yet the Netherlands, despite issues with the integration of a growing Muslim minority, has a successful economy, low unemployment and no recent history of jihadi terrorism. If anti-immigrant and populist politics can enjoy such success in the Netherlands, one must wonder how Le Pen will perform in the up-coming presidential elections as the metrics are far worse in France. A series of horrific jihadi terror atrocities, high youth unemployment, a stagnating economy and a deep national malaise provides fertile territory for her goal of becoming the next occupant of the presidential Élysée Palace.

I have written before that the key to the French elections will be how the French “silver vote” swings in the second round. Polls show that Le Pen is equal or ahead in every age bracket, from the ages of 18 to 64, and only falls of a political cliff with the over-65’s, as shown in the FT graphic.

The older French voter still associates Le Pen with the dark days of her fascistic father Jean-Marie Le Pen and a stigma remains regarding voting for the National Front. If Le Pen can persuade sufficient numbers of these grey voters that she is not an extremist, she will likely win the French presidential election, as I have predicted at the beginning of this year.

The conservative Republican candidate Francois Fillon enjoys solid support from the elderly with his traditional social views and hard-line worldview on the perceived growing threat posed by Islamic fundamentalism. Fillon, like his political peers Theresa May and Mark Rutte, belongs to a new breed of European political leaders who have combined populist language and policies despite emerging from the traditional political establishment. One can call them and their voters the “soft populists”.

Should Macron embrace a strongly liberal, open border and pro-immigration/European stance in a Le Pen versus Macron clash in the second round, the question remains whether “soft populist” voters on the centre-right will vote for Macron or go for the “hard populist” option of Le Pen in the absence of Fillon.

Whilst it is certainly plausible that Macron will win the French presidential election, the chances of a shock Le Pen victory is more likely then the political pundits and markets assume, and will have profound implications for Europe if the unthinkable does indeed happen.

Populist politics and the Dutch elections

Götterdämmerung

This article is part of a series of articles on the end of the liberal world order and the emerging post-liberal geopolitics which will replace it. I recommend that readers also read, in conjunction to this article, my post Europe’s coming Campi Flegeri explosion, the global implications of a Trump presidency and winter is coming.  

Berlin, Tagung Warschauer Pakt, Gruppenfoto

“The most important trends shaping the political landscape of our time, to my mind, are the descent of the liberal movement into its final decadence, and the first stirrings of the postliberal politics that is already emerging in its wake.”

John Michael Greer (The Coming of the Postliberal Era)

On 29 May 1987 the pictured leaders of the Warsaw Pact, the Communist military alliance, met to discuss matters of importance within the Soviet bloc. The division of the world into two major blocs had been a permanent feature of geopolitics since the end of the last Gotterdammerung, the fall of the Third Reich in 1945. The possibility that the Soviet world would implode within a few years would have been considered unthinkable by most observers of world politics, including the foreign policy elites of the Western world.

In a few years, when the Berlin wall came crashing down and the Red Army withdrawn from Eastern Europe, these confident leaders of a once mighty military and political bloc would fall from power amid massive street protests. The collapse of the Soviet Union and its external empire was an end of a world order based on the ideology of Communism. Perceptive observers of the Soviet bloc had noticed for years the crumbling of its foundations and there were a number of individuals who successfully predicted the collapse of the Soviet world order. Yet, with hindsight, it is sobering to note that few foresaw the possibility that the Soviet “house of cards” could and did come crashing down.

I consider the liberal world order, based on the free movement of labour, capital and trade within a globalized economic model is now facing its own terminal decline and death. One could write a book on the causes behind the collapse but I would argue that the primary factor, the Limits to Growth megatrend, is driving this collapse even if it is gone largely unnoticed. The peaking of conventional oil supplies and the long-term rise in oil prices, contributed to the financial crisis in 2008 and the “secular stagnation” which has so puzzled economists since then. Hard limits in the resources which powers our economy is incompatible with an economic-financial system which assumes limitless sources of energy will always be available and that physical reality is starting to impact.

The stagnation and decline in real living wages for the bulk of the citizenry of the developed world, which is a direct consequence of our growing resource scarcity predicament, has been a body blow to the authority and power of our governing liberal elites. The political shocks of 2016, the Brexit vote, the election of Donald Trump and the crushing defeat of the “yes” campaign in the Italian referendum, are the belated political reaction in the face of these long-term trends.

A core part of the liberal world order was a belief that nationalism was a thing of the past which would surely fade away as we became ever more globalised in the brave new world of Facebook, cheap flights and Amazon. This has not happened. Raw nationalism is back as a powerful political force as nationalist strongmen come to power across the world. The rise of these Caesar’s is a common pattern in history and is a sign that our own industrial civilisation is in a state of terminal decline, as John Greer wrote recently.

To understand why these charismatic strongmen, and potentially strongwomen, are coming to power one must explore the writings of Arnold Toynbee. I have written before on Toynbee’s civilisation model, with its division of the world into a dominant minority who rule a society, an internal proletariat (the workers) and an external proletariat outside the core regions of the civilisation at that time. The ideology of political liberalism finds its strongest adherents among the elites of society and those who benefit from the status quo, the financially comfortable middle classes, who constitute approximately 20% or more of society. Among the internal proletariat, who constitute the rest of the population, support for liberal values is in progressive decline as their living standards slowly disintegrate.

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This collapse in support for liberal values can be illustrated in the sobering opinion poll commissioned by the prestigious Chatham House institute, the results which are shown above. Majorities across Europe now support a ban on any further migration from mainly Muslim countries, including a remarkable 61% in France, which faces presidential elections in April/May. Currently only the National Front candidate Marine Le Pen has indicated that she could support such a policy. Clearly the internal proletariat’s of Europe are embracing populist, nativist and nationalistic ideologies which pose a huge challenge to our modern dominant minorities.

One response of a dominant minority is to enter into an alliance with the hordes of desperate external proletarians who wish to benefit from residing in the wealthy core of a civilisation. For decades, big business in America has benefited from the work ethic of millions of illegal immigrants who have come across the Mexican border to do jobs ordinary Americans don’t want to do. The election of President Trump, as I predicted in January 2016, was in part to the growing anger of many within the American proletariat to this state of affairs.

The German liberal elites, led by Angela Merkel, made a deliberate decision in 2015 to let in over a million predominately Muslim migrants from the non-European world into Germany. As this German article notes, the German government is aware of Germany’s low birth rate and the need to find new workers as its own internal proletariat shrinks in size. Or, to use Toynbee’s language, the German dominant minority have imported over a million external proletariat’s to in effect replace and supplant a declining internal proletariat which is increasingly hitting retirement.

The liberal world order, already in a profound crisis with the election of a neo-isolationist and nationalist President Trump, is unlikely to survive in the face of the defection of their internal proletariat’s to the new post-liberal ideology of populist nationalism. Opinion polls show that the majority of Americans back the Trump administration’s hard-line immigration policy and crackdown on illegal immigration, despite the howls of outrage from the liberal elites. It is also noteworthy that sixty-five percent of Americans reacted positively to the “America First” message in President Trump’s inauguration speech. The truth is that whatever individual voters views on the man himself, majorities back Trumpism and reject the foundations of the liberal world order.

Should Europe join America in rejecting the key tenets of liberalism, including free trade and relatively open border migration policies, the liberal order would go down a similar path to the lost world of Soviet Communism. I consider this very likely in the years ahead. Future historians may look back at the gatherings of our current Western liberal leaders in the same way that we react to pictures of those stony faced Communist leaders in the eighties before they were swept away by the forces of history.

Götterdämmerung

Europe’s coming Campi Flegrei explosion

civilization-collapse

‘In creating barbarian war-bands the external proletariat has merely prepared itself for a destructive attack upon the dying civilisation.’

‘Ancient civilisations were destroyed by imported barbarians; we breed our own’

Arnold J Toynbee “A Study of History Part 1”

Scientists have discovered that the Campi Fegrei caldera, off Italy, is heating up again. Over 30,000 years ago, the caldera erupted and spewed almost a trillion gallons of molten rock in the atmosphere, in the process setting of a “volcanic winter” which contributed to the wiping out of the Neanderthals.

Europe is geopolitically and literally sitting on a volcano and we are getting closer to the point when one of the core regions of a declining industrial civilisation disintegrates politically, economically and socially. The election of President Trump marks a sea change in the globalised liberal world order which was already struggling under the impact of the post-Lehman Great Recession, the long-term rise of resource prices, driven by limits to growth, and an increasingly rebellious populace angry about a perceived loss of cultural identity, economic stagnation and rising jihadi terrorism.

Europe has enjoyed a long summer under the benign protection of the US military which has meant that most European nations have been able to effectively opt-out of paying for their own defence. The post-Cold War “peace dividend” has allowed the European political class to focus on that ultimate grand liberal project, the European Union (“EU”), and its ever further integration. That world is now dying.

President Trump, in his inaugural speech, outlined an “American First” manifesto which has horrified the European political class. In it, President Trump articulated a return to neo-isolationism and an end to the certainties of a post-Cold, and indeed, the post WW2 era. Although Prime Minister Theresa May managed to get a grudging confirmation from the president that America is still committed to NATO, it is clearly on the condition that European allies will commit to the minimum 2% defence spending.

I am sceptical whether this will actually happen if the price is further cuts in welfare spending which will be deeply unpopular among continental electorates. It is therefore only a matter of time before President Trump effectively pulls the plug on America’s security commitments to the European continent. A Trump America may form bilateral military protection agreements with traditionally pro-American states like Poland and the Baltic states. However, this will be on the condition that these countries contribute far more to their own defence spending.

The EU itself can be considered a classic case of “sophisticated state failure”, with a Byzantine governance model which even the experts struggle to understand. The Ostrich type position of the Brussels establishment since the Brexit vote in June 2016 is an example of how the European political class is increasingly incapable of thinking creatively on how to restructure the EU.

A creative and bold European leadership would advocate a reformed union with a new class of membership, involving a repatriation of powers back to the member-state, for those countries historically more sceptical of European integration. A re-think on the principle of freedom of movement, internal border controls and a much tougher external border policy on economic migrants from the troubled Middle East and North Africa (“MENA”) region, along the lines of the Australian model, would also be significant moves in shoring up support for the project.  As you may have noticed, none of this has happened, to date.

The eurozone itself remains a half botched job with a monetary union without a corresponding fiscal or political union. The single market is in deep trouble as “temporary” border controls pop up around the Continent due to the security threats posed by jihadi terrorists and massive refugee flows from the MENA zone of disorder. Warnings from leading experts that the eurozone is a “house of cards” which could collapse soon are multiplying, reflecting the growing levels of alarm within elite European circles.

My conclusion therefore remains that the eurozone is likely to collapse within the next 5 years, as noted in my post “winter is coming”, and that the migration crisis will accelerate the collapse of the EU itself in the coming decades. The trigger for the coming collapse will be the rise to power of governments with a mandate to withdraw from the eurozone and even the EU itself on the Continent. I have predicted that this could happen as soon as this year, with the up-coming elections in the Netherlands, France and potentially even Italy and Austria.

The migration crisis which has hammered the Continent since the summer of 2015 should be understood within the broader historical context of a declining civilisation. Arnold Toynbee, a little known figure these days, wrote a 12 volume universal history comparing the rise and fall of 19 civilisations. His aim was to see, in this long cyclical story of the rise and fall of successive civilisations, whether common patterns could be discerned.

Toynbee argues that civilizations break down when there is deterioration within the social order, an inability to respond to challenges, and a subsequent loss of that self-determination that had once impelled growth, instead of variety and versatility there is deadening uniformity and uninventiveness. A disintegrating society breaks up into a dominant minority, and internal proletariat, and an external proletariat (barbarian warrior bands).

A dominant minority is the elites of society, the rich and powerful, who run the civilisation but who have lost the respect and authority in the eyes of the rest of the population, the internal proletariat. The Brexit vote occurred despite the fact that the majority of the academic, cultural, political and economic elites of Great Britain advocated for a Remain vote. A majority of the internal proletariat decided that their interests were better off out of the EU. This is a good example of Toynbee’s theory in action. The internal proletariat have lost respect for the judgements, wisdom and “expertise” of the elites and voted accordingly.

The external proletariat is the mass of the population who physically reside beyond the core zones of the civilisation of that time. The fearsome barbarian warrior tribes of the steppes were the external proletariat of the Roman Empire, which the Roman legions kept out, for centuries. Eventually the Roman Empire imploded and these warrior bands, led by charismatic strongmen, plundered, raped and murdered their way around the once wealthy Roman Empire.

In our industrial civilisation, the external proletariat is the mass of the world population who live beyond the core zones of North America, Europe, Russia, Australasia, and parts of south-east Asia. We call this the developing world where a small minority (their own dominant minority) lead a luxuriant lifestyle amidst a sea of poverty.  The eruption of the migration crisis is a sign that as the MENA region disintegrates into state failure and lawlessness, the fit young men of the external proletariat, will risk their lives to get to the security and perceived economic opportunity of the West.

It is important to note that just as the bulk of the “barbarians” who were initially allowed to settle in the twilight years of the Roman Empire had no intention of destroying the Roman world, the vast majority of the predominately Muslim migrants pouring into Europe only wish to enjoy the fruits of European prosperity. In an era of economic decline and worsening resource scarcity, the migrants will form part of a growing urban underclass, with little prospects of bettering themselves through legitimate ways. This is illustrated by the fact that approximately 99% of the German migrants are still unemployed.

The rise of Islamist and violent jihadi ideology among the Muslim populations of Europe is a sinister warning that as Toynbee warned, we are breeding our own barbarians. The thousands of trained jihadi terrorists across the Continent are being joined by ever further waves of radicalised Muslim migrants, creating a growing security nightmare for the European authorities.

The terrorists/barbarian warrior bands are already within the cities of the European heartland of our industrial civilisation and their numbers are growing. If history is any guide, we will see ever bigger waves of determined migrants forcing their way into Europe, as the MENA region faces water scarcity, food and energy shortages and protracted state failures across the region. A small but significant number of these migrants will start plundering, raping and murdering Europeans as Attila the Hun and his warriors did to the ancient Roman citizens. The Cologne sex attacks on New Years Eve, the wave of migrant crime in Paris and the horrific suicide bomb attacks in Brussels are an early sign of that grim future.

Should the European elites fail to get a handle on the growing security threats facing the continent and the significant flows of migrants from the external proletariat into the ranks of the pan-European urban underclass, than violence, social disorder and even civil war could erupt. This is the worst case scenario.

The alternative scenario, which I consider more likely, is that starting from 2017 countries across Western Europe will start electing populist and nationalistic political forces to power. These conservative and populist politicians will have a mandate from their internal proletariat to restore sovereignty, border controls and end the creeping Islamification of their societies. This will involve brutal measures, including the shutting down of mosques, deportation of Islamist extremists and refugees and potentially even the mass deportation of non-assimilated Muslim populations. The former conservative German Chancellor Helmut Kohl wished to deport half the Turkish Muslim population from Germany, declassified documents, now reveal. It is not inconceivable that similar conversations are on-going within security, military and political circles within Europe.

Fortress Europe, led by a club of sovereign states, will shut the borders and prevent, if needs be by force, the mass migrations of the external proletariat into the European continent. These political forces, who will be the new European establishment, will align themselves with the bulwark of traditionalism, the Russian Federation, under the de facto Tsar Putin. Russian influence in a post-eurozone and probable post-EU Europe will grow as America withdraws into isolationism and Russian gas, oil and coal become the main energy sources of an energy starved Europe.

The future of Europe largely depends on the electoral choices of the European people over the coming decade. The current liberal elite who run Western Europe are wedded to a set of policies that have failed and are causing more problems than they are solving. As Paul Arbair notes in his essay on Brexit, “The growing popular revolts against globalisation, the EU, or multiculturalism are signs that our societies are already struggling to uphold their level of complexity and are subject to strong forces that are pulling towards a break down to a lower complexity level i.e. localised economies, national governance, homogeneous societies, etc”. The rise of populism can thus be seen as a reaction against a failed system that is now in a systemic crisis and showing growing signs of collapse.

To conclude, Europe faces profound challenges as we enter into the twilight era of industrial civilisation. The drum beats of the barbarian war-lords can already be heard in European cities, the nativist warrior bands are stocking up their arsenals and millions of the external proletariat are planning to pour into Europe.

A certain degree of social disorder and violence is inevitable but how much and on what scale remains to be seen and will depend on how European politics changes in the coming decade.

Europe’s coming Campi Flegrei explosion

Guest post: Washington: You’re fired

Forecasting Intelligence welcomes back the political journalist who predicted Trump’s victory in his popular post Hilary Clinton and the alligator. Here is his personal take on what to expect as Donald Trump prepares to become the next president of the United States.

This Friday, 20th January 2017 will go down in history as the day that the man who shed the USA of huge swathes of its unwanted and ineffective autocracy, the Washington deadwood, took office.

I’m certain that Donald’s celebrated catchphrase from the Apprentice, ‘you’re fired’, has massively contributed to his successful run to become the next POTUSA.

Washington, prepare to be fired. And you deserve it.

There has been quite frankly too much self-interest, horse-trading and wastage going on in Washington for years and the electorate, who are far smarter than the so-called elites could ever bring themselves to believe, know it.

Telling Lockheed Martin and Boeing to come back to the table with much better deals for their bloated F-35 and Air Force One projects was just the start. And Trump isn’t even the president yet.

The appointment of Donald Trump’s cabinet has caused some consternation as he has surrounded himself with hard nose billionaire businessmen, generals and litigators.

I view it as being a bit like a sheriff or an outlaw, if you like, finding the roughest, toughest men in the village in order to pull off the hardest job they have ever faced.

Overturning the Washington special interests, lobbyists and cosy contracts is going to be a gargantuan task and Trump is going to need a rock solid team around him to do it.

Their opponents will include people like the CIA who make a living based on outdated diplomatic attitudes residual from the Cold War, which will be permanently displaced as Trump forges a new thawing of Russo-American relations.

They will not be shifted easily, but they and plenty other’s self-interest and archaic attitudes are damaging the USA and will ultimately bring down the country unless they are removed.

Trump would be wise to fear for his life in the face of such powerful adversaries.

But he is seen by the American people as a man who is ultimately hard but fair and can fix their country. It all starts by draining the swamp – the rallying cry towards the end of his barnstorming presidential campaign.

Donald Trump has his work cut out achieving this but his energy levels are incredible, his work ethic second-to-none and his passion to succeed never-ending. And he is a patriot.

Those in Washington who are not pulling their weight or hurting America will soon find themselves on the wrong end of the Donald.

And will soon be told: ‘You’re fired’.

Guest post: Washington: You’re fired

My predictions for 2017

Reading the annual forecasting jamboree of the media and political elites (the “Pundocracy”) is an illuminating exposure to the worldview of our contemporary Dominant Minority. A common theme is bewilderment about the events of 2016 and a sense that the normal “rules of the game” have been shattered by the victories of Brexit and Trump.

Various reasons have been given for this inexplicable shift from the status quo, ranging from nefarious Russian hacking, the rise of so-called “fake news” media or an up-surge of racist and xenophobic attitudes among sections of the electorate. For a perceptive minority of commentators, there is a dawning understanding that the globalised economic system is under threat by a growing army of economic “losers”, across the developed world.

Those who have read my “winter is coming” post will understand that powerful structural forces, including accelerating climatic change, the peaking of global conventional oil supplies and growing resource and water scarcity around the world are a mega-trend which will shatter the current business-as-usual model over the coming decades. Coupled with the huge levels of debt in the global financial system, the sovereign bond super-bubble and the long-term stagnation of wages across the developed world, it is therefore not surprising that there are growing warnings about the longevity of our globalised liberal world order.

It is in this broader context that I have prepared a series of probabilistic forecasts that I think are likely to occur in 2017. I have tried to make the forecasts as specific as possible and have focused on European politics as this may prove a “game-changing” year for the future of the euro zone and the European Union (“EU”) itself.

Please note that these forecasts will expire on 31 December 2017.

  • Marine Le Pen will succeed in getting into the second round and go on to win the presidential election in May (60% probabilistic chance)

Assuming the opinion polls are correct, it is likely that Marine Le Pen of the National Front  (“NF”) will succeed in mobilising sufficient support to get into the second round of the presidential elections and should face Francois Fillon of the centre-right conservatives in a second round contest.

There is a risk that Le Pen will be edged out in the first round by tactical left-wing voters and for this reason, along with the polling lag against potential opponents in the second round, I have placed only a 60% probabilistic chance of my forecast coming true.

However, assuming Le Pen passes the first round, the NF leader will most likely go on to narrowly win on the back of a huge surge of support from an increasingly angry army of unemployed youth, the blue-collar industrial working class along with a broad coalition of the middle classes. This will include a middle class “shy Le Pen” vote and the conversion of a section of the nominally leftist public sector workforce on a traditionally socialist and anti-austerity message which promises to protect the bloated public sector from reform and mass redundancies.

The majority of the French populace fear the impact of economic globalisation and therefore will struggle, when the moment comes, to vote for the economically Thatcherite and socially conservative policies of Fillon, which is politically toxic to left-wing voters. Le Pen is very different to her fascistic father and it is likely that her brand of nationalistic, populist and statist politics will resonate with broad layers of the French electorate.

According to Bloomberg, 51% of the French electorate consider security their top priority, hardly surprising considering the wave of jihadi terror attacks that have afflicted the nation over the past few years. Mainstream parties have shifted to the hard-right on security issues and adopted policies once exclusively owned by the NF. Le Pen is a clever, charismatic and forceful political figure who will likely persuade a narrow majority of the French electorate that only she can crush the growing jihadi threat once and for all.

To summarise, I consider it likely that Le Pen should manage to get through to the second round, and if so, has a good chance of defeating her opponent on a platform of using the power of the French state to protect the populace from the impact of economic globalisation and crush the threat from Islamic fundamentalism.

  • Geert Wilders of the Party of Freedom will become the biggest party in the March elections in Netherlands (75% probabilistic chance)

Geert Wilders of the Party of Freedom will become the biggest party in the March elections, leading to either political paralysis, becoming part of a coalition government in some capacity or the formation of an anti-Wilders coalition of the other parties.

The growing threat of Wilders to the political establishment has familiar themes to the rise of Donald Trump and the shock victory of the Leave campaign during the Brexit referendum. It may be the case that the centrist parties will succeed in locking out the populists from power this year but it is probably only a matter of time before Wilders ends up in power in the Netherlands.

  • The Alternative for Germany (“Afd”) will narrowly beat the Social Democrats into second place in the federal elections (70% probabilistic chance)

The German federal elections, due in the autumn, will see the populist, anti-immigrant and anti-establishment party the Afd narrowly defeat the centre-left Social Democrats into second place with approximately 20% of the vote. Angela Merkel is struggling to unite her political base in readiness for running for a fourth term and it is a possibility that she may withdraw from politics should she fail to develop a common consensus on migration and security issues.

However, assuming that the Pundocracy is correct and Merkel does succeed in getting the conservatives behind her re-election bid, I expect that Merkel will get re-elected but will be an increasingly lame duck leader due to  the rising power of right-wing populism in Germany.

  • At least one major West European country will elect an anti-Euro government into power (65% probabilistic chance)

At least one major West European country will elect an anti-Euro government into power (most likely candidates France or Italy if the latter has elections this year) which will cause a deepening political crisis in the euro zone.

I have written before on the internal contradictions which have beset the euro zone since its inception in 1999. The original sin of the founders of the euro was the failure to create structures of political and fiscal union across the currency zone and this has ensured that the experiment has lurched from one crisis to another since the Great Recession of 2008/09. European polling reflects a steady and systemic collapse in faith in European institutions, the political leadership and the common currency and at some point these trends will culminate in an anti-euro movement sweeping to power in at least one euro zone member state.

  • Deputy Crown Prince Mohammed Bin Salman of the House of Saud will be removed in a palace coup (55% probabilistic chance)

Deputy Crown Prince Mohammed Bin Salman (“MBS”), the leading figure in the Saudi Arabian royal family, has led a bold economic reform agenda which includes a public austerity drive, the proposed selling of a portion of the giant state oil company Saudi Aramco and challenging the traditional social contract with the Saudi populace. Whilst it may be the case that the reforms are sensible and long overdue, in a country with no political democracy, the risks of a public backlash are high.

MBS has also led the way in pushing for a more aggressive foreign policy and has been the public face of the controversial and costly Yemen war against the Shia rebels. Growing concern within royal family circles and the entrenched hostility among the powerful clerical establishment could lead to MBS being removed from power in 2017. There is even a wild card possibility of civil unrest from disgruntled members of the Saudi population which will aggravate a sensitive and dangerous moment for the Saudi Kingdom.

  • The sanctions regime against Russia will be eased or ended by President Trump by the end of the year (80% probabilistic chance)

Donald Trump has consistently said that it is in the best interests of America to work with President Putin in areas of mutual interest, in particular, the crushing of ISIS in the Middle East. I therefore consider it very likely that Trump and Putin will meet and arrange a grand strategic reset over the status of Crimea, coordinated military action over ISIS, spheres of influence in borderlands of Eastern Europe and the phasing out of the economic sanctions regime imposed on the Russian Federation by Europe and America.

Trump and his inner circle of advisers consider China the main strategic threat to American interests and wish to align Russia in a global anti-Chinese alliance. There will be entrenched institutional resistance to such a rapprochement from factions within the intelligence and military establishment and I would expect to see a number of high-level resignations from the upper echelons of the CIA as Trump forces through a radical shift in America’s foreign policy.

My predictions for 2017