FI Update – tottering pillars

“… (Merkel) sees the pillars of the world order teetering everywhere.”

Spiegel Online – “Merkel’s Dark View of the World We Live In”

“…Germany pays 1% (slowly) of GDP towards NATO, while we pay 4% of a MUCH larger GDP. Does anybody believe that makes sense? We protect Europe (which is good) at great financial loss, and then get unfairly clobbered on Trade. Change is coming!”

Trump tweet (10th June 2018)

Agrige21

romeartlover

 

During the final weeks of the 2016 presidential election campaign, I wrote a widely circulated blog post on how a President Trump would accelerate the disintegration of the post-war neoliberal world order.

The fiasco at the annual G7 summit of the major Western nations was a key moment when a horrified European political and security establishment woke up to this strategic reality. The imposition of tariffs against China by the Americans is just one sign that President Trump is deadly serious about ending the liberal globalised economic order using the leverage of American military, economic and monetary (dollar) power. Anybody who followed the Trump campaign closely, listened to his speeches or reads his tweets should not be surprised by these developments.

I intend to provide a short macro news update on a number of geopolitical fronts bubbling around the world.

Immigration:

The election of a populist, Eurosceptic and anti-immigrant government, formed by the hard-right strongman Matteo Salvini and the alt-left leader Luigi Di Maio, has already triggered a major crisis within the EU. The refusal to let a ship carrying 600 illegal migrants from Africa to disembark at Italian ports has led to a major crisis. In the end the new left-wing Spanish government agreed to let the migrants in.

Public polls show that 80% of Italians support the hard-line position of the new government, showing that the vast majority of Italians have had enough of the mass migration of migrants from the MENA region over the last two years.

The French President Macron condemned the actions of the Italian government, yet, his security forces have prevented African migrants from crossing the French border. Nearly three quarters of the French public, according to a recent poll, think that the nation could not cope with another wave of third world migration. Popular hostility will prevent President Macron from opening up French ports to further migrant boats, when the Italian Interior Minister Salvini stops the next boats heading to Italy.  If Macron does go against French public opinion, the political backlash will be fierce.

Angela Merkel is currently facing a major crisis in Germany over refugees, with her sister party the CSU demanding that refugees who have already registered in an EU country be rejected at the border. Whatever happens in the next week or so, and it is more likely then not that a compromise will be cobbled together, Merkel’s influence as a player is waning within the EU. Merkel understands that the world order is facing severe stresses but lacks the strategic vision to adapt to the changing times.

In my 2017 post Gotterdammerung, I wrote how the ideology of political liberalism was being replaced by a new populist consensus which rejected the permanent flow of migrants from the impoverished Third World. The recent Italian and Slovakian elections, where hard-line anti-refugee leaders came to power, just adds to the growing tally of populist governments across Europe. 2018 is increasingly looking like the year that the tide turned, finally, against the pro-migration consensus within the EU.

NATO:

In my 2016 post on the impact of a Trump presidency, I discussed how Trump may move to dissolve the NATO security alliance and how Europe would be pressured to start paying for its own defence. The disastrous G7 summit has shattered any remaining illusions among the European political class that business as usual would continue under a Trump presidency.

A rather entertaining Spectator article last week noted how Whitehall was in a state of panic about how Trump will perform at the next NATO summit. According to the Spectator, “…privately, ministers are in a panic and running out of options.” Without major commitments from European nations, in particular Germany, in the next few weeks to reach the minimum 2% spending on defence, a major clash is looming.

Based on Trump’s own tweets, his aggressive speech to his fellow NATO leaders last year and his long record of hostility to European “free-loaders”, I expect the NATO summit, due on 11th and 12th July, to be explosive. President Trump is likely to impose a final ultimatum on the Europeans, demanding within a certain timeframe that all NATO members comply with the 2% GDP spending on defence, otherwise America will withdraw from NATO or to that effect.

Brexit:

The recent votes within the UK Parliament on the Brexit bill hasn’t fundamentally changed my final forecast that Britain will end up with a semi-soft Brexit by the end of 2020. This will disappoint hard-line Brexiteers who favoured a hard/clean Brexit that allowed the UK a free hand to negotiate trade deals with the rest of the world. Hard-core Remainers, will be upset that Britain has still left the EU.

I suspect that the majority of the British electorate, who will be tired of the entire saga by the end of 2020, will be reasonably content with a semi-soft deal that brings back control over borders, provides greater freedom on regulations and laws for services but provides a frictionless trade for goods within the custom union or it’s equivalent.

It is likely that the final deal, will also involve association agreements on security, defence and other areas of mutual interest. 80% of NATO military spending, post-Brexit will be by member-states outside of the EU, making the UK a major force in military and intelligence matters. Should President Trump threaten to withdraw the American security umbrella to Europe, panic will break out and will strengthen those voices within the EU27 that want an amicable divorce with Great Britain.

Trade:

It is looking increasingly likely that Trump, will either this year or in 2019, impose 25% tariffs on foreign cars imported into America. This will primarily be aimed at the mighty German car industry and it is already causing fear and panic within Germany. The two biggest markets for German automobile companies are the US and UK, both of which are at risk due to potential tariffs and Brexit.

With German car industry facing a growing scandal over cheating diesel emissions, the risks of a meltdown of the car industry by the end of this decade is a serious danger. If Trump’s tariffs look inevitable, the domestic pressure to get a frictionless Brexit deal with the UK will become stronger.

The bigger picture is that the cycle of trade tariffs and counter-tariffs has begun between the major trading blocs (America, EU and China) and it will slowly unravel the process of globalisation over the past thirty years. Of course, a major trigger could accelerate this de-globalisation trend, one of which I will discuss next.

Global pandemic:

The World Health Organisation (WHO) has recently warned that a new strain of bird flu is the most likely candidate for a global pandemic that could potentially kill millions of people. The WHO “…has dubbed “disease X” – a newly emerging pathogen that could prove as destructive as the 1918 Spanish flu which killed between 50 and 100m people a century ago.” I haven’t covered this area much in FI, but the risks of a major pandemic occurring is considerably higher then the average citizen realises. John Greer has written in his books on the decline and fall of industrial civilisation that public healthcare systems will crumble as resources decline, public services are cut and states go bankrupt in the decades to come.

In this environment of a collapsing industrial healthcare system, the chances of a pandemic succeeding in going viral and killing millions is increasingly likely in the decades ahead. It is impossible to make a precise prediction on a pandemic, but the chances of a major global pandemic ravaging the world in the next decade is a reasonable one and it would shatter the just-in-time globalised economy. The film Contagion brilliantly shows how a modern industrial society effectively locks down in the event of a major pandemic.

The limits to growth business-as-usual model, which I reviewed in my 2016 post “winter is coming”, forecasted a global drop in population around the year 2030. As we are broadly tracking that model, the reader must take into consideration that by the early 2030’s, an imploding industrial world face the nightmare of pandemics, resource shortages and massive migration waves from a dying Middle East.

I am still writing my blog post on the disruptive potential of technology within the context of the Limits to Growth megatrend (climate change, resource, water, food and energy scarcity) and will aim to get that published next month.

If you enjoy the posts and wish to read them when they are published, please feel free to add your email at the bottom of the blog.

FI Update – tottering pillars

Book review of In the Shadows of the American Century by Alfred W. McCoy

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http://www.nyjournalofbooks.com

 

“Available economic, educational and technological changes indicates that, when it comes to global power, negative trends are likely to aggregate rapidly by 2020 and could reach no later then 2030. The American Century, proclaimed so triumphantly at the start of World War II, may already be battered and fading by 2025 and, except for the finger pointing, could be over by 2030”

Alfred W. McCoy

 

The acclaimed US historian Alfred W. McCoy (AWM) has written a powerful chronicle of the rise, triumph and impending fall of Pax Americana. Many of the trends covered will be familiar to those who read Forecasting Intelligence (FI) or who have come across the writings of the American writer John Michael Greer. These include the erosion of American economic power, the decay of a once vibrant American civic and democratic culture, the disastrous post-9/11 military wars in the Middle East and the vulnerabilities of a hi-tech military to asymmetrical attack by the rising powers of the East.

The central thesis of the book is that as China replaces America as the world’s largest economy, the US governing elite will increasingly rely on their residual intelligence and military capabilities to maintain their edge into the 21st century. The author considers the mighty American military vulnerable to space and cyber-attack which will deepen once Beijing covers the world with a fully operational global satellite system with quantum-based communications by 2020. China’s quantum-based satellite system is far more secure then the American reliance on compromised radio waves and will provide the Chinese with the opportunity to severely disrupt American military communications in the event of a future war.

Once this satellite system is in place in the ether, Beijing will be able to launch, in the future, space, cyber and air attacks with the goal of “blinding” the US military. This is precisely what Greer outlined in his fictional near-future novel called Twilights Last Gleaming which I reviewed here.

Whilst a military clash is a likely future trigger for the end of the American empire, AWM also discusses how accelerating climate change will devastate US coastal cities, cause mega-droughts in the south-west and mid-west and lead to mass migrations from a disintegrating central Americas by the 2040’s. The multi-trillion costs of repairing and mitigating the chaos caused will inevitably lead to a pull back from military commitments overseas.

It is interesting to note that AWM writes, in the climate change scenario, that by 2040, the chaos caused will lead to “… millions of refugees trudging out of the dry zone across North Africa and the Middle East towards a well-watered Europe”. The majority of these refugees will be Muslim and the spectre of a mega-migrations into Europe within the next few decades could trigger the end of much of Europe as we know it today. I have discussed this in my recent post Islamic Volkerwanderung.

The growing fiscal costs to be borne by climate related impacts is an additional burden on the gigantic and growing US debt burden, currently over $21 trillion and rising by the second. Escalating costs of entitlement programmes like social security and Medicare to cater to an ageing population will soar by 2030. According to current trends, social welfare costs will climb from 4% of GDP in 2010 to 18% by 2050, with pressures escalating sharply from 2020 onwards as the baby boomer generation starts retiring in their millions. Some kind of fiscal crisis is highly likely within the next decade and a retrenchment from the huge costs of maintaining the US empire abroad is inevitable.

AWM concludes by stating that by the end of 2030, the American empire will be over. What will replace it will be a post-American world of regional great powers in which China will be first amongst equals thanks to its huge economy and formidable military assets. Brasilia will dominate South America, a reduced Washington D.C. will dominate North America, Moscow – Eastern Europe, Istanbul – Middle East, Beijing – East Asia and South-East Asia and Pretoria – southern Africa.

Where I partially disagree with AWM is his views of President Trump’s “America First” domestic and foreign policy agenda. AWM is clearly an admirer of the Obama Administration and the so-called “pivot to the East” in terms of global trade and military redeployments. An entire chapter of the book is devoted to Obama’s promotion of the now rejected Trans-Pacific Trade Partnership (TPP), which would have isolated economically China within the region by developing a Pacific orientated free trade pact incorporating America’s key allies.

AWM rather blithely, in my opinion, notes that hundreds of thousands of Rust Belt workers would have lost their jobs if the TPP had been passed. The cost to America’s beleaguered industrial base would have been even worse, sharpening divisions between the Red and Blue states and weakening America’s ability to maintain industrial production in the event of a future war against China. The pro-globalisation policies of the Obama/Clinton camp would have fatally crippled America as it entered the next decade. The Trump Administration is attempting to reverse these trends, restore the once mighty industrial base where “Made in America” was a common and proud sign.

President Trump’s bravado hides a sophisticated vision of a partial withdrawal of US military personnel and bases from the imploding Greater Middle East and the free loading allies in Europe, South Korea and Japan. Right now, a staged retreat from the unsustainable business of empire and the deft handling of the rising powers, including driving a wedge between Moscow and Beijing, is the best bet in ensuring the “soft landing” the author writes off in his final chapter.

Whether President Trump can achieve this remains to be seen…

Book review of In the Shadows of the American Century by Alfred W. McCoy

Wind of change

1043442057

Sputnik international

 

“If Trump is serious and brings about the end of the late and lamentable era of globalization, the economic shockwaves will be considerable, and a great deal of wealth is going to redistribute itself.”

John Michael Greer (Ecosophia)

 

“The wind of change is blowing through this continent. Whether we like it or not, this growth of national consciousness is a political fact.”

British Prime Minister Harold Macmillan  

 

In 1960 the then British Prime Minister, Harold Macmillan, made a famous speech to the South African parliament warning of a wind of change sweeping the African continent as independence movements swept to power from the old colonial empires. It was one of those watershed moments in world history which couldn’t be stopped as the South African apartheid regime eventually realised in the 1980’s.

My view is that we are living through a similar era of massive change, driven in part by the disruptive forces of man-made climate change, worsening resource scarcity and a global debt super-cycle which nearly destroyed the financial system in 2008. The election of President Trump, something I predicted, was a critical moment in accelerating the process of collapse of the liberal international order.

This post will be a review of where we are on Brexit, the Trump presidency and global situation and where I see things going over the rest of this decade.

The Brexit vote was the first major tremor against the established political and economic status quo which so benefited the privileged classes of the developed world. Whilst the lower socio-economic classes experienced stagnating wages, driven in part by mass migration from within and outside the European Union (EU) the privileged classes benefited from higher housing prices, cheaper imported labour including nannies, plumbers and so on as a huge influx of hard working migrants drove down the costs of goods and services. The Leave vote was the moment a majority of the British population decided enough was enough.

One of the reasons the British have never had a violent revolution for the past few centuries is that it’s ruling elite have had the common sense to adapt rather than resist pressure from below. The decision by both the main parties, Labour and Conservative, to campaign to leave the single market underscores this shared recognition that being able to control immigration flows from the EU was a pressing concern for many British voters.

The Corbyn electoral surge in the May general election last year was also a rebellion against the establishment and the current way our economy is organised. For significant parts of the electorate, Jeremy Corbyn message of economic radicalism offered hope that some of the wealth accrued by the big corporations and the wealthy would be redistributed to the bottom 80% of the population. For those Brits who reside in the grim world of zero-hour contracts, Orwellian warehouses and high personal debt, capitalism holds no benefits to them. For those readers who think I am exaggerating I recommend that they read this review in the conservative Spectator magazine on how the other half live in modern Britain.

My central massage is that the Brexit and Corbyn political breakthroughs are two sides of the same coin, that is, the overwhelming desire for change in the current political and economic structure from the majority of the population. And this is happening across the developed world.

The recent elections in Italy have seen a massive surge in support for the populist parties of the Five Star Movement and the Lega gaining over half the vote. We will see if my prediction, at the beginning of the year, that the centre-right parties will be able to form a coalition government comes to pass but the scale of the anti-establishment vote shook the Italian and European political classes.

What was particularly striking was that 75% of young Italians voted for populist parties. Not surprising considering they are the “lost generation” coming to adulthood in an era of economic depression, mass unemployment and a failed euro experiment. As Ambrose Evans Pritchard notes in his article, this populist uprising will likely lead to an Italian government defying the EU on fiscal rules, banking codes, and migrant policies. Change is coming to the eurozone.

The rebellion in Italy, the rise of the nationalist AfD within Germany (which I explored last year) and the slow death of President Macron’s ambitious eurozone reform agenda all point to a softer Brexit outcome by March 2019. It is overwhelmingly in the economic self-interest of the major EU powers for an amicable divorce settlement with Great Britain. I concur with the forecast by the German investment bank Berenberg, who have predicted a “semi-soft Brexit” outcome.

What on earth is a semi-soft Brexit? To quote the bank, “the UK stays close enough to EU rules for many goods and some services to avoid a hard border in Ireland. UK remainers could support a deal that keeps the UK partly aligned with the EU while the Brexiteers could back such an agreement as it would offer the UK some room to pursue its non-EU ambitions. The UK and the EU could probably find a solution the Irish question – possibly a bespoke customs arrangement.” The recent proposals by the European parliament for a broader association agreement between the EU and the UK points to the same semi-soft outcome.

The British political class will be engrossed in the Brexit negotiations going into the end of this decade and much could happen, including a fall of the May government or early elections that could upend the current status quo. It is for this reason alone that it is too early to make a definite forecast on the likely outcome of the next general election, due by 2022.

However, assuming that an eventual semi-soft Brexit outcome is finalised by December 2020 (the end of the transition period) under the current government, it is likely that Prime Minister Theresa May will stand down shortly afterwards, to pave the way for a new leader to make their mark before returning to the country. The only Conservative politician who could transform the Tory party’s prospects is the Scottish leader Ruth Davidson who seems most in touch with the “struggling middle” who will be key to the general election. If she becomes the next female and first lesbian prime minister in a post-Brexit Britain, the Tories have a fighting chance to remain in power for a third term in office. If not, it looks more likely then not that Jeremy Corbyn’s Labour party will win the election.

I predicted at the beginning of the year that President Trump’s Republican party will remain in control of the House and Senate during the mid-term elections in November 2018. I stand by that prediction.

President Trump’s recent announcements on steel and aluminium trade tariffs has led to a howl of outrage from free traders but has been massively popular in the country. According to one poll, “about 83 percent of Americans said they supported Trump’s effort to level the playing field on foreign trade”. Trade tariffs can be a potent weapon in shielding American manufacturing from overseas imports and helping rebuild the Rust Belt industrial base across the flyover states which are key to re-election in 2020.

A recent poll published by Rasmussen illustrates the massive shift in public opinion within America on the issue of globalisation. When asked if it is “more important to keep manufacturing jobs in the United States or to keep prices low for American consumers,” a dominant 68% said it’s more important to keep manufacturing jobs in the U.S. Folks, this is a game-changer.

To put it simply, the majority of Americans support an economically nationalist tariff oriented economic strategy geared to the re-building of America’s manufacturing economy. As Greer notes in the quotation at the top of this post, if Trump goes through with his agenda, it will be the end of globalisation itself.

Whether or not the Orange Caesar carries through with his threat to impose tariffs across a range of industries, including cars, it is already causing tremors within Europe and beyond. An entire generational business model is under threat and already, German car manufacturers are panicking at the prospect of being priced out of their top two markets, the UK and America. My own view is that it is likely that an increasingly confident President Trump will impose his economic and foreign policy vision over the next two years, resulting in a likely re-election of President Trump in November 2020.

The global markets are entering the late cycle of the bull market which historically favours commodity related stocks, including oil and gold. It is for this reason I continue to think that oil will rise to 80 dollars this year which will be one facet within a rising commodity super cycle over the next couple of years.

In regards to the crypto market, it is likely that we will see continued volatility within this market over the two months before a major rise in prices from May onwards as institutional investors start to pour trillions into the new market. By the end of the year, investors will likely be kicking themselves that they didn’t take advantage of the depressed prices within the crypto sector during the early months of 2018. The emergence of the crypto-currencies and the underlying blockchain technology is a reminder of how technology is disrupting traditional industries.

I intend to carry on writing my series on technology and how it will impact the world in the coming decades and this will be the subject of my next post on FI.

I encourage all those readers who have questions to post on the comment box below or, if you have not already, subscribe to the blog.

Wind of change

Islamic Volkerwanderung

mass-migration

REUTERS

 

“We will get power, and then we will implement what is necessary…. Then we will give the directive that the three big M’s – Mohammed, Muezzin and Minaret – end at the Bosporus.”

Bjorn Hocke of Alternative fur Deutschland

“I expect mass migrations on the very large scale once climate change goes beyond certain levels, as warm periods in the past have caused extreme droughts in what’s now the Muslim Middle East. If people have a choice between migration and death, they’ll migrate — and so we’re talking about entire national populations on the move, more likely than not armed with everything the armies of their former nations had to hand.

Europe is utterly unprepared to deal with such a thing — due to many decades of blind trust in the United States for their defense, most European countries have feeble, poorly trained, poorly equipped militaries that have no experience in actual combat conditions. I see phenomena such as Daesh and Boko Haram as the first stirrings of the tsunami to come.

Will there be fighting? You bet, just as there was fighting when Islam first expanded across the Middle East, but by the time the fighting ends, I expect the borders of the EU to change in roughly the same way that the borders of the Byzantine Empire changed in the wake of the great Muslim invasions — and as usual in such situations, woe to the vanquished…”

John Michael Greer (January 2018 Open Post)

 

I would like you to read the above quote from John Greer.

And again, so that the full impact of his forecast is absorbed… especially for my European readership.

The spectre of mass migration during a period of changing climate change, droughts and a worsening scarcity in water, food and energy is not a far-fetched geopolitical fantasy but the most likely scenario facing Europe in the coming decades.

Indeed, the Guardian reported last year that “Merkel fears that long term demographic trends mean 100 million Africans could come to Europe driven by climate change, poverty and Europe is wholly unprepared”. Austrian military intelligence warned that up to 15 million African migrants could try and enter Europe by 2020. Similar leaks from secret reports prepared by other European intelligence services have been published in the media which highlight the awareness of this mega-trend within the highest European political and security circles.

During my recent review of Nafeez Ahmed book which covers the inter-connected crises threatening the global economy, e.g. climate change, resource scarcity and global debt, I referenced the potential time-frames when worsening climate change will trigger a mass flight from the Middle East and North Africa (MENA) region. This vast tropical area will become uninhabitable by 2030-2040, due to prolonged heat waves and dust storms leading to mega-migrations into the cooler European landmass.

John Greer’s grim prediction at the beginning of this year strikes me as terrifyingly plausible given what is already been discussed at the highest levels within the chancelleries of Europe. What I intend to do next is to give a potential scenario of what is likely to happen over the course of the next two decades with a focus on Europe for this particular post.

The 2015-2016 refugee crisis, which has abated somewhat last year (although reduced numbers of refugees and economic migrants have continued to flow across the Mediterranean) shows how hundreds of thousands of civilians can cross vast borders within a matter of months. It was a sneak preview into a dark future.

Imagine we are now in the year 2032. Climate change has got far worse since the dawn of the century and years of heat waves and droughts across the tropics has led to  a spiraling economic crisis, low-level famine and civil unrest on a bigger scale then the so-called Arab Spring in the early 2010’s. Arab and African governments, watching growing numbers of their citizens desperately attempt to get to Europe, arrange a secret conference where they discuss the crisis. The consensus, from the leading policymakers and guided by climate scientists, is that the region is doomed due to climate change and the only option is to leave for better climates.

A secret multi-national operation is hatched, led by the Arab League, to prepare for the invasion of the one continent that can act as a future homeland for the desperate Muslim masses of the MENA region, Europe. Over the next 18 months, governments arrange for the remaining physical capital and wealth to be shifted into relative safe havens in the Americas and East Asia, the funds of the states invested into the remaining national armies and the civilian population prepared for war. Clerics and the mosques play a key role in preparing the male youth on the coming war against the European infidels, a worthy jihad and a fight to the death in the name of the Prophet Mohammed and Allah.

Irregular Islamist pirates in the Mediterranean prepare the way, harassing the weak navies of the European Union (EU) and disrupting trade whilst the nations of Algeria, Tunisia, Egypt, Morocco, Turkey and Libya build a vast fleet of small ships ready to cross the seas. As the seas warm in the spring of 2034, the calls for jihad arise across the minarets of the Muslim world.

Whilst the civilian population are mobilised, taking their essentials, including guns, machetes, water, gold and anything else of portable value for the epic migration, the coastal towns and cities are rammed with small boats ready to cross the waters to southern Spain, Italy and Greece. The special forces and armed solders of Operation Saladin are ready to act as the advance guard of a massive population movement into the heart of Europe.

By the 2030’s, the Muslim population of Europe will be bigger then currently estimated, and will be concentrated in the major cities of western Europe. Whilst the majority of Muslim European citizens are loyal, polls suggest that a significant minority have ambivalent or negative loyalties to their host country.

It is likely, in the build-up of the armed invasion of southern Europe, that those jihadi cells will be activated to cause mass mayhem to distract European governments and their security services from the impending threat. Whether or not the jihadi terrorist plots are stopped or not, the attention of the authorities will be inwardly focused on domestic security.

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FRONTEX

 

Physical geography doesn’t change and the routes of an armed mass Muslim migration into Europe will be familiar to those who have followed the refugee crisis over the past few years. The key routes of the Muslim armada will be the following;

  • Crossing the Straits of Gibraltar into the historically Islamic lands of the fabled Al- Andalus, crushing the Rock of Gibraltar and heading towards the Pyrenees mountains, the natural barrier at the Spanish-French borders. These armies will be following the path of the legendary Abdul Rahman Al Ghafiqi in the 7th century AD.
  • The second key route will be from the city of Tunis to the horn of Italy, principally Sicily but also potentially the French island of Corsica to land in what will likely be the 2030’s to be the Muslim majority city of Marseille in France. I would imagine that isolated islands like Malta will be starved into surrender by the Muslim navies once they overwhelm the resistance of EU naval forces. Once naval superiority is achieved, a huge naval operation to transport hundreds of thousands of armed Muslim invaders into Italy would commence with the goal of conquering the capital of Rome, the citadel of the global Catholic Church and the ancient capital of the Roman Empire.
  • The final route will be through Turkey, crossing the Greek islands and heading northwards through the western Balkans into central Europe. The Greek military is a formidable force and would need to be vanquished before the Balkans route opens up for the Muslim invaders.

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DAILY MAIL

 

When one looks at the militaries of Europe, it is startling to see how few spend 2% or more of their national budget on defence. The only countries that spend the minimum NATO standard on military defence on the borderlands facing the Muslim south are Greece, with France in second place. The bulk of southern Europe can be considered military pygmies. The global rankings list for military firepower place Egypt in 10th place, Saudi Arabia in 24th and Algeria in 25th, indicating that a number of the national armies of the MENA region are not to be dismissed lightly.

A likely course of events will be that despite ferocious local resistance, the sheer scale of the invasion will see Muslim armies seize control of the bulk of Spain, the Mediterranean islands and assuming Turkey joins the war, the fall of Greece to the Islamic tsunami.

The Mediterranean will become a warzone, with naval battles and a huge armada of ships transporting initially the troops and later on the armed civilians to the landing grounds of southern Spain, Italy and mainland Greece. I suspect that the French military will be busy battling urban jihadi insurgencies in their big cities including Paris and fending off incursions by Islamic special forces into their southern coast.

Should Greece be militarily overwhelmed, the path will be clear for the millions of armed Muslims to cross through the western Balkans into Vienna. This will likely trigger the entry of the Russian Federation into the bubbling cauldron, in defence of their historic Slavic allies, the Serbs and Bulgarians. Expect to see a huge Russian army cross either by sea or land, into the western and eastern Balkans to battle the Muslim invaders coming northwards. In the process, much of central and south-eastern Europe will remerge as a de facto Russian sphere of influence.

One can therefore imagine a scenario whereby despite huge numbers, the Muslim armies become bogged down, like the Turks centuries ago, within the mountainous Balkans with the locals being financially and militarily supported by the Russian army.

Western Europe is a different matter. Whilst the United Kingdom still has a respected military, it is unlikely to become heavily involved in the fighting and will be busy securing the island defences and combating the internal jihadi threat. The most likely strong military powers in the 2030’s, France and Switzerland, will be key to the future of western Europe. The French have a large standing army, will have a young generation reared in military subscription and a shadow para-army of nationalists ready for war.

It is therefore likely that the French will crush any ethnic uprisings in their cities, with likely mass bloodshed and killings, and prevent the Muslim armies conquering southern France. The Alps will form another key defence, which will become a rallying point across central and northern Europe, with a multi-national European army joining the formidable Swiss military to keep the Muslim invaders out.

On a balance of probabilities, I think the French and Swiss defences will hold, just, with the critical assistance of the viable armies of Poland, Germany and the United Kingdom. However, it could be a close-run thing as the Muslims will literally have nothing to lose. In this climate, expect to see politicians and would-be Charles Martel warlords rise to power across Europe and those which have a long record of warning about the threat posed by Islam will likely be in a strong position to win power (including the AfD in Germany).

Should the natural defences of the Pyrenees and Alpine mountains fall to the Muslim armies, then much of central and western Europe will be exposed to the conquering armies of Islam.

Europe will become entombed in a new Islamist Dark Age.

As Greer warns in his blog, it’s entirely possible that this Shari’a dominated Europe could last centuries before being followed “…by a Reconquista on the Spanish model, with Russia and Scandinavia filling the roles of the northern provinces of Spain”.

You have been warned.

Islamic Volkerwanderung

My predictions for 2018

CroppedImage608342-decline-and-fall-of-the-american-empire1

https://www.paulstreet.org

 

“…the accelerating decline and impending fall of America’s global empire is the single most important fact of contemporary world politics.”

John Michael Greer – “A dangerous year”

 

It doesn’t seem that long ago that I started this blog, with predictions that shocked my early readership; of a world shaken by Brexit and the victory of Donald J Trump in the November presidential elections.

Now, that time of the year has arrived when I will be attempting to divine the future, again, using history as a guide. History rhythms and the election of Donald Trump, a populist demagogue, is a clear sign that the foundations of the American superpower is rotting badly.

John Greer, in his review of 2018, notes that the accelerating decline of American global power will lead to further instability as our liberal international order continues to disintegrate. This could lead to flash points in troubled parts of the world, including North Korea, the Middle East and North Africa, where radical and extremist groups or governments sense opportunities as an over-extended America cuts back financial and military aid to traditional allies.

The decline of the tottering American imperial giant is, as Greer states, the single most important fact in geopolitics, but it is within the broader context of what I refer to as the limits to growth mega-trend. Our industrial civilisation is facing hard limits to economic growth as it bumps upon the physical reality of resource depletion, worsening climatic change and growing water and food scarcity across the world. Already, the South African city Cape Town is on the brink of running out of water.

So, it is within these broader parameters that I will proceed, as in previous years, to outline a number of probabilistic forecasts for the year ahead.

  • A major volcanic eruption will happen (50% probabilistic chance)

Volcanic researchers and scientists have been noting an increase in seismic activity from known volcanoes around the world in recent years. My wild card prediction is that at some point this year a major volcanic eruption will lead to significant economic and societal disruption, including cancellation of flights, the enforced moving of populations and damage to homes and businesses.

Whilst I am not a climate scientist, I do wonder if the changing climate is contributing to the increased instability, particularly within the “Ring of Fire” in the Pacific, and whether Gaia is preparing to strike back against the human species causing so much disruption on Earth.

  • Italy will elect a centre-right coalition government (60% probabilistic chance)

The Italians are returning to the polls in 4 March and whilst the opinion polls currently suggest a hung parliament, the centre-right parties of Berlusconi’s Go Italy, the anti-immigrant Northern League and smaller right-wing Brothers of Italy are rising in the polls.

My forecast is that the centre-right parties will likely reach the 40% mark and be able to for the next government after March 2018 with Berlusconi as the kingmaker. The Italian electorate are increasingly frustrated with the waves of refugees flowing from northern Africa and perceive the current centre-left government as a soft touch on this issue.

Despite a modest economic recovery, youth unemployment is still shockingly high, particularly in the south, and frustration with the euro and the EU is also growing among many ordinary Italians.

Although opinion polls show that a slim majority of Italians wish to keep the euro, the new government will likely be Eurosceptic and hostile to French led efforts to further integrate the eurozone.

  • Bitcoin will end the year higher then it started – $13.400 (65% probabilistic chance)

The crypto-currency Bitcoin has had a rollercoaster ride, soaring to nearly $20,000 in December 2017 and making early investors fortunes in the process. Bitcoin has serious flaws, including high transaction fees and scalability issues, but it is a first mover and a crypto “gateway drug” to the alt-coins like Ripple, Dash, NEO and the hundreds of other little known cryptos in the sector.

Exchanges, where you can buy and sell cryptos, continue to see hundreds of thousands of new users joining every month. Dedicated crypto-currency hedge funds are raising billions from the superrich keen to get exposure to this volatile and exciting sector. This suggests that we are still in the early to middle stages of this asset boom, despite the speculative froth clearly manifest in parts of the market.

A “game-changing” moment will be if and when the US regulators approve a listed American bitcoin exchange traded fund (“etf”), which is likely to lead to an explosion in the bitcoin price, potentially up to $100,000 or beyond.

  • The Republicans will maintain control of the House of Representatives in the November Midterm elections (60% probabilistic chance)

I have been torn on this one for a while now. Until the transformational tax cuts were signed by President Trump I was reasonably convinced that a surge of liberal, anti-Trump voters in the mid-term elections would end the Republican Party’s control over the House of Representatives.

The Trump tax cuts have been widely misunderstood by the media and political elites (the “Pundocracy”). Whilst elements of the bill are giveaways to the corporation and the very rich, (e.g. cuts to the corporation tax for example),  the driving impact of the bill will be to redistribute capital and jobs to the “red states” from the high tax bi-coastal “blue states” who overwhelmingly voted for Hilary Clinton. As Tom Luongo notes on his blog, “All of that capital returning from overseas to invest in infrastructure and production won’t go to the big ‘Blue Wall’ states like New Jersey but to the new production belt in places like Chattanooga.” Trump’s electoral base will see the material benefits in 2018 and will likely turn out in force in the mid-terms to keep the Republicans in power.

Of course, there is a reasonable chance that a strong surge in turnout from the anti-Trump coalition of the upper-middle classes, the young and minorities will overwhelm Trump’s base and lead to a Democratic victory. My hunch though, is that the old Clintonian dictum, “the economy, stupid” will win out and Trump will trump, again.

  • The commodity super cycle returns (75% probabilistic chance)

Commodities have enjoyed a roaring trade since December 2017, with copper, oil and other key industrial commodities soaring in global bourses. My thesis is that a the global economy, swimming in trillions of central bank manufactured liquidity, is enjoying a late recovery which is starting to trickle down to the middle to lower stratums of the population.

My specific prediction is that Brent oil will hit $80 this year, on the back of growing global demand, on-going OPEC production cuts and a potential peaking of production by American shale oil producers as noted in this Bloomberg article.

Looking ahead, it is likely that commodities could spike in 2019 in the face of deepening depletion dynamics, leading to a re-run of the nightmarish 2008/09 economic crisis.

Lets not forget that the reason why sub-prime mortgage holders couldn’t afford their home repayments was because a spike in oil prices. This meant that ordinary American workers couldn’t afford their petrol, electricity, food and mortgage repayments and once they stopped paying their mortgages, the consequences led to the implosion of the banking giant Lehman Brothers and the near ending of the global financial system.

Could something similar happen again to the global economy, which is far more indebted, then a decade ago? I wouldn’t bet again it.

  • The Ethereum crypto will hit $2,000 (70% probabilistic chance)

The crypto Ethereum, also known as Ether, has enjoyed a soaring rise in 2017 and I think it is likely to see a further rise in 2018. Unlike the majority of the cryptos, it is a crypto with real world uses and could have a massive transformational impact in the future.

Ethereum is an indirect way of investing into the underlying blockchain technology and it is for this reason I am confident that the crypto Ethereum, the virtual fuel of the decentralised computing platform, will see a further rise in price in 2018.

I will be continuing my series on the impact of technology, which will include a review of John Michael Greer latest book, The Retro Future: Looking to the Past to Reinvent the Future soon.

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My predictions for 2018

Review of 2017

2017-Predictions

https://outlookohio.com

 

At the beginning of the year, I half jokingly considered including in my 2017 forecasts the prediction of a British royal engagement. If I had, it would have been a rare success story in 2017!

Reviewing my forecasts for 2017 has been a sobering experience with every one failing to hit the spot. This does not include my special British general election forecast of an increased Conservative majority of which I have already autopsied in my post-election equivalent to eating humble pie.

So what went wrong? To summarise, I over-estimated the electoral appeal and political calibre of the radical, populist and anti-immigrant/euro politicians on the Continent and failed to anticipate the strong anti-Trump/Brexit backlash from the liberal wing of the electorates. However, in my defence, I do think I captured the broader dynamics going on, even if my specific predictions were a bit off-piste.

Marine Le Pen did succeed in getting into the second round of the French presidential elections, as predicted, and had she faced Francois Fillon (“Fillon”), the conservative arch-Thatcherite candidate, may have had a better chance in the final result. As it happened, when I wrote my forecasting post, Fillon was still ahead in the polls with Emmanuel Macron (“Macron”) only starting to emerge into the limelight.

I would also note in my defence that I twice forecast, once the 1st round was over, that Macron would win the French presidential elections, which you can read here and here. Overall, I consider the French elections, considering the volatility of the race, a reasonable success story for me.

The Dutch elections is a classic case of me going along with the frankly near-hysterical liberal response to the Trump victory rather then doing my own further research into the Dutch far-right firebrand Geert Wilders (“Wilders”). After all, Wilders campaigned on a platform of shutting down mosques and banning the Koran, positions which make President Trump an arugula eating liberal by comparison. In the end Wilders came second, not first as I forecast, and increased his overall share of the vote compared to the last election with 13% of the national vote.

A similar tale emerged during the German federal elections which humbled the German Chancellor Angela Merkel. The Alternative for Germany (“AfD”) party, which had collapsed in the polls earlier in the year, roared back to win 13% of the vote in a result that shook the German political establishment. My post “make Germany great again” explored the rise of the nationalist Right in a country which had been relatively immune to populist politics.

Whilst the AfD failed to hit my ambitious forecast of getting into second place, the strong performance by the nationalists in the federal elections validated my view that populist politics would transform German politics in 2017.

A Bloomberg article noted that contrary to the post-Macron consensus from the Pundocracy the forces of political populism continued to rise throughout 2017. The article notes “A Bloomberg analysis of decades of election results across 22 European countries reveals that support for populist radical-right parties is higher than it’s been at any time over the past 30 years.” So to conclude, whilst my specific forecasts were mainly wrong, I did successfully capture the broader dynamic of a continued wave of populist politics transforming European politics.

The Saudi princes being allegedly tortured in the five star Ritz-Carlton hotel in Riyadh might wish they had removed Crown Prince Mohammed bin Salman (“MBS”) when they had the chance. I did predict, with a 55% probabilistic chance, that MBS would be sidelined or removed but in the end, MBS moved first to seize power in the Kingdom. MBS is certainly a man to watch in the coming years and it is conceivable that the reforms unleashed under his Ceasaresque reign will eventually bring down the House of Saud.

My final forecast was that President Trump would partially or totally remove Russian sanctions. This turned out to be totally wrong, with the alleged collusion before the election between the Trump team and the Russian government, aka “Russiagate”, destroying any changes of an easing of the sanctions regime in 2017. Ironically, the rise of right-wing populist politicians to power across central and Eastern Europe, including the Austrian Freedom Party, increases the chances that this may happen in 2018 when EU sanctions on Russia come up for renewal.

My 2016 forecasts on a narrow victory of the Leave campaign and the rise of Donald Trump to the American presidency were spot on and it was probably unlikely that I could achieve a similar success rate for 2017.

Cryptocurrency-Price-Forecast-for-Bitcoin-Ethereum-Ripple-PRtech_body_ripplexrpusddailylogpricechart.png.full

https://a.c-dn.net

 

One of the ironies of 2017 is that whilst readers who had placed political bets on a Le Pen victory or an increased Conservative majority would have lost money, if they had brought the crypto Ripple, following my crypto-currency post on 1 December, they would have made over 1,000% return in the weeks that followed. The Ripple price soared from 24 cents to over 3 dollars from the beginning of December to after New Year.

Other cryptos whom I tipped, including Ethereum and Dash have seen big increases in value since the publication of my crypto post on FI, and I remain bullish that 2018 will be a strong year for the crypto-currency space.

I will soon be publishing my forecasts for 2018 and we will see if I have a better success rate this year then 2017.

Review of 2017

Book review of Nafeez Mosaddeq Ahmed’s Failing States, Collapsing Systems BioPhysical Triggers of Political Violence

Screen Shot 2017-01-05 at 11.51.54

https://3.bp.blogspot.com

 

“… after 2030, both the Euro-Atlantic core, as well as the fast-rising Indo-Chinese periphery, will begin to experience their own symptoms of systematic state-failure”.

Nafeez Mosaddeq Ahmed

 

This book is a tour de force and a must read for anybody who is interested in the future fate of our industrial civilization.

Stylistically, Nafeez Mosaddeq Ahmed (“Ahmed”) is very different to that other great chronicler of our declining civilization, John Michael Greer (“Greer”), who is an easier read for the layman reader. I have reviewed two books by John Michael Greer, one a near future thriller which posits a rising China defeating America in the 2020’s and a non-fictional book on the impending collapse of the American empire. Both are superb and at times deeply troubling reading experiences.

Ahmed’s book is drier, academic and references a huge array of empirical and scientific studies to back his conclusion that our industrial civilization is heading towards severe trouble within the next 20 years. What it lacks in Greerian narrative and rhetorical flourish is made up by the use of data and scientific research to force the reader to acknowledge that the resource and ecological limits are pressing ever harder on our globalised economic order.

What is striking about Ahmed’s book is that his forecasts for key regions, including Europe, the Middle East, Asia and North America and when their systematic crisis will likely arrive are remarkably close to the 1972 Limits to Growth business as usual modelling shown below.

futurism-got-corn-graph

https://www.commondreams.org

 

I have discussed this prescient report before in my post “winter is coming” which you can read here.

So what did Ahmed forecast in his book? Here are the key points;

The world is seeing a “new normal” of extreme weather events, summer heat waves, wildfires, droughts, floods and extreme rainfall which is increasingly common throughout the world. The climate system is being fundamentally transformed, a “climate departure”, which means that within the next decade in the tropics (e.g. encompassing parts of the Middle East, Asia, Central Asia, South Asia and Africa) this will become the new normal, rendering the vast region uninhabitable by 2030-2040, due to prolonged heat waves and dust-storms.

The rapidly changing climate in this vast tropical zone will imperil the lives of up to 500 million people and will lead to mega-migrations into Europe. The political and demographic implications of this enormous wave of humanity attempting to enter Europe I have explored in a post earlier this year which you can read here.

Saudi Arabia, a pivotal global oil supplier, has seen its oil exports decline by 1.4% every year between 2005 and 2015. According to the net export model, Saudi Arabia net oil exports have been forecast to decline to zero by 2030. The Gulf States will face a systematic crisis within the next decade as the money runs out to keep their populace happy.

Total net oil exports to Europe by the former Soviet Union countries including Russia, Azerbaijan and Kazakhstan will decline to virtually zero by 2030 as production declines and China captures a growing share of oil production for its own requirements.

The south-western region of North America is facing severe water scarcity and climatic disruption, which could lead to Lake Mead running out of water by 2021. Lake Mead is the main water supply for the mega-city of Los Angeles and 90% of southern Nevada. The looming crisis is so great that in the medium term it threatens the viability of Californian agriculture and a substantial chunk of the global foodstuff exports which will lead to global food price rises.

American unconventional oil and gas shale’s will likely peak around 2025 which will ensure that the United States is relatively energy self-sufficient compared to Europe in the short-term. After that America will become increasingly dependent on oil imports by 2030 when these supplies will be drying up around the world.

The impending peaks in oil production and net export decline by key producers will lead to another global oil supply shock by 2020, something that I have warned recently in my review of crypto-currencies.

The core regions of our industrial civilization, Europe and North America (“Euro-Atlantic core”), will sustain the neo-liberal status quo by continued debt-money quantitative easing policies. However, after 2030 both the Euro-Atlantic core and the rising giants, India and China, will experience their own symptoms of systematic state failure.

Greer has recently commented on his blog that he expects to see another economic shock at some point in the foreseeable future which China will emerge, after the hit, as the dominant hegemonic power on the world stage at some point next decade, supplanting the United States. This strikes me as eminently plausible given the above trends outlined in Nafeez’s book.

Whilst Nafeez’s forecasts and dates are hypothetical and may be proven wrong, the overwhelming conclusion from reading this book is that readers would be foolish to ignore the rising alert signs emanating from different corners of the world. When visiting Granada last month, the local people mentioned the drought and the extreme heat wave in the summer of 2017, when temperatures hit 47 degrees in the shade! If this “abnormal” climate continues, parts of southern Spain could become uninhabitable within a decade. Indeed, the tour guides mentioned that the locals fled the city during the summer months to escape the extreme heat as it was so intense.

To conclude, if you are interested in learning more about the systematic challenges facing the world in the coming generation, Nafeez’s book is required reading.

Book review of Nafeez Mosaddeq Ahmed’s Failing States, Collapsing Systems BioPhysical Triggers of Political Violence