Brexit update: Clowns, circuses and would-be Churchills…




“New PM will have to pivot towards No Deal. UK assets to struggle.”

BlondeMoney consultancy – Boris might be a clown but hes no fool

“Johnson appears to be working to a carefully constructed plan. He avoids press comment over Brexit and writes about anything else in his Monday column at the Daily Telegraph. His contributions in Parliament have been brief, the few on Brexit generally confined to democracy rather than trade. He has positioned himself to rescue the party from electoral destruction if called upon, rather than appear to be an overtly ambitious politician, unlike all the other contenders. It is quite Churchillian, in the sense there is a parallel with Churchill’s election by his peers to lead the nation in its darkest hour…”

Goldmoney briefing  

“Unless something changes very drastically by the time of the next UK general election, the Tories may be facing the kind of electoral annihilation that ended the Liberal Party as a significant political force in 1922. One recent survey I saw indicated that if a general election was held today, Labour would win a narrow majority, the Brexit Party would be the opposition party with 11 fewer seats than Labour, and the Tories would have all of three seats in the House of Commons.

 If Farage does as he’s announced he’ll do, and unveil a detailed political platform for the Brexit Party once the EP elections are over, I expect to see continued shifts of pro-Leave voters in his favor; I would not be at all surprised if Brexiteer MPs begin to bail out of the Tory camp to join the Brexit Party; and if Corbyn continues to try to finesse the Brexit question, he may lose a lot of pro-Leave Labour voters in the midlands and the north.”

John Michael Greer – A Conversation with the World 


I’m sure many of you have been following the extraordinary developments in British politics over the last few days now that the zombified government of Theresa May has fallen and a new leadership contest is underway.

In my last blog post, which you can read here, I discussed where we were shortly after the original deadline for leaving the European Union (EU) expired on 31st March 2019. So where are we now given that the results of the European elections are to be announced tonight?

I wrote in my last post that “should a Conservative party go for a long extension with the humiliation of UK participating in the May European elections, it will be politically suicidal.” Well, that call has been spot on so far, with the Tory vote at the European elections expected to be wiped out.

Even worse for the Tories, their polling at a general election is in a state of collapse with Nigel Farage’s Brexit Party surging in the polls.

This general election poll of polls chart captures it beautifully.

UK polls



I also maintain that the Tory party, if it wants to survive as a major political force in British politics, has to ensure that the UK leaves the EU, deal or no deal, on the 31st October 2019. If the Tories, whoever gets elected leader now that Theresa May has resigned, fails to get us out their core vote will migrate en masse to the Brexit Party and will almost certainly never return.

The Tories would be committing political suicide.

There are growing signs that the Tory parliamentary party is starting, slowly, to get this political reality. MP’s across the board are coming out in support of Boris Johnson who has committed to leaving without a deal, if required, on 31st October 2019. There is a powerful anti-no deal faction within the cabinet who are fighting a rear-guard battle to stop a hard Brexiteer coming the next leader. Should those soft Brexit/covert Remain forces win the internal struggle over the next 4 weeks, the Tories will face electoral annihilation at the next general election.

Some may argue that, long-term, the Tories need to reach out to the younger generations who tended to vote Remain. By firming up their core vote and going for a Johnson or Raab Brexiteer candidate, the Tories only make themselves more toxic to those layers of the electorate who could be convinced to vote Tory.

The problem with that analysis is that whilst longer term it does have some validity it shows a shocking lack of awareness of the peril the Tory party faces right now. The bulk of the Tory 2017 electorate voted Leave and want to see the UK leave the EU. Interestingly, the poll ratings of the party only collapsed after April, suggesting that it isn’t so much May’s semi-soft Brexit deal that angered the Tory vote but the failure to leave the EU on time.

The rise of the digitally savvy Brexit Party, under the quasi-dictatorship of Nigel Farage, is now putting huge pressure on the Tories to deliver Brexit, and a hardened Brexit for that matter, by the next deadline on 31st October.

Leadership elections are notoriously hard to predict and I have been burned once already when forecasting a victory by Boris Johnson in 2016. So far, it looks like a race between the Brexiteer wing, with Johnson and Raab the main contenders fighting it out for the Brexit vote and a cabinet level battle between the Foreign Secretary Jeremy Hunt and the soft Brexiteer Environment Minister Michael Gove.

Michael Gove has evolved into a resolute loyalist of May and apparently an opponent of leaving without a deal. His background as a Leaver might encourage those anti-no deal forces within the cabinet to turn to him rather then the Remainer Hunt. The party activists are unlikely to support a Remain backing candidate after the disaster of May.

My best guess is that Boris Johnson, who seems serious about the leadership this time around, will get sufficient parliamentary support to get into the final 2 and go on to win with the party activists.

Boris and Trump

Project Syndicate


Boris Johnson is widely considered a clown in British politics and like President Trump, his haircut, regular “gaffes” and chaotic personal style are key reasons for this public perception. I would argue that Johnson is a more complicated, serious and underestimated political player then many within the media and political bubbles would like to admit.

Like his friend President Trump, Boris has the capability to energize a crowd, communicate effectively with the wider public and distill complex issues into “retail friendly” politics.

The key to Boris, which is outlined in the Goldmoney article quote above, is not an unprincipled showman but an egocentric leader who sees himself as a 21st century Winston Churchill. Boris considers himself as commanded by manifest destiny to lead the UK in its darkest hour just as his personal hero Winston Churchill did in 1940.

The real question you should be asking is not what Boris will do in the weeks coming up to that pivotal 31st October deadline but what would Churchill do. Would Churchill make that brave and fateful decision to leave the EU, if required without a deal, and leap into the unknown free from the bureaucratic shackles of Brussels? If your instinctive answer is yes to that question then it is likely that Boris will do the same.

I assume that if Boris does get elected, it is likely that he will attempt to get the backstop renegotiated with the EU and make full scale contingency planning for a no-deal Brexit.

Given the survival logic of the Tory party, the fear of Farage’s Brexit Party supplementing the Tories as the main party on the centre-right and the Churchillian instincts of Boris himself, my forecast is that the most likely outcome will be a Hard Brexit by the end of 2019.

There is certainly a lot that can go wrong with that forecast. An anti-no dealer might manage to become the next Tory leader and given that May has failed to get a deal through the House of Commons, it is unlikely that her replacement would have any more luck by the October deadline.

Boris, or whoever wins the race, might bottle it at the last moment. There will be huge pressure within the civil service, cabinet and parliament to avoid a hard Brexit. And there are other scenarios to consider, including a successful no confidence motion being passed by parliament or an early general election which leads to a potential minority Labour government under Jeremy Corbyn.

However, I’m sticking to my gut call, made in 2018 and more recently in April 2019, that Britain will end up leaving the EU, most likely, in a hard/no deal Brexit.

For those who wish to “play the game”, there are a few options to consider. The first is to go to a betting website and place money on a hard Brexit outcome. The other is to short sterling which is likely to sink further in the event of a Hard Brexit. Please note that I’m not a financial adviser and you should only follow these paths if you know what you are doing and can afford to lose the money you deposit on these trades.

Brexit update: Clowns, circuses and would-be Churchills…

Brexit update: can the Hard Brexiteers pull it off?




“1+2+3 = TM Deal is voted down + Parliament tries to take control but is unable to find an alternative + the PM accepts No Deal as the path to delivering Brexit.”

BlondeMoney consultancy – The PM will take No Deal over No Brexit


“…most senior officials in Brussels now believe a no-deal exit is less costly for the EU than a lengthy transition: senior officials across the EU’s institutions and capitals are highly sceptical of Theresa May’s ability to secure a majority for the Withdrawal Agreement in the Commons – many believe this “phrase of Brexit” can only be “unblocked” by no-deal and most now have this as their central scenario.”

Latest briefing from Mujtaba Rahman – Eurasia Group twitter feed


“It is tough, if not impossible, to find a single fund manager who genuinely believes a no-deal Brexit will happen, which is why it is not being built into the pound’s exchange rate already. “No one in the financial world thinks ‘no deal’ is a remote possibility,” as one hedge fund manager put it.”

Financial Times – Befuddled sterling shows market aren’t all-knowing


Tomorrow, Friday 29th March 2019, was supposed to be the day that Britain formally left the European Union (EU). That is not now going to happen.

In early January 2016, I forecast that Britain would narrowly vote to leave the EU which shocked my early readership. It has been a wild ride since that extraordinary day when voters rebelled against their own governing class, and with our next cliff edge date looming on 12th April, where are we now?

In my 2018 post “Beware the Ides of March” I considered the prospects of a no-deal Brexit (also known as a hard Brexit) and concluded that “…my head says there will be a deal but my gut is telling me it will be a no-deal/hard Brexit”. Since then I’ve gone with my head, most recently forecasting with a 60% chance that there will be an 11th  hour deal brokered to avoid a no-deal Brexit.

Having given this subject much soul searching, I am now increasingly convinced that we are, more likely than not, heading towards a no-deal Brexit within weeks or months, most probably at Midnight on Friday 12th April 2019.

The failure of May to get her Withdrawal Agreement and political declaration through the Commons has shown how toxic the backstop issue is with many within the Conservative ranks and the DUP who prop up the minority Conservative government. On the other side, Brexit remains deeply unpopular within the Remain strongholds of the major English cities and the Celtic fringe and any Labour or nationalist MP who facilitates Brexit will be hugely unpopular with their own voters.

The key reason why I now think that, on balance, the most likely outcome is a no-deal Brexit is the interests of the ruling Conservative Party. According to a recent ComRes poll, 44% of current Tory voters consider a no-deal Brexit the best possible outcome; nearly half.

When asked if they agree with the statement that “If the UK left the EU without a deal on 29 March it would briefly cause some uncertainty but then ultimately work out OK” a stonking 71% of current Conservative voters agree with only 11% disagreeing.

Conservative voters overwhelmingly support Brexit and a clear majority want the UK to exit the EU soon, with or without a deal. Should a Conservative party go for a long extension with the humiliation of UK participating in the May European elections, it will be politically suicidal. As the pollster James Frayne notes in Conservative Home, should the Tories appear to U-turn on Brexit “…its core vote will surely completely collapse and they will be left trying to go after voters who are mostly not culturally aligned to the party – an immensely difficult task”.

This electoral reality is reflected by the fact that in the indicative votes held by the UK Parliament this week, half of Conservative MP’s voted for no-deal. As the political consultancy BlondeMoney put it in their flash analysis of the results, “With half of Theresa’s own party choosing no deal as an option last night, it’s clear that if she continues to prioritise her Party, No Deal is the path she will take.”

The possibility, which I discussed at the beginning of the year, of a last-minute, cross-party consensus that carries enough Tory MP’s (that half that didn’t vote for a no-deal Brexit) of a modified version of May’s deal that includes the option of a permanent custom union remains a realistic scenario. However, it would be the case of May taking on half her parliamentary party, the bulk of the Tory party grassroots and a plurality of the Conservative electoral base at a minimum.

Moreover, Jeremy Corbyn, the Labour Opposition Leader, would need to whip his 125 odd loyal MP’s (who follow the party line) to save May’s deal, facilitate a Tory Brexit and own the political damage with his predominately Remain electorate. Is Labour really going to save a beleaguered Tory government in the interests of avoiding a no-deal Brexit?

The word within Brussels is that Corbyn is determined to remain a political virgin when it comes to Brexit and his inner circle secretly want a no-deal Brexit as the perfect conditions to pave the way for a future Labour government. It is hard to know what precisely the political calculations of Corbyn is although we do know that he is a life-long Eurosceptic and his closest aides backed Brexit and favour a return to a 1970’s type of socialist economics.

The betting and currency markets, as noted in the quotation at the top of the blog, continue to be in a state of collective denial about the possibility of an imminent no-deal Brexit in a spooky re-run of the days before the Leave vote.

The EU appear to be increasingly accepting of a no-deal outcome as a lesser evil to the alternative of a long extension, UK involvement in the European Parliament elections and the risk that the Brexit saga will never end. It was significant that the Irish leader confirmed to President Macron that Ireland could survive a no-deal Brexit which will be a key consideration for the EU leaders.

As Mujtaba Rahman notes in his most recent briefing after speaking to senior EU officials (see quotation at the top) Brussels consider a no-deal as their central scenario. Whether rightly or wrong, the EU Commission think that the bloc can handle a no-deal Brexit and this will encourage the member-states to play hardball should the UK fail to approve the Withdrawal Agreement in the next two weeks.

Outlier risks remain a general election which is unlikely given that May has promised not to commit to one and the majority of Tory MP’s would be horrified by the prospect. Alternatively, a majority could be found for a 2nd referendum within the House of Commons, but again, it is unlikely that the Tories could ever agree given that it would be the equivalent of committing electoral suicide.

A last-minute compromise deal which have proceeded the indicative vote process within Parliament, remains a viable scenario but is diminishing as we get closer to the 12th April cliff edge (45% probabilistic chance).

To summarise, I consider, that on a balance of probabilities, the most likely outcome, given the factors discussed above, is that the UK will stumble towards an accidental no-deal Brexit (55% probabilistic chance).

Brexit update: can the Hard Brexiteers pull it off?

How to prepare for a dying future

Dying future



“All in all, a new, highly complex and destabilised ‘domain of risk’ is emerging – which includes the risk of the collapse of key social and economic systems, at local and potentially even global levels. This new risk domain affects virtually all areas of policy and politics, and it is doubtful that societies around the world are adequately prepared to manage this risk. Due to the high levels of complexity, the scale of breakdown and systemic nature of the problem, responding to the age of environmental breakdown may be the greatest challenge that humans have faced in their history.”

IPPR – This is a crisis, facing up to the age of environmental breakdown


“It is not hard to see that these foreseeable catastrophes (glaciers melting within Central Asia) could lead to mass migration and even war on the Eurasian continent this century. The geological effects will start kicking in by in the middle of the century (which is only 30 years away) but the political effects are likely to hit much earlier, as those dramatic changes are being anticipated.”

Eurointelligence – public briefing 5th February 2019

“I expect the next really serious oil price spike to hit sometime in the early to mid-2020s, and it’s likely to be a doozy. Make your preparations now and you’re going to be in much better shape when the economy gets whacked again.”

John Michael Greer – “February 2019 Open Post


Over the last few years I have covered, on this blog, the rise of populist politics across the developed world, the growing risk of resource scarcity, the impact of a changing climate and the cultural and economic impact of demographic shifts and how these various dynamics will interact in the coming decades.

Long-term readers of FI will already know that the combination of climate change and growing scarcity of fossil fuels, fertile land and water across the tropics will trigger a rising cascade of crises, civil wars and eventually mass migrations into the cooler northern and southern hemispheres.

Mass migrations in the coming decades will be a symptom and trigger of a wider global economic crisis, as economic growth across the world withers away and growing parts of the world tip into a new world of permanent economic contraction.

Resource, geopolitical and climatic driven disruption, whether the rise of sea levels destroying coastal ports and cities, civil war in resource-rich states or the rise of nationalist strongmen who hoard key resources rather than allow them to be traded on the globalised market will strangle our globalised free market economy over the longer-term.

Within the context of this global story of the early decline of our industrial civilisation is the change of wealth and power on the international stage as the great Asian powers rise and the old Western world declines. Angst within the ruling elites of Europe and America about the future is ripe, with American policy elites waking up to the technological threat posed by China. Washington is now attempting to force their allies to ban the Chinese company Huawei from developing the next-generation 5g infrastructure. This may already be too little too late.

In Europe, a recent De Spiegel article focused on the growing threat posed by China to the mighty German economy with respect to electric cars. As the magazine noted “…according to P3’s predictions, two Asian companies will dominate the market by the middle of the coming decade: China’s CATL and South Korea’s LG Chem. The two companies will, according to forecasts, make up one-quarter of the global market. The rest will fall to manufacturers located mostly in China, South Korea and Japan — but not Europe.” Belatedly, after years of failing to invest in new technologies or infrastructure, the German political and economic elites are waking up to the fact that China is on course to displace Germany as a major industrial exporter.

It isn’t just in the economic or technological field that West is falling behind. Geopolitics also reflects this shift in power from the West to the East. The future of Syria, where President Assad has de facto won the civil war, will be decided in the capitals of Moscow, Istanbul, Tehran and behind-the-scenes, Beijing, not Washington, London or Paris. This is our new world order in action today.

So, what is a reader supposed to do with all this information, data and analysis? Here are my recommendations on things you can do in the coming decades to survive, mitigate and take advantage of the changes coming.

Stay healthy

To put it plainly, keeping physically and mentally healthy will become vital in the decades to come.

I haven’t discussed as much as I should the potentially shocking implications of the unraveling of our industrial health care systems and how even the common cold could become a lethal killer a generation or so from now.

One country is a harrowing example of our potential future. Venezuela’s healthcare and health research infrastructure has fallen into a state of collapse as a consequence of the wider socio-political crisis which also has a deeper energetic dynamic not covered by mainstream coverage of the country.

According to this article, there are “…over 400,000 cases of malaria in 2017, 15% of the rural population infected with Chagas disease, surging dengue, Chikungunya and Zika infections.” The huge migration of desperate Venezuelans into neighbouring countries raises the risks of regional wide pandemics, particularly, those refugees centred in the impoverished urban shanty towns.

Imagine a future world, let’s say the late 2030’s, where you have half a dozen Venezuela’s across the world going on simultaneously. Despite the best efforts of wealthy countries, the WHO and other international bodies, it is stretching the imagination to think that these issues can be contained indefinitely. At some point, major pandemics will become inevitable, leading to huge disruption of global and regional supply chains, international tensions and the closure of borders to refugees.

So, if you can, maintain a healthy diet, keep active and take care of your body. I would also recommend that you find ways of strengthening your mental fortitude because the coming decades will be a grim cocktail of depressing news and disruptive events. Whether that is gardening, walking, meditating or prayer or something else, it is advisable to cultivate healthy methods rather then go down the path of becoming addicted to legal or illegal drugs, alcohol or gambling like so many already.

Consider moving

The bulk of my blog readership live in either the outer edges of the northern or southern hemispheres (e.g. Europe, North America, Russia or Australasia) but for those who live around the tropics, in particular North Africa or the Middle East, I would strongly recommend moving.

Quite frankly, your part of the world will become uninhabitable to large-scale human life within a generation. Either you die, move now or attempt to move later when panic sets in.

Gideon Rachman, in the Financial Times, recently wrote about the growing tensions within the Muslim and non-Muslim worlds. The emerging superpower, China, has interned over a million Muslims as a national security measure after a series of terrorist attacks by the Uighur extremists. Rachman writes that fear of Islam “is now a central part of politics in most of the world’s major power centres — from the US to the EU, China to India.

Given the rise of hard-line Islamic fundamentalism across the Muslim world it is therefore sensible, if you are a Muslim living within that vast band of the tropics, to consider whether those power centres will tolerate future migrations from Muslim majority countries into their homelands.

You would be better off moving now before the doors shut for good.

For those of my readership who live on the future frontlines of this crisis, whether that is in southern Europe, south-west America and northern Australia moving should also be a major consideration. As a rule of thumb, if your part of the world is already impacted by refugee flows, its going to get far worse in the future.

Those who live within coastal regions should be worried too. Rising sea levels will destroy the value of properties exposed to flooding and force internal migrations in the future. Florida is a good example of a state that is already dealing with this challenge. My recommendation is to move to higher ground when you can still sell and insure your home should you reside in a low-lying area.

You should also consider the wider sustainability of your locality. If you live in a sky-rise penthouse in New York is that going to be the best place in say 30 years from now? It might be sensible to move to a large town with a farming hinterland with access to jobs, public transport and provide the opportunity to be less dependent upon the industrial system for your survival and subsistence. Within the UK, market towns and small cities are better places to live than some of the grimmer and dangerous large cities like London, Birmingham and Manchester where a crime wave is already occurring.

One will also need to factor in community. Whilst it is hard to generalise, you will want to live within a shared community that helps each other out, where neighbours aren’t strangers and is reasonably safe. You certainly don’t want to reside somewhere that resembles, at worst, a low-level warzone because it is likely to get worse, not better, in the future as our industrial civilization declines.

Develop skill sets and multiple income steams

Since the post-war years, a good rule of thumb is that if you have gone to university, specialised in a professional career and climbed the rat race you would have done well. I’m sure many of my readership, including myself, have a specialised professional career niche which provides a comfortable income.

John Greer was written before that every complex civilisation developed economic niches which were colonised by the educated classes, whether these were the scribes within the Roman Empire or the professional niches within our own industrial civilisation – marketing to give just one example.

Civilizations in decline aren’t able to justify these expensive economic niches, and slowly but surely these jobs will get terminated, taking the middle classes with them. So, what do you do, reader? After all, we can’t all become plumbers, gardeners and hairdressers!

Given that I’m in the same boat here, I’ve given it much thought over the years. Ideally you should retrain your career into something that is more sustainable long-term but if that proves difficult or impossible, here are my suggestions.

First, try and clear any debts you have, in particularly mortgage debt which is the main debt for the average citizen of the developed world. If you are able to retrofit your home to reduce your expenses long-term through insulation, rainwater systems and maybe solar panel, you should be able to live with minimal expenses once the mortgage is paid off. At the very least it will give you peace of mind.

Secondly, you should cultivate skills which will prove useful and popular in the future. That could include gardening so that you can barter food with friends and family, brewing beer, sowing, massage or martial arts to give just a few examples. These skills could also provide income streams in the future which may prove a godsend if you are out of work for a while.

Thirdly, you should try and develop alternative income streams apart from your day job. This could be dividends from blue-chip stocks, or rental from a buy-to-let property or a hobby that provides capital return (doing up classic cars and selling them for a profit). Over time those modest income streams will grow in value and will provide future opportunities, if and when, your bread earner job disappears.

I have written before of the likely technological disruptive changes looming in the next decade, specifically the blockchain revolution, AI and robotics. This Ark hedge fund graph is a striking visual take on what technological forces could disrupt our world within decades.


Ark Invest


Opportunities exist to take advantage of these disruptive changes as anybody who brought Amazon stock in the early 2000’s could confirm. In late 2017, I noted the crypto token Ripple when it was only 20 cents. Those readers who had acquired the token shortly after I had noted it within my cryptocurrency blog post could have sold it for over 10 times more within a few months.

I take the personal view (and I’m not an investment adviser) that there are opportunities within the crypto/blockchain space which I have recently discussed here. The point is that whilst we are in the early stages of a long-term decline and eventual collapse of our industrial civilisation, for the foreseeable future companies will carry on innovating, trillions of wealth will carry on sloshing around our globalised economy and life will carry on.

If you are prepared to take the risk, have funds to spare and are interested there are opportunities to grow your wealth and over time, hopefully, convert that into income yielding assets which will help you weather the future storms coming our way.

Embracing simplicity

One of the biggest challenges facing anybody who is prepared to consider the challenges I write about in my FI blog is the psychological hit to our internalised “progress” mythology that permutates our societies.

The underlying assumption is that we, that is humanity, will carry on “progressing”, overcoming any challenges and that growth will carry on forever. John Greer wrote a brilliant book on this subject called “After Progress: Reason and Religion at the End of the Industrial Age” which I highly recommend. The high priests of this secular religion are the men (they are usually men anyway) in white coats, working in hi-tech labs, who will save us from our self-inflicted problems.

Accepting that we are not progressing but in most aspects are now declining is a profoundly humbling challenge for many of us. In truth, it takes years to internalise that message but it is worth it.

Why? Because it is this faith, and that is what it is if you are honest, that “they will come up with something” that stops us from changing our lifestyles and planning for the inevitable shocks that will shatter our world this century.

The long-term challenge is to embrace simplicity. Grow food within your own garden, recycle, make and mend, try and use public transport and other sustainable forms of transportation and enjoy the free and simple things in life; a nice walk in the countryside, playing card games with your friends and enjoying home brewed beer with friends.

This is a normal way of life for the majority of the globe and they aren’t necessarily unhappier because of it. If you embrace rather then resist the inevitable shift to a more basic way of life you will be better off, materially and spiritually as a consequence.

Managing political risk

One of the darkest aspects of the coming decades of disruption is that potential negative political impact which could affect you and your family. It is a common pattern in a declining civilisation that you see the emergence of Caesars, charismatic strongmen who rise to power, something that Oswald Spengler predicted in his prophetic book “The Decline of the West” in the 1920’s.

History is also a good guide to what also can happen to minorities, particularly ethnic or religious minorities during periods of political and economic trouble. So, what do I see as the most likely fault lines and political risks in the coming decades with a focus on the developed world?

Well the first is the rise of the populist left with a focus of swinging wealth taxes of the wealthy across the developed world as economic growth withers away, the costs of maintaining our welfare systems skyrocket and government debts balloon. If you are rich expect governments across the world to target you via various forms of direct and indirect taxes.

I will be writing soon on the impact of the above trends on the low-tax offshore finance centres (also known as “tax havens”) where many of the super-rich have started fleeing to in recent years. It won’t be easy to avoid the return of wealth taxes but it probably can be mitigated if you wish.

The shocking return of anti-Semitism within the UK Labour party and within the progressive wing of the US Democratic party is an example that the oldest form of hate is still very much with us. Sadly, political risk will be of acute concern to Jewish readers of this blog who will need to navigate two main risks going forward; the rise of violent anti-Semitic Islamist ideology and the less violent but equally unpleasant emergence of a hard-left “anti-Zionist” hatred that quickly morphs into anti-Semitism.

Jewish people are physically most at risk from jihadi extremism with old-school far right extremism now only a residual threat. After all, the French nationalist leader Marine Le Pen now considers herself and her rebranded National Front party a friend of the besieged Jewish community. The wider re-emergence within polite society of anti-Semitism is a worrying development and should concern the Jewish community.

My recommendation to any Jewish readers would be to move to places where there is little anti-Semitism and Jewish communities can reside and practise their faith in peace.

Political risk can also include the emergence of authoritarian regimes, even in places that were once democratic and counter intuitively the loss of state power with risks of rising crime and civil disorder. Apart from trying to avoid likely places of trouble it is hard to give specific advice on this area given the future variables are so hard to foresee. Still, as a general rule, consider moving if you already live in places of racial/religious tension and/or there is a high crime rate e.g. major cities within western Europe and parts of America.

Overall, the coming generations of change will reshape everybody’s life to a lesser or greater extent.

Wise folk will start thinking and planning now before panic sets in…

How to prepare for a dying future

Our World Is Dying




“Despite the claims still retailed by the increasingly ragged chorus of believers in perpetual progress, industrial civilization is no longer progressing. Rather, it’s slipping bit by bit down the trajectory I’ve titled the Long Descent—the process, averaging one to three centuries in length, by which every previous human civilization has ended in a dark age.”


John Michael Greer – “The Dark Places of the Future



I was in Goa when the New Year celebrations commenced and it was certainly good fun! But whilst I enjoyed the party, the truth is that I have a sense of growing dread about what is coming down the track for our industrial civilisation and, to quote Mr Barnier, how the clock is ticking for me and everybody else on this slowly sinking Titanic.

Travelling around India was a fascinating holiday and a true eye opener into the day-to-day existence of a developing country. Regular electricity blackouts, horrific air pollution in the cities, immense poverty and vast slums where millions scratch out a living in heavily populated mega-cities.

One of the most illuminating conversations I had with our tour guide, a highly educated Hindi, was over his fears for the future of the country. India is facing huge water shortages within a decade and he was searching for a place in India which could act, in his words, as a safe haven for his family in the future.

Despite the vast progress India has undoubtedly made in the last decades, and will do so for the foreseeable future, the Limits to Growth mega-trends of resource scarcity, water shortages and an increasingly unstable climate are going to lead to a “perfect storm” by 2030 or so. The scenario painted by the Population Institute in their 2030: The Perfect Storm Scenario looks frighteningly realistic given the trajectory India is heading; a major economic, societal, political and energetic crisis within the next 15 years.

And it isn’t just India. We are all, to a lesser or greater extent, in the same boat although the Long Descent will impact different regions in different ways over the rest of the century.

2019 in the broadest sense, can be seen as another step down that jagged path of decline, partial recoveries and further decline, of our industrial civilization. To paraphrase John Greer in his superb 2019 review, our collective future will be dealing with the increasingly dire consequences of an industrial civilisation past its peak.

Long-time readers know that the beginning of the year is when I review the performance of my predictions for the previous year which you can read here.

I scored a winner with my forecast of a major volcanic eruption which would cause major economic disruption. The Kilauean volcanic eruption in May caused catastrophic damage to homes and businesses and led to Hawaii losing out on about $480 million in tourist dollars.

When making my 2017 forecasts I over-estimated the political fortunes of populist forces during the Dutch and French elections. As a consequence, I swung too far the other way in my 2018 prediction of the Italian elections and consequently under-estimated the stunning electoral triumph of the League and Five Star populist parties in the March 2018 elections who went on to form a coalition government.

Still I did get some of it right, correctly analysing that the electorate wanted a “strong hand” to deal with the refugee crisis and that the new coalition government would be Eurosceptic. So, I will give myself 50% for this one.

The highly volatile crypto asset market has proven to be a roller coaster in 2018 but not in the direction of travel I anticipated at the beginning of the year. Bitcoin, the lead crypto asset, continued its decline throughout the year and the overall sector remains mired in a bear market. Both my bitcoin and Ethereum price predictions were proven spectacularly wrong.

I anticipated that the barriers to the involvement of institutional money into the emerging crypto market would open by the end of 2018 leading to a price recovery of the top crypto assets. Whilst my timing is clearly wrong, and I didn’t expect such a brutal bear market, my medium-term outlook remains bullish about cryptos.

The institutional infrastructure will be in place by mid-2019 for major Wall Street firms, family offices and wealthy investors to easily buy and sell crypto tokens. My own view is that I do not expect to see a return of a crypto bull market until 2020, and unlike the 2016-17 bull run the potentially huge profits will be centred on a small number of quality crypto plays (readers who wish to read more are advised to go to websites like Palm Beach and Investing Haven which specialise in this sector).

I scored a bullseye on my prediction of a major rise in the oil prices in 2018 with tighter supply and sanction-driven fears sending oil to my forecast price of $80 on 17th May. Whilst the oil prices have temporarily dropped since then, I remain confident that commodities as an asset class are in the early stages of a renewed super cycle which will be positive for those invested in the currently unfashionable commodity stocks space.

The victory by the Democrats in re-taking the House of Representatives from the Republicans during the mid-term elections was a clear sign of a backlash from liberal America against the Trump White House. I initially wrote in my post that “…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”. However, influenced by John Greer’s slightly ambivalent forecast at the beginning of the year and the clear signs of a booming economy, I was swayed by the logic that the better economic climate would save the GOP. This is one I clearly got wrong however my mitigating plea was that my initial instincts were right.

So that’s another year gone in forecasting which I performed reasonably well despite a few howlers, what about the future? This year I wish to do things slightly different with my aim of consolidating in one post my long-term outlook which will also include specific forecasts for this year in bold.

Forecasting is a tough job and my thinking has evolved on certain issues since I started blogging in 2016. For example, when I wrote my “winter is coming” post, I discussed why I thought that the euro would collapse within the 5 years of that post (e.g. 2021 at the latest).

Since then, I’ve reached the conclusion that this is unlikely to happen, given the majority support for the eurozone across member-states among both the general public and elite opinion. Similarly, whilst the European Union (EU) is facing increased deadlock, the rise of populist and nationalist forces hostile to further integration, for deep seated political and economic reasons, its likely that the EU will survive as an entity in the coming decades.

For ex-Warsaw Pact states, the EU has been a source of funds but more importantly a recognition that they have become fully European after the horrors of long-term Soviet occupation. In southern Europe, membership of the EU is seen as a guarantee that they will not revert back to bad old days of fascist dictatorships. The common thread is that the EU is a form of escape by Europeans haunted by their own past.

Britain, the victor of WW2 and the liquidator of one of the greatest empires in world history, had no such historical escapism when it joined the EU. We joined, primarily, for self-interested economic reasons when Britain was known as the “sick man of Europe”. When the 2016 referendum of whether the UK should remain part of the club occurred, a narrow majority of British voters decided that for economic and security reasons the country was better of outside the EU (an outcome that I predicted in January 2016).

The Brexit negotiations have descended into farce and turmoil in Westminster amid widespread popular revulsion against the political class across the political divide. The Hard Brexiteers within the Conservative Party voted against Prime Minister May’s semi-soft Brexit deal along with the opposition parties ensuring that May’s deal, as currently constituted, is almost certainly dead.

Whilst a no-deal Brexit remains the legal outcome should the UK Parliament fail to agree the withdrawal deal there is widespread opposition from within the predominately pro-European MP’s to a no-deal outcome. The situation is fluid and highly volatile but my forecast (60% probability) is that Britain will leave the EU (in 2019) and on a semi-soft/softish terms once a 11th hour amendment to May’s deal is agreed between the government, parliament and the EU. I suspect that this will involve concessions on the so-called Irish backstop by the Irish/EU side, firmer provisions on UK labour rights and amended wording within the political declaration pushing the UK towards a permanent custom union.

A no-deal or no-Brexit outcome remain tail-end risks but not my base scenario. In the longer term, I expect to see a major economic crisis facing the eurozone once the ECB stop purchasing government debts. The eventual solution, once the political resistance from the German-led bloc fades, will be the full-scale monetization of European sovereign debt by the ECB to avoid a collapse of the euro. This crisis, likely by the early 2020’s, will ensure the eurozone survival into the “perfect storm” period of the early 2030’s, after which all bets are off!

I have written recently about how demographics, resource depletion and the growing climate instability amidst a warming planet will end our globalised economic order within decades. Transitioning from an era of economic growth to economic contraction will cause enormous disruptions within the global body politic, akin to a collective nervous breakdown by both the elites and the general public across the world. If that doesn’t make you feel nervous readers, then nothing will!

Gail Tverberg, a long-standing writer on economics and resource scarcity, recently published a fascinating update on the Limits to Growth mega-trend which I wrote in some detail in 2016 in my post “winter is coming”. She has attempted to update where we currently are within the BAU Limits to Growth modelling which is approximately 5 years “behind schedule” in the decline of our industrial civilisation (e.g. we are doing slightly better then where the modelling expected us to be vis v vis 2019).

limits to growth update

Our finite world


As you can see yourself, according to my rough calculations, we should expect a major economic crisis by early to mid-2020’s once services, industrial and food per capita peaks and rolls over. John Greer has written before that he expects various smoke and mirror fiscal and monetary magic by our politicians and central banks to hide this economic reality going into next decade but at some point, around 2030 will be an historical turning point for the world as we transition into a world of permanent economic contraction.

At the same time that the world faces worsening resource scarcity, please read here for an excellent review of this subject, the climate will continue to heat up. Reading the Sunday Times the other weekend, I discovered a remarkable map on when the coldest year in the future will be warmer than the hottest year in the past prior to 2005.

countdown to climate departure

Sunday Times Magazine


This dovetails with the analysis of Nafeez Ahmad whom I quote in my review of his book;

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.

When I was in Mumbai, we did a street food tour and the boys who were guiding us noted that the heat during the summer could be unbearable. Mumbai’s climatic departure is in 2034. According to statistics in 2011, 12 million people lived in the mega-city, and the real number is certainly higher now so the magnitude of the potential mass migration from the vast tropics to the cooler north and south can barely be imagined. The looming mega-migrations from the tropical belts to North America, Europe, Russia and Australasia (Australia and New Zealand) will dominate the 21st century and shatter the current global “liberal” world order.

Europe will be most directly impacted by the coming tsunami of human migrations and I have written in detail why I think the geopolitical outcome will be that southern Europe will become part of Dar al-Islam. How events will pan out within northern Europe depends on whether the growing Muslim minorities integrate within the wider European society, governments successfully marginalise and crack down on the Islamic extremists and ultimately on the ability of the security forces to maintain order in the future.

Internal migrations within the EU, from the increasingly hot and troubled southern Europe to the cooler and safer north will also be a major challenge for the EU. Assuming that the British successfully leave the EU and regain control over their borders, they may be relieved to escape the potential liability of becoming the destination for Italians, Greeks and Spanish citizens when the millions of predominately Muslim refugees attempt to storm into Europe in the 2030’s.

One just has to watch the news to see that the oldest democracies in the world, the UK, America and France are facing government gridlock, political paralysis and riots on the streets at the moment. As our economies stagnate, growth slowly dies and our politicians desperately stumble from one crisis to another as we descent down the path of the Long Descent, popular frustration with democracy will grow. I expect to see the democratic club of nations to continue to shrink in the coming decades. A wildcard prediction for 2019 (30% probability) will be that the security forces of the French state will join the “yellow vests” movement and strike themselves, leading to civil unrest and chaos in the heart of Paris. Commentators will refer to it as the “French Spring” given the parallels with the Arab Spring.

The biggest geopolitical story is the long-term decline of the de facto American empire and why some kind of grand crisis is looming in the 2020’s. I have already reviewed John Greer’s excellent novel on how China will defeat America in a major clash in the mid-2020’s as well as a recent book on the impending fall of the American empire by the historian Alfred W. McCoy. To sum up, I expect that a major crisis will erupt at some point next decade that will herald the end of American dominance and the rise of the new Chinese-Russian axis in global geopolitics. As part of that long-term trend my forecast (70% probability) is that President Trump will successfully withdraw the majority of troops from Syria.

 To summarise, I see 2019 as more of the same in terms of the big picture but longer term, the 2020’s will prove a major crisis for Americans in particular as they adjust to the end of their dominance over world affairs.

Looking further into the future, the key moment will be around 2030, as economic growth for the majority of the planet withers away and we enter into an era of economic contraction, population decline and a frightening new era of mega-migrations from the vast tropical region. The 2030’s will look and feel similar to the 1930’s, a dark and frightening decade with no clear light at the end of the tunnel.

My personal advice to those reading this article is to enjoy the relative stability of the current political and economic status quo as it will not last forever.



Our World Is Dying

Economic winter and the coming end of globalisation



The International Banker


As “free” market capitalism breaks down in a postgrowth era, command economies will be the logical fallback — both China and Russia already have hybrid state-capitalist economies, and as China extracts itself from the economic crisis its last few decades have guaranteed it, it’ll move further into a command economy direction. Markets will doubtless continue to function, but they’ll be manipulated more and more openly to produce the results governments desire, and a growing fraction of real economic activity will go off-book or be reduced to subsistence activities and local exchanges detached from market forces.”

“The timing of the turn into contraction is complex, not least because it’ll be papered over by the manipulation of abstractions for a good long while. I expect it to happen one country or region at a time, with some maintaining growth while others begin to contract, but the tipping points are to my mind likely to cluster around 2030.

John Michael Greer – The Ecosophia


Apologies for the delay in posting on FI. I’ve been busy with domestic projects and distracted by the US mid-term elections and Brexit chaos which have all diverted me from writing a FI post in the last couple of months.

This will be my final post for 2018 before I return after New Year to review (what looks to be a mixed performance!) of my 2018 forecasts and look at my crystal ball into what might likely occur in 2019.

I’m going to take you on a journey into our near future.

There is a group of small islands, called Jersey, Guernsey, Sark and Alderney which are close to France. They are known as the Channel Islands.


World Atlas


Economic and demographic challenges, principally a contracting population, a low birth rate and an aging society, are leading to an economic death spiral for the majority of these tiny islands. Sark, until recently the last feudal outpost in Europe, is facing a major crisis as young people leave the island, businesses close and the island faces looming bankruptcy.

To make things worse, the dysfunctional island government has entered into a serious dispute with the company which provides electricity to the island. The costs of ensuring that power is supplied are high and the locals have to pay considerably more then other islanders as a consequence. Whilst a last-minute agreement was reached in the last few days, there is still a real possibility that the lights could go out in Sark within months, making the world’s First Dark Sky island truly dark.

The economic implications of a contracting population, in particular a working-age population, is what interests me because it will be the fate of much of the core of our industrial civilisation within a decade. The forecasting company GEFIRA have a superb map showing how much of Europe is already shrinking and the same trend is occurring in East Asia, the Russian Federation and other parts of our core industrial civilisation.

Shrinking population Europe

GEFIRA No 27 newsletter


In Guernsey, where the economy has never recovered from the economic crisis of 2007/2008, the population is shrinking and housing prices have dropped 12.6% since a peak in 2014.

Alderney is facing an even worse economic death spiral. According to the Jersey Evening Post, a local Jersey newspaper house prices in Alderney, for example, have fallen by around 40 per cent from their peak (nearly 20 per cent of houses in Alderney are unoccupied”. I recently visited Guernsey and Sark and you can smell the stench of economic and demographic death. Businesses closed, sale signs aplenty outside properties, a lack of young people (and if they are around, they are unhealthy, uneducated and shabbily dressed); the overall impression leaves you feeling depressed, even if the islands still have a special charm to them.

For those who have read their Greer books, they should not be surprised. In Greer’s book The Ecotechnic Future, he writes that the most isolated areas will be cut-off first from the benefits of industrial civilisation as rising costs lead to the gradual phasing out of services, goods and electric power to the most remote areas. In the American context, it will be the isolated rural areas of America which will see funding on the maintenance of roads shrivel up and die, the hospitals, police stations and fire stations closed and finally the power will be shutdown, permanently making these areas off-grid. Greer warns that once the lights go off, these areas of America will be dangerous, unstable and unwelcome places for visitors.

I see a similar process for isolated islands like the Channel Islands which will increasingly be cut-off by the UK government and major corporations as the costs of supplying, maintaining and preserving the benefits of industrial civilisation become untenable in the coming decades. Greer tentatively forecast that the rural areas of North America will see the power cut-off by the 2030’s, approximately a century after electrification expanded beyond the cities, towns and growing suburbs to the American countryside.

Many experts say that immigration is the solution to this primarily demographic challenge and in part they are correct. The island of Jersey, which has a more liberal approach to immigration from predominately central-east European countries, has benefited from an influx of young, skilled and hard-working workers who culturally “fit” within a predominately white and nominally Christian population.

The German experience since 2015 is a belated warning that not all immigrants are the same and a mass influx of largely uneducated young men from the Muslim world hasn’t worked so well. Culturally, these migrants have struggled to integrate into a world very different from their conservative, patriarchal and Muslim backgrounds. Many are still unemployed and of those that have found jobs, they are largely unskilled labour, not the future teachers, engineers and plumbers Germany so desperately needs as the baby boomer generation retires.

Compared to the Polish migrants who flocked to western Europe after the accession of the ex-Warsaw Pact states, who were educated and hard-working with academic backgrounds, it is equivalent to comparing apples and oranges. A balanced, prudent and qualitative immigration policy can mitigate against the challenges of an ageing and shrinking population but the wider mega-trends of climate change chaos, resource scarcity and the coming mega-migrations remain.

The end of economic growth is inevitable given the shrinking resource base of our global economy, the massive and growing debts and the rising costs caused by accelerating climate change. I have explored these issues in a number of posts, including “winter is coming”, “the sleepwalkers” and “Islamic Volkerwanderung”.

I concur with Greer’s analysis that around the year 2030 will be the tipping point for the majority of the world to enter into demographic and economic contraction (although some areas will be earlier, like Guernsey and Sark, and others later). The economic consequences of the end of growth and a shrinking population will be declining housing prices, growing fiscal pressures on governments to find enough money to fund services and pay pension obligations, weakening demand for goods and services within the real economy which will have a knock-on effect on companies.

A world of permanent economic contraction, likely within 15 years or so, will be a world where it will be abnormal for businesses to make a profit, a shrinking consumer base will spend less on goods and services and shares on the global bourses will have to adapt their assumptions on the real value of companies big and small. Global debt markets, both corporate and sovereign, will need to start factoring in whether in a post-growth era, will these bonds be repaid. Once the full-scale ramifications of the end of growth are realised by financial markets, the inevitable re-pricing of these markets could be violent and hugely disruptive.

On the flip-side, I also expect that so-called “free markets”, whether it is sovereign bonds, the FTSE 100 or the corporate debt market, will be increasingly manipulated by central banks and literally owned by the central banks themselves to keep up the pretense for as long as possible. For those readers who think I am exaggerating, note that the Bank of Japan currently owns nearly 75 per cent of the Japanese exchange-traded fund (ETF) market.

In the longer term, the capitalist system as we know it will end given the “limits to growth” megatrends, something that the German military predicted in their peak oil report which I covered here. The rise of the Eastern giants, China, India and Russia will see the emergence of hybrid economies which will command the distribution of economic resources once globalisation either implodes or fades away in the coming decades.

So, to conclude, the coming end of economic growth, in part triggered by the demographic shifts going in in the cores of our industrial civilisation, will lead to a fundamental reset of economic relations within a generation. This is the biggest story going on and it is barely registered by our media, political and economic elites.

Economic winter and the coming end of globalisation

Brexit: Beware the Ides of March

Ides of March


“My take is that the EU leadership is far more interested in punishing Britain for voting for Brexit than it is in its own immediate economic interests. The thing Brussels has to fear more than anything else is that if Britain comes through Brexit in good shape, and especially if it’s seen to benefit as a result, other countries could head for the exit, and still others could start treating the threat of a referendum as a useful bargaining chip in their disputes with the EU. Thus, I’ll predict that the EU leaders will either reject the Chequers plan outright, or accept it but with demands for alteration that will be politically unacceptable in Britain.”

John Michael Greer – Ecosophia – An Astrological Interlude: Brexit


“… many European politicians have made a cold calculation that a ‘successful’ Brexit could create political momentum in their own countries for looser ties with the EU.”

BBC News – Brexit: sympathy without support from Europe’s right


In Shakespeare’s play Julius Caesar, the soothsayer warned the Roman dictator to “beware the Ides of March”. Those of my readership who are classical history buffs will already know the outcome: the great Roman leader was stabbed to death by his closest allies in an act of brutal betrayal.

Just as in Roman times, March is also a critical month for Great Britain as the clock ticks down to when Britain formally leaves the European Union (EU) on 31st March 2019. Britain’s Prime Minister Theresa May would not be human if she doesn’t occasionally wake up, sweating, in the middle of the night in 10 Downing Street at what the outcome will be for the British nation.

The truth is, nobody in Europe knows what the outcome of the Brexit negotiations will be, whether a deal will be agreed or not and whether a deal, assuming it is agreed, will be of a “soft” or “hard” version. As somebody who successfully predicted the narrow Leave victory at the beginning of 2016 on this blog, I thought it would be sensible to review whether my forecast of a “semi-soft” Brexit still stands.

Before I proceed, I will need to discuss an issue that may concern some of my readership. John Greer, the political thinker and analyst who I have referenced many times on this website, recently wrote an update on Brexit on his blog Ecosophia which I will reference in my post. He uses a very unconventional methodology to his near-term forecast of the Brexit outcome, astrology, which he considers a reliable approach to forecasting the future.

My own view is that I know nothing about astrology and have no idea if it works or not. However, if Greer’s approach works for him, and more importantly the underlying rational political logic and analysis dovetails with my own research and thinking, I see no reason why I shouldn’t reference and use his forecast in my own blog.

With that out of the way, I will proceed with my latest thinking on Brexit.

The underlying logic behind my forecast of a Brexit deal based on a “semi-soft Brexit”, largely along the lines of the Chequers plan, assumes that EU member-states will be primarily guided by their immediate economic and strategic interests. The UK is a major economic and military power and a no-deal outcome would negatively impact the EU27 economies, risk triggering a European recession and potentially lead to a surge in support for populist parties across the Continent.

Strategically, a toxic Brexit divorce would shatter NATO and destroy public support for the UK’s military protection of central-eastern Europe from Russian revanchism. With Russia, Turkey and America increasingly hostile to the European Project, refusing to engage with a soon-to-be Brexit Britain would be an act of strategic madness by Europe’s leading powers.

The hostile reaction to May’s Chequers plan, which involved painful concessions by the Prime Minister and the loss of two senior cabinet ministers (David Davis and Boris Johnson), by the EU would suggest that my assumption was wrong. It looks increasingly clear that the major centres of power within Europe, Brussels, Paris and Berlin have decided that preserving the integrity of the single market is more important than protecting existing economic and geo-strategic ties with Great Britain. There can be no “a la carte” Brexit, whereby Britain is partially in and out of the single market which is the core of May’s Chequers plan.

Either you are fully in, including signing up to freedom of movement for EU citizens, the Norway option, or you are fully out, with limited access to the single market, known as the Canada option.

Recent headlines have suggested that the EU are softening their position to save Theresa May as her political enemies surround her with their (metaphorical) knives. Reading the small print of these articles indicates no such thing. The EU are not prepared to make any substantive concession on Chequers and are only prepared to allow vague wording in the political declaration on the future relationship between the EU and the UK to help May push it through Parliament.

The calculation within European capitals is that a mutilated Chequers Minus package, once Barnier has had his pounds of flesh, will be a de facto ultimatum to the British government. Take it or leave it.

Certain issues will be fudged, kicked down the road and flowered up in vague wording but the core of the withdrawal treaty will be on the EU’s terms. As Ambrose writes in the Telegraph, Barnier’s game plan was “… was to pressure the Government into whittling down Chequers: either accept the Customs Union, swallow EU law across the gamut of services and goods, and give way on free movement or accept the thin gruel of a limited goods deal – one that should lock in the EU’s £90bn trade surplus, without reciprocation on services, where the EU has a deficit.”

It is precisely these alterations that John Greer was presumably referencing when he writes that “the EU leaders will either reject the Chequers plan outright, or accept it but with demands for alteration that will be politically unacceptable in Britain.” A humiliating Versailles-style settlement, assuming that the British government carries on negotiating on the basis of Chequers, is likely to lead to either the collapse of negotiations should the May team decide that the deal is unsellable back home or a later collapse as the Tory party and/or the Parliament reject the proposed settlement.

For any Chequers-Minus/Barnier deal to survive the ordeal of getting through the Conservative cabinet and Parliament, Prime Minister May will need substantial support from Labour and the Welsh and Scottish nationalists to win the vote. This is not inconceivable. Berenberg Bank, who I have referenced before, continue as their base case (60%) that precisely such a scenario will occur, although they are forecasting a 40% chance that the deal will be rejected.

There are a number of other scenarios that could play out over the next few months.

  1. Canada is resurrected

The first is that May, under pressure from her Brexit hardliners and the refusal of the EU to engage with her Chequers plan, adjusts and aims for a Canada style free trade agreement. This is unlikely to happen since a Canada style deal would not solve the Irish border quandary of ensuring no hard border between Northern Ireland and the Irish Republic post-Brexit. May committed to precisely such an undertaking in December 2017 with the EU27.

  1. May toppled from power

The second is that Tory backbenchers will attempt to topple May from power in the coming months. Eurointelligence, in their briefing today, note that should May be toppled by the former Foreign Secretary Boris Johnson, “…he would dump Chequers and call for a Canada-type deal. This would lead to a head-on confrontation with the EU over the Irish backstop, which will remain unacceptable to the UK in this particular scenario. If the EU blinks over Ireland, there will be a compromise. Otherwise, a hard Brexit.

The prospect of May facing a leadership contest is growing amid widespread grassroots rage about Chequers and the manoeuvrings of ambitious Tory politicians sensing blood.

  1. EEA comes back

The UK Parliament rejected in a previous vote a proposed joining of the EEA, also known as the “soft Brexit” option which would involve remaining within the single market and customs union. Both political parties have rejected this option, for two reasons. The first is that Britain would become a rule-follower without any input or influence of the shaping of the laws and regulations within the EU27. The second, even more politically explosive, is that Britain would not regain control over its borders.

Immigration was a key issue during the referendum campaign and many MP’s are wary of the backlash from Leave voters should they bounce Britain into a soft Brexit which doesn’t involve “taking back control” of our immigration policy and borders.

  1. Article 50 extended

Should negotiations collapse or the withdrawal treaty is rejected by the UK Parliament, the prospect of crashing out of the EU without a deal will lead to widespread calls for Article 50 to be extended. For Britain to postpone leaving the EU would involve the approval of every EU government across the EU28, including the UK.

The EU have made it clear that they are reluctant to prolong the Brexit agony and would be loathed to extend Article 50 beyond May, when critical European parliament elections occur. The prospect of dozens of UKIP MEP’s returning to parliament would be intolerable to European elites already frightened of the rising tide of populist and nationalistic forces across the Continent.

The only realistic way Article 50 could be extended is if a deal is close to completion and would be approved on a time limited basis only.

  1. Brexit revoked

In the event of a failure to reach an agreement, the government could agree to revoke Brexit, subject to the approval of the UK Parliament and the EU27. This strikes me as highly unlikely. It would lead to unprecedented political and constitutional chaos with the prospect of serious civil unrest from enraged Leave voters.


The political and financial elites of Europe assume that Britain will swallow whatever package is eventually hammered out by Barnier and his team since the prospect of a Hard Brexit is unthinkable. Yet, the same elites said the same thing before the Brexit referendum about the possibility of the British people voting Leave or the Americans voting for Donald Trump in November 2016.

Having read the various no-deal reports I’ve reached the conclusion that assuming that the UK ensures interim holding arrangements with its neighbours the worst-case scenarios of food and medicine running out will be proven wrong. A hard Brexit, with Britain falling back on WTO will likely lead to a degree of disruption for the first few months but the worse-case predictions are unlikely to come true.

There is a reasonable chance that the UK could economically boom post-March, thanks to the further fall in sterling, the saving of the 40 billion divorce bill (equivalent to 2% of the British economy) and inflationary wage pressures on the economy as the supply of foreign EU workers dries up. Rising real wages for the bottom 80% would increase consumer confidence and boost the UK economy.

As Bernard Connolly, the European Commission’s former currency director and founder of Connolly Associates, said a weaker pound has already led to a big improvement in the UK’s current account – when adjusted for the jobs boom and full employment, the metric that matters. A further slide would make the UK economy even more competitive and narrow the deficit further.

If I summed up my thoughts in one sentence, it would be that my head says there will be a deal but my gut is telling me it will be a no-deal/hard Brexit.

Overall, I now consider the chances of a no deal outcome (e.g. Hard Brexit) equally likely as a deal, whether based on a Canada-type deal or a Chequers Minus/Barnier package.

I will provide a further update in the coming months as negotiations proceed.

As always, I welcome your feedback and recommend, if you haven’t already, subscribing to my blog for future posts at the bottom of the page.

Brexit: Beware the Ides of March

The Sleepwalkers



“During the spring of 1977 and the summer of 1978, the Jasons met to determine what would happen once the concentration of carbon dioxide in the atmosphere doubled from pre-Industrial Revolution levels. It was an arbitrary milestone, the doubling, but a useful one, as its inevitability was not in question; the threshold would most likely be breached by 2035.

The Jasons’ report to the Department of Energy, “The Long-Term Impact of Atmospheric Carbon Dioxide on Climate,” was written in an understated tone that only enhanced its nightmarish findings: Global temperatures would increase by an average of two to three degrees Celsius; Dust Bowl conditions would “threaten large areas of North America, Asia and Africa”; access to drinking water and agricultural production would fall, triggering mass migration on an unprecedented scale.

“Perhaps the most ominous feature,” however, was the effect of a changing climate on the poles. Even a minimal warming “could lead to rapid melting” of the West Antarctic ice sheet. The ice sheet contained enough water to raise the level of the oceans 16 feet.”

The New York Times Magazine – Losing Earth The Decade we almost stopped climate change


“…without fossil fuels to prop it up, our entire way of life will come crashing down. We could have weaned ourselves off fossil fuels if we’d followed through on the promising developments of the 1970s, but we did the opposite, boosting our fossil fuel consumption per capita way above what it was in that decade. Now our politicians are trapped; keeping the beast fed requires more and more drastic measures, and even those are just a matter of buying a little more time at the cost of an even worse outcome down the road.”

John Michael Greer – The Ecosophia


The world is sleepwalking towards a catastrophe.

It won’t be like the Hollywood movies, when the world ends in a week and there will definitely be no superhero arriving to save us from our own self-inflicted mistakes.

For those readers who live in a cave, just a few of the headlines this summer give just a taste of what will come in the decades to come as we plunge further into the nightmarish world of resource depletion and accelerating global warming. Unprecedented forest fires in California, intense fires in Greece which have incinerated dozens of men, woman and children, disastrous crop failures across the world, drought in Iran and Iraq, riots in Haiti due to rising food prices and the emergence of violent piracy off the coast of Venezuela.

The media, with the odd exception, have failed to “connect the dots” on these interconnected crises, which can be summarised as the rising tide of system failures and collapses caused by the bigger forces of the inexorable decline in the supply of readily available fossil fuels and the global impact caused by climate change.

The tragedy is this future, which is baked in now, was discussed and warned about publicly nearly 50 years, during the 1970’s. I have already discussed the Limits to Growth report, published in the early 1970’s which explored the impact of the depletion of non-renewable resources on our industrial civilisation in my post “winter is coming”.

For this post, I would like to focus on a subject I have discussed less, which is climate change. The quote from the New York Times article references the Jason’s, a group of scientists, who painted a grim but prophetic report to the US government on the implications of increased carbon emissions would have on the planet in the late 1970’s. That is now happening.

According to a recent report by an international team of scientists, under current trends, the Earth is heading towards a “hothouse climate”, which will see huge swathes of the planet become uninhabitable and 200ft sea level rises. Crop failures, rising sea levels and extreme heat waves and droughts will cause immense long-term damage to the foundations of our globalised economy.

Rising sea levels threaten our mega-cities which are the focus of the transportation of goods and agricultural produce. The respected international think tank Chatham House wrote a report on this recently, titled “Chokepoints and Vulnerabilities in Global Food Trade”. The writers of the report warned of “… the risk of severe disruption at certain ports, maritime straits, and inland transport routes, which could have devastating knock-on effects for global food security.”


Chatham House – Maritime, coastal and inland chokepoints and major shipping routes


During the 2007/08 oil spike, which had a corresponding impact on food prices, countries around the world suspended food exports as the global poor started to riot over rocketing prices of basic foodstuff. Any disruption of the key choke points of global trade in key goods and food produce would act as a trigger for a wider breakdown of global supply chains.

In the medium term, rising global temperatures will devastate significant parts of the world, including large areas of North America, Asia and Africa, which I discussed in my review of Mossaddeq Ahmed book on resource depletion and climate change. By the 2030’s, it looks likely that climate change will be severely impacting those parts of the world along the tropics and triggering mass migrations to cooler parts of the world.

I read a recent Guardian article on the “perfect storm” developing in Iran, where a drought, the worst in half a century, depletion of water supplies, a disastrous crop, hyperinflation and sanctions is contributing to a growing sense of despair among the people. Protests are erupting on a near daily basis, many of the youth dream of fleeing and there is open talk that the country is doomed. Whilst there are specific factors unique to Iran which have brought forward the crisis, the same challenges are present throughout the Greater Middle East and North Africa.

As I note in my post Islamic Volkerwanderung, the likely outcome will be that by the 2030’s, enormous waves of Muslim refugees will be fleeing this vast zone and will try to move into Europe. How big and violent the coming mass migrations will be remains to be seen but it is unlikely that the tens of millions on the march will not be prepared to fight their way to safety, even if that means slaughtering the existing inhabitants of Spain, Italy and the Balkans in the process.

Mass migrations will impact other parts of the world. Within the United States, rising sea levels, the emergence of Dust Bowl conditions across the south-west and mid-west will see internal migrations within the United States. Central America, already deeply troubled by failed states, violent narco-groups and economic collapse will provide further mass instability, with huge waves of refugees attempting to flee to the relative safety of America in the coming decades. The offshore tax havens of the Caribbean are already starting to collapse, and if the violence and piracy get worse, you may see the collapse of tourism in the future.

It is not all doom and gloom of course. Certain major powers will be relative winners in this new era of scarcity industrialism. Russia, already partially withdrawn from the globalised economic system due to Western economic sanctions, is rich in natural resources, food and land. Under President Putin, Russia has aligned itself with the rising power of China and integrated into the emerging Eurasian network of trading and railway links spreading across China into India, Central Asia and European Russia. This is called the Belt and Road Initiative and it is creating a new economic order centred on Beijing and Moscow.



Prior to the election of President Trump in 2016, I discussed the possibility that Trump would pivot to Moscow and separate the Russians and Chinese. This now strikes me as unlikely to happen due to the hostility of the Washington military-industrial establishment and the growing economic clout of the Chinese. President Putin appears to have bet on the Chinese horse and there is little President Trump can do to stop that.

The jagged withdrawal of the Americans from their empire is a sign that President Trump will be happy to make deals with the rising Russians and Chinese in the coming years in periphery areas like South Korea, Iran, Turkey and Europe. I fully expect that Trump will push forward the withdrawal of American troops from Germany, South Korea, Turkey and Afghanistan as the American empire is slowly wound down. Under President Trump, the prospects of a terrifying Twilight Last Gleaming scenario appear to have diminished but the prospects of a future crisis which shatters global confidence in American military and economic prestige remains.

As I discussed in my review of a recent book on the coming end of American hegemony by 2030, President Trump grand strategy is founded on the rebuilding of the nation-state, in particular the industrial base, along with a partial withdrawal from the empire business overseas. This offers one peaceful genteel scenario which preserves America as a great power as we transition into a new world where the Eastern powers dominate.

Since I wrote my article “winter is coming”, I have had a chance to review my forecasts made in 2016 and this is an opportunity to expand my thoughts on the likely probabilities as we sleepwalk into the death of the old world.

  • Europe: I have shifted my timeline on the likely end of the eurozone from around 2020 to 2030. Elite and public opinion support membership of the eurozone across the member-states despite the growing pressures on the common currency and sufficient political will remains to prop it up for another decade. I anticipate that eurozone debt will be mutualised by the ECB during the next financial crisis which will kick the can down the road for a little while longer.



  • Global economy: Taking into consideration the Limits to Growth business-as-usual modelling, the super-debt cycle and the likely peaking of fossil fuels by 2030, it looks increasingly likely that after 2030 the global economy will unravel. This will be a process and will impact certain parts of the world worse then others. Parts of Africa, Central America and the Middle East look extremely vulnerable to economic collapse and will likely disintegrate next decade. The core wealthy enclaves of industrial civilization, North America, Europe and East Asia may only face systematic crisis after 2030.


  • I have reviewed the German military report into peak oil and the dire medium-term implications on the global economy before and concur with its thesis that in the medium term “…the global economic system and every market-oriented national economy would collapse.” I expect the global economic system to collapse by the 2040’s. This will include the global pension industry which will likely face insolvency during the 2030’s leading to the bankruptcy of global pension schemes by the 2040’s.


Research Report: Resource constraints: sharing a finite world


I finish by referencing a recent book I have recently finished reading, called Stars Reach by John Greer. The story is based hundreds of years after the end of industrial civilisation and is a superb adventure story about a young scholars’ journey to find a fabled place called Stars Reach.

The novel explores the shrunken post-Global Warming and resource depleted world of America which has largely lost touch with the rest of the world. It is at times a harrowing read and the demise of the old world, our world, is difficult to digest at times. Yet the world described by John Greer feels realistic and incredibly well researched, taking into consideration the likely climate of America in the 2450’s and the nature of the salvage economy which will likely emerge after the era of scarcity industrialism dies once fossil fuels become extremely scarce in the future.

This is our future and we should start preparing for epic changes in the coming decades.


The Sleepwalkers