Making predictions is always dangerous, because the world and indeed the universe never act in a predictable way. Randomness is a fixed part of the process. But we have to try to take some view on the future, or we’re all going to just stay lying flat, and that is not going to help any of us. So what is the shape of the coming year? We might as well have a go at working out how this is going to go.
We will start with China, because that is of course, our focus. And our prediction would be that the year ahead is going to be a difficult one. It is not going to be one of a sudden crisis, but the problems that beset the system are going to gradually worsen, and there are for sure plenty of black swans and grey rhinos hiding in the bushes, waiting to jump out at us. The nature of the system is such that it can maintain its placid appearance for far longer than systems where there is transparency and accountability. But in the end, and don’t ask us when, there is a consequence and a resolution.
To be more specific, we predict employment is going to become worse, property will not see a significant rebound, it will prove impossible to fundamentally alter the current mentality of investors and consumers who are taking a passive and basically pessimistic view on prospects. It would take a major announcement on a significant issue by those command to shift that basic attitude, and such an event seems very unlikely. They have decided on the path, and they intend to stick to it.
Our guess is that the message Mr. X gave to Mr. Biden, that nothing was planned with regard to the island in the immediate future, will prove to be true, and that there will be no move to “resolve” that issue, regardless of how the forthcoming presidential election over there turns out. But the uncertainty that surrounds the issue is the most basic factor, and it is not possible for them to sweep that away, without abandoning the goal entirely. And that is certainly not quite yet.
In international terms, the prediction would be that the wolf warriors will be kept under tighter control than in the recent past, but the fundamental approach of looking to undermine the western-dominated global systems will continue unabated.
As to the rest of the world, we would predict the conflicts in Gaza and Ukraine will persist, but will not escalate beyond current levels. The Middle East will continue to fester. As to Ukraine, both the determination of Ukrainians and of the West will ensure Russia will not win and will continue to suffer huge losses. A ceasefire seems unlikely. How that one ends is impossible to say, but it still seems unlikely it end with Putin smiling.
As to the US, the main focus will be on the fate of Trump, and our prediction would be that in the end, the wheels of justice will push him into jail. If the GOP actually fields him as their candidate, they are idiots. And they might because they are. Middle America, in our view, is not going to support this man regardless of how old Biden is. The election may turn into a Biden versus Nikki Haley contest, and given the complete moral capitulation of the Republican Party, our money would still be on Biden to win. Possibly with another running mate.
Meanwhile, the US economy is doing okay, Europe is muddling along as usual, and while China is making good use of its relations with Africa and the Middle East, its increasingly difficult relationship with the developed world is not good for its economy. For the United States, if Trump is firmly and clearly rejected at the electoral and legal levels, then there is a chance for some sort of an American revival in the years ahead. The world is becoming more multipolar, no doubt about it, but America is not going to disappear or cease to be the hub.
Overall, we look to the future with hope and some consternation, but the human race has a way of finding the right path through its troubles, and we predict that we will do the same in this extraordinary time.
Have a great year ahead.