2024 Will Be Just Like 2023, Only More So
2024 Will Be Just Like 2023, Only More So
A Few Reflections On Where The World Is Headed
2023 is now officially in the history books, and 2024 is now officially started.
What sort of year was 2023? Was it a good year or a bad year?
What were the signal events of the year, and what do they tell us about what lies ahead for 2024?
Do we stand on the precipice, about to fall?
Will peace and prosperity come to the world at long last?
For better or worse, the same trends that shaped 2023 are set to shape 2024 as well. The world is likely going to stumble on for the coming twelve months, neither collapsing in calamity nor exploding in apocalypse, but also not witnessing an upsurge in peace and prosperity. Wars and rumors of wars will continue. The economic outlook will remain gloomy.
2024 will almost certainly be like 2023, only more so.
Let us consider a few of the pivotal narrative arcs from the past year, and contemplate what they portend for the coming year.
The narratives on the economy will without a doubt continue to be dominated by what the Federal Reserve has done and may do. Those narratives will also underscore both how little credence Wall Street gives the Fed, and how little control the Fed actually has over the economy.
We saw this unfold early in 2023 with the twin collapses of Silvergate Capital and Silicon Valley Bank, two banks which fell victim to their own mistakes and misjudgements during the liquidity mini-crisis of last March.
A point needs be made here for emphasis: The Federal Reserve’s interest rate hikes are but one factor among a sea of issues surrounding the governance of each institution. The Federal Reserve did not push FTX to commit fraud on a scale to make Bernie Madoff blush. Jay Powell did not demand Silvergate bet big on doing business with the fraudulent FTX. Jay Powell also did not demand that SVB hold onto money-losing Treasuries at low yields even as he pushed yields higher.
Both Silvergate and SVB have been part of the mainstream banking system since well before 2022, and thus well before Powell started raising interest rates. Both banks have seen interest rates move steadily higher, while their respective lower-yielding securities steadily lost value. Both banks had over a year to address any prospective weakness in their liquidity strategies. Both banks failed to do so.
Just as the liquidity crisis was predictable once the Fed began its policy pivot towards a tighter monetary policy, so, too, was what would happen in the inevitable fallout on Wall Street, which has time and again refused to wean itself off the “cheap money” the Fed has provided since the Pandemic Panic Recession.
Yet Wall Street refused to learn the lesson from Silvergate and SVB, and as late as December has continued to guzzle the Fed’s Kool-Aid.
Meanwhile, the Fed continues to game both monetary policy and interest rates with a less than transparent approach to shrinking its balance sheet.
At the same time, the economic reports from the Bureau of Labor Statistics and the Bureau of Economic Analysis are becoming more and more obscure, as their headline numbers become increasingly massaged and therefore irrelevant.
There is zero reason to believe either narrative trend is going to change any time soon. The “official” sources on the economy will continue to promote distorted and disingenuous perspectives, and Wall Street will continue to pretend those narratives are accurate, following them all the way down to the next big crash—which may or may not come next year. Their effect on the economy and how people perceive the economy will not be benign.
With 2024 being a Presidential election year, there is little doubt that political headlines will be once again the main attention-getters.
Yet even in 2023, this country’s political discourse was greatly altered and even distorted by the serial efforts of state and federal prosecutors to indict and convict Donald Trump—the leading candidate for the GOP nomination—on a wide range of presumed offenses.
That the indictments themselves were a triumph of politics over pragmatism for the prosecutors has been self-evident from the outset.
Yet these indictments have already been subsumed in the political jihad being waged by Democrats in several states to simply keep Donald Trump from running.
While these bare-knuckle tactics are sure to draw the Supreme Court into the fray, they may have already exposed fatal flaws at the heart of the indictments being pursued against Donald Trump—that these are contrived cases targeting Donald Trump and not credible pursuits of justice and defenses of the law.
The outcome of the cases against Trump are likely to prove to be the pivotal political story of 2024, as the GOP debates have proven beyond any and all doubt that the rest of the GOP field barely qualify as serious politicians.
Ironically, the cases against Donald Trump are also shaping up to pose questions of extraordinary legal and Constitutional significance, with the role of impeachment in the prosecution of a former President and what should be the process for disqualifying him from appearing on a state’s ballots presenting thorny questions of “states rights”, presumption of innocence, and Presidential immunity.
While it is too soon to even guess how the Supreme Court will resolve these matters, the election calendar alone dictates the Supreme Court hear the inevitable appeals quickly, and that they render a decision equally quickly. Whatever the Court does will shape the 2024 election in profound and significant ways—like it or not, the Supreme Court has now been drafted into having a say in the electoral outcome next November.
On the other side of the Pacific, the dominant narrative in China was that country’s “reopening” after its draconian “Zero COVID” policies had shut that country down for virtually all of 2021 and 2022.
The media and Beijing certainly attempted to present a picture early on of a vigorous economic “recovery.”
Reality, of course, prevailed as it always does, and it soon became clear that there was no “recovery”, that instead deflation and stagflation were what lay ahead for China.
While China continues to present massaged data to show economic “growth”, it is plain even from the massaged numbers that China’s economy is set to get worse before it gets better.
The global economy will get no boost from China in 2024, and possibly not even after. China is in long-term decline, with little evidence to suggest a reversal of any meaningful sort in the near future.
In the Middle East, the dominant event will continue to be the Israeli-Hamas war, which blossomed overnight on October 7th, presenting a host of competing narratives which all media outlets are still struggling to parse correctly.
One narrative arc that is persisting is the likely involvement behind the scenes of Israel’s arch-enemy Iran.
Yet Iran’s attempts to pull countries into a wide war in the Middle East, if that is indeed its strategic objective, have by all meaningful metrics been an abject failure.
Even Iran’s Houthi rebel proxies are coming up short in attempting to spread the war past the Gaza strip.
Will Iran’s proxies ultimately succeed in widening the scope of the Israeli-Hamas war? At present that seems unlikely to happen, but it absolutely remains very much a possibility.
Perhaps it is important to note also the stories that did not happen in 2023:
Financial markets did not collapse in 2023, not even after the scare in March.
Civil war has not broken out in the United States, despite the very best efforts of the Deep State to push the people into greater and greater levels of division and conflict.
The US government did not impose martial law across the land, nor have the COVID lockdowns returned—although the face mask mandates have retained a curious life of their own.
This, even after the rest of the Pandemic Panic Narrative collapsed into history.
China has neither surged ahead of the United States, nor collapsed inward upon itself.
World War 3 has not broken out, in spite of continuing war in both Ukraine and Gaza keeping that possibility alive in the minds of many.
Such was the year 2023, and thus is likely to be the year 2024, only more so.
The economy is likely to remain in a slow downward spiral into stagflation and then deflation. The rolling recession that has prevailed since 2022 will keep rolling on. If Wall Street and the Fed combine, even accidentally, to push interest rates too low, inflation will return even without any real economic recovery and expansion. We remain caught between deflation and stagflation in the near term.
The longer the Fed maintains a tighter monetary policy the more likely it is there will be yet another liquidity crisis. By definition, tighter monetary policy drains liquidity from the system, and last March proved conclusively how uneven that liquidity drain can be, and how much stress it can place on banks.
As the Donald Trump court cases grind their way slowly through the appeals process, the political tensions in this country are sure to increase, and the political divides within the electorate equally sure to become deeper and seemingly unbridgeable. While violence is not assured, where there is political tension and political conflict violence can never be discounted.
So long as oil demand underperforms oil supply, energy prices will continue to decline, and pull the rest of consumer prices down as well. Service price inflation has not really shifted all that much, and there is scant reason to believe that it will do so in 2024.
Yet if Iran finally does succeed in expanding the Israeli-Hamas war to include the wider Middle East, and especially if the United States is drawn directly into that expanded conflict, oil prices will quickly reverse and take off, which will just as quickly reignite consumer price inflaiton globally. Whether that will or will not happen is far too problematic to even hazard a guess. Right now the Houthi rebels are failing to expand that war, but it would only take a few successful strikes on the right targets to reverse that.
It is disturbing to contemplate, but all the calamitous events that did not happen in 2023 are still very much a possibility in 2024. If anything, they are even more probable in 2024 than they were in 2023.
However, even in 2024 calamity will not just happen. If calamity does strike, events will be building towards it over time. There will be facts and data points—warning signs and red flags to alert the wary of imminent crisis. This is how the world unfolds, and how it has always unfolded.
No one can say how 2024 will unfold, not in any great detail. There will be events to come that will not have been expected. Yet we can expect that in 2024, just as in 2023, if we pay attention to the facts and not the narratives, we will not be caught unawares regardless of how the year unfolds.
Follow the facts. Follow the evidence. Follow the data. These are the only things any of us can truly trust.
Don't usually link New Year's predictions because everyone has them, but I do make exceptions when they are spot on. Linking your's today @https://nothingnewunderthesun2016.com/
The facts and evidence will always bring out the truth. Let's hope more truth than ever before comes out this year! Thanks for all you do!!!
Happy New Year, Peter Nayland Kust! An excellent summary of where we begin 2024 - thank you!
A wild card, to my mind, is who in heck are the Democrats going to run for President? Dementia Joe isn’t going to be viable, Harris out of the question, and all anyone has to do to discredit the current Governor of California is show a video of present-day San Francisco. Who is the Democrat candidate that could rekindle Americans’ idealism and hopes? (They lost their chance with endorsing Kennedy!)
Mr. Kust, I hope you will consider expanding your reach and influence this year by researching, analyzing, and writing - freelance or otherwise - for organizations such as the Heritage Foundation, Reason magazine, or others seeking to restore us to Constitutional values. Please keep an eye out for opportunities, as this country could surely benefit from all that you have to offer. Good luck!
And Happy New Year to all of us reading Substacks!