Pre-Election Predictions and Beyond

Armchair Commentary on Economics and Foreign Affairs

For my own reference in the years to come, I want to record my predictions about the next 4, 10, or more years regarding key issues like inflation, currencies, and foreign policy. This isn’t written with an audience in mind; it’s mostly so I can look back someday and say, "Yes, I predicted that."

On This Election: Surprisingly, if I were a strategist for either the GOP or the DNC, I’m not sure I’d want my candidate to win. The incoming president will inevitably shoulder the blame for consequences and crises that are already in motion or will soon be. Ironically, both Harris and Trump have a share in the existing blame—arguably, in equal measure. Here’s my forecast on some of these issues:

1) Inflation: The core cause of inflation is… inflation. This sounds obvious, but it’s crucial to define the term. Decades ago, "inflation" mainly referred to an increase in the money supply—essentially, the creation of fiat currency, primarily through the Federal Reserve (our central bank), but also via banks with fractional reserves. Most people have some understanding of fractional reserve banking, but confusion often arises around the Fed’s role. When the government runs deficits, the resulting bonds usually end up with the Fed, which "buys" them with newly created money. While these bonds might pass through corporate banks first, they eventually reach the Fed, which effectively monetizes the debt.

Pundits on corporate media might dress this up in complex terms, saying things like, "We’re borrowing from ourselves," or, "Debt is just money shifting between the Treasury and the Fed. People don’t understand monetary policy." But the plain truth is this: trillions of dollars are created out of thin air to fund our $2 trillion deficit.

This creation of money is monetary inflation, and in the real world, it leads to price inflation. It’s a theft of purchasing power—a "sneaky tax" that hurts the poor most, as even John Maynard Keynes acknowledged. Printing money is a tax on everyone’s purchasing power.

Here’s the “M2 Money Stock Chart” by the Fed, the most reliable way to track monetary inflation:

Next: The Fed’s Balance Sheet

The Fed might manage to reduce some of this temporarily, but in the next major crisis, we’ll likely see them slashing interest rates and absorbing vast amounts of spending, fueling further inflation.

Debt vs. Interest Rates:
In a healthy, free economy, interest rates naturally fluctuate to balance spending demand. When spending and borrowing increase, interest rates rise, encouraging people to save and invest long-term. However, artificially low interest rates, set to support government deficits, mean there is no true savings. Freshly printed money may stimulate spending, but without real investment and the saving of actual resources. These low rates lead to malinvestment, where companies make decisions they otherwise wouldn’t if given accurate economic signals. Furthermore, it creates moral hazards, as large companies know that if their risky investments fail, taxpayers will bail them out. Yet, many blame these bailouts on “capitalism,” even though they are imposed by government force.

As of now, our debt is nearly $36 trillion, with interest costs approaching $1 trillion annually. Reality dictates that unsustainable trends will ultimately end.

If history is any guide, Trump will sign every spending bill that crosses his desk. In his first four years, he signed every spending bill, every NDAA, every omnibus. Why would he now start vetoing them, sending them back to congress, and say “fix this”, forcing them to come to a veto-overriding agreement or to better balancing these insane spending bills? And we can safely assume Harris would sign them all as well since she’s never even hinted at cutting spending.

The only way to curb the serious long-term degradation of our currency is to stop the hemorrhaging of new money from the Fed, which necessarily means stopping the unfathomably huge, completely unsustainable, entirely crony and corrupt spending sprees from congress. Let’s just say I’m not holding my breath.

Foreign Policy and Global Events

The situation worsens as we shift to foreign policy. Right now, a coalition of countries that are anything but "jokes"—China, India, Russia, Brazil, Saudi Arabia, the UAE, Egypt, Iran, and others—are meeting in Russia to push for openness in trade and cooperation across economic, political, and cultural spheres. Call it what you want, but these BRICS countries have made it clear they no longer care about Western opinions or media narratives. At some point, they decided to "take their ball and go home," fed up with the West’s endless sanctions, weaponization of systems like SWIFT, coups, proxy wars, and inflationary deficits pushed onto anyone holding USD reserves. These actions inevitably lead to blowback, and here we are.

Saudi Arabia has not renewed the Petrodollar—a monumental move that corporate media barely touched. The UAE is trading oil in Chinese yuan. Even Turkey, a NATO ally, has requested to join BRICS. These nations no longer care if elitist Washington insiders view them as "stupid" or "lesser" countries. They’re tired of being bullied and manipulated. At the BRICS summit, Putin made a clear statement before the other leaders:

"The (US) dollar is used as a weapon; it’s true, and we see that. I think it is a great mistake by those who do it, since the use of the dollar, which is still the most important tool in global finance, as a political tool undermines trust in this currency, thereby reducing its capability. We are not the ones who do that; it’s others. We are not rejecting the dollar or fighting against it. But if they don’t let us work with it, what else should we do? We should seek other alternatives, and this is exactly what we do."

You don’t have to like him, but insisting he’s lying about their very publicly stated intentions and complaints about the West is just stupid. If your neighbor threatens to pepper your dog with birdshot if he keeps digging in his flower beds, would you say “you can’t trust the neighbor. He’s a liar.” and then pretend to be shocked when he does just that?

The rest of the world doesn’t see Russia as some imperialist caricature. People understand the complicated history of Ukraine, with its social, ethnic, and linguistic divides, the 2014 coup, the civil war, the Minsk Accords, weapon movements, and Russia’s clearly stated goals—most of which they have either achieved or are on track to achieve soon.

Ukraine’s population, economy, and infrastructure have been decimated. Even pro-Ukrainian sources like the Kiev Independent acknowledge that they are running out of men, artillery, missiles—everything, despite Western support. Yesterday the NYT ran a piece titled, “As Russian advances accelerate, Ukraine enters a grim phase”. Ukrainian officials and military leaders themselves admit this. Western countries are also quietly acknowledging that their stockpiles are low and not even close to the level needed to sustain a state-on-state war with Russia, let alone the newly aligned Eastern and Southern powers. Russia has already won this war, and they will only accept terms of surrender which concede all of their stated goals: no NATO for Ukraine, no Ukrainian control of the Donbas, and the de-militarization of Ukraine’s leftover rump state.

Today, in 2024, anyone can follow the real-time battle maps on X. Since Ukraine’s disastrous “counteroffensive” last year—a campaign Western intelligence knew would fail but encouraged anyway (which we know thanks to the famous Discord leaks)—we’ve watched Russia steadily advance westward using combined-arms tactics. Even pro-Ukrainian accounts concede this. Russia’s air and artillery superiority is overwhelming, and they now have over a million troops in their military. Active-duty U.S. generals have admitted that far from being "decimated," the Russian military has expanded in size and ramped up weapons production. Like most major armies in the first year of conflict, they had to adapt and refine their tactics, evolving from a poorly organized force into a well-equipped, battle-hardened military of over a million, now tightly aligned with China and Iran. The first 6 months proved they were a paper tiger, but the West’s insistence on Ukraine not negotiating and fighting till the last Ukrainian has created a very real, objectively larger and better-equipped real Tiger out of the Russians. Oh, and they also now have a bunch of new allies! Good job Western leaders!

Russia’s economy has rebounded and grown. Sanctions have backfired, to the point where Western assets in Russia were sold back to Russia at a discount—a move that’s less punishment and more profit return for Russia. Countries worldwide continue to buy Russian energy, fertilizer, and other exports. Western leaders can announce new sanctions all they want, but words alone don’t compel global compliance. Most embarrassingly, Europe’s number one source of oil is now India. Since the start of the war, exports from Russia to India increased ten-fold. I wonder where all of Europe’s Indian oil is coming from?!

Who would have thought that high-handed policies—staging coups, imposing aggressive sanctions, engaging in proxy wars, and deploying weapons near adversaries’ borders—would eventually drive these countries to refuse submission and start interacting without us?

Even Saudi Arabia, once central to the Petrodollar system, is now exploring joint exercises with Iran in the Red Sea. Imagine that!

Neither U.S. candidate can—or even wants to—reverse any of this. Trump is more likely to spark a major conflict in the Middle East, while Harris might do the same in Eastern Europe. Neither scenario makes us freer, wealthier, safer, or truly "defends our interests." Trump is more likely to use nukes in the Middle East, which could, incidentally, destroy Israel, while Harris might see nukes flying over Eastern Europe. I’ll take neither, thanks!

Here in North America, no one is waiting to attack us if we would just lead by example with freedom and open markets. China isn’t planning to invade the U.S., Russia isn’t either. Without our involvement, would our proxies be perfectly stable? No. But by intervening, we only intensify and prolong conflicts, leading to more deaths. We tell countries like Ukraine that we’ll "have their back," which starts as a promise and ends in a threat. Just like in Afghanistan, where we were lied to for two decades, the sunk-cost fallacy drives these disastrous policies. Without the U.S., Ukraine and Russia would likely have signed another Minsk Accord by 2022 (if not upheld the original). The Donbas might have become an independent state, and hundreds of thousands of Ukrainians would still be alive, millions wouldn’t have fled, and the economy wouldn’t be in ruins, on life support through our tax dollars—potentially forever. Instead, Russia now nearly completely controls the four regions it claimed and advances westward by the day. Yet our administration talks as though Ukraine has already won. The serious question now is: "Where will Russia choose to stop?" OR "Do we provoke World War III and risk nuclear destruction?"

Taiwan should take note what happens to D.C.’s “friends”.

Meanwhile, in Israel, the tragedy is staggering: tens of thousands of dead Palestinian children, and the only debate between our candidates sounds like:

“I’ll send more bombs to Israel.”
“No, you’re anti-Semitic. I’ll send more weapons.”
“Actually, you are, and I’ll send more bombs!”

And so on. Their words and actions are almost indistinguishable.

The entire world (at least the rest of the world) is watching, and the way our media reports on it is beyond shameful. On X and other platforms, you’ll find countless videos of parents pulling their children’s body parts from the rubble of what were once homes, schools, refugee camps, and hospitals. Gaza is left with almost nothing untouched by bombs. International doctors who’ve worked there report horrors most people can’t imagine. Yet, nearly anyone pointing this out is branded as "racist," as if opposing the bombing of a fenced-in population with nowhere to go is purely about bigotry. It’s absurd. And here we are, forced to choose between two candidates who won’t meaningfully change the policy. No thanks.

Imagine if, after 9/11, we had fenced off Riyadh, killed tens of thousands of Saudi children, destroyed all infrastructure, and blocked aid allowing kids to starve—would anyone questioning this be deemed "racist against Americans"? Does anyone actually believe that?

Again, no thanks.

The depressing topics go on, but let’s turn to the real question: How does this end?

The world is clearly shifting toward a multi-polar order. The U.S., though still the largest player, is losing its dominance. And we can’t maintain it. Our currency will continue to lose value. Inflation is a tax, and a hidden one that disproportionately hurts the poor while asset prices rise as a hedge against it. So the empire's largest "tax" on the people comes in the form of higher grocery costs, housing prices, and insurance rates. While each market has unique variables, the single biggest factor driving inflation across every market is the money supply. Printing trillions yearly has consequences. Resources don’t magically become immune to scarcity because money is printed.

Finally, my longer-term prediction: secession. It may take decades, but I believe the U.S. empire will end with states, like the BRICS nations, deciding they’ve had enough and taking their proverbial ball home. Revolutions need not be violent; people can simply opt out. Even the USSR dissolved almost overnight, and I think the U.S. could start with #TEXIT. Texas already boasts the world’s 8th largest GDP, ahead of Canada and Russia. We have major ports, extensive farmland, and ample energy resources. When taking a class on the GI bill, a liberal professor at ACC said states were "too small and stupid" to govern themselves—despite Texas ranking among the top ten in economic output. Texans would probably welcome a version of the Articles of Confederation with states willing to trade and travel freely. This can be done peacefully and is hardly worth fighting over. Half the country would likely welcome the departure of either the reddest or bluest states.

I’ll close with a few thoughts, not as advice but as a reminder: Don’t place your trust in the princes of this world. Be discerning and question obvious truths that the mainstream may ignore. Build skills, build friendships, and live generously. Above all, take heart; the LORD is on His throne. All earthly princes die, and all earthly kingdoms fall, but the King of Heaven lives, and His kingdom will never end. Live in that truth.