Welcome to 2023!
As we welcome the New Year, we find ourselves in a realm of speculation and ideas, where unconventional thoughts and abstract theories thrive. Here at Economic Prism, we embrace imaginative cycles, metaphysics, and even amateur prophecy in our quest to understand what lies ahead.
With the dawn of 2023 upon us, it’s an ideal moment to gaze into the future through our unique lens and share our observations about the year to come.
In the atmospheric swirl of hope, despair, and radiant opportunities, we unearth both light and darkness. We stand on the brink of new prospects and possible tribulations. What insights should you carry with you as you embark on another journey around the sun?
What awaits us in the areas of stocks, the 10-Year Treasury note, gold, oil, bitcoin, and beyond? Will junk bonds face significant upheaval due to widespread corporate defaults?
Could Joe Biden’s recession deteriorate into a full-blown depression? Will the advent of a Federal Reserve-backed digital dollar—trackable and programmable—usurp the anonymity of cash transactions?
Are we in for another surge in inflation? Might the notorious Sam Bankman-Fried meet an untimely end? And what of Maxine Waters… will she, too, pass away?
Will protests erupt in your locality? Is a failure of our power grid on the horizon? Will the state of California simply fade away? Could your social credit rating be marred for failing to recycle food waste?
Are we destined for a complete breakdown of societal norms? Is 2023 veering toward the second coming of Jesus?
Such questions are endless; their answers could be even more varied.
So, where do we begin?
Believe In Yourself
Let us clarify: our approach to prediction is quite straightforward. We intentionally sidestep commonly used forecasting methods—such as trend lines or data analytics—and instead lean on conjecture and intuition.
Before we delve deeper, we pause to consider: “What do you think, dear reader?”
You likely have your own views on these pressing issues. Most people do. Even your least perceptive relatives may have thoughts to share. The answers to our myriad questions will eventually unfold, some during your lifetime, others perhaps later.
In the meantime, keep it simple and trust your instincts. Many so-called experts often miss the mark. Your insights may prove more accurate than their forecasts.
After the challenges faced in 2022, and with Karine Jean-Pierre as White House Press Secretary, the unpredictability of 2023 could reach unprecedented heights—anything could transpire, including the possibility of World War III!
Consequently, we will refrain from making too many predictions about the upcoming year. But rest assured, we won’t leave you empty-handed.
Instead, through careful examination and a touch of humility, we’ve pinpointed one critical—yet often ignored—event that will shape 2023. This prediction is bold and, we believe, fundamentally important, as it is poised to influence all other developments.
To be transparent, this forecast isn’t unprecedented or obscure. Many may already sense its impending reality. Yet, like eyewitnesses who avert their gaze from the horror of a war veteran missing limbs, most prefer not to confront the ugly truths.
But today, we shall face the unpleasant realities head-on, even at the risk of discomfort.
Who Done It?
To put it simply, if you have yet to recognize this reality, World War III began on February 24, 2022, with Russia’s invasion of Ukraine. Many in America still struggle to comprehend this fact.
Right or wrong, NATO’s eastward expansion towards Russia’s borders over the last two decades was a provocation waiting to elicit a response.
The initial American and NATO reaction involved implementing a series of sanctions against Russia, while simultaneously engaging militarily in Ukraine through its proxies. Key aspects of these sanctions included severing Russian financial institutions from SWIFT and freezing the Bank of Russia’s foreign reserves. Soon after, the push to ‘freeze and seize’ the assets of Russian oligarchs commenced.
However, Putin was prepared, implementing countermeasures to stabilize the ruble by purchasing gold at a fixed price from domestic banks, effectively linking the ruble’s value to gold—a strategy that hindered its devaluation against the dollar.
In retaliation for sanctions, Putin mandated that foreign purchasers of Russian natural gas pay in rubles, cleverly establishing a link between the ruble, gold, and natural gas pricing. By doing so, he fundamentally altered the global economic landscape.
Since 1971, the US dollar’s status as a global reserve currency has hinged on oil. The petrodollar system has persisted because of the world’s reliance on dollars for oil transactions and the U.S. government’s military might to suppress competition.
On September 26, 2022, secret bombings disrupted gas supplies through the Nord Stream pipelines between Russia and Germany. Who was behind this? We may never truly know.
Despite sanctions proving less effective than anticipated, America has continued to send substantial military aid to Ukraine. But is this approach sensible or reckless? At what point does a proxy war cease to be just that?
If you find yourself asking, the crucial boundary has already been crossed.
With this context established, let’s look ahead. What key event do we foresee in 2023?
One Great Big Nasty Prediction for 2023
In October, Chinese President Xi Jinping emerged from the Chinese Communist Party’s 20th National Congress with a historic third term as general secretary and chairman of the Central Military Commission.
This outcome elevated Xi to a status reminiscent of Mao Zedong—he is now considered ‘emperor for life.’ Moreover, the CCP’s stance on Taiwan has become clear: unification is seen as vital for realizing the nation’s rejuvenation.
On Christmas Day, shortly after the holiday festivities, China dispatched 71 fighter jets and seven naval ships near Taiwan, with many aircraft crossing the median line of the Taiwan Strait—a significant provocation. This show of force was partly in response to President Biden’s signing of the 2023 National Defense Authorization Act, which allocates $10 billion in military assistance to Taiwan.
Simultaneously, during Nancy Pelosi’s visit to Taiwan, simulations of a potential Chinese invasion were conducted, yielding grim predictions for both sides.
While a full-scale invasion of Taiwan may seem improbable, so did the sudden incursion of Russian tanks into Ukraine—until mere moments before it became a reality.
As noted by JPMorgan, “while the world is short on commodities, China has been stockpiling them since 2019, holding 80 percent of global copper inventories, 70 percent of corn, and significant portions of other essential commodities.”
What motivates China to amass such vast reserves of resources?
Simultaneously, U.S. sanctions against Russia have inadvertently strengthened ties between China and Russia, with Russia exchanging oil for yuan throughout the year.
Additionally, Xi recently met with Saudi Crown Prince Mohammed bin Salman and other Gulf Arab leaders, wherein he indicated China would aim to purchase oil and gas using yuan, challenging the petrodollar’s dominance.
What conclusions can we draw from these developments?
A form of economic warfare is in play, as the geopolitical landscape begins to shift toward a potential escalation of conflict in the Pacific region.
With all humility and full recognition of the challenges presented by conjecture, here lies our crucial prediction for the New Year: expect the unexpected. China will invade Taiwan.
This event will overshadow all other predictions for 2023.
[Editor’s Note: As outlined above, brace for the unpredictable in 2023. While we may not welcome it, we intend to leverage it. Moreover, subscribers of the Wealth Prism Letter will soon learn exactly how that can be done in the January issue, set for release early on January 2. If you wish to seize this opportunity, act swiftly and subscribe today! Have a prosperous 2023!]
Sincerely,
MN Gordon
for Economic Prism
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