Everything, everywhere, all at once
Usually, I would say there is nothing new under the sun; there are no new paradigms. Status quo is always your best guess. So, just relax and keep at your processes. Take just one ridiculously easy step to make sure you get started at all. Then take just one more. As you were.
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But as it always does, the cycle turns. In effect, it’s more of the same, just one more cycle. For everyone under 100 years old, however, it seems new, since it hasn’t happened in about a century. So fuck the status quo for now. The new is the same.
According to The Generation Theory, as well as the Fourth Turning idea, once every 85 years the paradigm shifts markedly – not to something completely new, but to a regime reminiscent of the ways things were 85 years ago.
Money. War. Institutions
The last time there was a Fourth Turning, we experienced a stock market crash in 1929-1932, a total war in 1939-1945, a new currency regime starting with Bretton Woods in 1944, the formation of the UN in 1945, as well as The European Coal and Steel Community (ECSC), a.k.a. the European Union, in 1952.
All of this seems set to repeat itself. New war, new hegemony, new money, new governing bodies, new alliances, new politics.
Plus ca change…
The details need not be exact, but nobody relevant today has any first hand memories of the 1930s and 1940s. If you turned ten in 1952, you’d be 80 today – most unlikely to be particularly influential. Hence, for all practical purposes, the WWII, UN, BW and the foundations of the EU are all lost to the history books. Hence, the mistakes are due for a retake.
I think most of the 2020s will be tumultous. Financially, economically, politically, and not least geopolitically. There will be war, pestilence, famine and death. All the riders of the apocalypse are actually already in the bag; just take alook at Ukraine, food shortages and the pandemic. But there will most likely be more.
Ukraine is not the war, it’s just a battle. The real war, the total war of the Fourth Turning is about the next long term superpower(s) and the New World Order for the rest of the 21st century: physical and digital. Who will control the most important physical resources in terms of energy, metals and food? Who will control the media, the narrative? Who will control the money? Who will control the heavens (space)? Who will decide what’s accepted behavior, what’s allowed?
Politics: First Trump, then AOC
I think Trump will win the 2024 presidency, due to the Biden administration being perceived as too weak in the face of strongman Putin’s brinkmanship politics, and Xi Jinpings exaltation as supreme and glorious leader until his passing. Since Trump can’t run in 2028, and since the US economy and its global status have been run into the ground by the end of his term, Accidentally Occasional Cortex will run in and win the 2028 election. She will for good and bad usher in a new era of socialism for the more and more marginalized USA. Maybe she’ll even serve more than two terms (!) We’ll see. In any case, she won’t fire off any nukes, no matter how rich and powerful China becomes. She’ll be too occupied levelling the playing field within US borders to fight external wars.
The long bear goodnight until February 14, 2023
The bear market will last longer than most expect, and the central banks will be more hawkish than most anticipate – willing to sacrifice the working class and shareholders alike in order to tame stubborn inflation. The ultimate nominal bottom might very well be reached already in November 2022, but could also be the result of a final capitulation “puke” a full year later before the usual election stimulus cycle takes the reigns. My best guess is the final puke comes around the turn of the year to 2023, maybe when Q4 earnings and 2023 outlooks are published – or slightly after when the reports are fully digested, i.e., in January or February 2023.
As always, there will be vicious bear market rallies along the way. Be ready during earnings seasons and around FOMC rate decision announcements. CPI announcements might be key as well. Tread carefully. Don’t be a hero. Don’t use leverage. Focus on value.
We’re actually due a rally right about now, I think (timestamp: July 15, 2022). I would have thought relatively decent corporate Q2 earnings reports would’ve already triggered a rally, but so far too high inflation numbers have weighed more on traders’ sentiment.
Anyway, I’m tilted slightly longer than average in my hedge fund Antiloop’s L/S Equity strategy. Waiting for Godot. Rally anytime now. Ready here…
I’m long cheap “value” and short expensive “tech” and “hype” stocks. Not very sophisticated, but nor is the market. Just short everything ARK owns, and be wary of the rallies, and you should be fine. I’m buying long term real assets such as mining stocks, oil majors (Conoco, Chevron), gold miners (AEM, NEM), and fallen tech angels like SPOT, GOOG, INTC, MU and META. I also like car manufacturers and Nordic banks, plus select take-over targets lika Elekta (medtech) and salmon farmers (Austevoll).
When the final puke comes, I expect central bankers and politicians to pivot like never before. In the US either Biden during the Democrat presidential campaign, or Trump right after winning in 2024. The mother of all stimulus will drive stocks, inflation, gold, mining stocks, real estate, interest rates and so on. It’s hard to pinpoint any losers except ordinary workers, left behind by robots and asset holders. And then the deluge, the crash of crashes. The crash to end all crashes around 2027-28, which hands AOC a landslide victory on a platinum plate.
Preppers be prepping
The details don’t matter. Neither does the order of events. The message is one of turmoil, of fast moving markets, of opportunities abound. Where will you live (country, city/countryside)? What money will you use (gold, silver, Bitcoin, Ether, Monero)? Where will you keep your wealth (land, real estate, gold, stocks, bonds, crypto, art, farmland)? How will you make a living? What skills will you hone? What education will you get? What network will you prove your worth to? How will you go from your conventional position today to an unconventional position just ten years from now? There is a risk in moving too early, and another in moving too late.
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