Yesterday, the highly unstable leader of North Korea tested a nuclear missile capable of striking the highly unstable leader of America. And what happened to the global economy? Nothing! Our stock market surged to new highs. Look at the horizon there—do you see it? It’s fucking bad.
This is the time of year when people in the media make predictions about what might happen in the coming year. Without exception these predictions are worthless. Now I will make my prediction.
***NOTE: ALL PREDICTIONS ARE WORTHLESS***
America is behaving like a doomed and desperate convicted felon, holed up smoking as much crack as possible before we have to report to jail. Tons of post-recession free money from central banks, eight years of steadily rising asset prices, the eerie absence of volatility, and the post-election conviction that Donald Trump’s band of goons would—if nothing else—cut taxes on corporations have all combined to fuel a manic investment wave that have made stocks and bonds and real estate and every other asset everywhere expensive as hell. Bitcoin is a classic bubble. Housing prices are insane. And Republicans, who have proven too incompetent to accomplish almost anything, look like they will be able to successfully pass a tax bill that funnels more money to corporations and their investors, who decidedly do not need it. But who will be happy to take it, even if they know that exploding the deficit to give already rich people more money, during a time of essentially full employment, is the opposite of long-term financial probity. They also know that our president is a dumb, incompetent loon. (Wall Street, though it may be evil, benefits by seeing political situations with a ruthless clarity.) It is this situation of clear short term opportunity combined with infinite geopolitical and economic dark clouds looming that has fueled our manic economic boom. Get it while the getting is good, for tomorrow you may be dead!
When the price of everything is high, and you are still taking desperate measures to fuel those prices higher, the world is a very risky place. Our leaders are doing everything they can to make inequality worse, which is the social equivalent of throwing propane canisters into your fireplace because you felt a chill. The cushion that normally exists has grown very thin. Everything is priced as if if everything will go perfectly; when it doesn’t, there is nowhere to go but down. Even as investors have grown rich, they have grown increasingly on edge. Everyone is nervous as hell. They know that these bull markets don’t last forever. Yet we’re not quite in bubble territory, and since everything is expensive, you just have to close your eyes and buy something.
So prices climb, and so does risk. The central banks, which shot their wads after the Great Recession, have few means to help now if something goes catastrophically wrong. Here we are: all nervous, greedy, and on edge, collectively wondering what the tipping point will be.
The classic idea of free financial markets is that they are exquisitely sensitive to risk. The more risk you take, the higher the return you make to compensate for that risk. Yet any rational person looking at the USA today can tell you that the risks we are now facing are terrifying, and seem to have become fully separated from the financial markets, which just boom and boom and don’t stop booming. The confirmed threat of a global nuclear standoff could not even make the market fall by one point. Something has to give.
Anyhow here’s my fucking prediction: In 2018, something will give. Maybe it will be a fight with North Korea. Maybe it will be a major terrorist attack in the US. Maybe it will be war in the Middle East. Maybe it will be a political scandal so devastating that it undermines public faith in our system. But it will be something. It is stupid to wager that another entire year of Donald Trump, president of the United States, will not result in a catastrophe that rises to the level of tipping point. It’s a bad bet. The stage is set for disaster. And when it happens, everyone will want to take their money and run at the same time. And then we’ll be in the dark time.
The recession that struck in 2008 was bad. And the next couple of years after that were bad. But slowly, for at least a majority of Americans, the economy has been okay—for a large minority, it has been very good. (The tons of things besides the economy that have been Bad are too obvious to mention here.) For most people, we’ve had at least a good five years that have not been marked by poverty and rampant layoffs and sudden destruction of wealth. We’ve just been waiting for doom to reappear the whole time.
Well, the bad times are coming back in 2018. I can feel it. Feel it in my bones. I’m not just saying that it’s going to be generically bad, in the same way that every year is generically bad if you are the sort of person who has the mindstate of most journalists and internet cranks. I’m not just saying that some very bad things will happen, as they always do. I’m saying that it’s going to be actually and measurably bad and our economy is gonna get fucked up again because some crazy shit is gonna happen that freaks everybody out. This will be the year when we don’t just bounce back. “Worse than this year??” you ask. Yes. You can disagree if you want—that doesn’t cost a penny—but the storm is coming. We can only hope that this time, when the hard times come, everyone doesn’t spend too much time moping about it. The pitchforks and Molotov cocktails have been sitting out in the shed since 2009. And all the real rich people are much richer than ever.