Economic Predictions for H2 2022, Conclusion: A Bifurcated World of Woes Awaits

By Germán Torreblanca (Own work) [CC BY-SA 4.0 (], via Wikimedia Commons

Writing is a tough balancing act, especially when you know a fair number of people in your regular audience are not likely to like what you write. That is made even more precarious in a world so far off balance that it is now dividing like an amoeba into Left and Right halves and cracking into East and West hemispheres, fought out with election battles over the elections themselves, escalating into talk of civil wars, and in a no-holds-barred physical battlefield, escalating into talk of nuclear war in a land bridging the hemispheres and sucking the world into its vortex of fury.

But here goes…. The last part of my precarious predictions deals with the war and the trade divisions that have become the greatest forces pressing into our collective and divisive future … and I suppose that is why I saved them for last. But, alas, how can one ignore the worst parts and have anything to say about the overall future that is even worth listening to? If you are among those who don’t like what I predict below, I only ask that you hold the predictions in red into next year to see how they actually turned out. If they turn out about as stated, they served you well even if you didn’t like them as I clearly have no ability to make them turn out. The world will do what it will do, and I am but a lowly cartographer of the fractured terrain ahead.

I am not even the navigator for your journey. That is you.

War and sanctions divide the world

Putin’s War is not going nearly as well for Putin as many in the alternative media were predicting it would. First, Putin’s tank battalions stalled out in a seventy-mile line for days that turned into a couple of weeks until many turned and fled under fire. While that looked pretty bad, many arm-chair warriors in the Putin praise wagon found ways of claiming it was just a ruse and all part of the grand plan. Then Putin’s obvious attempted conquest of Kyiv failed with nothing gained, and they claimed it was 4-D chess. As the tanks fled that had stormed toward Kyiv painted with swastika-like Zs to make it abundantly clearly they came gunning for Zelensky, the Putin glee club claimed Putin had not really intended either regime change (killing or capturing of Zelensky) nor to take over Kyiv in order to change the government by getting his own people in charge. They said he had finished what he wanted to accomplish there, which was apparently nothing but indiscriminate death and destruction because tactically he gained very little. When he retreated to concentrate in Donbas, they said now we would see the real stuff! Yet, Putin lost ground so suddenly in Donbas this week, that we are now seeing huge swings of mood inside of Russia toward outright expressions of despair.

The usual Putin propagandists on state-run Russian TV, who recently boasted about how Putin would crush Ukraine, filled the screen with lamentations about how terribly the war is going. Some of Putin’s most stalwart supporters on Russian TV said Russia must finally own up to its serious losses, or it will repeat them. There was simply no way of dismissing the considerable loss this time while much of the world praised the success of those who had been attacked by Putin.

Other written publications have stated some Muscovite leaders who are native to Putin’s hometown — formerly named after the father of the Russian Soviet empire until the Russians came to hate him so much they tore down his visages and renamed his namesakes — are now openly asking the Duma they are part of to try Putin for treason. Over the top of this outcry, Putin’s puppet, Medvedev, has taken to quoting The Apocalypse to intensify his warning to the world that Russia will melt its concrete cities if they try to take either him or Putin to trial for war crimes. The desperation throughout Russia is now palpable.

So, the war has gone nowhere nearly as well for Putin as many in the alternative press claimed it would in their belief that he would conquer the entire Western financial system on top of little Ukraine. Throughout that time, I’ve been one of the few voices in this sphere refusing to join the many who claimed Putin would win in Ukraine or that his cause is just. He is now further from winning anything than he was when he began. His army is beyond decimated. His troops are deeply demoralized. Reports have stated over and again that they laid down their weapons in order to run more quickly from battle. If they couldn’t get their tanks out, they left them behind for the Ukrainians to refuel and chase them. (OK, I jest on that last image of the chase, but they did leave them behind.) Multiple cities returned to Ukrainian control just as they did around Kyiv. (You can check the past week’s articles that have covered this in The Daily Doom under “War” to read about the sudden transformation of the invasion of Ukraine.)

Of course, some have tried to claim on other sites that I’m just a propagandist for the West and that none of the flaws in the war I commented on along the way were truthful just as they did about Trump draining the swamp when I claimed he was draining it all straight into the White House basement. Eventually, it became clear the swamp is still fully in control. Almost everyone Trump installed was a swamp creature, and I spent several articles early in his presidential career pointing that out, losing readers for that, too. My point here is that people will find a way to argue for anything they want to believe even when it makes utterly no sense. I say what looks true to me, whether I like it or not and whether my audience likes it or not; and, if that becomes the end of me and my writing, so be it … as it well could be. That is my set-up to say, expect no less in this final article of predictions for the final months of 2022 and going into 2023.

While many in the alternative press have been dead wrong about how Putin would easily win this thing as he has paraded from loss to loss around the swamps of Ukraine, his determination to leave a scorched earth behind if he does not get what he wants has repeatedly gone as extreme as to say he will incinerate the world, even though Medvedev acknowledged this week that would also mean Russian cities would get melted down in retaliation. For now, he has chosen more mundane trials of destruction, such as blowing up dams with cruise missiles to flood Zelensky’s hometown on the way out and make sure he leaves Ukraine without any power. If he can’t have it, he wants to make sure no one will and that as many die this winter as possible. That will teach them to defend themselves when he wants something! So, to lead off …

I boldly predict PUTIN WILL NOT WIN THIS WAR, and NATO will not and NEVER WOULD BE the first to fire nuclear missiles. Whether Putin will, who can say? He’s certainly trying to look like he’s always about to. Putin will go down in continuing and greater defeat, leaving him to take more desperate measures and leaving himself desperate in terms of support inside Russia as the Russian outcries spread against him. Those who sided with him publicly (inside of Russia and outside) will find themselves far on the wrong side of history. Efforts to remove Putin or try him for treason inside of Russia or for war crimes in The Hague will grow, regardless of his nuclear threats.

That doesn’t mean Putin won’t fire nuclear missiles and NATO won’t, in response, do the same thing. As Putin’s situation is clearly becoming desperate in Ukraine and at home, his actions will become more extreme. I doubt very much Putin will be that stupid, as the second missile to hit its target would probably land right on top of his head. If NATO doesn’t know where his head is, the second missile may be sent to destroy one of the most beautiful capitals on the world by taking out the Kremlin. It doesn’t matter whether the risk makes sense, I am arguing it simply is what IS. The West is not about to back down, and Putin WILL become more deperate.

While I state those nuclear maybes that nearly all of us are acknowledging, I don’t think any of that will happen, but we’re talking about trying to predict insanity, and nothing could be more insane than that. So, I’m certain beyond any doubt Putin will not win the war, but I certainly don’t know if Putin will move beyond his extreme saber rattling to doing anything other than lying about it. We have never seen him lose a war in which the West was so inextricably involved against him to know what that looks like; but it was his folly to ever believe they wouldn’t be, given how visceral memories of longtime Russian domination are throughout Eastern Europe and its Western allies. Whether you think their response is morally right or wrong, he clearly grossly underestimated the determination and breadth of their response as well as his ability to win this war without seeing Russia crumble under the effort.

Here is what I am certain of. The sanctions placed on Putin will become extremely hard to live with for Europe and will create a winter of great discontent in the US, too. It will be hard, and sanctions have never been particularly effective anywhere. Those who scoff about how the sanctions are not hurting Russia are naive. Russia will be hurt the worst. (A reader recently helped me to understand “the winter of our discontent” originally referred to a winter that would sooth our troubled souls. Well, that is not the kind I mean for this winter. It will be a winter that will cause greater discontent far and wide, but that doesn’t help you unless I am more specific, so I shall be.)

For now, Russia has been enriched in terms of its oil money by sanctions driving up the price of oil as Russia finds workarounds, but this is because it is taking time for Europe to line up enough alternatives to survive the winter, so it has provided many backdoors for sanctions that it intends to slowly close as its alternatives improve, AND THEY HAVE IMPROVED. They are trying to avoid slicing off their own heads with their own swords. It is a war that will not be painless for any party in the conflict. While Russia’s coffers have still been filled with oil money, Russia is feeling the pressure of shortages in many ways, too, and those will intensify considerably this winter inside of Russia.

By next year, the suffering in Russia will run as deep as it does in Europe, maybe even worse, and that will increase the kinds of calls we have seen for Putin to be tried for treason (or inside attempts at assassination) because many Russians will realize this trouble never had to overwhelm them if Putin’s reach had not so obviously exceeded his grasp due to his miscalculations about what the West would tolerate in Ukraine to avoid their own pain. This isn’t about me fixing blame for the war, though you know what side I’m on, but about how Russians will increasingly fix blame on Putin for their problems.

For now, those inside of Russia who dare speak against him are few and far between, and those who register their complaints will probably continue to fall out of windows or off of boats in the days ahead, as tends to happen in Russia where they seem to have a lot of klutzy people, at least if you believe the Putin administration’s claims as to how they died.

Some publishers in the alternative press have stopped carrying my articles because of what they see as my audacious claims that Russia will lose this war and Russia will lose the most on sanctions, too, as if those views are just expression of bravado against Russia, but that is not my intention in writing them here. My days may be more narrowly numbered than Putin’s and I realize that; but, if you strongly disagree with me, please save the words in red to see how it all actually turns out, and you can ask yourself next year if you’d rather have heard what actually did happen or just the point of view you want. I’m kind of a Lone Ranger it seems on the right for stating these beliefs, but they have proven correct so far, so I’m staying with them.

For example, nothing of what I am saying means Ukraine will not be left derelict because of Russia’s intention to destroy whatever it cannot have, but the idea that Ukraine will only “fight to the last man standing” because the West is enticing it to do so has been beyond naive! Ukraine will fight to the last man standing … and then to the last woman standing … and then to the last elderly person standing … and then to the last child with a cap gun even if the West had done nothing to help, and not because Ukrainians are the bravest people on the planet, but because Ukraine will NEVER allow itself to go back to the domination it knew for decades under Russian rule and they have no reason from their history to believe that is not exactly what will happen if they lose.

The question of Western support is only whether they succeed in that fight before they all die or all die before kicking Putin out. The citizens of Ukraine remember far better than people in the alt-right media seem to about how RUSSIA was responsible for Soviet Imperialism, not other nations under the Soviet umbrella. Russia was the driver of the Soviet Empire, and it was the driver of hundreds of years of imperialism throughout the region for hundreds of years prior to that, and Ukrainians and all Eastern Europeans remember well the decades they suffered under the Soviet empire, and they will die fighting to avoid ever going back to that. And that is why Ukraine will win.

That is not meant as a proclamation. What I am saying is that Ukraine will win for the oldest cause of victory in all of war history. The will of Ukrainians to die for their freedom from Russia is VASTLY greater than the will or Russian troops to die for Putin’s imperial ambitions or to die because they fear either Ukraine or NATO will attack Russia — something that as NEVER happened. That is WHY you see Russian troops demoralized and laying down their weapons. They have no personal reason to be in this battle, other than Putin told them to. That is why they stopped their tanks to avoid running over civilians in that initial 70-mile line of tanks. Their heart was not in it. It is why they failed to take Kyiv and why they now flee Donbas: most of them want nothing to do with Putin’s War. So, if the chance of death looks greater ahead than behind, they will turn and run because they have no other reason to fight Ukrainians.

Shortages, food shortages, and all-out famine besiege the earth

None of that means sanctions will not hurt the entire world. They will. All nations have been living off their stores, which have been slowly depleting in some places even during this time of year when they should be stocking up. We’ll see where we are when the fall harvest has come in; but, at this point, it looks clear that the entire world is going to get a double whammy of BAD.

The first side of that is we have shortages that come entirely from man-made causes:

  1. The Trump Trade Wars badly broke supply chains. That breakage was all over the news for months before anyone among us ever heard of Covid and long before Putin’s War.
  2. The Covid lockdowns that began under Trump in March 2020 and throughout Europe and China, etc. throughout 2020, took what was already broken and smashed those chains into a heap of busted links.
  3. The labor shortages that developed out of the Covid lockdowns and the Biden mandatory vaccines guaranteed we are not able to produce as much as we consume because we have millions of fewer producers.
  4. Putin’s War cut off even more supply lines purely for wartime effects that made shipping routes out of the Black Sea and out of Ukraine impossible and passage through the country nearly impossible.
  5. Finally, after all of that, we doubled down on that vast collective of destructive events to global supply chains by piling on sanctions all over the world.

So, there is not a chance on all the earth that shortages will not grow worse this winter, likely even apocalyptic in the poorest areas of the world at a level that becomes a fearful spread across all nations faster than we can believe … just like all the above happened faster than we ever envisioned back at the start of those trade wars. We had no idea all the extra causes of supply-chain breakage that would be coming. But they are all here now, and we are likely in denial about how bad the impact will become as we use up the last of our stores because none of us have ever had to conceive of something like this on a global scale.

That’s just the first set of causes of the double-whammy — the manmade causes!

The second is the droughts that nature has chosen to ravage the earth with this year. Europe, the United States, and China have all seen the worst droughts in decades. Other parts of the world, too, but those regions stand out because famine from drought is far less common there than, say, in Africa or India. Crop reports have come in throughout the US showing major crops are down about 20% due to drought, but also due to lack of fertilizer (which is one of those man-made sanction disruptions). Even if we get a deluge of water all over the earth this winter, it won’t help at all with the crops shortage we already have, and it may make things worse for next year because, flooding land that has not been planted with cover crops because it cannot be, results in soil erosion, and we saw in the past two years how flooding in some areas also reduced crops because those areas remained too wet for too long in the springtime to plant.

So, while we have largely averted food shortages by paying higher prices to get what we need in the US, the likelihood of food shortages has only gone up. That means prices of food are certain to rise more and shortages to appear more. It would be a mistake to let your guard down and think none of that happened. It has been happening in some parts of the world, and will keep spreading throughout the world. We have never seen so many reasons to be concerned about food shortages.

At the same time, droughts will compound the energy crisis by reducing hydro power in the months ahead, but here there is a caveat because a major change in weather could avert that, whereas it is too late for this year’s food crop and could actually make next year’s worse in the manner noted. (And I don’t pretend to predict the weather; I’m just noting what will happen if the weather holds in its dry pattern because hydro projects that are still running have become dangerously record-low in many parts of the world.)

So, rotate the extra supply you laid in last fall, if you followed my advice and keep slowly building up with the things you regularly buy. So long as you rotate in time, it will cost you nothing to be prepared if you are only buying the foods you regularly eat anyway. I’m not encouraging people to store enough food that will last for years, though this could easily last this long, so I wouldn’t discourage it either; but, at minimum, store enough to make sure you get through sporadic shortages during the toughest parts of winter. More if you can.

Dollar v ruined ruble & yawning yuan in competition for reserve currency

Leaning on China is not going to be great salvation for Russia because China is doing the best job any central planner could of ravaging its own economy with the most repetitious series of entire-city lockdowns/quarantines ever seen on earth. That isn’t even slightly overstatement. If you didn’t know better, you would believe Xi is on a massive campaign to destroy the Chinese economy. He started tightening the centrally-planned economy and shutting down its insane housing market, but did this as he also shut down entire cities in quarantine. The result is deeply growing unrest, greatly diminished production, a housing market crashing harder than anywhere on earth, banks teetering, and a seriously crashing currency just when he was ready to launch it as the global reserve currency with Russia’s support.

While Xi and Putinazi just had their meeting of the minds as to how they will kill US hegemony, and I have no doubt they will cause as much trouble for the West as they can, one would be foolish to think they are in a position to do better. This site will be publishing an article this weekend that lays out the reasons their combined currency will be far from replacing the dollar in gold markets. It is not gold-backed. It never will be gold-backed. Its constituent parts are crashing in value. The only reasons the ruble appears to have value is because it has been locked out of all the markets that can hurt it, but what value does a largely unusable currency have? The Chinese renminbi/yuan has been on a longterm cliff dive. They are both, in short, in far worse shape than the dollar, which has been doing nothing but climbing against nearly all currencies.

Here is an interesting animated graphic showing the competition of global reserve currencies over a century of time and what a small part the dawning yuan played even before it started to deteriorate after the Ukraine Invasion and the past year’s Chinese lockdowns.

Again, I’ve been something of a Lone Ranger in the alternative press about the dollar not being taken out, and that has made me unpopular with those who hate the US or with the goldbugs; but we are now six months into Putin’s War, and the dollar has rarely if ever been stronger. I’m not saying it is not going to be replaced with something down the road, but I have always said it will be replaced with a central-bank digital dollar when the Fed is ready to do that, and …

These global problems will provide the arguments the Fed needs for selling its digital dollar to the public, which arguments I think we’ll start to see rolled out in earnest next year. The dollar isn’t so much going down, as it is going to be transformed.

I don’t like that solution, and I don’t like losing publishers willing to carry my articles because I am stating points of view financially interested people on the Right hate, but those predictions have proven right so far, and I’m staying with them because I am all about what I believe is true, even if it costs me my limited writing career to where I have to close up shop because no one these days wants to read news unless it supports their views, much less opinions.

So, the ruble-yuan will not crush the dollar and will have far more troubles than the fiat dollar, but the dollar will evolve as we go deeper into these dark times. It will not evolve into a true crypto currency, though it will become digital, and the evolution might by BY U.S. CHOICE to something more global (not my choice or preference, but that is how I see this going). That, however, will only be with the intent of keeping the US an integral part of global hegemony. In fact, I see Washington, DC, as the center of gravity for Western hegemony and Beijing as the center for the East.

While those on the alt-right have been raising their hands in hallelujahs over how the dollar would crash because Russia and China would crush it into the dust, here is what actually happened during the time of this war and Chinese lockdowns:

As you can see, the yuan was climbing against the dollar through the second half of last year when the haters of the West or of the dollar became emboldened in predicting the dollar’s demise. Then the yuan began to fall as Putin’s War began in late February. Since then it has fallen sharply twice and has only been spared worse plunges by massive Chinese intervention to try to save it. To be clear, this path has been clear in all predictions on this blog about the dollar. So, I have nothing to back down from, in spite of some publishers dropping me because they were so certain Russia and China would crush the US.

Here is a bit of that consistent view. During the first week of the war, I observed at the start of March:

Concerns about use of this war by China or Russia to break the dollar seem overblown. If there was such a conspiracy, China must have realized quickly that Russia has already lost that battle and hasn’t wanted to stay with a lost cause….

The rapid death syndrome of the ruble is not having much contagion to the Chinese Yuan in its global status as a new reserve/trade currency:

“The greenback is slightly firmer against the Chinese yuan for the second consecutive session, but it remains a little lower for the week.”

The damage to the yuan has been mitigated by Chinese prudence.

“The Big-Dollar-Big-Bear Ruble Rumble”

That was at the very start of the war when the yuan was still holding up, but that wasn’t a prediction, just an observation, and the yuan soon started to crumble badly. So, it became a prediction a month later as the bend of the trend became obvious enough to predict a trajectory for its landing:

I’m making Part Three of my “Epocalypse Revisited” series available to all because it introduces where the series will go in examining the world’s transition to a global, digital cashless society, countering the notion that globalism just fell off a cliff and dispelling rumors about gold-backed rubles and the mighty yuan trouncing the dollar.

Opposite of the many, I believe present events actually accelerate the path toward a global, digital currency. Many of the people I am reading seem to be jumping all-too-rapidly to the conclusion that the old globalism they hated is ending and being replaced by some form of multi-fractured nationalism and gold-backed or “commodity-backed” (read “oil-backed”) currencies … as if all the powerful globalists, including all the central bankers, would so easily walk away from their dream. I think that is wishful thinking with no evidence to support it….

Regardless of what feels like my solitary status, I think the obituaries now being written all over the economic blogosphere for both US hegemony and the dollar are as premature as they were when I read people saying the same thing forty years ago. While the dollar’s days in its present form are numbered, it is not going to come about as some financial defeat in which Russia and China team up to crush the petrodollar and replace it with their own currencies or some hybrid built from those currencies. That, in my view, is not even remotely likely

Epocalypse Revisited Part Three: Monetary War in the new New World Order

I’ll refer you back to that post to read the rest of my prediction about where currencies are going. Suffice it to say, I am simply more certain of it now than I was then, and I was certain enough to make it a prediction back then.

Globalism’s great schism

So, along these lines, I’ve been writing we will see a new kind of globalism — a bifurcated globalism

It’s true that the globalist paradigm has to adapt to the new â€œNew World Order” that US President Biden has proclaimed now that the West is battling Putin with sanctions just as the Everything Bubble is blowing up all over the world. Many are saying this forebodes a decline in globalism because nations will be pressed to depend on themselves and grab for all they can to save themselves from the shortages all of this will create….

I see Biden’s new New World Order as being the same old thing, except that it is now splitting into a bipolar version. The globalists are far from giving up what they have sought to create throughout the decades of my life. Nothing that hard-fought ever ends as easily as many in the alternative press are now saying, yet I’m reading their declarations that globalism is dead everywhere….

A huge crack has formed in the world for sure, and globalism must adapt around that fissure; but that only changes the character of the thing. The Davos crowd will not only find it easy to adapt around the new East-West divide, but the whole war-and-sanction situation makes globalism more assured than ever. In fact, I think that will become so apparent it will tempt any good conspiracist to wonder if the war and sanctions were secretly planned to take globalism beyond its recent stalling point where it seemed to have bogged down when the Trump Trade Wars followed by global Covid lockdowns hammered years of smooth cooperation.

Epocalypse Revisited Part Three: Monetary War in the new New World Order

I don’t see anything in all of that running off track. So, I’m simply staying consistent on what I’ve said is coming. I am, however, wary of the uniform thinking I read in the alternative press about all of this. It seems, even in the alternasphere, you only win if you preach the party line:

Many in the anti-dollar or anti-Fed or even anti-US crowds see the present sanctions as being the end of US hegemony in global politics (as they’ve hoped for) and particularly the end of the US dollar as the global reserve currency. That leaves me, as usual, a man without a club or a camp to be a part of. Such is the cost of independent thinking: sometimes everyone disagrees with you, and you just have to accept that.

You can refer back to that post if you want to recapture the basis of my predictions for globalism. Nothing that has happened has changed the basis for my belief that globalism will continue with even more intensity, except that it will become bifurcated. In short, I believe making sanctions work will require greater teamwork between those who have imposed them, so sanctions will become the uniting force to create a tighter Western world in the new bifurcated globalism that I predicted, and by “bifurcated” I am not implying the two sectors will be equal halves.

This shouldn’t be construed as meaning I think sanctions are particularly effective, nor that they are not damaging the West about as much as Russia, nor that I like globalism; but I’m not here to say what I want. However, the Chinese, Russians and their partners are in a position to lose far more by losing the combined economies of Europe, the British Commonwealth and the US than the West will lose from the now-rising East. India and China became rich by selling to and providing services to the West. Japan and South Korea are more closely wedded to the West than to the East financially, though culturally, they are, obviously, deeply Eastern.

How will that balance of financial and economic power that leans heavily West shift fifty years from now or even just twenty? I have no idea. I never even attempt to see that far. I feel I’m doing well to see the next year with some clarity. I’ll just note that many are those who arrogantly predicted the death of the West each decade for the past sixty years that I’ve lived, and none have been right so far. However, many of them have died.

It is a greatly unequal balance to begin with, and the West is far too big to go down as easily as the newly bonded Eastern partners believe, nor is their own bond without its many deep fault lines. China has already begun to express concerns about Putin’s war now that it is proving to be far from a fast success as I think Xi hoped it would be. He knows that, as long as the war continues, the West will keep seeking to tighten the sanctions to make them effective even though sanctions are never very effective and always hurt the poor the worst, especially now that the Chinese see Putin repeatedly losing ground in the war and see Russia’s economy starting to suffer and see their own crumbling everywhere under the strains of Covid and trade breakdowns.

The whole world will suffer under sanctions until Putin goes home because the West is not about to drop its sanctions, and then the world will suffer for a long time from the damages caused by those sanctions on top of all the damages already described above. No one winds up a winner here, but such has long been the problem of the human condition. In the end, the West will seek to save itself via tighter financial unity. Though divided, East and West will inevitably remain intertwined in complex ways, as the connections have become too innumerable to completely separate, but the bonds within each of the two major global factions will be stronger than the bonds between them … at least until it all breaks down. I suspect we’ll also see intensified efforts by both sectors to try to polarize other nations in joining them.

Thus ends the series, and I hope I haven’t offended any too mightily with what some may see as contrarian views, but I’ve always tried not to make my predictions based on what I think will be popular, and how much would they really be worth to you if I did?

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