Deagel.com Country forescast

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shemp
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Deagel.com Country forescast

Post by shemp »

http://www.deagel.com/country/forecast.aspx

Not sure if this post belongs in the money section. More like "Futurology Discussions" section, if there were one. (Also, I did a search on "deagel" and it didn't show up as having been previously discussed here.)

As of 2014 (prediction possibly updated 2017), author was predicting wholesale collapse in the USA and various European countries by 2025. In his footnotes, he gives some reasons why he thinks USA will fall hard, but doesn't go into great detail. He makes some cryptic remarks about how average schmoes in the USA "will be hit badly by a full array of bubbles and ponzi schemes", with implication that old people will give up hope and die prematurely after losing all their money, smart young people will emigrate to other countries, population that remains will resemble cast of "Idiocracy". Countries he predicts will do well by 2025 are mostly either oil rich (Russia, Malaysia, etc) or very strong Net International Investment Position (Taiwan, Japan, Netherlands, etc). So evidently he believed, as of 2014 and maybe 2017, in peak oil impact by 2025, but not in climate change impact by then.

I'm definitely of the belief that big upheavals lie ahead, and that days of USA exceptionalism are numbered, but I find it hard to believe USA will be in worse shape (PPP GDP per capita) by 2025 than Gabon, Equatorial Guinea, Lebanon, Portugal, Colombia, etc.

One place I do agree with author is that Russia has a bright long-term future, though maybe not by 2025, which is why I am heavily overweight Russian stocks (13% versus 1% world market cap). Those are mostly oil, gas and other mining stocks. I also believe Japan and South Korea are safe havens to some extent, so have another 13% there. Another 13% in China, Taiwan, Hong Kong. I don't trust shareholder rights in China, but at least the whole country isn't likely to collapse like Venezuela or Zimbabwe. Then 7% scattered around in other "emerging markets"' that I don't trust. But after scams like Wirecard, is it really fair to suggest emerging markets are untrustworthy? Unrustworthy compared to what?

nomadscientist
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Re: Deagel.com Country forescast

Post by nomadscientist »

Is there any methodology given other than the purple text at the bottom? Largely meaningless if not.

I also overweight countries I see with a good long term future. I base this primarily on demographics and institutional quality.

The US has worsening demographics, as well as a worsening institutional quality. However, absolute institutional quality remains quite high, and amidst the worsening general demographic trend the US continues to be the #1 destination, by a large margin, for the very most capable and ambitious. Only when that changes will I dump the US; I judge that ten above average engineers do not replace one Elon Musk. I don't think the US is going to lose population, as one of the most sparsely populated flat temperate parts of the world already, even if living standards dropped a lot.

Japan and even more so Taiwan and South Korea have collapsing populations and will be undesirable destinations for immigrants (personal judgement) even if they decide to adopt an immigration strategy; you must judge whether you think current P/E prices that adequately. Personally I'd be happy with these countries with P/E 10 or below, although even at current valuations I would agree they provide safety as their likely worst cases look better than US or EU.

Continental EU looks surprisingly similar to Japan but with greater tail risk. Many European countries' native populations have similar demographic trajectories to Japan, masked by non-selective immigration weighted to the lower end of aptitudes; quality immigrants tend to go to English-speaking countries with high salaries. This is a demographic problem that in the medium term will also create institutional problems.

Australia, Israel, Canada (though tightly coupled to the US), and the UK/Ireland look best by the combination of demographic and institutional measures.

I am also overweight Russia, though it has both institutional and demographic problems, because of very low P/E, and because it diversifies a heavily Anglosphere portfolio somewhat.

Maybe this goes too much against the lore of this site but I'm very skeptical about peak oil as a driver of gross civilisational trajectories. You can have modern industrial society without private cars. The only vital application for which oil absolutely can't be substituted (except for synthetic oil, which I hear quoted at $250/bble) is powering military vehicles.

shemp
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Re: Deagel.com Country forescast

Post by shemp »

I researched that site some more. Appears to be a troll site by someone with too much time on his hands.

I don't worry about declining/increasing populations so much as possibility of geopolitical realignments.

USA will survive, but it may not be the great world exception like it was the past 100 years. If the USA merely slipped from head and shoulders above everyone else, to about equal with Europe/Japan, that would be a massive surprise to the USA stock market. Lots of ways to bring about that slip. Dollar no longer special status. Wage/price inflation. More taxes and spending to bring USA closer to Europe model. USA gets nose bloodied in a war with Iran, China, etc.

In addition to very low PEs, Russia should be a big geopolitical beneficiary of declining ability of USA to project military power overseas. Russia would play similar role in USA vs China war that USA played in WWI and WWII. Namely, arms and commodity merchant to China, same as how USA was arms+commodities merchant to Britain and other allies.

Japanese companies have extremely strong balance sheets, whereas the Japanese government is world's most indebted. Also, most big Japanese companies have factories and sales elsewhere, so only headquarters management and engineering affected by declining Japanese population. PE's are high, but Japanese accounting is misleading. I see Japanese stocks as the ultimate safe haven for decades to come. Unlikely to rise much, but won't fall much either, and semi-neutral in case of USA wars (other than with North Korea) since I suspect they will weasel out of fighting with China.

nomadscientist
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Re: Deagel.com Country forescast

Post by nomadscientist »

I got skeptical of geopolitics as main driver after seeing Rate of Return of Everything.

E.g. compare France and UK to one another, and to US. Germany does fine even including WWII. Sweden does better than USA. Finland does best despite losing WWII. Etc.

Mister Imperceptible
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Re: Deagel.com Country forescast

Post by Mister Imperceptible »

If you are looking at that Rate of Return on Everything you will see best equity returns (so far) are under the petrodollar system.

giskard
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Re: Deagel.com Country forescast

Post by giskard »

shemp wrote:
Tue Aug 04, 2020 8:40 am
One place I do agree with author is that Russia has a bright long-term future...
If you read Peter Zeihan he pretty much says the opposite. Russia has a population in terrible health and a horrible demographic future, a government that is basically a cleptocratic dictatorship, and is surrounded by enemies.

He also predicts China will implode due to a civil war and demographic collapse.

Meanwhile the US is resource rich, has great natural geographical defenses, friendly neighbors, and has somewhat favorable demographics. Even if we destroy our currency or something due to "ponzi shemes" we can start over and we won't starve (probably).

shemp
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Re: Deagel.com Country forescast

Post by shemp »

Russia can import Muslims from central Asia. Unlike in western Europe, they don't allow these Muslims to misbehave and they choose the smartest and most disciplined rather than accepting whatever rabble shows up. Also, in a future of widespread robotics, demographics is not that important. If demographics = power, then sub-Saharan Africa owns the future.

Russian government is indeed kleptocratic but they also power hungry and smart, so they have to allow a flourishing private sector to have an industrial base for military power. I like freedom, which is why I wouldn't want to live in Russia or China, but I recognize that authoritarianism, with an intelligent meritocratic elite in charge, has many advantages compared with democracy. Just look at where democracy has gotten Argentina. All the USA advantages you cite apply to Argentina, BTW (demographics, natural resources, peaceful neighbors, good defensive position).

Russia specifically requires 90% self sufficiency in all major food stuffs, as a national security goal. USA just assumes food will always be plentiful.

Russia's only serious enemy is China, but the Chinese are pragmatic. They will buy Siberian resources, not steal them.

USA power depends on open shipping. In a future hot war, it would be trivial for drone subs to cut sea lanes. This would have little effect on Russia or China (which can get oil from Russia) but would cripple the USA and its allies. USA would then have to launch a land attack on whoever was behind those drone subs, without being able to support this land attack with shipping. Hopeless. I don't expect such a war, but it shows that USA military would be a paper tiger in a hot war with Russia or China.

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Jean
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Re: Deagel.com Country forescast

Post by Jean »

I Wonder how good would the usa fare After an élection in which both side wouldn't believe that they lost (or judge the result by différent rules, leading to both sides claiming Victory).

nomadscientist
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Re: Deagel.com Country forescast

Post by nomadscientist »

At some time in the next century a functional country is going to fix the demographic problems of the postwar models. The current conventional wisdom is this contradicts some law of physics and isn't even worth thinking about, but basic logic suggest it's inevitable. That will be an inflection point for my portfolio.

shemp
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Re: Deagel.com Country forescast

Post by shemp »

Site was updated back in September 2020. I highly recommend reading more at the bottom of forecast page, because whether you believe the forecast or not, notes are thought provoking: https://deagel.com/forecast

In particular, I agree with site suthor that Russia/Chinese alliance is a game changer. In my opinion, USA needs to quickly disengage from Asia and avoid engaging in Ukraine or elsewhere that Russia considers its sphere of influence.

As for anfifa, BLM. etc, unlike author of site, I have little doubt that USA will get a grip here at home using same harsh measures used against Iraqis/Afghans, and then some. Helicopter gunships, torture assisted interrogation, etc. All this fretting about covid mortality rates will seem extraordinarily quaint when machine guns open fire on crowds, ala dictatorships in South America a few decades back, and then bodies are dumped in mass graves and covered by bulldozers. The rich will not give up their power if they don't have to, and they don't have to given modern military technology.

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Ego
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Re: Deagel.com Country forescast

Post by Ego »

shemp wrote:
Wed Apr 14, 2021 1:34 pm
The rich will not give up their power if they don't have to, and they don't have to given modern military technology.
Do you believe the rich are feeling there is a legitimate threat to their power?

If Covid showed us anything it showed us just how correct Huxley was though perhaps he didn't realize just how much fear would need to be created as part of the infant conditioning. The antifa/BLM/Proud Boys make a pretty good boogie man that can be let out of the closet every so often to scare the children into submission.
Within the next generation I believe that the world’s rulers will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging and kicking them into obedience.

shemp
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Re: Deagel.com Country forescast

Post by shemp »

Ego wrote:
Wed Apr 14, 2021 5:07 pm
Do you believe the rich are feeling there is a legitimate threat to their power?
No, and I agree that panic over covid shows that people today are easily controlled. I was merely addressing the point made by the author of the site, who believes USA and other bubble economy nations of the western alliance will collapse into ethnic violence when the money spigot eventually gets turned off. IF such chaos happens, then I believe the chaos can and will be controlled by harsh measures.

But precisely because of the point you made, such chaos probably won't happen. Propaganda images of violent mobs combined with scary talk of a new covid variant can be used to whip the people into a new hysteria and justify mass arrests of those who do seriously threaten order. Clubs and prisons are for the 10% of less who rebel against the system, not the 90%+ who support it.

Personally, i'm a lot less worried about chaos and mob violence, or police state response to the same, than to economic chaos as a new world order emerges, with China/Russia alliance as the new dominant military power. A lot of people might decide to hold less dollars and euros than currently, and once the process of dumping them starts, it could gain momentum. To preserve currencies, governments will have to make huge spending cuts and tax hikes, but they won't act quickly. So it will fall to the central banks to raise interest rates, which they will do, but only just enough to stop hyperinflation. So we'll probably get high inflation (5-10%) and high nominal but low real interest rates (maybe 2% real). Good times for debtors, bad times for most investors. Very rich mostly own equity (businesses), which passes through the inflation fire mostly unscathed. Critical government employees, including military and police, will get cost of living increases, so also unaffected.

Ultimately, the big adjustment that needs to be made is that the middle class in USA and Europe needs to be pushed down to world middle class levels, or typical $1000/month salaries (in today's dollars) not these $5000-10000/month salaries they are accustomed to. And retirees in USA/Europe also need to be pushed down. And this has to happen under facade of democracy. So given those constraints, you look for what is feasible. Wiping out small savers with inflation is a non-brainer. Wiping out sicker retirees and middle class with higher medical copays and insurance deductibles. another no brainer. Stocks, bonds, gold, bitcoin crashes are easy to engineer with tax law changes that don't affect the masses or threaten the elite. Etc.

3% or even 2% safe withdrawal rates, based on current stock/bond prices and 30 year retirement, are probably realistic looking forwards. That is, it will be a struggle to avoid losing money in stocks/bonds, much less earning a real return. I continue to have all my money in stocks, 27% USA value stocks, remainder non-USA, and I'm comfortable with this, despite my expectation that stock returns in the future will be very low.

If USA stupidly fights China over Taiwan or Russia over Ukraine, it will lose, and then the economic fallout could be much worse.

Mister Imperceptible
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Re: Deagel.com Country forescast

Post by Mister Imperceptible »

The prediction is for nuclear war but as we saw the corrupt elites play Event 201 just in advance of Covid-1984, NATO is now playing a cyber war game so I would expect that to be next.

nomadscientist
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Re: Deagel.com Country forescast

Post by nomadscientist »

My experience in covid time is that you can choose to have the regulations or choose not to have them. Choosing not to have them requires some mild inconvenience doing obvious moves, but otherwise not much more than a tiny bit of chutzpah. I am not talking about breaking laws here. But, most people have chosen to stay in house-prison rather than even test the boundaries.

It may be a natural development. Never in history had so many people been allowed to roleplay as what was once called middle class and before that minor nobility. It's not a natural state of affairs, because most people aren't actually self-directed. It may be natural that these masses of automata-tourists become once again tied to land and work.

I'm skeptical the markets are going to blow up. The promised mass retirements are probably fake but the 401k system allows governments to deflect blame already. Bogleheads will be fine because they over-saved. People here could, at least in principle, do non-obvious moves with their investments, which will make them less vulnerable to manipulations. Overall world living standards may drop along with the population collapse of wealthy countries, but this will also reduce the prices of many things (such as land and structures - already happened in Tokyo) and anyway people care more about relative wealth.

In all of history there has always been a class of small and middle holders trying to hang on to their wealth in a world they don't understand very well, and a class of people who understand it better trying to take the wealth off them. This is in the Book of Genesis. Undefended wealth tends to change hands. But smart and active people do tend to remain wealthy. Lottery winners of all varieties don't.

shemp
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Re: Deagel.com Country forescast

Post by shemp »

2 points made by @nomadscientist in previous comments:

1) Geopolitics doesn't correlate well with stock market returns. My impression is that correlation is better in case of countries with poor returns. Russia and Chinese stocks went to zero in their revolutions, Japan/Germany/Italy were disasters if you bought pre-WW2 and couldn't wait 30+ years, etc.

So my approach is look for potential disasters and seek to avoid those, versus looking for high returns. In my previous comments regarding Russia, I might have given the wrong impression. Namely, that high future returns are what motivate me to put 13% in Russia. Actually, it's that I see Russia stocks as a safe haven if things go to hell elsewhere, given their current prices.

Also, the danger is not that US economy will go to hell necessarily, but rather that USA stocks are priced as if expecting USA economy to boom forever accompanied by low interest rates forever. If those expectations are not met, effect on stock prices likely to be dramatic. Geopolitical issues could be a trigger for failure to meet expectations.

In other words, for both Russia and USA, I'm taking geopolitics into account mainly from a negative point of view.

2) Fixing demographics. This is actually very easy to "fix". Simply tie women's pensions directly to earnings of her children, with some accommodation for adoption (money mostly goes to foster rather than biological mother). Also need to punish women who produce worthless children by making them pay for childrens' institutionalization to some extent, with imprisonment for woman if she can't pay. People with no children get nothing. Fathers who help with child raising get something, but less than mother.

Selling punishment part is easy: images of some poor single mother (black in the USA, Muslim one Europe) with 13 criminal children, each with a different criminal father, etc. Selling increase in pensions for mothers with high-earning children also easy. Average mothers and men who help with child raising are left unaffected, so no political opposition from them. Finally, childless people, including men who divorce and don't help with child raising, get screwed. Propaganda machine should be able to silence protests of this minority by labeling then as selfish, etc.

Anyway, that's the obvious long term fix. In the short and medium term, intelligent immigration solves the problem. There's billions of people in poor countries, many with genetically high IQs and high self-discipline. These can be easily trained to do mid level technician jobs, which is the main bottleneck. 30 years later, children of such immigrants will provide the next generation of high level scientists/engineers/entrepreneurs.

Problem with USA and Europe is encouraging stupid rather than intelligent immigration, and/or not integrating immigrants properly in parts of Europe. Japan/Korea/China allow essentially no immigration, but they can use robotics until the policy changes listed in previous paragraphs are instituted. Russia can accept and integrate vast numbers of central, west and south Asian immigrants and has no qualms about being ruthless about their quality and ruthless about cracking down on misbehavior by immigrants. With some 2 billion potential central, south and west Asian immigrants to choose from as global warming heats up, so to speak, Russia is in a very strong position to solve its demographic problems.


giskard
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Re: Deagel.com Country forescast

Post by giskard »

shemp wrote:
Wed Apr 14, 2021 1:34 pm
Site was updated back in September 2020. I highly recommend reading more at the bottom of forecast page, because whether you believe the forecast or not, notes are thought provoking: https://deagel.com/forecast
I wanted to read it out curiosity but the link just redirects back to the homepage now for me?

shemp
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Re: Deagel.com Country forescast

Post by shemp »

giskard wrote:
Thu Apr 22, 2021 11:55 am
I wanted to read it out curiosity but the link just redirects back to the homepage now for me?
Looks like they removed the forecast. But it was definitely grim.

Given the positive forecast for Russia, this might be a Russian troll site, though not sure what the point is. Hardly anyone reads it. My own positive forecast for Russia was derived independently. Extremeness of disappeared Deagel.com forecast didn't so much confirm my forecast, as make me wonder if we were both being misled by some psy-ops, except deagel misled worse.

Underlying my forecast is the view that drones, hacking and biowarfare will be dominat factors in any future war. The west is much less resilient to hacking and also biowarfare, in my opinion, as covid has shown.

As for drones, herds of drone torpedos will be used to cut sea lanes, which means USA can no longer project power, or even trade with the rest of the world. Final result is that USA is isolated while Russia dominates Europe and Chna dominates Asia. Then maybe Russia gets nervous about Chinese power and so those powers clash. USA would be okay of it just abandoned Asia and Europe, but likely it won't. However, given those herds of drone torpedos, naval defeat is inevitable. If the USA could walk away from defeat and lick its wounds in isolation, again fine. But there is the possibility of USA completely collapsing in wake of defeat, rather than regrouping, due to ethnic tensions.

nomadscientist
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Re: Deagel.com Country forescast

Post by nomadscientist »

There's no need to believe in novel superweapons to predict US defeat here. The PRC will soon have a larger economic capacity as well as the big geography advantage as being on the same side of the ocean as the conflict. It will be able to defeat the US in a direct confrontation with whatever are conventional weapons at that time. The US will not be able to afford to keep its border against a stronger power 99% of the way to that power's coast. Retreat to Guam or Hawaii - however exactly it happens - is inevitable if China does not blow up.

Russia will not be able to defeat the USA directly in our lifetimes, but Russia is also by far the less important of those two powers. If the USA can't afford to defeat China alone, it cannot afford to defeat Russia simultaneously, and will steadily withdraw forces from Europe to try to maintain its Asian position as long as possible.

Advantages for the USA:

- it probably has the best hackers/technologists in general (but is losing the ability to do large engineering projects)
- it's an invincible island
- the ethnic tensions are created by coordinated media and can be switched off overnight if necessary

It's difficult for me to understand the motivations of the USA ruling class, though their existence and coordination is clear, so it's difficult to predict the end-game, but I agree with the broad conclusion that Russia-China played correctly is a superior combination to the USA.

nomadscientist
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Re: Deagel.com Country forescast

Post by nomadscientist »

btw, my main concern about holding Russian equities would be the US government seizing or otherwise rendering worthless that holding.

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