Nearly one year ago, the writers of this blog predicted that 2023 would be a year much unlike 2022. Whereas 2022 was a year marked by seismic military, economic and geopolitical upheaval resulting from Russia’s disastrous decision to invade Ukraine, we foresaw that 2023 would be characterized by a slow and steady churn of events – many of them less than pleasant ones – that ultimately added up to a kind of incremental progress on a number of fronts, even if it did not always appear that way.
In this, our last posting of 2023, we are going to admit that…we were right, yet again. This is not arrogance, folks, but rather a dose of ‘pundit accountability’ that happens to be swinging in our fortunate direction following yet another cycle of events. And given that this is a blog devoted to both long and short term forecasting in the political, cultural and economic spheres, we would be remiss to our readers if we did not validate their habitual choice to log into this blog to check out the ‘coming events’ that it is our calling to predict, mostly correctly, for the third year in a row.
THE BIG PICTURE: WE WERE SLAVES TO ‘THE GRIND’ OF EVENTS IN 2023
On January 1, 2023, Greymantle made a number of big predictions for 2023 in our first posting of the new year. We categorized a number of these predictions, however, as ‘non-predictions’ actually, and the substance of our views was that readers should, in fact, not expect a number of things to happen for which they might secretly be hoping. Chief among these: the overthrow of Vladimir Putin, the collapse of Xi Jinping‘s Chinese government, sweeping Ukrainian advances on the battlefield, a return to pre-2020 levels of global economic growth, and Donald Trump being sent to prison.
No, no, we cautioned. None of those things are going to happen in 2023; none of them did.
What Greymantle and company did make for 2023 were five main big predictions —
- China’s economy would not enter a strong recovery in 2023 due to the end of its ‘Zero Covid’ policy. In fact, additional bad economic news would come out of China in 2023.
- Donald Trump’s legal woes would be among the biggest news stories of 2023, but absent an arrest of Trump by state or federal authorities, there would be limited US unrest in the short term.
- Ukraine’s military would make progress against Russia in 2023, but would not recapture notable amounts of territory. Rather, Ukraine’s progress would be realized more in the areas of air defense systems and hardening its energy system than it would on land.
- Inflation would recede around the globe, albeit slowly. The Fed would raise short-term rates up to 5.5% and stop there. Other central banks would keep raising rates.
- The EU economy would bounce back from its 2022 contraction in the second half of 2023, with the UK being a notable growth outlier on the negative side.
As predictions go, these five were all solid. Greymantle and Co. stand at 4-for-5, and when the final EU and UK economic data for 2023 are made available in Feb-March 2024, we might be 5-for-5. Things are looking relatively good on that front. As we had predicted, natural gas prices in 2023 continued to moderate from their 3Q2022 peaks and EU countries were easily able to secure more-than-sufficient supplies for the 2023-24 winter at much better prices than the year prior. All good for EU economies.
We are most proud of our spot-on forecasts for #1, #3 and #4. A horde of credentialed pundits last winter confidently predicted a sharp Chinese economic rebound in 2023, and all those forecasts fell flat on their faces. These pundits somehow ignored the fact that the Chinese property market was already in crisis in 2021 (and had been badly over-extended prior to 2020) and that a reckoning was long overdue.
In the case of #3 (Ukraine), a lot of observers wanted Ukraine to win and simply wished new gains into being after the success of Ukraine’s 3Q 2022 battlefield advances, without focusing on whether those gains were really sustainable over the medium term (they weren’t). At the same time, those same pundits apparently forgot that boosting energy system resilience and keeping sea lanes open to export shipping would count as tangible successes for Ukraine in this war, and gave scant to no mention of the possibility that advances in these areas might be just as important as battlefield success for Ukraine.
Greymantle was happy to see that we were right again on this front in 2023: Ukraine’s navy – despite having no actual ships – scored a string of notable combat successes in 2023 by damaging and sinking various Russian naval vessels, allowing Ukraine’s fleet of commercial freighters to sail out of Odessa into the Mediterranean via an alternate route.
These naval successes came despite Russia’s pulling out of its grain deal with Ukraine in the summer. Russia tried to pressure Ukraine into making concessions, threatening to sink Ukrainian freighters if Russia’s demands were not met. Now their Black Sea Fleet is planning to decamp from Sevastopol to Abhkazia on the Georgian border to lick its wounds following a series of devastating attacks on its war ships by unmanned Ukrainian drones, i.e. they are being sunk by remote-controlled boats.
Where #5 is concerned, the facts speak for themselves: the US Fed stopped raising short-term rates once they reached 5.5%. Greymantle was spot-on.
News of our successful forecasts does not fill us with unconstrained joy, however. Recall that our Big Picture forecast for 2023 was for ‘The Grind’, by which we meant that we foresaw a series of incremental gains in the wars against inflation, recession, stability and Russia, all coming at great cost.
For those many persons devastated in body, mind or fortune in 2023, and for their families and loved ones, 2023 was not a joyful year. It was truly a grind – a meat-grinder, even, for so many Russian and Ukrainian men (and women) and their families. We were all slaves to it in one way or other.
COUPS AND OTHER EVENTS WE PREDICTED WOULD NOT HAPPEN
The non-events of 2023 that we predicted would not, uhm, occur, also didn’t provide us with a shot of pure happiness, despite the satisfaction we take in our forecasts coming to fruition. To recap our five major ‘non-predictions’ for 2023, we had forecast that —
- Vladimir Putin would NOT be overthrown in a coup d’etat
- Xi Jinping and his coterie would remain safely in power in Beijing
- Donald Trump would not be sent to prison
- Joe Biden would not announce his retirement from politics
- The world economy would not return to pre-pandemic growth levels
All five of these ‘non-predictions’ were realized, although we must admit that we did not foresee that a coup attempt would actually take place in Russia in June 2023 sparked by the Wagner Group of mercenaries and their mercurial, and now “late” leader, Yevgeny Prighozin in an apparent tacit alliance with General Vladimir Surovikin (this has not been proved). In any event, the ‘Wagner Mutiny‘ as it has been termed outside Russia did not succeed, and Vladimir Putin remains in power.
Additionally, we made a number of smaller predictions for 2023 that we also kept careful track of as the year rolled on. These were:
A. Turkish President Erdogan would narrowly win re-election in the spring 2023 poll
B. The Ethiopia-Tigray Truce would hold through 2023
C. Nigeria would avoid major election-related violence in its March presidential poll
As with our five major predictions, all three of these forecasts bore fruit. President Erdogan won another five-year term in office on May 14, 2023. The Ethiopia-Tigray Truce is still holding, and Nigeria’s presidential and general elections were held on March 1 without any notable disturbances.
WHAT WE FAILED TO PREDICT
In life, there are always ‘known unknowns’ and ‘unknown unknowns’, the latter being those things which you don’t know that you don’t know. In other words, the things you cannot predict because they lie outside the realms of both your knowledge and your imagination.
In 2023, there were two such events that failed to register with Greymantle in advance. Both of them were events of a negative kind, alas.
The first was 2023’s unusually hot summer, combined with the effects of the largest wildfires Canada has experienced in its known history. The second was the deadly Hamas attack on Israel that took place on October 7, 2023, and resulted in Israel’s current military operation in the Gaza Strip, which is now entering its eighth week and may go on for months.
The freakishly hot summer I might have predicted if Greymantle focused more on weather and climate change-related issues. Sad to say, there is only so much one has time to focus on. There are a limited number of details that one can master – or attempt to master. Meteorology has never been one of my main interests, though perhaps it should become so. Given the warming trend globally of the last two and a half decades, I suppose we all should have seen it coming. But Greymantle did not.
That the Hamas organization remained in control of the Gaza Strip and was a rising power in the Palestinian communities of the West Bank could not be denied going into 2023. If he had been asked, Greymantle would have posited that the chances of ‘some major clash’ between Israeli forces and elements of Hamas stood at a ’50-50′ likelihood for 2023; however, Greymantle would have said that an unusually bold and well-coordinated attack by Hamas on Israeli territory was very unlikely.
In this, I was much mistaken. If all the places around the globe that extreme violence might flair up and pull in worldwide attention, Greymantle would have put the Gaza Strip at about fifth or sixth place on a Top Ten List of ‘Hotspots’, but not Number 2 after Ukraine.
We all have our blind spots. It goes to show that there are exceptions to every rule and every general flow of events. The summer heat waves of 2023 were arguably a ‘grind’ of a different kind, but the Israel-Hamas War in Gaza of 2023 is a thing of a different order entirely. It was much harder to predict even than Russia’s invasion of Ukraine (which this blog predicted two years ago in Dec. 2021), but its shocks are likely to be just as seismic and, possibly, even longer-lasting.
TO OUR READERS, THANKS FOR ANOTHER GREAT YEAR
We aren’t going to close this post with a new set of predictions for 2024. We’ll do that in our next post, scheduled to come out mid-next week. Instead, we will say ‘thank you’ to our readers and leave you all with a few ‘things to watch’ for the coming weeks.
Three big things to watch in U.S. politics in January: Chris Christie, Nikki Haley, and New Hampshire.
While the Iowa Caucuses on January 15 are definitely going to be interesting and may hold one or two big surprises, the political year is going to pivot on the New Hampshire primary of January 23, in ways similar to how this event has often has pivotal significance in Presidential primaries past. The stakes are much greater this time than ever before. If Mr. Christie pulls out of the race before January 23, if Nikki Haley wins the primary, and if she is able to build additional momentum after it, then we will all be looking at the biggest political story of 2024 – and the biggest since 2016.
We think she can do it. Stay tuned.
The S&P 500 had a very good 2023, with particularly strong performance in the fourth quarter as inflation took a decisive dive, leading to a powerful stock market rally. If inflation continues to fall, and if, as Greymantle believes, the Federal Reserve begins to cut rates sooner, rather than later, say in March, then you are going to see a sustained rally in equities in 2024 that is going to feel like a bull market. If this coincides with ‘You Know Who‘ struggling in the primaries and eventually losing them, then you are going to see an S&P 500 surge and an explosion of ‘relief spending’ by consumers.
We think it’s possible. Again – keep your eyes peeled.
Finally, we believe international observers are under-counting Israel’s technological capabilities and ability to beat Hamas by end of February. If that were to occur, expect Israeli Prime Minister Benjamin Netanyahu to leave office sooner, rather than later (however unwillingly), and a vindication boost in the polls in early spring for U.S. President Joe Biden. Sweden will also formally join NATO.
To all our loyal readers who stuck with us for another year – Thank you! It’s been another wild ride, but a lot of fun. We’re all learning a lot.
Please stay on board for what will prove to be a most eventful 2024.
All the best,
Greymantle
