2018: Get Ready, Get Ready, Get Ready!

The secret of change is to focus all of your energy, not on fighting the old, but on building the new. ~ Socrates

Every year, I develop four scenarios for the future designed to assist Solari subscribers in their strategic and investment allocation planning for the coming year.

During 2016, we produced a Solari Report with Eric Best: Scenario Thinking, to help subscribers learn more about the use of scenarios. The future is invented, not predicted. Preparing for a variety of environments and future risks and opportunities and identifying the deepest trends and variables will help us “rock and roll!”

At the end of 2016, I did a complete overhaul of our existing scenarios for the 2016 Annual Wrap Up which was published in January 2017.  I said that the dominant “slow burn” scenario of the prior decade was over. We were moving into a period when the slow burn was accelerating and institutional changes are accelerating with it.

This is exactly what happened. It will continue to happen and the pace will quicken in 2018.

The US and G-7 leadership intend to keep the slow burn going. However, if you look at the speed of change resulting from the end of the debt growth model – from new technology and the global “productivity” backlash – the number of people protected economically are diminishing by a lot.

Central banks and governments have used a great deal of their capacity to intervene and to subsidize. Pension funds, financial institutions and companies are engaging in liabilities destruction or in what I call “controlled demolitions.” Governments are re-engineering their budgets, operations, and policies. For many people around the globe, changes in multiple areas will impact us all at once.

The leadership wants to control more cash flows and related financial data so that they can guide the flow into government taxes, large financial institutions and the national security state. The struggle between forced centralization by multiple factions and cartels defending their fortunes and institutions and the powerful economics of decentralization continues to move to a new level of intensity.

We will use the same variables I chose for our 2017 scenarios :

• Political and Economic Alignment: Unipolar vs. Multipolar: The primary debate in the US elections was whether or not our leadership would push to maintain a global empire or to sacrifice the empire in order to preserve North America. The North American faction won the election –  but they continue unipolar military commitments and US alliances. Significant increases in the US military budget and tax reform indicate a significant effort to continue to explosive growth of a secretive national security state in North America.  If anything the dependency of the US economy on war is greater than ever. This is one of the reasons we are delighted that the Saker will be joining us again in 2018 for quarterly reports on The Emerging Multipolar World.  At the heart of the debate between a unipolar and multipolar world is the question of whether we will have a human culture or if we will continue to shift to an inhuman, transhumanist culture. This is – by far and away – the most important variable of all.

• Return on Investment to Taxpayers: Positive vs. Negative: The US federal budget and regulations have been designed to centralize control of the economy rather than to optimize the economy. The result has been a negative return on investment to taxpayers. We have seen a similar dynamic in the European Union. In part, this reflects the desire to run the economy by rules instead of allowing markets, communication, and allocation to be driven by freely determined prices. The new US administration has indicated a desire to turn things positive for taxpayers. However, the win-lose relationship between the Popsicle Index and the Dow Jones Index is old and deep – and reflects the powerful divergence of Fortune 500 revenue growth from GNP growth that began in the mid-1990’s. Can we turn this situation into a win-win relationship? This choice is not as important as whether we choose to have a human culture or not. However, optimizing the economy may help us rebuild trust destroyed by inequality creating corruption, share natural resources intelligently and protect the environment as we move towards creating a more human culture.

Here are the resulting four scenarios  for 2018 and beyond – same as for 2017. If you click on each title, you will find a presentation dedicated to each one.

Scenario #1: Popsicle Index Rising (Weighting: 10%; down 20% from 2017)
A commitment to human values, environmental stewardship, market economics, and global cooperation are successful.

Scenario #2: Global Musical Chairs (Weighting: 60%; up 20% from 2017)
A commitment to human values, environmental stewardship, and market economics are constrained by a failure of national and global cooperation. This results in continued high levels of debt, military expenditures, and disaster capitalism.

Scenario #3: Mind Control (Weighting: 20%)
A commitment to command and control governance and transhuman values combined with success at re-engineering government resources creates a world of “friendly fascism.”

Scenario #4: The War Machine (Weighting: 10%)
A command and control world without human values and with little success at optimizing resources perpetuates a state of war.