Posted October 10, 2023
By Sean Ring
Five Rude Predictions
- Will banks exist in their current form by 2030?
- Will the military-industrial complex still run America by then?
- What about global warming and Russia?
Good morning from sunny Asti.
Last week at the Paradigm Shift Summit in Las Vegas, I opened the conference with “Five Rude Predictions.”
My point was to extrapolate the future from what is happening right now.
This weekend’s events in the Middle East muddied the waters further.
But much of what I said still stands.
In today’s Rude, I’ll relay the gist of the talk to you. It’s not an exact transcript, as I don’t read speeches. I just hop around the stage, chatting with the audience.
Five Things I Think Will Happen by 2030
Crypto Destroys the Treaty of Westphalia
First, some definitions.
The Treaty of Westphalia is the foundational moment for our modern concept of the nation-state. To cut through the academic jargon, this set of peace treaties in 1648 said, "Hey, let's respect each other's boundaries and not interfere in one another's domestic issues." That might sound like common sense now, but back then, it was revolutionary.
Before Westphalia, Europe was a battleground of religious wars, feudal struggles, and territorial disputes. I'm talking about the Thirty Years' War and the Eighty Years' War, which made Europe resemble something from a Tarantino movie. These conflicts weren't just about who got what chunk of land; they were also deeply rooted in religious differences.
So, come 1648, European powers gathered in the Westphalian cities of Münster and Osnabrück and started hammering out these treaties. The key players included the Holy Roman Empire, Sweden, France, and Spain.
The result? A significant shift from a Europe dominated by religious doctrines and imperial ambitions to a Europe of sovereign states.
Post-Westphalia, the state became the primary unit of political organization. That's where we get this principle of "sovereignty" crucial to international relations even today.
The idea was that states have complete control over their territory and internal affairs and shouldn't mess with the affairs of others. While the treaties didn't explicitly lay out these principles, they have been interpreted as such over time, becoming part of what we now call "Westphalian sovereignty."
If you were thinking, “Wasn’t that the Congress of Vienna?” you were close.
The Congress of Vienna was held between September 1814 and June 1815. It was Europe's grand attempt to clean up Napoleon’s mess. You could think of it as the 19th-century equivalent of hitting the reset button on European politics.
Let's set the stage. Napoleon Bonaparte had rampaged through Europe like a bull in a china shop, redrawing borders and toppling monarchies. When he was finally defeated, European leaders stared at a continental jigsaw puzzle with pieces missing, switched, or utterly destroyed.
Enter the Congress of Vienna.
Key players included Austria, Russia, Prussia, and the United Kingdom, represented by their top diplomats and statesmen. France was also there but in the somewhat awkward position of being both the cause of and a party to the negotiations.
The main goals? First, create a balance of power so no single state could dominate the continent again. Second, restore the monarchies and conservative orders toppled because - heaven forbid! - the commoners get any crazy ideas about equality and liberty.
So, what did they come up with? It's a diplomatic masterpiece or a patchwork quilt, depending on how you see it. They redrew the map of Europe, carving up territories like a Thanksgiving turkey.
Poland was divided among Austria, Prussia, and Russia. Norway and Sweden were joined in a union. Belgium and the Netherlands were merged into a single kingdom. And so on.
But it wasn't just about redrawing borders. The Congress of Vienna also laid down the rules for diplomatic conduct and set up a sort of early "United Nations" called the Concert of Europe. This was a framework for European powers to resolve their disputes diplomatically rather than going to war at the drop of a hat.
And crypto, or some digital currency linked to gold - but not to a nation-state - will destroy this framework.
The way money moves is changing and fast. Digital currencies, especially decentralized ones like Bitcoin, are already challenging traditional financial systems and central banks.
Countries with fragile economies (see: El Salvador) will start using digital currencies to bypass economic sanctions or stabilize their economies. For governments, this is both a tool and a challenge. Sovereignty will be tested, and new alliances may be formed around shared digital financial infrastructure (perhaps BRICS).
The US Military Industrial Complex Suffers Enormous Losses
Just this weekend, the US seems to have dumped Ukraine for Israel. Who knows if Taiwan is a distant memory?
The US is stretched far too thin as The World’s Policeman™, which will wreck the MIC.
But as that old gigolo, St. Augustine, once said, “Give me chastity and constancy, but not yet.”
And how did our aerospace and defense sector perform yesterday, on the dreadful news in Gaza?
It couldn’t be better!
NOC was up 11.43%, LMT was up 8.93%, and GD was up 8.43%.
But like butter scraped over too much bread, the US military will be Bilbo Baggins-tired soon.
China’s BRI Will Reshape Global Supply Chains
Blockading China’s entry into the sea seemed like a good idea at the time.
But the Chinese are too smart not to have figured out an alternative.
And that’s the Belt and Road Initiative (BRI).
One railroad to rule them all. From Lisbon to Vladivostok, the railroad would slash costs and obviate the US/UK’s naval power. We’ll be back in Mackinder’s world soon.
I’ll love Chinese logistics stocks in the future.
My theory goes like this: if you listened to Richard Mayberry, who, after September 11, 2001, said to buy defense stocks because we’re going to have war for a long time, your portfolio would resemble this:
If you bought HMO stocks simultaneously because you knew Americans were getting obese, your returns would look even better!
The one thriving part of the USG after this mess will be spying.
Palantir, headed by authoritarian lunatic Alex Karp, is America’s excellent spy machine.
Here he is, a private citizen, talking about how he’s embarrassing competitors into helping the USG with artificial intelligence. The man is deranged.
And that’s why I love the stock so much.
In short, if you pay taxes to fund the military, offset that cost with aerospace and defense stocks.
If you’re going to pay for Obamacare, offset that by owning HMO stocks.
If you’re going to get spied on, offset that by owning spy stocks.
As of yesterday’s close, PLTR is $17.61. Fill your boots!
Global Warming Frees Russia
Russia’s permafrost is melting. The tundra isn’t so frozen anymore.
Vladimir Putin pissed off the environMentalists by saying, “An increase of two or three degrees wouldn’t be so bad for a northern country like Russia. We could spend less on fur coats, and the grain harvest would go up.”
Many true things are said in jest.
Russia gets two big things when the permafrost melts:
- Warm water ports, which it has always wanted.
- A seat at the European table, which it will take once this Ukraine mess is finally finished.
Russia’s Northern Route is ice-free for part of the year now and will hook up with the BRI to change everything about how Eurasia does business.
If anything, I hope this was entertaining.
If you're still watching, we’ll see if I was right seven years from now.
Have a wonderful day ahead!