Prediction 1 - THE WORLD'S BIGGEST EVER FINANCIAL CRISIS OCCURS
Did that happen? No. However, in making the prediction, I set out, as always, that its impossible to be confident about any such prediction, in relation to financial markets. If it were possible, then Marxists would be multimillionaires. Marx did engage in some speculation on the stock exchange, but unlike Ricardo, was not very successful at it.
As Marx writes in a letter to his uncle Lion Philips in the summer of 1864:
“I have, which will surprise you not a little, been speculating … in English stocks, which are springing up like mushrooms this year … and are forced up to quite an unreasonable level and then, for the most part, collapse. In this way, I have made over £400."
Further on in his letter to his uncle, Marx says that he is going to do some more trading:
“… now that the complexity of the political situation affords greater scope, I shall begin all over again. It’s a type of operation that makes demands on one’s time, [but] it’s worthwhile running some risk in order to relieve the enemy of his money.”
Engels perhaps had more success, as a result of his business activities, and having a seat on a stock exchange, as well as hob-knobbing with capitalists in business forums, and as part of the Cheshire Hunt. He had shares in the London and Northern Railway Co., South Metropolitan Gas Co., Channel Tunnel Corp. and Foreign and Colonial Government Trust Co. As with Marx's comment above, he noted, that trading stocks “simply adjusts the distribution of the surplus value.”. It doesn’t expropriate it from the workers.
If they couldn't predict stock market movements, I have no pretension in that regard either. What I said in the original prediction, however, still holds. In fact, during the year, we did see the biggest ever crash in bond prices, and rise in bond yields, basically for the reasons described in the initial prediction, as global interest rates rise. On the back of it, we also saw stock markets drop by around 20-30%, and, in real, inflation adjusted terms, more like 30-40%, though they have also experienced two bear market rallies, including one still running.
One reason that the crash has not yet happened is that states have been able to continue to suppress economic activity. The war in Ukraine facilitated the spread of fear, and sharply rising energy prices resulting from NATO's boycott of Russian oil and gas, diverted household incomes into paying for these necessities, whilst states also acted to try to hold down the wages of public sector workers, resulting in a rash of strikes across the globe. The continued implementation of lockdowns in China, also held back global growth, but China has been forced to abandon them, as a result of widespread revolts against their continuance.
As China reopens, in the coming weeks, it is likely to see a significant boost to its economy, and spreading into the rest of the Pacific, and subsequently global economy. Attempts to proclaim imminent recession to persuade workers not to demand pay rises to cover inflation, are continually falling on deaf ears, as consumer demand continues to surpass predictions, and labour shortages become further extended, leading to rising wages. In short, all of the conditions for economic expansion, rising wages, and the need for capital accumulation leading to rising interest rates and a collapse in asset prices, remain in place.
Prediction 2 - POPULISM IS PUT IN RETREAT
Within that prediction, I pointed out that the prediction from the previous year had already been partly fulfilled, and so too with last year. Yet, the process is characterised by contradiction. The most obvious manifestation of populism being put in retreat was the failure of the Trumpists, in the US, to take control of the Senate, or to make major gains in the House, at the same time as failing to make significant gains in the gubernatorial, and other local elections. The victory in state ballots supporting abortion rights, and so on, was a further indication of that. In Britain, Brexit is now clearly a minority sport, with polls showing clear majorities in favour of re-joining the EU, and the even greater manifestation was that the populist fantasy of the Brexitories ran aground with the election of Liz Truss, as Tory Leader, and so Prime Minister, whose attempts to implement Reaganite populist policies led to a crash in the Pound, soaring bond yields, and the rapid removal of her government, as the international ruling class demonstrated, once again, really who did have control over Britain. Across Europe, the further advance of populist forces has been halted.
Yet, it has been halted, whilst simultaneously having been mainstreamed, much as the advance of the NF in Britain, in the 1980's, was halted only by Thatcher adopting their clothes. Brexit is opposed by a clear majority of British voters, who now want to re-join the EU, and that sentiment is only likely to grow stronger, and yet, whilst, in practice, Brexit remains an illusion, Sunak and his government remain nominally committed to it, in order to retain the support of its petty-bourgeois base, and that position is also bizarrely held by Starmer's Brexitories too, as they abandon Labour's core working-class support (66% of which backs re-joining the EU as soon as possible), in the hope of winning the support of those same petty-bourgeois voters, and backward, lumpen areas concentrated in the decaying old industrial towns.
In the US, the Trumpists failed to advance, and Trump and his close allies are facing increasing court proceedings against them individually, which will further hamstring them, in the months to come, and yet, Biden and the Democrats have, like Starmer's Blue Labour, mainstreamed populism. Biden's economic nationalism and trade war against China is little differentiated from that of Trump before him, and the progressive social-democratic wing of the Democrats is little better. Its perhaps illustrated by their support for the measures passed in Congress to force a terrible deal on US rail workers, but the general protectionist measures being pursued, by Democrats, are ones that seek to subordinate workers interests to those of US capital.
The more obvious manifestation of that is, of course, the populist support for NATO's proxy war against Russia, being fought out in Ukraine, as well as similar moves in support of Taiwan to ramp up tension with China. That support, given also by large sections of the so called Left, is entirely populist in nature. It avoids any analysis and position based upon class, and proceeds purely on the basis of abstract, idealist conceptions of “nation” and “people”, the very definition of populism, as against class politics. The war, we are told, is all about defence of Ukraine, or the Ukrainian people, as though any such concept is more than just an abstraction that hides the fact that all nations are comprised of antagonistic classes. It belies the fact that, even setting aside the role of NATO imperialism, Ukraine is a reactionary capitalist state, run by a corrupt, kleptocratic regime, heavily reliant upon fascist forces of the Azov Battalion, and Right Sector, just as much as is the reactionary regime of Putin in Russia.
At the same time, we have other populists that have thrown their support behind Putin's reactionary regime, in a mirror image of those backing NATO imperialism, and the reactionary regime of Zelensky in Ukraine. All of this is a manifestation of the continued weakness of the working class and its leadership following more than 30 years of defeats, and an inability of the class to forge ahead with its own self-activity, and pursuit of its own distinct class interests, made worse by the debilitatung consequences of the welfarism and statism that strengthened during that time. But, as described, the change in global economic conditions is fundamentally altering that situation.
Labour shortages continue to grow, increasing the power of labour as against capital. Whatever Biden or Starmer might seek, workers will continue to push ahead on the basis of those changed conditions to demand higher wages, and firms competing for labour are forced to concede or even voluntarily offer such increases. The more conservative social-democrats are seen as an obstacle to that they will be ignored, rolled over, and new representatives of workers established in place of them. In Britain and the US, lockdowns had to be ended, and that has fed into the above process, and, although governments have sought to feed fear over a continuation of COVID, it has lost its sting, and other alternatives like Monkey Pox, Strep A and so on, cannot be hyped up in the same way. Even in China, as I had predicted, the Stalinists have been forced to abandon their ludicrous zero-Covid strategy whose real purpose was to keep workers and consumers pinned down, and so restrain economic growth, which threatens to cause Chinese wages to spike, with a consequent spike in interest rates, which will crash massively inflated Chinese asset prices.
Across Europe, workers are seeing through NATO imperialism's war against Russia in Ukraine, and the consequent effects of boycotting Russian oil and gas and food supplies. Not only has it caused European energy prices to soar unnecessarily, but it also threatens to cause unnecessary closures of European industry, affecting workers livelihoods, again driven not only by NATO's war aims, but also by a desire, again, to restrain economic growth, as in China, so as to avoid rising wages and interest rates, crashing asset prices once more, as they have become even more inflated than they were prior to the crash of 2008. Those protests, across Europe, are likely to intensify in the months ahead, particularly as Arctic blasts eat into gas storage.
The Left has been derelict in its duty, in that regard, as it collapsed into a populist, social chauvinism in support of NATO imperialism's war in Ukraine against Russia. It left the field open, in opposing the effects of those sanctions, to the red-browners, and other reactionaries supporting Putin. But opposing Putin's reactionary war in Ukraine, does not at all mean a need to support the reactionaries of the Ukrainian state and ruling class, nor its NATO puppet masters, nor the sanctions imposed by NATO/EU etc. Marxists do not determine their position on the basis of campism, of putting a minus where our opponents place a plus sign. Opposing Putin's war, does not require supporting Ukraine or NATO's war, and nor does it require us to support sanctions which threaten to damage the interest of both Russian and European workers, and even US workers, indirectly, as energy supplies shipped from the US cause US energy prices to rise.
As workers, across Europe, strengthen their position, in the months ahead, fighting and winning for higher wages to combat persistent inflation, they will also need to take up the issue of those energy prices, and more specifically shortages, caused by those sanctions, as they threaten their jobs. The vanguard in that struggle will quickly pass out of the hands of reactionary populists into the hands of a mobilised and organised labour movement.
Prediction 3 – Gold Heads To $3,000 an ounce
The Dollar Price of Gold has remained barely changed since the start of the year. However, at its highest point, the Dollar Index, against other currencies, was up by around 20%, meaning that, in other currencies, Gold too would be up, by around 20%, or around $400. That would still leave it well short of the $3,000 mark.
The underlying factors, set out last year, remain in place. The costs of gold production continue to rise, exacerbated by rising global inflation. But, inflation has not yet led to a rush from fiat currencies into gold as a safe haven, and, as other asset prices fell by around 20%, during the year, with crypto prices falling even more, gold, as a speculative asset, has been impacted by the same forces. That gold remained steady, despite the large falls in crypto-crap, and in stock and bond markets, is an indication of its continued power as a store of value.
It faces further contradictory pressures in the year ahead. On the one hand, inflation may rise, as workers continue to prise higher wages out of the hands of capital, as a result of labour shortages, and strikes, and as central banks respond by introducing yet more liquidity to enable firms to compensate their profits. The opening up of China, following the ending of the insane lockdowns, will boost the global economy, probably on a large scale, and as some bottlenecks, for example, in relation to microchips, are removed, that will facilitate even stronger global growth of manufacturing, and demand for labour. Higher global inflation may lead to speculators looking to gold for capital gains, as other assets continue to see declines.
Prediction 4 – Africa Outperforms
Sadly, this prediction also failed to materialise, as the continued effects of global lockdowns badly impacted global trade and African economies as a result of it. On top of that, NATO sanctions on Russian gas and oil, and other exports have badly impacted Africa. On the one hand, it is affected by sharply rising energy prices, but also prices of fertiliser rose sharply as a consequence of the rise in gas prices. Furthermore, Russia is the world's largest grain exporter, and the sanctions imposed on Russian grain exports not only created global food shortages, but also pushed up grain prices, significantly badly impacting all poorer countries, particularly in Africa.
Prediction 5 – Trump Indicted
Its still necessary to say “Watch this space”, as Trump still avoids indictment, whilst those around him are being indicted, sent down, or drawn into ever more legal entanglements. The noose continues to draw tighter, as courts issue orders for his tax and other dealings to be made open, and subject to scrutiny, and as the FBI has raided his home and uncovered masses of secret state documents he should not have had. The weight of material against him and his family and associates on a whole range of topics is mounting by the day, and that is before the question of his role in the attempted January 6th coup is added to it.
The Trumpists undoubtedly hoped that they would have taken the House by a large majority, and possibly the Senate, as well as taking control of several Governorships, which was central to their strategy in frustrating further legal action against Trump, and Congressional investigations, as well as preparing the ground for him running in 2024. Yet, despite Biden and the Democrats giving them every opportunity, in that regard, they failed. Democrats have control of the Senate, and its not clear Trump has a majority in the House. As he becomes a liability for Republicans, and given the contradictory nature of such populist formations, they are likely to form up around some alternative such as Florida's Desantis. Not that he's any better, but it opens the door to the Republicans clearing the decks by throwing Trump to the wolves, along with his supporters.
That process is now speeding up as the House of Representatives has voted to call on the Department of Justice to charge Trump on various criminal charges, including incitement to insurrection.
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