16 Dec Cassandra – The Year Ahead

“The best way to predict the future is to study the present, and be a student of the past.” — The Lonely Realist

In a letter to TLR in July, #Cassandra predicted a rosy economy for months to come …, and she was right. Her performance is the reason why TLR has repeatedly asked her to share her insights into issues facing America. This is especially important in advance of 2024, an American election year. It recalls the accuracy of Cassandra’s October 2020 prediction that President Trump would reject an election loss and attempt to reverse the outcome. However, even with her Gods-given insights, Cassandra has only a limited ability to predict timing. She also is not in the habit or informing readers when her predictions change. Nevertheless, with her 3000-year record of discerning prophecies, TLR again believes it is worthwhile to seek Cassandra’s guidance, cautioning that her views are not investment, legal or tax advice.

TL Realist:           Good morning, Cassandra. Given that the end of 2023 is fast approaching, readers of TLR once again are eager to hear your views. Thank you for taking the time to speak.
CASSANDRA:     The pleasure is all mine, Mr. Realist.

TL Realist:           Let’s start with your assessment of the American economy. In June 2022, you prophesied that “easing supply chain pressures, commodity price declines, energy price reductions, and declining food prices and consumer inflation expectations will persist and will result in ‘immaculate disinflation.’” You were early in making that prediction … and you’ve been right. What does that mean for 2024?
CASSANDRA:     The answer is straightforward, Mr. Realist. The U.S. economy is decelerating, goods inflation is at zero, and unemployment is slowly increasing. The Fed is part of a government that during election years follows a policy of growth coupled with protecting against adverse surprises. Steadily falling economic indicators and an inverted yield curve already have led the Fed to pivot from a hawkish fiscal policy to a dovish one. The Fed will continue to follow an easing path and, although it will use tough-talk to temper over-exuberance, it will not tolerate a recession. With inflation under control – the fact is that inflation truly has been “transitory” – and recessionary fears banished until after Election Day, Candidate Trump will target Jay Powell as a flunky of the Deep State. Powell therefore will carefully weigh his words and the Fed’s actions, but nevertheless will begin cutting interest rates no later than March and continue cutting through November.

TL Realist:           While it is true that inflation has been easing, Cassandra, that’s been due to the reduced cost of goods, particularly #energy. The price of West Texas Crude, for example, is down by more than 20% in this quarter alone. Is that a trend that will continue in 2024? How much of the Fed’s success will depend on it?
CASSANDRA:     A great deal, Mr. Realist. The U.S. is continuing to pump oil and gas at record rates …, and is pumping significantly more than Saudi Arabia or Russia. With China’s growth slowing (foreign direct investment in China turned negative in Q3) and with developed countries transitioning from fossil fuels, global demand will continue weakening. Increased usage by India and other developing economies will not crystallize demand for some time …, although Mr. Putin will do his very best to pressure energy prices over the next 12 months.

TL Realist:           What will lower energy prices and waning inflation mean for America’s stock markets?
CASSANDRA:     2024 is a Presidential election year, Mr. Realist. Equity prices of necessity will rise, although the increase will be a modest 2% …, unless, that is, the speed of AI deployment exceeds expectations – yes, Mr. Realist, growth and living standards will be driven primarily by #AI.

TL Realist [laughing]:     That’s quite a prophecy, Cassandra! Both I and my readers are familiar with the dystopian futures predicted by The #Terminator and The #Matrix. Is #Skynet then the outcome you see for humanity?
CASSANDRA [pausing]: Most certainly not in 2024, Mr. Realist …, and there is no need today to speak about the more distant future.

TL Realist [frowning]:          Alright, then. When we spoke last year, Cassandra, you expressed skepticism about Vladimir Putin’s ability to achieve victory in #Ukraine. Do you still foresee revolution in Russia?
CASSANDRA:     You misrecollect, Mr. Realist. When you asked me how the Ukraine War would proceed during 2023, I said “to a stalemate” with Russia thereafter gaining an advantage through supplementation of its armaments using “Iranian and Chinese weaponry and profits earned from sales of oil and gas to China, India and Turkey.” That is precisely what is happening. Putin is remaking Russia into an Axis-supported war machine with the 2024 goal of intimidating both the EU and America’s electorate into terminating support for Ukraine – thereby allowing Russia to absorb Ukraine and enabling Putin to further pursue empire-rebuilding. Whether or not he succeeds, the Ukraine War will not end in 2024. Nor will Vladimir Putin’s reign as Russia’s czar.

TL Realist:           How will the Ukraine War, as well as the conflicts raging in the Middle East, affect American politics in 2024, Cassandra?
CASSANDRA:     The outcome of American politics, Mr. Realist, is determined by the electoral college in 8 States: Arizona, Georgia, Michigan, Pennsylvania, Nevada, Wisconsin, North Carolina and Florida. The other 42 truly are irrelevant. The Presidential candidates accordingly will spend the bulk of their campaign dollars in those States, sparing the majority of Americans a barrage of media ads and targeted email, text and social media messages. The Senate will return to the Republicans and the House to the Democrats.

TL Realist:           More importantly than the Congressional divide, Cassandra, what will be the outcome of the Presidential election?
CASSANDRA:     Today, supporters of former President Trump believe that President Biden will be the victor and supporters of President Biden believe that President Trump will prevail …, but no election is being held today …, and both predictions are wrong. Regrettably, Mr. Realist, I’ve promised an exclusive to another media outlet and already have said more than I should.

TL Realist [smiling]:        Perhaps you can share further information when we next speak, Cassandra? Well, then, would it be correct to conclude that the 91 criminal indictments against President Trump will doom his electoral chances?
CASSANDRA:     Not at all, Mr. Realist. As your Mr. Bret Stephens pointed out, “A single criminal indictment against a former president is a disgrace, but 91 [criminal] counts is a blur.”

TL Realist:           Finally, Cassandra, when will America’s government finally begin taking action to reduce the budget #deficit, reform the tax laws, and address educational reform?
CASSANDRA:     I’m afraid none of those crises will be addressed in 2024, Mr. Realist. However, none need be addressed with the advent of AI.

TL Realist [laughing]:           An intriguingly paradoxical answer, Cassandra, but given your time limitations we will have to leave it at that. Thank you again.
CASSANDRA:     You are most welcome, Mr. Realist.

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Finally (from a good friend)