"Predictions for the 2020s"
by Dmitry Orlov, Club Orlov (January 3, 2020)

While many commentators see it fit to publish their predictions for the year ahead, I find a single year to be too fine-grained for any meaningful forecast. For me, plus or minus five years is about the right size of the error bars to place on any prediction with regard to timing, making it possible to time any major change to within a couple of decades. And it just so happens that another decade has gone by since I published my last set of predictions for the United States in the 2010s and it is therefore time to come up with a new set, for the 2020s.

My last set of predictions worked out moderately well. Although in some cases the process has not run its course, the trends are all unmistakable and the processes I outlined should be expected to continue and in some cases to run to completion within the new decade. But this time around I will attempt to make more specific predictions.

With regard to economics, something is bound to snap, possibly quite early in the decade, and color the rest of it. There is a growing disconnect between the financial economy, which functions based on rules that people can, and do, make up as they go along, and the physical economy of mining, manufacturing and logistics. There is no reason to particularly trust official statistics with regard to economic growth, unemployment, inflation, stock market valuations: these are all clever forgeries. A sufficiently bubbly stock market or real estate market can be maintained by suitably huge injections of fake money conjured into existence and handed out to key insiders. But if we look at how much stuff gets made and shipped, how much new public infrastructure gets built, and other such physical factors, we can already observe steady deterioration.

While finance types and economists, who deal in dimensionless quantities identified by quasi-religious mystical symbols such as $, €, ¥ and £, toil tirelessly to maintain a fake Potemkin village façade of a thriving economy, no such theatrical suspension of disbelief is possible when looking at tonnes, cubic meters or kilowatt-hours. A bunch of ruthless financial swindlers teamed up with pointy-hatted economists spend their days reasoning circularly about price determining value determining price while resolutely confusing money creation with wealth creation. Meanwhile, a shrinking physical economy obscured by runaway debt remains on a collision course with reality; once the collision takes place, the result will be similar to what happened during the financial collapse of 2007-8, except that the desperate financial manipulations that were then used to arrest it will no longer work at all and the physical economy, which is already languishing, will grind to a halt.

A particular canary in the coal mine is likely be the fracking industry. It never really made any money, but it did win the US a reprieve from the ravages of Peak Oil. And now production from fracked wells is peaking, depletion rates are going up, fracking companies are going bankrupt and the newly drilled wells are less oily and more gassy, with the gas not particularly high-quality or valuable. At some point during this decade the US will again be forced to rely on importing most of its oil and gas. Meanwhile, any attempt at a Green New Deal to decarbonize the US economy will result in a cost structure for electricity and transportation that will make virtually every kind of industrial production noncompetitive, as has already happened everywhere this has been tried, including the UK and Germany.

Another canary may turn out to be the market for US treasury debt. As the US shipped its industry overseas and replaced industrial production with a service economy of overpriced lawyers, doctors and dentists, lots of swindles in real state, finance, retirement planning, insurance and education, plus lots of underpaid baristas, dog groomers and yoga instructors, an unwritten rule was that the trading partners, who now make all the stuff the US has to import, will invest their trade surplus in US treasury debt, making it possible for the US to continue to get something for nothing. But lately China, Russia and other countries have started selling off their hoard of US debt and instead using their ever-growing trade surpluses to stimulate their export industries and to provide import credits to their more solvent new partners among the developing countries. This development is pushing the Federal Reserve in the direction of direct debt monetization, which is sort of illegal for it to do, but it can easily get around this restriction by lying about it. Direct debt monetization has a pronounced tendency to result in hyperinflation, which is especially in a country such as the US, which is running staggeringly huge budget and trade deficits. This particular canary suffered a coronary arrest during the REPO crisis in September 2019, and the Federal Reserve has been keeping it on life support ever since.

With regard to military matters, it seems safe to declare that by the end of the 2020s the US empire will be definitively over. It is already the case that the US can no longer even threaten a long list of countries, especially those armed with Russia’s new air defense systems which can establish no-fly zones for US aircraft, while the US military cannot function at all if it is denied air superiority. It is also already the case that the entire US aircraft carrier fleet is obsolete and useless because the latest Russian missiles can reliably sink it from greater distances than can be reached by the armaments or the aircraft these aircraft carriers carry.

Add to this the fact that Russia’s latest missiles, which can achieve Mach 20 and which cannot be intercepted using any current or planned missile defense systems, make it possible to take out targets on the US mainland, including the Pentagon itself, should the US ever attack Russia. The US still has nuclear deterrence, plus the ability to cause minor mischief by arming and training terrorist groups around the world, but it is so woefully behind Russia in weapons development that it will probably never catch up in spite of constantly outspending Russia ten-to-one on defense.

Russia’s stance with regard to NATO troops training, preening and posturing provocatively right on Russia’s borders has been largely dismissive. Russia has largely rearmed with new weapons based on new physical principles known only to its scientists, engineers and designers and is now cutting its defense budget while bringing in billions from increased worldwide weapons sales. The US cannot catch up—not due to lack of money (as long as the printing press continues to run) but due to lack of brains.

As the impotence of the US military becomes obvious, the NATO alliance will come apart. Already Turkey, which is NATO’s second-largest member, is barely a member at all and far more interested in cooperating with Russia and Iran on defense matters rather than with the US. In spite of this, the US military-industrial complex will continue its zombie-like existence until the money dries up, at which point my initial prediction of US troops left stranded at a multitude of overseas locations with no resources available to repatriate them will come true.

In the meantime, the US military will do what it can to justify its existence by periodically staging provocations against such small but invincible adversaries as Iran and North Korea while meddling in the politics of the weaker and less stable nations that happen to have resources that US industry wants to “liberate” (be it Venezuelan oil or Bolivian lithium for electric cars). It will repeatedly come nauseating close to unleashing an all-out military confrontation but will refuse to commit to one for three excellent reasons.

First, based on all of its recent experiences in Iraq, Afghanistan and beyond, it knows that it cannot win. Second, it knows that it can no longer even fight for any length of time because the industrial base needed to resupply troops in the field no longer exists. Third, it knows that it can no longer protect the US mainland; all it would take is a few rocket attacks to take out the large power line transformers that maintain the electric grid and the oil and gas pipeline pumping stations that provide for the rest of the energy infrastructure and its entire economy would simply stop.

In all, I am optimistic that a large-scale war will be avoided, for the simple fact that wars are fought to be won, not to be lost. If it is immediately obvious that any large-scale military action will reliably result in complete and utter defeat, humiliation and ruin, then it becomes a suicidal move to order that action. In turn, the upper echelons in the military chain of command are not staffed with suicidal types; they didn’t spend half their lives working to get promoted by kissing ass to then turn around and kill themselves. Sure, they will assassinate people and cause humanitarian disasters whenever they feel that they get away with it. But even their risks to themselves are low enough to assure them of their own continued physical existence, they will avoid strategies that result in major casualties on the US side, for fear of getting their precious yarbles in a vice politically.

With regard to politics, the US has already stopped functioning. The ruling elite has split up into two warring camps which are now treating each other with the same viciousness, malice and disdain they have previously reserved for foreigners. This development is inevitable: faced with their own full-spectrum failure, the elites have been forced to search for a scapegoat—anybody but their own beloved selves—and have found… each other, of course!

As the warring sides of the ruling elite proceed to gnaw off each others’ faces, various faults enshrined in the US system of governance will come to the forefront and thwart all efforts at making positive changes. Most of the trouble stems from a particular obsolete and faulty document: the US constitution. It allows a president to be elected without gaining a majority at the polls. It also makes it possible for that president’s party to control the upper house of parliament while completely disregarding the interests of the most populous states in favor of the underpopulated hinterland.

Finally, it allows that president to also stack the judiciary with his own people, who can then overrule any legislation based on their creative reinterpretations of any piece of legislation including that same faulty and obsolete constitution. And a particularly insidious bit of English tribal law known as “precedent” means that a law, once broken by a judge (reinterpreted, that is) stays broken. For instance, some judges decided that the 2nd amendment allows people to have firearms in their possession even if they are not part of a state militia, settling the issue in perpetuity. This principle, coupled with the severe shortcomings of the constitution and the system as a whole, results in a tendency to run to the courts to settle any and all disputes, be it an indecisive presidential election or the question of whether one should be allowed to marry one’s Saint Bernard. The result is a gigantic legal Gordian knot knitted together out of a myriad of smaller legal boondoggles.

This flawed constitutional arrangement may have worked before, when the country was more united, had more of a sense of common purpose and destiny, and had a chance at securing positive outcomes for much of its citizenry. But now that none of these wholesome ingredients is available, it provides for maximum political dysfunction at every level of government. Nevertheless, much of the populace in the US still feels that there is something to be achieved by voting, remaining impervious to very simple and well reasoned arguments that the US is not a democracy at all and that it doesn’t matter who is president. Although these words will most likely fall on deaf ears, it bears repeating that the country is going to get flushed down the same golden toilet no matter who is nominally in charge.

Although collapse in the US is yet to run its course, I feel that it is already time to give the United States of America a more appropriate name. After all, it is not the only united states on the American continent: there is also Estados Unidos Mexicanos. This shameful, self-important name-squatting has to come to an end at some point. I therefore propose renaming the USA—perhaps not immediately, but perhaps in a decade, maybe two. As its new name I would like to suggest something like the Republic of Deteriorado, Degenerado or Disintegrado. Its national language is likely to become Spanglish. Its national bird already seems to be the extended middle finger. As for its flag, here we can simply observe which flag is considered sufficiently sacred and inviolable to result in jail time for anyone who dares to burn it in public. And it turns out to be the LGBTQ rainbow flag.