World's Edge could mean many things. It can be the horizon, that is as far as it can be on the sea, and you can't tell what lies beyond. It can be that mythical end of the world, that place where the sea falls in an enormous neverending waterfall. It could be your favourite cliff, or your favourite abyss. It could be the point where any number of graphs reaches a discontinuity: the stock market (has been busy at it last week), world natural gas production (expected to happen soon), food production (might happen with climate change), or living standards (could go to hell with any of the above). It could be the beginning, the end, the beginning of the end, or any more complicated mix of endings and beginnings. It can also be about living at the edge, whatever "edge" means. In short, it's the snappiest description I could think of what it's like to be alive today and aware of what's happenning. I plan to keep reporting from my priviledged position at the edge of some momentous changes.
For a start, I'd like to support my claim that I have some idea of what's going on. This is what I said nine and a half months ago in the public forums of the Financial Times, predicting what would happen this year:
My answers to the specific questions asked:
1)Will there be a bear market in 2008?
Certainly.
2) Will China revalue its currency?
Very likely, considering that the dollar is almost certainly going to continue falling. China can only follow the dollar so far.
3) Will Iraq disintegrate?
Hasn't it done it already? Iraq is likely to remain "stable" - in the same sense that a patient in deep coma is stable. It will remain as screwed as it is now, with no indication of things getting better.
4) What do you think will happen to oil prices?
The yearly trend will be up, with the price of oil at the end of the year definitely above $100. But there will be ups and downs along the year, following seasonal variations and unpredictable scares.
5) What will happen to interest rates?
They will be cut, but not down to the levels seen in 2002. Stagflation will rise its ugly head and central banks will have to take that into account. Interest rates will be cut more in the USA than Euroland or the UK.
6) What will happen to the current squeeze on credit?
It will keep getting worse and worse, to the levels only forecast now by some of the scariest doom-mongers. Bankers are very clever people, which means they are very clever at hiding holes in their accounts. When it gets to the point that they can't hide them any more, you know the holes are big enough to swallow whole small nations. And not all the holes are visible yet.
7) Who will be the next US president?
My bets are on Hillary, but by the time of the election the state of public opinion in the USA may be very different from what it is now. The whole country is getting hit by a disaster of the proportion of 9/11 or Katrina, but this time an economic disaster. It's hard to tell who will people turn to as a source of comfort in the middle of a disaster.
Now, the answers to the questions you aren't asking:
1) What will be the most memorable thing of 2008?
Hard to tell, with so many things happening at once. Probably it will be memorable like 1968, as a year when everything seemed to be happening at once. My guess is that most of these things are likely to happen this year:
- The beginning of a very nasty downturn of the world economy, most especially the USA, but the rest of the world aren't going to "decouple".
- Rise in unemployment in the USA and Europe, leading to a nasty streak of discontent against immigrants (especially Muslim) and a rise in violent crime, possibly with some famous case hitting the headlines. Riots on the streets are possible.
- Saudi Arabia's oil production will visibly drop.
- Some interesting events will happen in Iran, having to do with their nuclear program. Hopefully, it will all remain political posturing.
- Beijing Olympics will give a lot of people a chance to see what China is really like, and they will realise it's a giant with mud feet. The mud being quite literal in some instances.
- An Islamic terrorist attack somewhere in the USA or Europe is very likely, and it will be blown out of all proportion.
- Some very unlikely climate disaster or weather event that will wake up a lot of people to the fact that climate change is really happening.
- A big blackout in the USA that will affect the services of some well-known sites on the Internet, and will get people thinking hard about how to protect themselves from the vagaries of electricity companies.
- Comparisons between current times and the fall of Rome will become fashionable.
Not too far from the mark, eh?
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