[Part One of this article can be found on RMN here: https://www.rumormillnews.com/cgi-bin/forum.cgi?read=234668 . . . SC]

When I hit the streets back in ’81
Found a heart in the gutter and a poet’s crown
I felt barbed wire kisses and icicle tears
Where have I been for all these years?
I saw political intrigue, political lies
Gonna wipe those smiles of self-satisfaction from their eyes
- Marillion, White Feather

By Tom Luongo - January 9, 2024

In my last post, Part I, I asked the question, “Where do we go from here…” knowing that we have political upheaval in the West we haven’t seen in the US since the 1860’s. Joah Bii-Den! fulfilled his promise to divide the country further with a speech commemorating the riot at The Capitol that sounded better in the original German (H/T Dennis Miller).

The general theme of my first five observations on where things are headed in 2024 build off the basic premise that Davos et.al. would rather burn the world to the ground than give up their perception of control over it.

Like in 2023’s prediction post the controlling idea of inflation returning in the second half of the year informed most of my commentary, this Globalist Temper Tantrum is central to my thinking this year.

And believe me, I will be happy to be wrong about this. Happier than I can fully express in words.

That temper tantrum, however, is now facing the natural opposition from, for lack of a better term, normal people. So, bound up in these predictions will be the idea of the counter-revolution as people come into their own, master their fear of the establishment, and stride forth with purpose. I’ve seen it building for years across the West. 2024 is, I believe, where these two titanic societal forces meet on the battlefield and determine humanity’s future.

It will come down to how hard will they beat us while we decide just how ungovernable we will become. History tells me people always win over systems.

#6 – Political Upheaval in the Heart of Globalism

For years I’ve been developing the idea that the European Union is the model for Davos’ more perfect technocratic union. It’s built on many of the ideas put into practice in the 20th century in the USSR and China.

It’s one of the controlling ideas of everything I write about on Gold Goats ‘n Guns. Globalism isn’t just an idea, it is a religion and a process to be methodically implemented over time. This is a multi-generational thing. It doesn’t mean that anyone is actually in charge of anything, it means that there are people pulling levers as if they are in charge of everything.

So, what’s been building for years in Europe has been wholly predictable as there are wildly different cultures, histories of inter-tribal wars, language barriers, and differing legal constructs all embedded deeply within the DNA of the people who live there.

Hungary is off the reservation and takes control over the European Council Presidency in July. The Netherlands held massive farmers’ protests which ended in snap elections and Geert Wilders’ Party for Freedom (PVV) winning. The heart of the EU is seizing at the exact moment when the EU is pushing to consolidate political and economic power.

The European Parliamentary elections won’t likely change anything ultimately as the European People’s Party (EPP), currently the largest party in that body, will win again. There won’t be any change at the nominal top. It’s digging into the details of what is happening in Germany, however, that is the key to seeing what comes next.

Because the EU rests on the idea of a Germany willing not only to lead the EU, in a kind of political Fourth Reich, but also spending what’s left of its soul as Germany to make that happen.

I was expecting to write about Germany’s political woes in this post before I heard about their trucker’s revolt that’s going on as I type. The current coalition government is unwieldy. It’s polling numbers are actually worse than US Democrats’ at this point.

And under anything close to normal circumstances, the German government would have already collapsed. But it hasn’t because it is still under orders not to give in. The Traffic Light Coalition’s job now is to ram through what they can before state elections later this year.

Brandenburg, Saxony and Thuringia all go to the polls to elect new governments in 2024. Alternative for Germany (AfD) is expected to sweep them, polling in the mid-30’s in those three states. Predicting an AfD win in those states is no challenge. Neither is predicting the roadblocks in front of them entering into any coalition government.

What is hard to predict is whether those roadblocks will succeed in stopping the populist juggernaut building in the former East Germany. Because if AfD wins a big enough victory in those states then that will preclude the kind of back-stabbing that Angela Merkel engaged in after Thuringia’s vote in 2020. Review my coverage on this from 2020. The effects on the CDU were profound, causing real and deep divisions within the party. You can see that the seeds to defying Merkelism (which is just Davos’ wishes) should sprout this spring into full blown political revolt.

This is why there is a new CDU splinter group trying to head AfD off at the electoral pass, in the hopes of draining some of its support. Meanwhile AfD are preparing thousands of meals for the farmers protesting peacefully for a saner future. Winning of hearts and minds, exactly as I exhorted them to do when they first crossed the 16% Chasm.

If AfD enters the governments of those three states it gives them veto power over 12 of the 69 votes in the German Upper House, the Bundesrat. The Greens will still have a massive veto majority. The question then is will that translate into a collapsed coalition for Scholz and snap elections later this year.

With the FDP voting last week to stay in the coalition, despite serious questions as to the vote’s legitimacy (where have we heard this before), the answer right now is no. But Mark Rutte was forced out of office in the Netherlands. Never say never.

#7 — Japan will Strengthen the Yen, Nikkei Will Soar

Per my last discussion with Francis Hunt, The Market Sniper, we came to the conclusion that Japan was one of the most interesting fulcra on which the global financial system rests. When former Bank of Japan chief Haruhiko Kuroda shocked markets in December 2022, at his last meeting, by widening the band on the bank’s yield curve control (YCC) policy to 0.5% it was a harbinger of big changes coming.

When the new guy, Kazuo Ueda took office he slow rolled those changes, disappointing markets that, as always, got way ahead of themselves. For most of 2023 I commented on Japan saying that the BoJ would re-enter the global game of monetary policy poker, after being the fish at the table for three decades.

The standard analysis of Japan is that they are screwed because of their insane debt-to-GDP ratio. But, in a world where all the first world economies are running massive deficits I have to ask the question as to why Japan gets singled out?

Japan is in the same position as the EU: an energy importer that needs to exit QE because the Fed has done so and has to contain inflation. For Japan, however, inflation burbled up slower than it did in the US and Europe. This is why Ueda has been able to slow roll his changes to monetary policy, with the YCC cap on the 10-Year JGB now a ‘soft’ 1%, up from Kuroda’s 0.5%.

Now, you can argue, rightfully, that 3% inflation in Japan is a far more important political issue than 4% or 5% here, but the point still stands, they have a much different problem than we’ve had.

As we enter 2024, the Q4 “Buy All the Things” Rally will attenuate across all asset classes. A stronger yen will tame inflation, especially at moderate energy prices, while also allowing the BoJ to begin shrinking its balance sheet. Japan will adopt Powell’s monetary policy.

Once rates rise above 1% on the 10-year JGB, the breakout and consolidation we’ve seen in the Nikkei 225 will end and a new rally will begin on the rotation trade. My target for the yen to hit 125 this year, with the Nikkei following along rallying towards 45,000.

#8 — Soft Secession in the US and Canada

In Canada the two themes of Climate Change and Sovereigntism came together beautifully in the form of a good ‘ol fashioned North American tax revolt. In the US states are openly defying the Federal government on immigration (Texas) and health policy (Florida declaring the vaccines dangerous).

Last fall in Alberta . . .

[SNIP]