Note: This post was written in January 2016 but was unpublished because it made bold predictions which could backfire if they didn't come true. The election of Donald Trump, Brexit, and the Deutsche bank crisis of 2016 help validate the general plausibility of the predictions made here, which were arrived at by combining the Law of Social Cycles and Adam Smith's maxims on real value and economics into a model that predicts crisis and future events.
In our early posts, we have designated 2019 as the start of the global stagflation to be sparked in late 2018. This stagflation will increase from 2020 onwards up to 2027 when it will reach its peak, culminating in some kind of conflict. A stagflation is a phenomenon which has low employment and output while having high inflation or high prices at the same time.
Stagflation vs Depression
Normally, a low employment and low output phenomenon is called a recession and a long recession is called a depression. In a recession or depression, people do not buy or cannot buy, so prices do not rise, hence there is no inflation.
However, in a stagflation, there is both a recession and rising prices. This is unnatural, and is only possible if there is high inequality. In both a depression and stagflation, ordinary people do not buy and cannot buy. But in a stagflation, the ultra rich can still buy and so it is they who are causing the inflation. In the 1970’s those rich were the oil companies and the Arab states who because suddenly rich from having more petrodollars from rising oil prices, and the dictators of Latin American countries who suddenly got a lot of loans from those excess petrodollars.
The end effect depressions and stagflations are conflicts or wars, since they are the only ways for the mind to naturally relieve itself of the oppression from inequality. This is in turn caused by the fact that our species evolved from monkeys and monkeys do not want inequality. The 1930’s Depression was relieved by World War 2 and the 1970’s Stagflation was relieved by the Arab-Israeli conflict and global Communist insurgency.
Secular Stagnation is here but real Stagnation is still coming.
The stagflation of the 1970’s where characterized by high oil prices and high inflation. Our model predicts that this will also happen after 2020. When we first made our model in 2013, we did not know how oil prices can possibly rise like the 1970’s when in fact it has been declining since July 2014. However, the recent conflict between Iran and Saudi Arabia, the two largest oil producers, solves this puzzle precisely and serves to fill in the missing pieces of the puzzle.
Update 1/2017: Oil prices are still rising
Update August 2017: A Slight Change
Mid-way into 2017, I was wondering why oil prices have not risen as fast as predicted. It soon became obvious that money was no longer being invested into companies, oil, or gold, or land as the traditional store of value, but into cryptocurrencies such as Bitcoin and Ethereum. Cryptocurrenices are a new ‘tool of trade’ and are not supposed to be a store of value. But since it has no precedent and people are unaware of its real nature as a distributed hash, they buy it nevertheless. The rise of bitcoin in these ‘pre-crisis years’ still match our model very well and it is only a matter of time before it crashes to its real value, like all things that the mind assigns value to. The real test for our proposed science is whether it can accurately predict when this crash will occur, something that Economics is incapable of.
So What Are the Deeper Implications of a Global Stagflation?
If a global stagflation does occur after 2020, then it implies that economic activity follows a predictable pattern or cycles which are ultimately under the field of metaphysics. Buying and selling is based on desire and the roots or dynamics of desire lies in the study of metaphysics of the soul* and not in study of psychology or the brain. In the ancient past, prophets made predictions about future events using their intuition (without any scientific method) which later became true or not true. Our system provides a more scientific way of making predictions because it goes deep into the nature of human minds (even from its monkey-origins), societies, exchangeable value, etc. to find patterns based on real events and big data.
Adam Smith, the founder of Economic study, learned about metaphysics from his best friend David Hume. Our models are built on Smith’s economic principles which he built on top of Hume’s metaphysical maxims. True economic solutions can only be attained if they agree with human metaphysics or how minds work, separate from the brain (as a soul). Our proposed science of Soranomics, based on Smith, is ultimately based on the metaphysics of Hume and is therefore more able to offer real, ‘silver bullet solutions’ to any economic problem since it deals with minds directly.
*We define soul as a disembodied mind, or a mind that is or can be separate from the body. We align our definition with Hindu metaphysics with the mind having two general states: mind by itself (atman or soul in English, which has the ability to be an impartial spectator [boddhi] ) and mind in a body (jivaatman or physical mind, which can be affected by biology or monkey-ness [in the human species] )
Edit: Sep 2017: added Shah and Marcos