The Great Simplification with Nate Hagens - Systemic Themes for 2024 | Frankly #51

Episode Date: December 18, 2023

Recorded December 17 2023   Description   In this final Frankly of 2023, Nate outlines some global themes that are worth keeping an eye on in 2024. From climate change to domestic and global politics to an unstable financial system, world events continue to converge. How will the social fabric of our society respond as changes to our current way of life continue to grow? How do these seemingly isolated events interconnect and enhance each other? How will governments, businesses, and individuals respond to these circumstances as more people are propelled from the lives we've become used to and into an unfolding Great Simplification?    For Show Notes and More: https://www.thegreatsimplification.com/frankly-original/51-systemic-themes-for-2024   To watch on Youtube: https://youtu.be/xgMv73iabjQ  

Greetings. This is an intro to my intro to this year-end, frankly. What you're about to see, 13-minute, frankly, I had my staff and inner circle watch it, and they're like, Nate, that's pretty doom and gloom for a year-end holiday season. And that's true. Our situation is different than it was five or ten years ago when we couldn't imagine one thing that could go wrong in the next week in our world. And now everything is interconnected. And what I'm trying to do here is act as a witness and a synthesizer of how these various risks fit together. So I'm not going to apologize that the following short reflection is on the dark side. I'm trying to describe what 2024 may look like and there's a lot of things that are converging and as from day one of this

podcast and this frankly sandbox side channel i want to be honest have candor and talk to you the viewers on things relevant to your lives our lives so here's the original frankly greetings we're approaching the end of the year this will be my last uh frankly frankly in in 2023. Later today, I'm going to record another one or two to be broadcast sometime in January. I am taking a six-week technology hiatus, which I will explain why that's relevant to the followers of this website and podcast in my next, frankly. Here I'd like to talk about some themes ahead of 2024. Longtime followers of this podcast know that I'm not trying to predict the future. I'm trying to explain how the systemic parts and processes of the human situation fit together

and what that might infer about our future preparations, plans, interventions. So here are a few themes that I think are going to be worth watching in 2024. First of all, climate change. I just had Leon Simons on a podcast. His podcast will be out sometime in January. He is the climate scientist who drilled down and did a Sherlock Holmes treatment of how aerosol sulfates historically and recently have been masking the warming that is due to the thermal imbalance in our incoming. solar radiation versus how much is outgoing.

So both James Hanson and Leon and others believe that the combination of the Pacific Decatal oscillation, the PTO, switching from La Nina the last few years to El Nino, and the reduced masking effect of aerosols is going to bring our current 1.4 or 1.4. 5 degrees Celsius in late 2023, up another half a degree Celsius. So by summer, we might for a month or so see 2 degrees Celsius over pre-industrial baseline. That's going to be crazy. That is going to be horrible for Europe, the Asian subcontinent, et cetera. If that happens, lots of people are going to wake up and freak out.

and probably die, sadly, to be honest, if we do pierce two degrees. It may be kind of an emotional wake-up call for humanity to do something. Clearly, we've done nothing so far, but it's kind of like arguing with a forest fire, but at least there'll be more citizen political awareness that this is real, and it's serious, if not for us, for our children. grandchildren, and the biosphere. So the next six months, there's going to be a lot of news in the climate space and global ecosystem craziness, I expect.

The second theme is related. If that happens and if many other things happen, it kicks in antibodies to people have built their identity and reputation around that not happening or anything else not happening, of growth or AI or anything else. And so I think cognitive dissonance with humans in aggregate is going to increase because as the futures that we attached our identities to or our hopes and dreams and beliefs, not only don't manifest, but the exact opposite is happening. People adopt strange behavioral vocal stories.

And I think cognitive dissonance is evident in so many areas of our culture. And I expect that's going to accelerate. If we do hit 2 degrees Celsius by summer, I really wonder what those people who say climate change is a socialist hoax or climate's warm before. And it will again. And humans don't have a role. I wonder what stories they will be saying less important for the long term. much more important for our near term. Another theme is geopolitics. There is a changing world order. The U.S., NATO, Russia battle within Ukraine is not over. And each side is going to increasingly get

desperate on not losing. And there may be things like false flags or extreme reactions. And it was my hope that the Middle East would kind of declaw the nuclear war risk in Ukraine and Russia, NATO. Maybe it has. I don't know. But broader situation is we're heading from a unipolar world to a multipolar world. And there will be lots of different agreements and financial new partnerships. and new energy and commodity things. A subset of geopolitics is the issue of choke points in global transportation.

The Panama Canal, because of drought, is running out of fresh water and able to fill the locks. On a larger risk is this week. I'm recording this on Sunday, December 17th. This week, the situation with the Suez Canal, which is close to Yemen, and the Yemeni Houthi rebels are attacking ships, and many of the world's shipping companies are saying this is not an acceptable risk, and they're choosing to not go through the Suez Canal and instead go around Cape Horn in South Africa, which adds probably a week or two from Singapore to Rotterdo. route and also roughly double the cost. I don't know that for sure, but it's in that ballpark.

I don't think the United States will allow this because it will cause inflation and supply chain disruptions, et cetera. So I expect there's going to be a protection of the Suez Canal in the near future. And then the biggest choke point is, of course, the Strait of Hormuz, where around 20% of the world's oil is transported every day, around 17 million barrels on ships. And if that were to be disrupted by any military or other means, that would cause major chaos in global financial oil and delivery markets of things. Longtime followers of this podcast see that we have a six-continent supply.

chain and it's predicated on peace and credit and available, affordable oil. And all those things are now less certain going forward. What else to watch in 2024? AI is going to be a bigger deal as far as its behavior, its impact on our behaviors and our culture than many expect. yesterday I was watching a football game and in the box seats at a football game, people were on their phones watching things while the real football game was on in front of them. And this is an example of hypernormal stimuli that things on the phone shout louder to our brain than the things on the real field. And I think AI is going to exponentially increase that because all the color and the perfectly

situated to your brain and the beautiful artistic brainstem stimuli is going to even be more than we're currently used to, and we're just going to lose people to the fantasy world, among many other influences of AI, including some systemic risks. So AI is going to be an unfolding story. There are some people who think we don't have the energy to power the servers, and it's going to cause disruptions on energy. I think it's going to accelerate damage on the environmental front, and we'll have to see what happens there. I think another theme in 2024 and beyond is a stretching of the haves versus the have-nots, and I may do another, frankly, if I have time on how we define halves and have-nots, because there's a lot of things that we have that are not measurable in

monetary or bank account terms. But I think, at least in the United States, there are a lot of people who are suffering already. And the sugar high from the COVID stimulus is running out. We have higher interest rates. We have higher car payments, higher house payments. 40%. If you watched last week's reality roundtable, 40% of U.S. households are asset limited, income constrained, and yet there is still employed. I think the wealth inequality, when it gets to the point where people can't afford their health payments and their rent and their food, it's going to be bad. And I think that's coming. Of course, the big story, of course, any of the stories that I just talked about could be big, but the U.S. election is going to be kind of a keep things in a holding pattern until

October, November. And unfortunately, no matter who wins, Biden or Trump or someone else, a third of the country is going to be pissed off. And I think the splintering of the tribes, which happens from polarization, which happens because our present is a tough than the past, which happens because AI is going to hone in on people's confirmation bias and beliefs. There's going to be all kinds of deep fakes. It's going to be nasty. And I wish it could be avoided because the things that the United States faces, the things that our world faces, are going to be the same, no matter whether the Republicans win or the Democrats win.

We need some sort of a civic resolve that we suppress our identities and get beyond the technology and the blame. But I'm not holding my breath. I'm really worried about the social discourse because if we can't talk to our neighbors or people that disagree with us, then we're not going to be able to solve these issues. Lastly, of course, we have managed to keep our central bank finger in the financial dike to hold things together. There are still many policies in place from the great financial crisis, the Great Recession in 2009 that were temporary that are still ongoing. Global central bank balance sheets have ballooned. The Bank of Japan is printing money and buying their own stocks and bonds, et cetera.

And so I think we're going to see another version of the banking crisis where we're now look at the larger banks, reverse repo rates are going to potentially require Fed intervention. And I think the larger story is it's the central bank monetary narrative meets the biophysical, ecological narrative. And as oil peaks and declines, as climate change requires a lot more spending and things to mitigate, we can't just cut rates because the economy is low. And then there's more inflation. I think the Fed and other central banks are about to have big problems. So all this being said, we have a lot of work to do in your communities, in your own life, in my own life. And I've got a lot to say and hope you tune in next year. There'll be another one or two

Franklies that I'll record before I leave. Be well, everyone.