Going Full Nostrodamus on 2023
On April 17, 1793, three French soldiers broke into the tomb of Michel de Nostredame, a man we know as Nostradamus.
Legend has it that one man, a Corporal Adelaide, picked up the skull in an attempt to gain the power of the long-dead seer.
His fellow soldiers bore witness that his eyes opened wide as he gained full knowledge and then was immediately struck down and killed by an errant bullet, fired from the nearby riots.
A plaque around the neck of the corpse read 1793.
It is by channeling the ghost of Nostradamus — as if drinking blood from the very skull itself — that I give you my bold predictions for 2023:
- The car market will crash. Used car prices have already started to fall on increased supply. New car prices hit an all-time high in November 2022 at $47,680 on average but are expected to fall 10%–20% in 2023 due to high interest rates and increased supply.
- Housing will hold up better than expected. This isn’t 2008. People who have owned homes for more than 18 months have high credit ratings, record equity, and low mortgage rates. Home prices will hold up, but sales will decline.
- Rent inflation will ease as record multifamily housing construction is completed.
- Deglobalization and reshoring will remain catchphrases in boardrooms around North America as supply chains continue to adjust to new circumstances. Mexico will be the big winner and China the loser.The Best Free Investment You'll Ever Make
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- 2021 was the year of container ships due to supply chain issues. 2022 was the year of oil tankers due to Russian sanctions. 2023 will be the year of dry bulk shipping due to China’s reopening and new demand for coal, iron ore, and other commodities.
- China will get slammed with COVID, causing many deaths, but won’t admit it. According to a WeChat survey of 1,916 people in China, 68% have tested positive for COVID, including 47% currently experiencing it.
- China will hit herd immunity by Q2 and ramp up its economy.
- Governments around the world will try to implement central digital currency. This will lead to social control via ratings and will be tied into travel and banking.
- The ESG trend will keep CapEx low for all sorts of things necessary for modern life. Copper, oil, and steel will see bull markets as supply constraints hit.
- After a furious battle in the spring, Ukraine and Russia will negotiate a peace deal.
- 2023 will be the year of AI. ChatGPT will change the way we write. Cheating in school will become a huge problem.
- Microsoft will leverage this AI and make serious inroads in Google’s search monopoly.
- Vladimir Putin will be assassinated, which will throw the world’s largest country with the world’s largest nuclear arsenal into chaos, much like what happened in Libya and Iraq.
- TikTok will be banned in the U.S. and Canada for being a tool for Chinese espionage.
Overall, 2023 will be a year of two halves. In the first part, there will be high interest rates in the U.S., high inflation, and low equity prices. In the second half of the year, people will start to talk about easing rates and high unemployment. You should expect energy prices to top out in mid-February and stocks to bottom in March or April. My favorite stocks right now are tanker shipping companies, Guyana oil, and Mexico. I plan on selling many of my energy plays in a few months and buying the dips on Mexico. The Mexican manufacturing story is completely discounted and ignored by Wall Street.
See you next year,
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