Predictions: 2023 & Beyond

This week, I wanted to share some predictions and trends that I'm focused on.

If you've read this newsletter on a regular basis, none of them will seem "new". But I wanted to revisit them all together because I think 2023 will be the year that we start to see these trends arrive and react to one another. It'll be hard to say when exactly they'll "happen", more likely they'll appear over the span of a couple of years. But generally speaking, these "predictions" and "trends" showcase the direction I see the world heading in and 2023 is the year they'll accelerate.

Like everything I write and share through this newsletter, think about the topics in context of The Sovereign Individual. Ask yourself, how might these trends influence the themes of self-sovereignty?

Future Shock & The Overton Window

Future Shock will emerge as a major trend and it will enter the overton window.

That means that we'll acknowledge as a society that the world is changing at an accelerating rate. We'll acknowledge that this accelerating change is causing deep cultural changes. And we'll finally have real discussions about how these changes are influencing diverging policy preferences that makes everyone seem to hate each other.

We'll acknowledge that the digital transformation, multipolarism, and lingering lessons from Covid (supply chain weaknesses) are forcing us to reevaluate our lives, our wants and needs, and what we value from our governments.

The theme: we'll acknowledge that life isn't "going back to pre-covid normal".

Capital Rotation & The Hot Ball Of Money

To that end, as these macro and society-wide changes occur with increasing speed, we can expect rapid rotations of money into a variety of investments as investors struggle to position themselves for "what comes next".

Think of this as a byproduct of future shock. Smart investors will figure out that the rate of change is accelerating and adapt by repositioning their money more often. While many other investors will take no action as they struggle to grasp what's happening around them and revert to some cultural, societal, "historically trendy" strategy.

I believe that as changes accelerate, smart money will become active money, rotating in an attempt to keep pace with emerging fads and trends. We'll see "active money managers" get popular again with rock start managers emerging as they did in the wake of the 80's. 

Convergence Of Trends

As the digital transformation occurs, and trends accelerate, they'll also converge, collide, and restructure society many ways.

One example I repeatedly have mentioned is the emergence of the quarter time job. This is the year we should see that manifest at a large scale.

New Workstyles & Lifestyles Are Born From Remote Work

I was reminded of this by a tweet from a VC who among other things specializes in future of work investing.

The core idea: that dual income couples will ultimately embrace solopreneurship. I believe this to be an accurate prediction.

And I think of this prediction as a "cousin trend" to the manifestation of the quarter time job. It's a 2nd/3rd order impact of remote work. ie: they're trends born from similar parent circumstances (remote & digital work) but are different in how they impact lifestyles.

The point being that we can expect these lifestyle changes from remote work to speed up, to spread, and as they do, expect them to influence how culture, preferences, and government policies manifest.

Have We Hit A Local Top For the Dollar's Value?

We may look back at this past Fall's "energy crisis" as a time when the strong dollar presented the most leverage to accumulate assets denominated in other currencies for many years to come.

This is a low conviction prediction, but I suspect that both Europe and the rest of the world will rapidly reorient their strategic supply chains to a multipolar world. The consequence being that the dollar may become less relevant as a reserve asset as commodities and other strategic "hard resources" become more valuable.

The Rise of Neutral Money & Hard Assets

As I've said in a recent newsletter, this also presents an interesting opportunity for other types of "neutral money". ie: bitcoin and gold. I am high conviction that moving forward, nations will diversify away from the dollar when they can. That will include holding any neutral, non-state-controlled assets.

Digital Access Creates A Rise Of The Rest Global Order

All the trends above are reinforced by a world becoming more digital.

More work that can be done online will be done online. That will make other places outside of the "West" more valuable for a variety of reasons.

Bottom line: we can expect many more "white collar" jobs to be outsourced to the developing world at lower levels of compensation. (see the economist article in this week's rapid-fire section for more)

Geo-Arbitrage Will Be One Of The Top Investments Of The Decade

The best "trade/investment" of the decade will be made by individuals that earned a digital age standard of income while opting to live in less expensive locations that are still entrenched in the location dependent ways of life.

There are of course many exceptions to this prediction and in-person work will continue to be valuable.

But the individuals that move quickly and leverage cost of living arbitrage, that take advantage of dual income relationships, and the ability to create alternative sources of income outside the scope of traditional and centralized lifestyles - they will achieve a new quality of life and this will present one of the best ROIs of the decade.

All These Trends Combine & Have Predictable 2nd & 3rd Order Effects

These trends combine to create the circumstances that we would expect "The Sovereign Individual" to become more than a tech-bro fantasy.

Rapidly Evolving Competitive Governance

The deeper consequences of this reality are already being felt in key cities around the world like San Francisco and New York. Office valuations are falling as workers no longer commute and businesses downsize their office needs.

As the number of commuters falls, local businesses suffer, public transit suffers, causing tax revenues to fall and city budgets shrink. As they shrink, key government initiatives and social programs will start to suffer.

Crime increases, stores close, and cities struggle to stop the slow but steady decline. As the populace catches on, as politicians wake up to reality, we can expect in some places punitive policies like taxes to emerge as a penalty to the idea of remote work.

While in other cities, politicians will open their arms and reduce barriers to attract this new mobile constituency.

Watch New York, watch San Francisco, and watch places like Miami to understand how policies will diverge along these lines.

Why does this all matter?

The New Social Class System Forms

Because it signals among the many aspects of Future Shock and the Digital Transformation that a new social class system is finally beginning to emerge.

From blue collar vs white collar to location-dependent vs location-independent.

Your next vote may be cast for issues along these lines. Are you a remote worker fighting for policies that conflict with your lifestyle like punitive taxes? Or are you a location independent worker fighting to protect public transit and rising housing costs due to an influx of remote workers?

Your answer (and vote) to these types of questions will depend on whether or not your educated on the real and core issues of social change.

Government Policies & Political Parties Will Change For This New System

Keeping in mind that society is in a rapid state of transformation, you'll need to understand that the policies you vote for today may no longer be the policies you should be voting for tomorrow. The political parties and politicians will rapidly adapt their agendas to meet the needs of these new voting blocks.

Many people will abandon traditional left vs right political ideologies in favor of parties that better align with their digital age wants and needs. And parties will adapt to this reality (although this will likely take many years to happen effectively).

Final Points & Meta Themes

Change is coming, it's speeding up, and will drive meaningful change to how we live, work, form relationships, and govern our communities. 

That's the overarching meta theme of all these "predictions". You don't need to assume all or any of them will come true. But you should assume that they are directionally correct and focus on what that means for the world.

Rapid change, trends that empower mobility, competitive tribalism between nations and within them, and a growing number of lifestyle choices that are available to more people than ever before.

The point is that we are watching in real time the formation of the world undergoing a paradigm shift like the one that was referenced in The Sovereign Individual. It's not identical to the book. Nor should you take all the book literally. But many of the overarching themes are happening now.

Worry less about the micro trends and focus more on the macro. Focus on how these trends collide and the probabilistic 2nd and 3rd order consequences that arise when they do collide.

That's what I'll be watching and preparing for in 2023. I recommend you do the same.

Rapid Fire

• Microsoft in talks to invest $10 bln in ChatGPT-owner OpenAI, Semafor reports | Reuters - I wonder if we'll look back on the integration of ChatGPT into everyday life as the beginning of the singularity.

• Tech Layoffs, Remote Work Mean More Pain for Empty Office Buildings - Bloomberg - The trend continues. Remember - this is a forcing function that leads to the creation of the new social class divide. Location-dependent vs location-independent workers.

• Flights across US disrupted by technical glitch - BBC News - If you want to attack a superpower, you inflict death by a thousand cuts and you do it across their key infrastructure systems.

• www.citizenshipbydescent.io - A consulting company that helps people with getting citizenship by ancestry. Consults are on the expensive side but it's worth checking out the website.

• How technology is redrawing the boundaries of the firm | The Economist (archive.is) - "Exports of commercial services from six large emerging markets have grown by 16.5% a year since the pandemic began, up from 6.5% before it".  Pay attention to these numbers - they signal the shift mentioned in my predictions above.

Extras

What do you think about this ban?

The Next Few Decades Will Be Defined By This Launch