The Trends To Watch For In 2014

Tyler Durden's picture

Submitted by Charles Hugh-Smith via Peak Prosperity,

At the beginning of this year (2013), I identified eight key dynamics that will play out over the next two to three years (2013-2015):

Trend #1: Central Planning intervention in stock and bond markets will continue, despite diminishing returns on Central State/Bank intervention


Trend #2:  The omnipotence of the Federal Reserve will suffer a fatal erosion of confidence as recession voids Fed policy and pronouncements of “recovery"


Trend #3: The Mainstream Media (MSM) will continue to lose credibility as it parrots Central Planners’ perception management


Trend #4:  The failure of what is effectively the “State religion,” Keynesianism, will leave policy makers in the Central State and Bank bereft of policy alternatives


Trend #5: Economic Stagnation will fuel the rise of Permanent Adolescence


Trend #6: Income, the foundation of real economic growth and wealth-distribution stability, will continue to stagnate


Trend #7: Small business—the engine of growth—will continue to decline for structural reasons


Trend #8: Territorial disputes will continue to be invoked to distract domestic audiences from domestic instability and inequality

I know it may strike some as “cheating” that my forecast is for these trends to be consequential within a three-year window rather than by a specific date, but note these are trends, not events, and trends tend not to matter until suddenly they do. This is the nature of Pareto Distributions, in which trends are inconsequential until they reach a critical-mass of 4% of the populace, at which point the “vital few” exert outsized influence on 64% of the populace.

Let’s see how the trends developed in 2013:

Trend #1:  Intervention yielded outstanding returns on corporate profits and stocks, but diminishing returns on employment, household incomes for the bottom 80% and growth, all of which are historically subpar.

Trend #2: The Fed’s members are still regarded as heroic demigods who benignly manage the Earth’s economy. When (not if) the stock market rolls over in 2014-15, Fed omnipotence will suffer.

Trend #3: This one is difficult to track but anecdotal evidence (declining circulation of many mainstream print media, declining viewership in some cable news channels, etc.) may reflect rising disenchantment with the media’s coverage of key issues.

Trend #4:  I think it is quite clear that the Fed and its posse of experts have no alternatives to ZIRP (zero interest rate policy) and QE (quantitative easing).

Trend #5:  This one is difficult to monitor. If we use the percentage of young people still living at home and the rise of “selfies” (photos taken of oneself), then perhaps a case can be made that this trend is already visible.

Trend #6:  Median household income has edged up, but I suspect this is the result of higher incomes for the top 10% rather than widely distributed gains. Since the top 10% collect 51% of all income, it stands to reason that increases flowing to the top will boost median income even if the bottom 90% saw declines in income.

Trend #7: The unintended consequences of the Affordable Care Act have yet to fully play out.

Trend #8: China’s recent invocation of a “defense zone” that includes the Senkaku Islands suggests this trend is definitely in play.

I also listed eight outcomes:

Outcome #1:  The counterfeiting of risk-free assets will continue to be a primary policy of the Status Quo


Outcome #2:  Risk will continue to be transferred en masse to the public


Outcome #3: Democracy in America is officially dysfunctional


Outcome #4:  Incentives will continue to be structurally perverse, and the rule of law will continue to be bent by individuals, enterprises, and the government


Outcome #5:  Healthcare (a.k.a. sickcare) will continue to be an enormous drag on the economy as diminishing returns, fraud, complexity, and defensive medicine add costs without equivalent improvements in health


Outcome #6:  The costs of complying with Obamacare will act as an inflection point in the decline of small business


Outcome #7:  The trend of the Status Quo “solving” perceived problems by adding layers of immense complexity to systems already suffering from marginal returns will continue


Outcome #8:  The informal cash economy will continue expanding, as those who choose to opt out of the Status Quo and those who must opt out as a survival mechanism do so

Without going into detail, I think a self-evident case can be made that each of these outcomes is already visible at the end of 2013.

Additional Trends to Watch in 2014

Since the trends listed above are still operant, these eight are additional rather than replacement trends:

Trend #1: The Number One growth industry in the private sector will increasingly be lobbying the government for favors.  When the State selects the winners and losers throughout the economy, then companies are essentially forced to make their case for special dispensations via campaign contributions and unrelenting lobbying. Elected officials benefit from their centralized powers, as the line of corporations anxiously pressing campaign cash on them lengthens in direct proportion to the expansion of State power.

This is the essence of what some call the Corporatocracy that effectively governs the U.S.A., and what I call the Neofeudal Cartel/State system, as the State and its chosen cartels dominate the economy and society in a fashion that can only be described as neofeudal.

Since organic growth from increases in wages and purchasing power are limited to the top 10%, the only sectors that can possibly gain growth from rising sales are Porsche dealerships and other luxury outlets that cater to the top 10%.  But since the number of households adding income is a thin 10 million out of 121 million households, moving more luxury goods offers little growth opportunities for the rest of the economy, which is stagnant at best.

As a result, lobbying the central State for favors is the default “growth industry.”

Trend #2:  The difference between anemic growth and recession will increasingly be semantic. This is another “how many angels can dance on the head of a pin?” debates in which Ivory Tower/State economists parse juiced or manipulated data to conclude the economy is “growing slowly” or slipping into negative growth, i.e. recession.

Experientially, if purchasing power and discretionary income (what’s left after paying taxes, rent, mortgages, food, utilities, etc.) are both declining for 90% of households, the “growth” in inventories, exports and other factors that feed into gross domestic product (GDP) are not reflecting the economy we actually inhabit.

Trumpeting what amounts to signal noise as “steady growth” is adept perception management (i.e. propaganda), but if it doesn’t include increases in purchasing power and discretionary income for the bottom 90%, it’s a propaganda embarrassment, like the Fed official hyping the declining cost of tablet computers while someone in the audience shouts, “I can’t eat an iPad.”

Trend #3: The decline in local government services will accelerate as rising pension/healthcare costs squeeze budgets.  Local governments (city, county, state) have avoided the politically combustible collision of rising pension/ healthcare costs and angry taxpayers tired of service cuts by accounting trickery and jacking up fees and taxes. Crunch-time has also been put off by rising home values that pushed property tax revenues higher.

These solutions are running out of rope: property values have topped out and accounting trickery hasn’t solved the fiscal impossibility of maintaining services and meeting pension obligations in a stagnant economy. When push comes to shove, services must be cut, either by bankruptcy or negotiation. Since the likelihood that taxes will drop is zero, taxpayers will get fewer services for their taxes.

Trend #4:  Middle class income, purchasing power and discretionary income will all continue to stagnate.  Unless you define “middle class” as those households earning $150,000 and up (9.1% of households)—and if you define the top 9% as middle class, your definition has lost all meaning—what’s left of the middle class will see real and discretionary income continue to stagnate. The causes of this decline in labor’s share of the economy are structural and cannot be remedied by lowering interest rates to zero or jacking up the stock market: zero-interest rates have deprived households of income and few in the bottom 90% own enough stock to affect their wealth. (Source: The Distribution of Household Income and the Middle Class)

Trend #5: Junk fees will continue to replace legitimate taxes.  Fearful of blowback from ever-rising taxes, local governments have turned to junk fees as the preferred method of “revenue enhancement.”  These include sharply higher fees for recreation, parking tickets, permits, etc., and a multitude of add-ons to property taxes and other existing tax structures. Local authorities are counting on the taxpayers to sigh but do nothing as long as the fee increases are small enough to avoid triggering political resistance.

In our small California town, the city has raised the fees for trash pickup by more than 100% in recent years—ironically, their reason is that recycling (which they encourage) has reduced the amount of trash being collected.  This sort of nonsensical rationalization for radically higher fees will join the usual justifications, i.e. “we can no longer fill potholes and pave streets unless we raise your taxes.”

How did they manage to perform these basic services 10 or 20 years ago with much smaller budgets? The answer: see Trend #3: skyrocketing pension and healthcare costs.

Trend #6:  The African oil exporting nations will move from the back-burner to the front ranks of geopolitical flash-points, joining the South China Sea, the Mideast and North Korea. I recently discussed The Scramble for Africa's Oil and the “resource curse” that is fueling the potential for conflict over Africa’s untapped oil wealth. 

Trend #7:  Americans will continue to passively accept the rise of the Police/National Security State. This may eventually change, but for the next few years the existing motivations for passive acceptance of increasing centralization of power will continue to hold sway.

The first is complicity: the 49% of all Americans—156 million out of 317 million—who receive direct transfers/benefits from the Federal government see little reason to rock the boat or put their cash from the government at risk.  (Source)

The second reason is a rational fear of State power: fear of getting tear-gassed and arrested should you join a protest, for example, and a generalized fear of putting whatever you still have at risk by confronting a government given to secrecy and retribution against whistleblowers, protesters, etc.

Trend #8:  The Federal government will quietly absorb the rising losses from defaulting student loans rather than reveal the bankruptcy of the entire Higher Education/Student Loan Cartel.  There are myriad ways to quash the recognition that the Higher Education/Student Loan Cartel is failing to provide useful education while it burdens younger generations with $1+ trillion in high-interest debt: quietly forgive some defaulted loans, stop enforcing collection of defaulted loans, etc.  The Federal government doesn’t want to call attention to its management of this powder keg, as widespread recognition that the system is broken will unleash calls for a general debt amnesty that will blow the big-debt-for-worthless-degrees system wide apart.

In Part II: Outcomes to Bet On in 2014, we’ll forecast the most likely consequences of these trends. With such understanding comes the opportunity to position ourselves in front of them for protection and/or profit.


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stant's picture

read martin armstrongs stuff from december.  i am going long brass framed revolvers and stars and bars

PR Guy's picture



I made a short cartoon so that the Grim Reaper himself could have a final word on 2013.....

Xibalba's picture

“When I think of those complacent prosecutors and investigators, deaf to our protests, I’ll always feel that rising anger I used to reserve for the enemy.” - Navy Seal Keefe. A sentiment that I'm sure is shared by many more 

zerozulu's picture

Middle class will keep on disappearing.

Shocker's picture

Job Market will be a big one

Layoff / Closing List:


Ying-Yang's picture

Continued release of NSA documents will be the 2014 Wildcard.

2014 may be the year people really get pissed off.

Here is a good source to stay up with NSA leaks and oversight.

Experimental library of TV news clips pertaining to recent revelations about the NSA and its oversight.

Fully searchable by query.....

withglee's picture

2014 may be the year people really get pissed off.

Why did WTC7 fall down? It's been 12 years. Most people don't even know about it. And many of those that do are not in the least pissed off. Nope ... this pot of boiling frogs is in for the duration. TPTB will get their 80% population reductions. Inevitably some of them will get caught in the whirlpool and become part of that reduction. I'm just wondering how the clueless and worthless remaining PTB are going to feed themselves. And who's going to wipe their bottoms?

Ying-Yang's picture

The continued release of NSA documents is eroding trust. If all of the documents were released in one batch then it would blow over after a period of time. What's different this time is the steady release. With each released document people are reminded and the loss of trust is reinforced.

Trust is faith, once lost, can take a long time to regain, if ever. The steady dribble of erroding trust has a remarkable effect over time... unless the releases are stopped.

I share your anger about 911 and building 7 is the smoking gun. Most people don't question things like you do but have faith, they are coming around slowly but surely.

Years ago I spoke with family members and friends about the NSA and they dismissed me. Now they listen.

Gazooks's picture

if I may, one other notable and necessary consideration for the year 

in addition to your worthy list;


Cheers everyone!

Steaming_Wookie_Doo's picture

It's been 12 yrs, tens of thousands of killed/maimed soldies and how many trillions on the wars in the Middle East. You'd think people would get really pissed about that too. Of course, the day the avg anesthetized Joe will get smoking mad is when the gubmint $$$ stops flowing (SS, pension, food stamps, take your pick). I remain hopeful that full scale annihilation is out of the picture, merely for the 100 million guns in this country

PrecipiceWatching's picture

Hmmm.  Antique weapons and the Confederacy.  Interesting.

Link to the specific piece(s) you are referencing?

Looks like his site is down.



stant's picture

He wrote 2 articles on the subject. One was called 224 year cycle of contraction points to us break up. Also warren pollock just did a yt vid on the subject iwas speaking metaphoricly about the stars and bars bit I can read a map

PrecipiceWatching's picture


I thought maybe Armstrong had praise for the South.  Certainly the people I'd want to be around when the SHTF, as opposed to a bunch of smug, effete, "well-educated", cowardly northern liberals.

Still don't get the part about the brass revolvers.  The legendary, hands-down reliability of this weapon?

Thanks for your reply.

stant's picture

Brass framed revolver speaks to making do with whatcha got Plus they are pretty to look at

booboo's picture

"Outcome #3: Democracy in America is officially dysfunctional"
On the contrary Democracy is working perfectly as planned, it has always been know that when given the chance people will always vote their own ass into slavery. Democracy is dysfunctional by design because people are selfish by nature.
Why do you think the thrust since the 1900 was to spread demoCrazy and is still parroted by our puppets in chiefs.
You don't fry the live frog, you put him in a pot of cold water and turn on the fire. At least kings thought long and hard before committing their own money to raise an army and the average tax rate was well below what the average global slave pays today and you VOTED for it.

Gankfest's picture

Not Surprised...

dbTX's picture

False flags flying everywhere.

Stoploss's picture

France is back in Africa.





Kirk2NCC1701's picture

France is the world's 3rd largest MIC.  After the US and the UK.

And you DO understand the "Essence of Banking"**, don't you?  War is good for Debt (in a deb-t-based fiat currency), and Debt inflates demand for Petro-Dollars.


walküre's picture

75% tax rate on incomes will put France on top of the list of nations to avoid for any kind of business

PR Guy's picture



I made a short cartoon so that the Grim Reaper himself could have a final word on 2013.....


Skateboarder's picture

The radiation will not be televised.

Tijuana Donkey Show's picture

The radiation will not be tweeted/twerked/facebooked/blogged/txt'ed/IM'd/posted/ Just absorbed.

walküre's picture

How are the cleanup efforts going? They started moving fuel rods a few weeks ago. Where's that at?

pods's picture

Pretty well. They are taking the homeless and giving them those yellow dish washing gloves and getting them to carry them out 1 at a time.  Slow process, as you need a new crew every few rods.

Of course you won't hear about it, as the government decided that you only get to hear what they want you to hear.

Kind of like the USSA.


Tijuana Donkey Show's picture

They give gloves? In the USA, they woudn't get soap...

Jack Burton's picture

Good catch Sweet Chicken. I am with you, Fukushima is being covered up by governments and media. In fact, the state of the three melted cores is unknown as they have not been seen or located yet. They went part way or maybe all the way through containment flooring and are in the ground. TEPCO has seen record levels of radiation in several places and a new leak of record level radiated water. This is new, on top of everything we already know. Radiation levels are RISING, this means something bad is happening.  Don't be fooled by pro nuclear power people, they have an agenda. Note, I have never been anti nuclear, I even served on nuclear powered ships. I just want the truth, and too many nuclear power advocates are trying to downplay Fukushima. This is not right, good or bad, we need the truth.

Jack Burton's picture

Sweet Chicken, I have been following up your story. Few sources, but it seems that this is real and that it has been off and on for a week. We will have to await developments, but I would say this might be big trouble brewing. People should know that there never was a traditional "cold shutdown" made of the reactors. They are in emergency cooling via giant flushing of water into the general area of the cores and spent fuel. If all hell breaks lose, I bet it will be a spent fuel pool disaster, with a buring fuel rod, or two or ten or a hundred.

TEPCO is not up to this disaster. The world should invade Fukushima with troops, secure the area, than allow American, EU and Russian exprerts onto the site with an unlimited budget in dollars to attack this problem, before it gets more out of hand. Period!

GeorgeHayduke's picture

That's a great idea, but it doesn't blow shit up and make money for the Military industry.So nothing like that will happen.

Also, while it's the most important thing any of the world's so-called leaders could address right now, it doesn't help any of the dumbass politicians get re-elected because the sheep aren't paying attention to it. So, the chances of anything worthy happening to mitigate Fukushima is low. Well, maybe once Japan has to evacuate the country and they decide to start forcibly colonizing other countries and islands again as they did in the 1930's and 1940's. Then things may start happening after it's too late. Expect nothing more than the usual modus operandi from the leaders of the short attention span public of the US, or the rest of the world for that matter.

In the meantime, the remainder of the world's nuclear plants continue to age and operate on borrowed time as nobody has a clue how to decommission the damned things. Nor would the public push for action because they don't understand the implications of actually dealing with the radioactive material at these plants. Besides, they might miss a tweet from Kim Kardashian while they are learning about this shit. They don't have time for that!

TBT or not TBT's picture

Who is this "the world" and what is their phone number, or URL?

Kirk2NCC1701's picture

The sky will keep falling. 5 yrs in a row.

Cause you KNOW that that Broken Clock will be Spot On eventually.

OwnSilverPlayMusic's picture

Trend #9 if the above happens: martial law

Skateboarder's picture

MSM will be so happy to guide us into it... with an evil smile.

edit: You Could Die Like That!

"Do you want to die (4x)

Ya you´re always talking reporting all the news
Who´s been where and who´s done what,
Just what´s in for you
Ya you want to tell some lies, tell it like it is
Let me tell you something bitch,
You ain´t got long to live

You could die like that (4x)

Ya you gotta say something well say it to my face
Let me tell you something I´ll put you in a place
If you want to talk to me, well say it to my eyes
Let me tell you something bitch
I got your big surprise

You could die like that (4x)


Ya you best stop talking
If you want to stay alive
Mind your own damn business
Unless you want to die
Ya I´ll tell ya something,
I´ve gotta a big surprise
I´ll break your bones and drink your blood
And pluck your eyes

You could die like that (4x)"

nickels's picture

Trend # 10, Shelley nominated poet-of-the-year.  Ozymandias:I met a traveller from an antique land

Who said: "Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
`My name is Ozymandias, King of Kings:
Look on my works, ye mighty, and despair!'
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away". 

Dugald's picture


IN Egypt's sandy silence, all alone,
Stands a gigantic Leg, which far off throws
The only shadow that the Desert knows:—
"I am great OZYMANDIAS," saith the stone,
"The King of Kings; this mighty City shows
"The wonders of my hand."— The City's gone,—
Nought but the Leg remaining to disclose
The site of this forgotten Babylon.

We wonder,—and some Hunter may express
Wonder like ours, when thro' the wilderness
Where London stood, holding the Wolf in chace,
He meets some fragment huge, and stops to guess
What powerful but unrecorded race
Once dwelt in that annihilated place.


Ignatius's picture

Charles, please consider that you stop calling the corporate media 'mainstream', it only encourages them.

Dugald's picture


Lets call them Mainliners, sure pumpin themselves with hot shit.....

maskone909's picture

gerald celente is going to be pissed everyone is bitting his style.  however, most of the observations in this article do match my sentiments.  i especially like #trend #5, an attempt at quantitative analysis of "selfies".

JailBank's picture

Picked up more for the stack for the first time since gold was $1350. Not 100% sure how I feel about the purchase yet.

Magnum's picture

How many stories about Soaring Gold will be authored in 2014...

PrecipiceWatching's picture

I hope NONE.


I am still in the acquisition phase.

G.O.O.D's picture

#1. Gun registration and consfication will continue throughout The united states as more fake shootings and bombings fuel the acceleration of the collapse of Amerika.

Kirk2NCC1701's picture

The last US Pb refinery closes today.  After today, you'll be getting Pb from foreign sources. 

PrecipiceWatching's picture

I am LONG American ingenuity, black markets and underground weapons fabrication and raw materials processing.




Dugald's picture

You may not care for the way its delivered....!

SilverRhino's picture

Not too worried, copper makes a faster bullet and using a micro CNC makes design work interesting.  

Now if you really wanna get mean.  Copper cladded Tantalum carbide will ruin your fucking day (better than AP rounds) and be completely legal. 

Expensive though.