Postcards: My 2024 Forecast (Ten Predictions)

We welcome a possible addition to the Florida Republic's limited government, and I explain why I just can't get behind a Bitcoin ETF. Plus, 10 predictions for the year ahead in the markets and economy                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Postcards: My 2024 Forecast (Ten Predictions)]( We welcome a possible addition to the Florida Republic's limited government, and I explain why I just can't get behind a Bitcoin ETF. Plus, 10 predictions for the year ahead in the markets and economy [Garrett {NAME}]( Dec 9   [READ IN APP](   Dear Fellow Expat: This morning, I drove to the car wash and the grocery store. As I pulled into traffic, I saw who the Florida Republic’s Secretary of Transportation should be. She was in her mid-70s and barefoot. She had a grey flat top and sat in a motorized scooter in the middle of the intersection. As I pulled around her, I noticed three things. She was white-knuckling the handles. She had a Marlboro Red cigarette pursed between her lips, full bore. And in her basket in the card was a loaf of Wonder bread and a 24-pack of Natural Light. This woman’s not here for a long time, but she’s posting for a good time on this 81-degree day. She put her petal to the metal and pressed up Interstate 41 along the sidewalk, never reaching for the cigarette once. On the way back to the nearby Over-55 retirement park, she just smoked it, handless.   She probably puts nails in her sandwich. Godspeed, mam. She’s living in the now. I’m looking forward to compiling my expectations for the market and economy next year. So, let’s dig into my 10 Predictions for 2024. Prediction One: Equities Will Rise. The S&P 500 will continue to move positively higher on the back of global liquidity expansion. Volatility is VERY low right now, a hallmark of bull markets. The U.S. dollar is heading lower, benefiting emerging markets in next year's second half. I think the markets are heading higher into 2026 – and the reset or crash everyone is predicting will happen then. I know it’s a way off, but [liquidity expansion matters](. China is a frontrunner to keep pumping money into the system – which positively impacts global economic expectations. I won’t make the same mistake I made this year by focusing too much on the Federal Reserve. Instead, I’m [watching all global liquidity sources]( – and the outlook is bullish in the medium term. Ups… and downs… are part of the market. Prediction Two: Equities Will Also Fall. This market isn’t even close to unwinding all its central bank-related challenges. The Bank of Japan is expected to start tightening its monetary policy, which would be a stark reversal from the last ten years. I [expect two short-term downturns next year of at least 8%]( - marked by panic around the [regional banking system]( the Presidential election, and [the Treasury Department’s refinancing]( challenges problems in the repo markets (The Fed lent $200 billion in overnight cash last Wednesday, the highest since the COVID-19 crisis started. That’s not good…), or any number of surprises on the horizon. Seasonality will again guide those moves. While there’s a chance the Fed cuts rates by March, I’m leaning toward July – and impatience will certainly affect sentiment as the debate shifts from “How High” [on rates to “How Long”]( above 5%? This is why it’s essential to watch overbought and oversold signals and play the game of the algorithms. Prediction Three: Pundits will be Wrong… Often. You’ll need to zig where others zag because our [Equity Strength Signals]( have been deadly accurate for this Fed-driven cycle since November 2021. [We avoided the March 2022 banking selloff]( and called a bottom in October when technicals took us into oversold territory. Oil prices had tanked since our sector signal went negative in September when I talked about [the energy counter-narrative](. This comes after banks in New York predicted $100 oil in the fourth quarter. They were wrong… and people need to stop listening to them. Our [final rule in the Florida Republic is]( “Buy on the sound of cannons and sell on the sound of trumpets.” Being a contrarian has paid off in the post-COVID era and will pay off again. Prediction Four: Grey Swans Will Be Everywhere: There are some rather apparent threats to the market next year. The Fed needs to get inflation down to its 2% target, but we’re not going to see that with increases in COLA payments and upticks in government spending. We’ll get to 2.5% in 2024 and not get to the end game until 2025. The Presidential Election threatens to put things temporarily into disarray. I’m a guy who points the camera and figures out how to make money no matter who is in charge. We have no control over the election. You vote and wait to find out how the rest of the mob decided. But I think this market will face a lot of pressure in October when polls reveal that Trump is on the verge of winning – largely due to Robert Kennedy’s allure in swing states. Kennedy will do more damage to Biden than Trump, the opposite of what most pundits believe. The reason is that most Trump voters have already decided to be Trump voters. I’m not sure who will win, but I expect next year’s election to set a record low in decorum and greatly affect market sentiment. Next year, look for another problem with elections: Deepfake videos that the media embraces without verification, spurring new issues around election integrity. If you thought “And I can see my Russia from my house” was terrible, welcome to the new age. --------------------------------------------------------------- Editor’s Note: Porter Stansberry is known for making bold predictions that cut against the mainstream, “approved” narrative.   He predicted the 1998 emerging market crisis, the 2007 financial crisis, the bankruptcy of General Motors, the loss of America’s AAA-credit rating, and the recent wave of banking collapses. On December 12, Porter will share [a shocking new prediction]( that he considers one of the most important of his 25-year career.[ ]( your seat, right here.]( --------------------------------------------------------------- -Prediction Five: No Official Recession This one will bug many people, but this is based on the trickery of the U.S. financial bureaucrats with too much at stake in the 2024 election. [Remember that they changed the definition of recession in 2022.]( I’m expecting that only the second quarter of 2024 will see negative economic growth – and we’ll see plenty of government spending to keep propping up this economy. [Buying oil at $70 per barrel]( gives the government plenty of ways to manipulate growth. There are plenty of negative economic indicators because the Fed’s rate policies punish the private sector. But… and this is important – it doesn’t impact the largesse at the Treasury. These deficits are piling up, and this is why there will be a reckoning halfway through the next Presidential term right around Midterms in 2026. Some say that warning people about something three years away isn’t a good analysis – but it’s clear that liquidity is expanding in the years ahead. I argue that you use this period to take every damn dollar you can out of these markets by following momentum. That’s because we’re on pace for the U.S. deficit to hit 15% to 20% of GDP in extreme weakness. You’ve got a few years before we reach the economic point of no return. Take them seriously. Prediction Six: Insiders Will Call Multiple Short-Term Bottoms If I’m wrong, and this market does collapse in March, or a reckoning builds due to deposits in the banking sector, there are two things to watch. First, look for Oversold technicals on the S&P 500 SPDR ETF (SPY). I’m specifically talking about a Relative Strength Index under 30 combined with an oversold Money Flow Index at 20 or less. Meanwhile, watch the insider buying signal we track daily in the [Republic Risk Letter](. That signal has coincided with short-term bottoms for the last two years. Most recently, insider buying hit its strongest level in a year in late October before this rally commenced. Prediction Seven: Power Continues to Shift from West to East The ongoing geopolitical winner of 2024… will be Saudi Arabia again. The country continues to [play chess while everyone else plays checkers](. The government just announced a 30-year tax break (no corporate income tax) to any company that places a regional headquarters in the Kingdom, while the West is doing all it can to raise taxes on international businesses. Western nations are currently run by inept politicians who have zero long-term thinking skills. In late November, the United Arab Emirates stopped using the U.S. dollar for petroleum trading. The BRICS nations and their new members own the bulk of global oil production, rare earth production, metals and mining, and nuclear energy and weapons. America exports shows about dancing and stupid social policies that will fuel economic distortions. Prediction Eight: No One Convinces Me a Spot Bitcoin ETF is a Good Idea I welcome this debate, but I don’t understand the premise behind a Bitcoin Spot ETF. This would be the first and only ETF in a commodity or asset class where the amount of the asset is finite. So, it will create scarcity and shift the economic curve on the price. So, it’s bullish, but at the same time, it makes no sense as a product. Why would someone buy an ETF of this asset and pay a custodian for the privilege? Because they want exposure, but they’re not legally allowed to own it? Roughly 2% of Bitcoin holders own about 93% of all coins – and these spot funds will create “forced buyers” out of big institutional players. This feels like a solution in search of a problem – but it’s great news for very wealthy speculators already entrenched in their positions – with still very little oversight into the practices of this industry. Fundamentally, I find it to be a dumb idea. Still – I’ll take the money, as I still allocate a small percentage of BTC in any portfolio. Passive investing has become a fundamental problem in these markets – enriching BlackRock and misallocating capital to worthless companies with no business being public. This is just that trend on acid. Prediction Nine: It’s an Even Greater Banner Year for Artificial Intelligence The rewards of the CHIPS Act, combined with the deployment of AI, set up a continued run on major players in the AI space and a handful of laggards trying to rebound against the competition. Be aware that competition is coming for the biggest players – but next year, we will start to see actual results beyond ChatGPT functions. The deployment at the corporate enterprise level could add up to $4.4 trillion in growth across 63 industries, according to consulting giant McKinsey. AI is our only chance at widespread productivity growth to help eat up the debt we continue to incur. Lots of liquidity will chase this trend – and take valuations to even greater nosebleed levels for now. This isn’t cannabis, sports gambling, or a niche industry. It’s coming for everything – so finding backdoor ways to invest in [great companies like Deere (DE)]( and [Domino’s (DPZ) will be valuable]( for investors. Prediction Ten: Value and Momentum Outperforms the S&P 500 Finally, look for a portfolio of stocks at Republic Risk Letter to arrive in January as we kick off the new year. Specifically, we’re eyeing reversion momentum names in industries that make something and sell real products and services. [You'll recognize the metrics if you’ve been reading.]( With two metrics and a deeper dive into fundamentals, [we could score names]( like SkyWest (SKYW), which popped nearly 200% this year. We’re looking for this portfolio of eight names to outperform the S&P 500 next year and benefit from an uptick in liquidity. That list will arrive around January 3, 2024. Standby. Tomorrow, I’ll be back with a rundown of the week ahead. Stay positive, Garrett {NAME} Secretary of Defense The Florida Republic PS: Remember to check out Porter’s upcoming event. [Here’s the info](. You're currently a free subscriber to [Postcards from the Florida Republic](. For the full experience, [upgrade your subscription.]( [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2023 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()