2024: The Beginning Of The End Or The End Of The Beginning? (Part 1)

Looking At The Most Important Issues Of The 2024 Presidential Election

Do you ever have something that keeps you up at night? You hop in bed at the usual time, and your mind just won’t turn off? That has been me over the last couple weeks ruminating about what is coming in 2024. I try to fall asleep, and eventually I give up an hour or two later and start writing. I usually last an hour or two before knocking out for the night, which is how I ended up with this post. I should be taking a break from markets, hitting the slopes, and relaxing, but this has been floating around my head for awhile, and the only way for me to deal with it is to write it down.

I hope all of my readers had a Merry Christmas, and are looking forward to a Happy New Year’s. As we look forward to next year, I think we are headed for a year of chaos in geopolitics as well as markets. Despite all of the turmoil in 2023, I think this year was the calm before the storm, and I think 2024 could be a slow motion train wreck as far as geopolitics and markets go. While I could be wrong, I think that next year is going to be chaotic to say the least, and I think it will set the table for the rest of the decade.

Call it a vibe shift, call it woo woo, call it whatever you want. I just have a gut feeling that something major is coming, something that is going to be a culture shock. The last one we had was the government response to COVID (not the actual virus itself, I want to be clear on that), and I just have this feeling that we are going to experience another important event (or series of events) over the next 12 months. Recently, we have bounced from one crisis to the next, and it seems like things have been accelerating over the last couple years. I thought this was going to be a one part article, but the post kept getting longer and longer, so I decided to split it into two parts.

Setting The Table For The Rest Of The Decade

I think 2024 is going to be a fork in the road that will have a big impact in setting the table for the rest of the decade. The Presidential Election is the obvious geopolitical event on the horizon for next year, but I have a feeling that it won’t be the only important event in 2024. We can’t travel into the future, but I think we might look back in a couple years and trace things back to 2024 as a potential turning point. Today’s post is going to talk about what I think will be the main issues of next year’s election. Tomorrow, I will go into my opinion on the main candidates, and talk about how the outcome of the Presidential Election could have an impact on the rest of the decade. Next week, I will go into what I think is coming for financial markets, with a look at different asset classes, commodities, and sectors.

I haven’t made it a secret that I think commodities will be the place to be invested over the next several years, but I have been focused on a bunch of different things as 2023 developed, and now the year is drawing to a close. Ukraine started the year as the primary focus of the West, and that dramatically shifted after events in Israel and Gaza kicked off and put Ukraine on the media back burner. I talked about this shift in a post in October, and my mindset on the current thing.

Since then, we have seen the Houthis attacking vessels in the Red Sea, impacting trading routes and sending day rates (and many shipping stocks) soaring. Many ships transporting goods have opted to go around the Horn of Africa, instead of using the Suez Canal. This is a much longer trip, but many ships have opted for this route to avoid issues in the Red Sea. I have seen a couple people say that World War III has already started, but we just haven’t realized it yet.

I’m not here to cause panic and raise the alarm, but I do think we are in for a tumultuous decade on the geopolitical side. At first I started this post by writing about stocks, commodities, and other asset classes, but I realized that just focusing on the market side of things would be an incomplete look at things moving forward. If you want to be an active investor, I think you have to be aware of what is going on in the world, whether it’s elections, wars, or cyclical changes, and factor that into your investment process.

Despite all of the things that I think are coming in 2024 and the rest of the decade (some would call it a Fourth Turning), I’m very optimistic about the future of America. If I thought America was a lost cause, I would be preparing for the worst and heading to South America or Southeast Asia. It’s going to take time, and huge changes on a cultural, societal and political level, but I think that things are going to get much better for Americans in my lifetime. I have unorthodox opinions on many topics, and American politics is no exception. The American Presidential Election is set to be the most important geopolitical event on the 2024 docket, and I think it is going to be one for the history books.

The Election

Political pundits always say “this is the most important election in history.” I’m not going to do that because those people are unserious people, but I do think that the outcome of this election is going to have a significant impact on what path America and the rest of the world takes for the rest of the decade. I don’t really fall neatly into one of the two parties, so I’m sure I will say something to piss every reader off in one way or another, and I’m fine with that. If I don’t do it with today’s post, I’m sure I will with tomorrow’s. The time for censoring ourselves to avoid hurting feelings is past. I’m going to tell you exactly what I think about the slow motion train wreck that could be coming in 2024, and that starts with the Presidential Election.

Key Issues

There are three key issues that I think will be themes of next year’s election news cycle. The phrase “It’s the economy, stupid” applies to every election, but I think that it will rank third among the dominant issues in this news cycle. A couple years ago, it seemed like COVID, experimental vaccines, and the government lockdowns would dominate the 2024 election news cycle, but it seems like most people are fine with putting that nightmare in the memory hole. Whether it stays there permanently is another debate, but it doesn’t seem like the topic will take center stage next year. The most important issues in my opinion will be illegal immigration and American involvement in foreign wars.

Illegal immigration

Illegal immigration has been a contentious topic for some time in American politics, and I doubt this election will be any different. However, there have been some changes recently to immigration that mirrors some of what has started to happen in Europe. When most of the immigrants are military age males, many of them from Africa and Asia, not South America, that is an invasion, not immigration.

The immigrants hit the welfare state immediately. They are given a $2,200 per month allowance or a $5,000 debit card, bus and plane tickets, housing, food, and medical services. “They used to do the monitors on the ankles, and those were being cut off. So now they give them phones.” Unmarked buses deliver them to destinations in the middle of the night to avoid blatant detection and minimize the optics.

- Dave Collum’s Year In Review, page 94

You can’t have a bloated welfare state with open borders, at least not for long. This has long been an issue for states like Texas and Arizona, but it has started to become a problem for liberal leaning states as well. While bussing immigrants to New York City, Washington, D.C., and Chicago makes for a good headline, it’s not a real strategy for either side. I’m of the opinion that America needs to restrict immigration, legal and illegal, but at the very least, we need stop the invasion at the Southern border and everything that comes with it.

Build the wall is a oversimplification, but I think we will see immigration be one of the keystone issues of the 2024 election. If you had a dedicated military branch that was dedicated to the closing the border (we have a Space Force, why not a Border Force?), I doubt you would have trouble recruiting for that branch like we have seen recently for the other 5 branches of the military, which brings me to my next topic.

American Involvement In Foreign Wars

While lying our way into wars is a time honored tradition in America, I think the average Joe is finally starting to realize that America’s involvement in Ukraine, Israel, and other places around the world is not in the best interests of America. The military has had significant problems recruiting enough people to fill the ranks, and it doesn’t show any signs of getting better. Some have even suggested that we start enlisting immigrants, which is another slippery slope that we should avoid. If you want to get a feel for what the younger generations think of joining the Military, look no further than the Army’s recent “Be All You Can Be” ad.

The post got more than twice as many comments than likes (which is an achievement if you know anything about social media), and the noticeable absence of the diversity, inclusion, and equity theme (DIE) of past ads was conspicuous. I don’t usually spend my time reading comments on social media, but there were a couple that show what a lot of people think about joining the Military today.

• An ad full of straight white men? I guess we are going to war.

• I will not die for Biden, I will not die for open borders, I will not die for Ukraine, and I will not die for Israel.

I don’t think you’re going to get young white men to sign up for the military meat grinder, in a period where it looks like we could be headed for multiple major conflicts around the world, for a culture that hates us. Society today seems like it is as divided as it has ever been, and I don’t see any signs of that changing in 2024. There are divisions along racial, generational, and economic lines, and it’s frustrating to watch as our culture continues to show signs that late stage empires have shown in the past near their collapse.

It’s not just on the subject of the economy that we see a generational gap. It’s also in attitudes on we see on Israel, Ukraine, politics, the economy, and many other topics. The American Empire has been busy over the last two decades stirring things up in the Middle East, and I think Americans are fed up with the perpetual wars that our country has been involved in. I think our so-called elites will have a hard time getting most Americans to continue to support the conflicts in Ukraine and Israel, especially younger generations. While these conflicts have the potential to lead to a wide scale conflict, I don’t know how likely it is. There are just so many moving pieces. Looking at social media for these things isn’t some scientific process, it’s just an observation of today’s zeitgeist.

The Economy

How the economy is doing is always an important election issue. While the condition of the economy in 2024 is a confusing problem to address, I think that unless we see a dramatic change (better or worse), the economy could take a backseat to the other two issues in the election news cycle. Inflation has started to come down (not that prices are actually coming down, but the rate of price increases are slowing), and while I think that it is a temporary condition, it makes the economic outlook more stable for 2024. I still think the actual inflation is much higher than the CPI reflects. It just won’t be a constant part of the news cycle in 2024 unless it starts to get worse next year. It’s definitely possible, especially if oil prices start to surge again (inflation tends to follow oil prices on a 3-6 month lag in my opinion), but I don’t think inflation is going to be the dominant economic topic of the election news cycle.

One of the other topics on the economy that is sure to come up in an election cycle is the wealth gap. This is not me whining about how hard younger generations have it, and that our country needs commie government policies like wealth redistribution or universal basic income. Each generation has a different set of challenges, and people my age have an interesting problem set to say the least. What I will say is that if you start to see the same thing over and over, where people in their 20s and 30s are complaining about housing prices, cost of living, and other economic issues, it’s worth paying attention to. Whether you agree or not, I think you would have a hard time convincing the majority of the under 40 crowd that the American Dream is alive and well.

Personally, I’m glad we have rising interest rates, because it will start to flush out all of the malinvestment we have seen over the last 15 years of near zero interest rates. Interest rates have been held steady for several months, but markets are expecting a pivot and lower interest rates in 2024. We will definitely see solar, wind, and other areas prone to malinvestment struggle unless we go all the way back to 0%, which I find highly unlikely. Hopefully, we also get lower real estate prices, an opinion which is heresy to older generations. I will talk more about residential real estate in my post on markets next week, but I think housing affordability is going to be an important subtopic on the economy in the election news cycle.

Housing Affordability

Housing affordability is at an all time low and I think there is a disconnect in the real estate market. If you want to see prices stay level or go higher, I think you basically need sustained lower rates. You probably need the Fed Funds rate back in the 2-3% range, with mortgages at or below 5% for affordability to get better without real estate prices come down. If you don’t get lower rates, I think the natural outcome is lower prices. I have had some version of this conversation on real estate with several boomers, and you will almost certainly get a very similar conversation.

“Back in my day, our mortgage rates were in the teens.” My simple response is that homes were priced at 2-3x median income back then versus 8-10x median income like they are today. If you say that, most of them look at you like you just grew a third eye in the middle of your forehead. Back in their day, you could pay for college with a summer job, and spend the leftovers to buy a car for a couple grand. They also didn’t have institutional investors and older generations buying up homes because number goes up.

One of the other things that could bring residential real estate closer to fair value is the simple passage of time. It’s a morbid subject, but I think that as the Boomer generation continues to pass on, you will start to see a lot of houses (and other assets) get passed down or sold onto the market. This could potentially fix the housing supply deficit, but it is going to take time and I wouldn’t count on it before 2030 and maybe 2035. The last thing that could help with housing affordability is actually putting serious restrictions on immigration. If you stop the flow of millions of illegal immigrants that come into the US each year, that could have a significant impact on real estate prices.

Conclusion

Like I said earlier, I have a feeling that next year is going to be even more eventful than 2023. The Presidential Election is the big event that we all know about, but I don’t think it will be the only impactful event next year. What the other events could be is hard to predict. For example, I doubt many had the Hamas paraglider attack on their bingo card for 2023. I certainly didn’t. Before taking a look at the Presidential candidates tomorrow, I wanted to lay out the keystone issues that I think will dominate the news next year. Illegal immigration has been an issue for decades, but for those paying attention, it has changed dramatically for the worse over the last couple years. Some might be reluctant to call it an invasion, but that is what it looks like to me.

Another issue that could come to a head in 2023 is American involvement in foreign conflicts. It’s another issue where we see a generational gap, and I don’t think younger generations are going to fall in line and support what is going on in Ukraine or Israel. The American Empire looks overextended, something that has happened to empires throughout history. What typically comes next isn’t pretty. I think the economy will be fine in 2024, but I think several topics on the economy will come up frequently in the election news cycle. Whether it’s the wealth gap or housing affordability, the economy will be an important topic next year, but I think it could take a backseat to topics like immigration and foreign wars.

I love writing about investments and individual stocks, and that will always be my bread and butter, but I think a quick detour into the Presidential Election is warranted. I think there are a lot of things that could create chaos next year, and I wanted to throw my two cents out there. I couldn’t do it justice without laying out some of the important issues for next year’s news cycle before talking about the candidates. I try to be as objective as possible when I’m forming my opinions, but at the same time, I won’t sugarcoat anything once I have formed my opinion. No matter what happens, I think 2024 is going to be a year to remember.