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Predictions for the Trump Presidency - 2017.01.20
On the day of the Inauguration of Donald Trump as President of the United States of America, the SDFM sees it as its duty to publish a short analysis and prediction based on different scenarios.
The wave of populist successes in various regions of the world has its roots in a combination of economic stress caused by globalisation and automation and of a wide-scale cultural dumbing-down of large parts of the population. This dumbing-down process has causes worth a long analysis, connected both to right-wing and left-wing policies and is measureable e.g. via basic maths and language skills. Trump has been able to use the economic stress to convince the dumbed-down population in the U.S. to put their best interests in the hands of a casino and building industry billionaire.
One characteristics of Donald Trump and his associates is their unpredictability. They are torn between a traditional conservative approach, radical free-market ideology and a social-populist agenda. Any logical conflicts between these political directions are ignored. This makes the future politics of the U.S. and similar countries difficult to predict. Therefore, this analysis is forced to work with probabilities for its predictions stretching over the next 4 years. Of course, the scenarios might overlap or combine in many ways.
Successful Impeachment Scenario - 20 percent probabilityTrump will push for trade and debt policies which will be seen as a threat to many established interests both on the Democrat and Republican sides. Cases of corruption and / or a hidden link to Russian or other foreign interests might be used as a lever to start an Impeachment process which would be supported by a significant minority of Republicans as well as the Democrats. Attempts by Trump to put pressure on those involved backfire, his support would crumble and he would be replaced by his Vice President Mike Pence.
Military Coup d'Etat Scenario - 5 percent probabilityThis scenario would almost certainly only take place after a successfully suppressed Impeachment attempt based on facts clear to the security and military apparatus, but ignored by parliamentarians under pressure. As such an act would break the constitution, it would be a last resort only. Its probability is raised, though, by the fact that Trump's cabinet contains a number of former career officers who might decide to switch sides if Trump is threatening them with dismissal.
Demise of the President Scenario - 15 percent probabilityDonald Trump was born in 1946. 70 years old at his inauguration, he statistically (for an average male in the USA) carries a probability of 11.8% to die in the next 4 years. This may be lowered by excellent health services available to him and by him not being a smoker. But both his old and his new job are stressful and involve much travelling and long work times. He is short-tempered and aggressive, making him prone for a stroke. In addition to this comes the risk of assassination which is present for every president, but maybe even more pronounced for him.
Large Scale War Scenario - 25 percent probabilityAs a consequence of inconsistent alliance and trade policies, combined with economic and other factors, war might break out between two or more of the world's great powers. Here, we see the situation in China / Taiwan / South China Sea as highly critical, especially as any trade crisis will shake China's economly. There is also some probability of Russia using the perceived weakness of the West for new adventures, although it is much easier for them to work with classical destabilisation methods like at present. Finally, the Mid East situation might explode with the loss of American protection e.g. for Saudi Arabia. The First World War is a good example of a world war situation created by low predictability of the actions of all parties involved. The distraction caused by war between large powers would also entice smaller powers to take up arms in local conflicts.
Limited Secession Scenario - 30 percent probabilityThe political conflict regarding illegal immigrants between the Trump administration and liberal oriented cities escalates, with the U.S. government ordering National Guard or federal forces to intervene, similar to the 1960s. This forces states with strongly Democrat leaning majorities to choose between federal law and their own citizens. In this scenario, they decide for a limited break with federal law, commanding National Guard forces to stand back or even to hinder federal forces from intruding the contested cities. We expect the conflict to be suspended at this stage due to the high level of U.S. patriotism instilled in every citizen, but it is feasible that the rebel states unite and start to create new structures outside the federal ones, which would be the first step on the path to full secession.
Civil War / Uncontrolled Breakup Scenario - 5 percent probabilityCivil wars usually need a long run-up until they break out. There is a slowly rising level of segregation between red and blue states and districts, but on a high resolution map it is clear that there are almost no large scale areas completely in the hand of one side or another. Also, the two traditional parties have both lost much credibility, without any organisations able to replace them and organize their followers in a sufficient way for armed conflict. The risk is still estimated to be higher than zero, though, as this scenario might be triggered by one of the other scenarios like Coup d'Etat, demise/assassination or Uncontrollable Economic Crisis.
Controllable Economic Crisis Scenario - 35 percent probability9 years after the last economic crisis, the probability is high that within the next 4 years, another economic crisis takes place. This crisis could be triggered by Trump's trade policies - an introduction of new duties or "import taxes" would lead to a breakdown of international trade. Deficits and debts also play a role - with the high level of debt, any expansionist creation of new debts will increase the bond outflow from present creditors, increasing the asset inflation in the U.S.. Inflationary policies might contain this crisis, though, and Trump might be able to use his strong standing to push through economic reforms stabilizing the country.
Uncontrollable Economic Crisis Scenario - 15 percent probabilityWith a high Dow level, a bond bubble and both private and public debt quite high, a "Black Swan" event might create a panic which is not containable by the Federal Reserve. Chaotic policies of the Trump team might amplify the crisis instead of controlling it. In this scenario, trade and trust in the US$ would break down quickly, generating a hyperinflation similar to those regularly happening in Latin America. State and country wide currency reform could introduce gold-based or even binary (bitcoin-based) currencies. Poverty levels would increase exponentially. The situation would be similar to Argentine or Brasil in the 1970s / 80s and might even approach that of the breakdown of the USSR. A Secession scenarion would be a probable side effect of such a crisis.
Ecologic Crisis Aggravation Scenario - 90 percent probabilityDue to Trump's aversion against climate change mitigation and international cooperation, the Paris talks might break down and the U.S. would ramp up their fracking and coal production. In the last few years, the 2000-2010 pause of climate change has ended and the temperature curve risen steeply. Arctic areas are now much less covered by ice over the year, leading to an extreme rise of temperature in the Arctic and therefore to additional release of Methane, a strong short-term climate gas. This might lead to an extension of the draughts in the southern U.S. states. In addition to the long term detriment, there might be much more short term damage to the U.S. than currently expected, especially on the Eastern coastline due to superstorms. Internal migration might lead to more conflicts between population groups.
Trump Success Scenario - 10 percent probabilityIt is necessary to take into account that Trump's policies could end up in success. This scenario defines this success by internal and external factors. Internal factors would be moderate economic growth with an improved distribution of wealth, a stabilisation of debt, a rebirth of U.S. industrial production by limiting the interests of international corporations based on globalisation and a successful introduction of a basic but workable health insurance system. Like Bismarck, Trump is in a better position to reach this goals than his predecessors if he rises above his own interests and those of his peers. A moderate but firm foreign policy, extricating the U.S. slowly from many conflicts, might lead to a stabilisation of existing conflicts and reduce the probability of new conflicts. European unity might even be strengthened by the need of self-reliance.
In a way, the Trump Success Scenario could be seen as the other side of all other scenarios together, with the exception of the Ecologic Crisis Aggravation scenario as his supporters would mostly ignore it over the time scale of 4 years considered here.
Unluckily such a success scenario would almost inavoidably lead to an era of oligarchic Presidents, compareable to the Roman emperors following the highly successful Augustus Octavian. Even if Trump would not go for re-election, a succession by other billionaires would be highly probable - Mark Zuckerberg is said to have some interests there, and Trump's children, especially his daughter Ivanka, might come into play, too.