Key Moments
Geo-Strategy Update #10: I Was Wrong. The Democrats Take Congress.
Predictive HistoryKey Moments
The Democrats' 'blue tsunami' in the midterms was a shock to predictive historians, but the real surprise is how Trump and the new Congress might cooperate on AI bailouts and a US-Israel defense pact, while the Iran war pauses.
Key Insights
Professor Jiang admits to being wrong about the Brazilian elections, the Alberta independence vote, and the US midterms, highlighting the need to adjust predictions based on new information.
The author previously theorized a global struggle between globalists and nationalists, influenced by figures like Mark Carney and Donald Trump, as the primary driver of geopolitics.
The Brazilian election upset was attributed to the mobilization of evangelical voters (now 20% of the population), sophisticated social media targeting by Meta, and voter fatigue with Lula's "corrupt" party.
The surprising "blue tsunami" saw Democrats not only take the House and Senate but also flip governorships, including Texas, which is now considered "purple" rather than red.
Jiang predicts a period of "cooperation" between a Trump White House and the Democratic Congress, focusing on economic growth rather than impeachment, with a potential $2 trillion AI bailout and a formal US-Israel defense research pact.
A tentative two-month ceasefire in the Iran war is predicted before January, followed by potential US ground troops entering Iran by March, with Congress complicit through inaction.
Admitting electoral miscalculations and the evolving nature of predictive history
Professor Jiang begins by candidly acknowledging his errors in predicting recent elections, including those in Brazil and Alberta, and most notably, the US midterm elections. He frames these mistakes not as failures but as opportunities for learning and refining his model of world affairs. Jiang's work in "predictive history" involves developing a worldview or model to interpret current events and testing it through predictions. He identifies the core global conflict as one between "globalists" (represented by figures like Mark Carney) and "nationalists" (represented by Donald Trump and Vladimir Putin), or between elites and counter-elites, as theorized by Peter Turchin. This struggle, he contends, manifests in elections worldwide, and his recent missteps highlight the challenge of accurately forecasting its outcomes.
Lessons from the Brazilian election upset
A key factor in Jiang's miscalculation was his underestimation of Jair Bolsonaro's support in Brazil. He had assumed Lula's strong voter base and the Workers' Party's political machinery would secure his victory. The surprise win by Bolsonaro in the first round, with other conservative candidates consolidating behind him, defied Jiang's expectation that Brazil would remain a "center of globalism" in South America, a counterweight to a more Trump-aligned Argentina. Jiang identifies three primary reasons for Bolsonaro's success: the powerful mobilization of evangelical voters, who now comprise about 20% of the population and are fiercely Zionist; the effective use of social media platforms like Meta for targeted advertising and narrative shaping; and widespread voter dissatisfaction with Lula's "corrupt" Workers' Party, indicating a global trend of voting against incumbent governments.
The "blue tsunami" and a recalibrated geopolitical outlook
Influenced by the Brazilian election and the apparent rise of nationalist forces, Jiang initially anticipated a stronger showing for Alberta's independence vote and a potential Republican hold on the US House of Representatives, possibly due to hidden campaign funds and opaque social media algorithms. He even speculated about secret plans by Trump to rig or delay the midterms, citing Trump's unusual "complacency." However, the unexpected victory of Lula in Brazil's second round forced a significant revision of Jiang's worldview. He realized that "globalists" still possessed considerable power. This led him to predict, just weeks before the election, a "blue wave" or "blue tsunami" for the Democrats, which indeed materialized. The Democrats not only won the House and Senate but also secured a majority of governorships, flipping states like Texas, now considered "purple."
A pragmatic future: Trump-Democrat cooperation and the AI bailout
With Democrats controlling Congress and assuming key leadership roles like Hakeem Jeffries (18% approval) as Speaker and Chuck Schumer (13% approval) as Senate Majority Leader, Jiang predicts a period of "cooperation" rather than "revenge" between the White House and Congress. He argues that both figures are heavily indebted to AIPAC and lobby groups, and that American voters are wary of continued US involvement in the Iran war and its close ties to Israel. Instead of focusing on impeaching Trump, the agenda will likely center on economic growth. Jiang anticipates a close working relationship between a Trump White House and the Democratic Congress, suggesting Trump performs best when challenged, not when in control. A major item on this shared agenda is the impending collapse of the AI bubble, with companies like Nvidia experiencing significant drops. Jiang forecasts a government bailout, potentially reaching $2 trillion, to rescue AI companies and invest in data centers, driven by the underlying issue of the petrodollar system's decline and liquidity problems in Saudi Arabia and Japan due to the Middle East conflict.
Formalizing US-Israel defense ties and a temporary Iran war lull
Another key legislative item Jiang expects is the formalization of US-Israel high-tech research collaboration through the National Defense Authorization Act (NDAA). Despite Trump's initial threat to cut $4 billion in annual aid to Israel, Jiang believes Trump is using this leverage to push Congress to pass the NDAA. This act would essentially grant Israel backdoor access to the Pentagon's $1.5 trillion budget, solidifying existing cooperation exemplified by the Stuxnet virus. Concurrently, Jiang predicts a temporary "lull" in the war against Iran for the next two months, before the new Congress is sworn in. He posits that major escalations, such as nuclear strikes or ground invasions, will be avoided during this period. However, he forecasts that by March, following the new Congress's seating, US ground troops might enter Iran, with Congress becoming complicit through tacit approval or silence.
The "Clarity Act" and the shift from the petrodollar
Jiang also discusses the potential passage of the "Clarity Act," designed to establish a regulatory framework for stablecoins. This move is seen as a crucial step in replacing the petrodollar system. The traditional model involved Saudi Arabia selling oil for US dollars and reinvesting them in the US economy, enabling excessive spending. However, with the petrodollar system weakening due to the Middle East conflict affecting Saudi liquidity, the US needs new ways to finance its $40 trillion debt. Stablecoins, digital currencies backed by US Treasury bonds, would allow individual consumers globally, including large savers in Japan and China, to invest in US debt, thereby providing continued funding. This transition is presented as essential for the US economy's survival.
Trump's unpredictable leverage over Democrats and the Epstein files
Jiang explores a strategic dilemma for the Democrats: should they challenge Trump by, for example, passing legislation to defund the Iran war or compel the release of the Epstein files? While such moves could force Trump to veto, potentially damaging his image, Jiang emphasizes Trump's unpredictability. The author argues that Trump, unlike most politicians, might sign such legislation, which could have devastating consequences for Democrats if their party's prominent figures are implicated in the Epstein files. Jiang believes Trump is not implicated in the Epstein files himself, citing his disciplined, non-alcoholic lifestyle and his mentorship under Roy Cohn, an expert in avoiding legal trouble. He asserts that if Trump were implicated, the Biden administration would have revealed it already. Consequently, Jiang concludes that Democrats will likely adopt a conservative approach, avoiding direct confrontation to protect their donors and themselves from potential exposure, leaving Trump with greater leverage over them.
Impending geopolitical summit and the elusive peace
Looking ahead, Jiang points to a potentially significant, though unannounced, summit in Shenzhen involving the "big three" world leaders: Donald Trump (US), Vladimir Putin (Russia), and Xi Jinping (China). This meeting, likened to the Yalta Conference, could involve discussions on a face-saving exit from the Iran war, with China mediating a peace treaty between Russia and Ukraine. While Jiang believes this summit might yield positive outcomes and a sense of global peace, he ultimately predicts that geopolitical realities and various active forces will disrupt these efforts, leading back to conflict. He also mentions his upcoming series on "esotericism," based on his new book about Gershom Scholem, promising it will tie together global events and political actions into a coherent narrative.
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Common Questions
The speaker admits to being wrong about the Brazilian elections, the Alberta independence referendum, and the US midterm elections, attributing his errors to flawed assumptions and an incomplete understanding of shifting geopolitical and social factors.
Topics
Mentioned in this video
The speaker's current location, where he is with his family.
Location of a past independence referendum where the speaker's prediction of 40% support was incorrect.
A potential target for a US Marine seizure during a conflict escalation with Iran.
The country to which Alberta voters chose to remain affiliated.
A hypothetical target for a nuclear strike by Trump during a potential escalation of conflict with Iran.
Key player in the petrodollar system, facing liquidity issues and selling gold and US investments.
The site of a recent election where the speaker's predictions were incorrect.
Mentioned as leaning towards Trump and Zionists, contrasting with the speaker's expectation for Brazil.
The subject of ongoing conflict and debate regarding US involvement.
The setting for the midterm elections, where the speaker's initial predictions were overturned by a Democratic sweep.
Mentioned as experiencing liquidity issues and contributing to the collapse of the petrodollar system.
Mentioned in the context of potential peace talks facilitated by China between Russia and Ukraine.
Close ally of the US, whose relationship and military aid are discussed in the context of the new Congress.
Mentioned for his concept of the conflict between the elite and the counter-elite.
Described as a mentor to Trump and 'Epstein before Epstein,' known for blackmail tactics.
Mentioned as a representative of globalists in the conflict between globalists and nationalists.
Portrayed as a representative of nationalists and a key figure in US politics, whose actions and unpredictable nature are discussed extensively.
Mentioned as a representative of nationalists alongside Donald Trump.
Mentioned as someone Democrats hope will testify against Trump.
Mentioned as a Democrat potentially implicated in the Epstein files.
Mentioned in the context of understanding Kabbalah for the speaker's upcoming series.
Brazilian presidential candidate whose victory in the first round and performance in the election surprised the speaker.
Mentioned as a powerful Democrat potentially implicated in the Epstein files.
Identified as the likely new Speaker of the House, with low approval ratings.
Identified as the likely Senate Majority Leader, with low approval ratings.
Expected to be called by Democrats to testify against Trump, but predicted to not implicate Trump and later receive a pardon.
Renowned scholar of Kabbalah and Jewish history, author of a book recommended by the speaker for his upcoming series.
Its stock drop is cited as evidence of the collapsing AI bubble.
Mentioned as a provider of stablecoins that could facilitate investment in US Treasury bonds.
Mentioned as one of the social media companies that influenced political narratives through targeted advertising.
Mentioned as a provider of stablecoins that could facilitate investment in US Treasury bonds.
Mentioned as a major AI company that might require government intervention and a national stake.
Mentioned as a provider of stablecoins that could facilitate investment in US Treasury bonds.
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