The Nostradamus Awards

In 2012, I was asked to deliver an economic update presentation to a team that was tasked with ensuring the security of company employees across the globe. One of their requests was that I present some long- term geopolitical risks that I believed they should monitor.  Five+ years after that presentation, I thought it would be an interesting exercise to review my predictions, and analyze how accurate they were. As you can imagine, my forecasting was not completely off-base. If it had been, I would not be writing an article looking back and passing judgement on my accuracy!

To rank the accuracy of each prediction, I thought it would be fun to judge them on a Nostradamus scale. Other than the Mayans, whose reputation as futurists took a big hit when the earth survived the year (and the movie) 2012, Nostradamus was probably the world’s most famous predictor of future events.  With that, each prediction will be ranked from 5 Nostradamuses for the most accurate predictions, with a sliding scale down to 1 Nostradamus for predictions that, with the benefit of hindsight, are laughable.

Prediction 1: Chinese Democracy. With globalization moving forward and China’s economy becoming more intertwined with western developed markets, I foresaw a slow but steady pivot to a free market democracy.
Did It Happen: No! Say it again: NO!!!
Analysis: While I did not believe there would be a transformation within five years where China had become fully democratic, I believed we would have seen more signals that, from a social and economic standpoint, the country would be leaning democratic. But government controls on housing and credit and massaging economic growth to match forecasts continue to be prevalent. President Hu continues to consolidate power.  Maybe using a Guns and Roses album title for a prediction helped get the band back together. For that, I earn…
Score: One Nostradamus

Prediction 2: Vladimir Putin’s hold on the government would lead to a return of Russian Imperialism. With the 2008 war with Georgia still relatively top of mind, and 2012’s re-ascendance of Putin to the role of President, it seemed that Russia was in the early stages of reasserting itself as an imperial power.
Did It Happen: Any Ukrainians out there that would care to answer?
Analysis: Crimea, Ukraine and Syria. Enough said.
Score: 5 Nostradamuses.


Prediction 3: An Environmental Disaster would impact the global economy on a massive scale. In 2004 the Indian Ocean earthquake had killed 250,000 people. 2005 saw Hurricane Katrina devastate New Orleans. And 2011 saw an earthquake and tsunami cause a natural and nuclear disaster in Japan.
Did It Happen: Not Really. While hurricanes have impacted the U.S. on a regional basis, the situation that occurred in 2017 in Puerto Rico has a chance to have domestic political repercussions.
Analysis: A year after the Japanese earthquake and tsunami, environmental disasters were top of mind, though the ones we have seen since have not had the devastating impact to an economy that the tsunami and the resulting nuclear meltdown at Fukushima had on Japan.
Score: Two/Three Nostradomuses*


* (The dreaded asterisk). While this did not prove out, a bonus Nostradamus was awarded for making this prediction a few months before Hurricane Sandy hit the East Coast of the United States. Sandy resulted in a much publicized “bro-hug” between Republican Governor Chris Christie of New Jersey and Democratic Presidential Candidate Barack Obama which many felt aided Obama’s victory in the November 2012 election. Consider the Butterfly Effect involving Obama-Romney-Trump (and potenitally Clinton) had Hurricane Sandy not happened.

Prediction 4: Count on the U.S. getting involved in a new war. When analyzing post-WWII U.S. history, the country enters a new war arena about every 10 years. 2012 was 9 years after the invasion of Iraq. We were due.
Did It Happen: Sort of. The war on the Islamic State has been systematic, involving training and support of foreign troops, but without a specific front where U.S. troops are fully engaged.
Analysis: The score is based on the War on the Islamic State, but since the prediction was made the U.S. has not entered into a new arena. Unfortunately, if tensions continue to escalate on the Korean peninsula, the rating on this prediction will improve.
Score: Three Nostradamuses.


Prediction 5: Oil exporters in the Middle East will face social and domestic political turmoil due to lower oil prices. The increased adoption of renewable forms of energy like wind and solar would, by the 2030’s, significantly reduce global dependence on crude oil. When this happens, countries that are dependent on crude oil revenues to support social programs for their population, like Saudi Arabia, will quickly spend their reserve funds and be faced with a challenging domestic problem. Supporting social programs without oil revenue would be unsustainable, leading to radicalism and revolt, destabilizing the region.
Did It Happen: This prediction was more long term, but the impact of lower oil prices has changed the dynamic in oil revenue dependent countries.
Analysis: The prediction that oil prices would turn lower was correct, but my reasoning was off the mark. When I made these predictions in 2012 the Shale Gale in the United States which flooded the supply of global oil markets and tanked prices had yet to impact the market. While my predictions as to why oil prices would falter (renewables instead of shale supply) and the timing of when that would happen (a couple decades in the future instead of now), were off, lower prices have begun to erode social programs and decrease investment in non-oil industries in oil-rich countries.
Score: Three Nostradamuses. This may be a bit generous, but the full impact of structurally lower oil prices has yet to be felt.


Agree with the scores?

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