In the 12 months following this August 2022 episode, the number of U.S. job openings (around 10–11 million at the time) will decline by roughly 300,000–400,000 per month, reaching approximately 5–6 million job openings by around August 2023.
“jobs and we've talked about this every month as we watch it, uh, finally dipped under 11 million, as Sachs predicted. You know, we're going to shed 3 or 400,000 jobs, it seems, every month, uh, which should take this, uh, you know, ten, 11 million number over the next year, down to maybe 5 or 6”
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Explanation
US job openings declined only gradually and remained well above 8-9 million through mid-2023, not falling to the predicted 5-6 million.
From the market lows discussed earlier in 2022, the S&P 500 will rally to a range of roughly 4,000–4,300.
“I think at the time, initially I think I said, you know, it rallies to around 4000. I was a little off rallies... The S&P yeah probably gets to 4000 204,300.”
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Explanation
The S&P 500 did trade within the predicted roughly 4,000-4,300 range at various points in late 2022 and 2023.
By October–November 2022, energy supply and pricing issues will again be the central focus of geopolitical and national security debates, at a level of complexity comparable to earlier in 2022 (e.g., around the onset of the Ukraine war).
“if you play all of that out, you start to see an issue where by, you know, October, November of this year, we're back into the same complexity, where energy is the tip of the spear around which everybody starts to debate all of the national security issues that we have to deal with, the Ukraine war, etcetera, etcetera.”
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Explanation
Energy supply and pricing remained a central focus of geopolitical and national-security debate tied to the Ukraine war in that October-November 2022 window.
If U.S. CPI inflation remains at about 9% three months after this August 2022 episode (i.e., around November 2022), then the Federal Reserve will continue raising interest rates beyond the then-current levels rather than stopping.
“If we still have 9% inflation three months from now, then I don't think the rate increases are done.”
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Explanation
Inflation remained elevated into early 2023 and the Federal Reserve did continue raising rates beyond that point, matching the conditional prediction.
Given U.S. CPI readings successively above 5% in 2021–2022, the Federal Reserve will ultimately need to raise the federal funds rate to at least the level of CPI (i.e., into the mid‑single digits, roughly double the then‑assumed equilibrium rate) in order to bring inflation back under 5%.
“We've never seen a moment in history, in American history where when CPI has printed successively above 5% that it got under 5% without fed funds getting to that same number. So we should all hope that this is the exception that proves the rule. But there's an enormous amount of data that would tell you that we have to take rates to double what the equilibrium rate is thought to be right now.”
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Explanation
The Federal Reserve peaked at roughly 5.25-5.5%, well below matching CPI's 9% peak; inflation fell without rates rising to match it one-for-one.
Over the coming years, as deglobalization and national-security–driven supply-chain reshoring proceed, the U.S. (and broadly the developed world) will experience a persistent regime of higher interest rates, higher inflation, and higher input costs compared to the pre‑2020 "cheaper, faster, better" globalization era, even as overall economic growth can remain positive.
“That era of cheaper, faster, better is over. And what comes with that is better national security. But the cost of that better national security is higher prices, higher prices, less growth. And there's nothing that we can do to avoid that... I actually think that there's enough excess slack to be absorbed by all of this free money, that I think you can still have sustained growth, but it will come with higher interest rates and higher inflation and higher input costs.”
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Explanation
Interest rates and inflation did stay elevated for longer than the pre-2020 era, partially matching the prediction, though the framing as a fully new persistent regime is debatable.
In the near term (within roughly the next couple of years from August 2022), global financial markets will be repeatedly destabilized by successive shocks including: (1) flare‑ups in various geopolitical or economic "whack‑a‑mole" crises, (2) significant stress or partial implosion in U.S. consumer credit, and (3) an attempted power grab by Jair Bolsonaro in Brazil following an election loss; these events will contribute to a persistently inflationary, fragmented global environment that ultimately requires higher interest rates to normalize.
“there's going to be a whack a mole that emerges. That's going to tilt the markets. Then the consumer credit thing will implode. That's going to tilt the markets. Then Jair Bolsonaro will try to take over Brazil. That'll tilt the markets. And we'll go back to this, you know, inflationary, fragmented, globalized view of the world that just frankly takes higher interest rates to normalize.”
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Explanation
Both specific sub-predictions materialized: US regional-bank/consumer-credit stress emerged in 2023, and Jair Bolsonaro's supporters staged the January 8, 2023 attempted power grab in Brasília after his election loss.
Given growing bipartisan U.S. support for defending Taiwan, there is a very high probability that the United States and China will eventually fight a war over Taiwan (or in the broader Western Pacific) at some point in this century.
“I think there is bipartisan support now to defend Taiwan. I actually think that that is in the cards. I think there's a very high probability that we actually end up in a war with China.”
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Explanation
A century-scale prediction that has not yet had time to resolve.