Chips: To the West, and to the Inventing Nations in general, chips drive almost every economic product and are considered "ABC," or Anywhere But China. This schism literally breaks the world economy in two, as China and its allies are forced into second- or third-generation tech overall, while the West continues to rush forward in chip engineering and production at increasing innovation speeds.

No new chips, no dice, in this tech-driven economy.

AI: Recent reports that Microsoft Research has provided a large majority of the funding, knowledge, and headcount in China's total AI efforts, since they began, underline two important aspects of AI: 1) the West created and remains ahead in this top target of the Chinese Communist Party (CCP) Standing Committee and will remain so; and 2) US companies need to stop aiding and abetting the enemy in this field. Microsoft, Apple, Tesla, IBM, and Intel all need to reassess their roles in building Chinese industrial / military AI.

The Big, Dark Secret of Neural Networks will continue to constrain growth in this sector: the Black Box, the Wall of diminishing returns, and the requirement for Hypotheses all continue to emerge as complete fails in the NN world of AI - which means, virtually for everyone.

While new incremental predictions continue, major new discoveries remain elusive.

Energy: As well-intended activists continue to rail against any fossil fuels, the truth sinks in worldwide: getting to complete renewability will happen in two phases: 1) increasing natural-gas production to replace coal worldwide (particularly in China and India), for about 20-25 years; while 2) converting all sources, including these, as quickly as possible to renewables.

The efforts of OPEC+ continue to bring Saudi into CRINK's fold. How will the Saudis accommodate their war against Iran? That's the mystery of the year.

China continues to attempt to block Western efforts in green projects through global dumping of solar and windmill products; the West has figured this out and will respond in order to promote domestic manufacturers in these fields.

Healthcare:

Discoveries leading to innovation and economic growth fall into two clean categories: 1) the yesterday stuff providing important but incremental discoveries; and 2) the new stuff providing major breakthroughs in science, tech, and business. The world of innovation moves past social networks funded by clueless VCs and back into deep science, as in the '80s.

In the world of venture capital, it's back-to-the-future time. Most VCs are completely unprepared for technical issues and/or deep science, which leads to a surfeit of hesitation and dry powder.

Russia: Putin loses not only Ukraine, and more land in its east, but also his influence and/or control of the next layer of edge ex-Soviet countries. Kazakhstan, Moldova, Tajikistan, Georgia, and even Kaliningrad now are in play as they turn West; as well as Germany and eastern EU countries such as Hungary, Romania, and others, which will pull further away politically and economically from Russia as a result of Putin's War. It is not at all clear that Putin himself can survive these events, or the year.

Germany: While the three car companies and many of the mid-sized firms continue Merkel's pro-Chinese folly, the people of Germany react against this path, creating a political split, led by the Greens on the left and joined by many nationalists on the right. Political winds shift violently against trading with the enemy, and Scholz is caught in the middle, relegated to figurehead status.

German companies will lose share in China, part of the Chinese long-term plan, accelerating this problem.

China: As first noted in the Global Report in January 2015, China's domestic economy continues an accelerating implosion, made much clearer as the West strips away its various forms of collusion and support, with massive reductions in direct foreign investment, market support, and IP theft. GDP continues to drop, fraud in the real-estate sector continues to unfold, the banking sector is increasingly precarious, bankruptcies of companies keep growing, and Xi's repression of everyone maintains its breathtaking pace. Other effects of Disengagement by the West, and of internal protests and demographics, are all negative.

The real heroes in China are leaving China, while all the past heroes have been jailed or killed.

The Belt and Road Initiative, while dialed back, is now fully understood as a military / economic war preparation. Major areas of operation are the South Pacific / Indian Ocean islands and ports; Central and South America; Afghanistan and Pakistan; and breaking the EU, through control of Greece and Italy.

CRINK (China, Russia, Iran, and North Korea): We have moved into the world of the daily tightening of this alliance in energy sales, political alliance, military cooperation, and economic ties.

CRINK vs. the West is now the primary geopolitical story of the decade.

Turkey: Turkey continues to play a vital pivotal role and an equally impossible one.

This is what happens when an increasingly Islamic-government country tries to join the EU - it's an impossibility, given the world's other geopolitics.

Japan: Japan continues growing into its role as a co-leader in the Pacific Western alliance. While making nice trading noises to China as its largest trading partner, Japan builds its economy and military in preparation for a fight with China.

Australia: Oz finally believes in climate change, after decades of denial force-fed by its mining companies. It has succumbed to the inevitable logic of too much wildfire, too much rain and flooding, and too much crisis on a daily basis. Australia is now also fully awake regarding the threat posed by China, providing strong leadership vs. Xi in the Pacific and at home.

Meta is micro - a real MegaFUP. Introducing the term MegaFUP, for Mega Failure to Understand Potential. The Metaverse, just like IBM's Watson, is a firing offense, if your CEO is fireable. Fortunately, after 25 quarters of diminishing revenues, Ginny was; unfortunately for Facebook, after billions of dollars down the rabbit hole, Zuck is not. Perhaps they'll promote him out?

Sports betting catches fire. Forget Vegas. As TV NFL and MLB viewers know, it's time to bet on the pitch, the speed, the catch, the throw to home, the score, perhaps even the effect of the wind on a foul ball. Or, just bet on the bets. The sudden confluence of femtocell broadband and 5G, AI (think AWS ads), and years of lobbying state and federal governments has led us to this. Fasten your seatbelt, and make sure your wallet in is your back pocket before you do.

At $50B + for the next six months, the US alone could easily see $100B or more spent on sports betting.

E-currencies vs. e-payments - conflation leads to global risk. While it is easy to confuse these platforms, China uses the second to further the first, while the rest of the world is on autopilot as Beijing takes over the payment systems of emerging nations, using them to force the use of the digital renminbi ("e-Rmb"). Western governments will be too slow in understanding and reacting to this threat to the dollar, the SWIFT system, and privacy. China will succeed in using confusion to make major international inroads against the current global currency system of regulations and controls.

Crypto craps out. Marc Andreessen and the Valley VCs take a massive hit. But really, exactly who didn't see this coming? Note to the California pump'n'dump crowd: you can't have a currency without an army to back it.

Economic migration swamps political migration. The left doesn't like to talk about it, but people just want to move to a better life. By the billions. This is a major challenge for the developed, and the developing, worlds. No economically developed nation will avoid the pain and confusion of migration's pressures far beyond expectations, or their ability to cope.

Inflation continues to decline. Central banks created hyperinflation via quantitative easing and zero-percent interest rates and then "saved" us by abruptly halting QE and raising rates. This year, things are moving back to normal. Long live the Fed, but save us from it, too.

To Jerome Powell: After you've killed the lion, you can stop pulling the trigger.

And Let's Not Forget The Economic Costs of COVID - Including Long COVID. When Global Productivity Drops, Inflation Immediately Follows.

The AI emperor is confirmed to be half-clothed. While an explosion in neural networks provides incremental improvements, the big discoveries remain elusive, and this ugly secret gets out of the bag. The gulf between what the data team promised the management team continues to grow, leaving a sour taste in corporate boardrooms. 

It's time to move beyond NNs, and this is the year we will.

Work on climate change accelerates tremendously, on Russia's battle schedule. Thank you, Vlad, for accelerating the world's move to renewables by at least a decade.

Disengagement from China is no longer optional, and an increasing flood of companies and governments will be on this path. While China fights to hide itself as the country of origin for its exports, the West will be busy decoupling and distinguishing goods made elsewhere for import. FDI will drop, and damage from Chinese economic attacks will begin to decrease, for the first time in four decades. This leads to improved economic security for the West, and stronger markets.

Autonomy hits the certification wall. As it was before AI came onstage, certification for safety is a major chokepoint, now clearly in the pathway to self-driving cars, autonomous flight, and any other proposed autonomous robots related to human survival. In the US, neither the FAA nor the NHTSA nor any other agency today has the Explainable AI needed to certify autonomy. Oops. Watch the vendors back away from autonomy deadlines.

Special Bonus Prediction: Universe 2.0 is not your mother's universe. The James Webb Space Telescope confirms that the universe is very, very different than we, and astronomer Edwin Hubble, had thought. Ideas about its history, its size and age, the Big Bang theory, and every process that keys off these measurements, will now need to be measured again.

Perhaps Resonance theory, which predicted all of this, can be of some assistance.

Battery technology responds to the most intense financial and innovation pressures in tech history, leading to radical improvements in both energy density and safety. New materials, solid-state, cheaper, faster, better. Huge fortunes are bet, lost, and made.

10 pts. In the past year, more progress has been made in battery technology than ever, at every scale, from liquid to solid electrolytes, graphene anodes and cathodes, and silicon-based and iron-based tech to new lithium designs, with grid-scale batteries right in line.

Rapid, accurate COVID detection will be recognized as the necessary complement to vaccination, with both being understood as required in order to avoid continuing health and economic damage. New math and Pattern Discovery will provide the detection improvements needed to keep the world going on both fronts.

8 pts. Radical new testing techniques have been achieved, as in ProSpectral™ realtime testing with light and two drops of saliva. But the political need, currently replaced by massive home testing, has not been fully recognized, at least not outside of Asia.

Everyone makes chips, and chips are for everyone. We leave the era of chip monopolies and rapidly move into a completely new era of technological innovation at the most basic, often commercial, levels. Forget Intel; welcome Ford and GM. Forget PCs, servers, and smartphones and welcome Smart Everything.

10 pts. The world changed in a year, with the EU and the US (with the Chips Act and the Infrastructure Act) leading the way.

We accept the world of Absolute Insecurity, from IoT and home networks to ad tracking, the surveillance state, and completely invasive vendor behavior. While security companies remain prosperous, no one and nothing is trusted to be secure. This has a deep psychological effect on citizens, customers, and partners, in addition to the mammoth hidden tax put onto people, companies, and transactions by this forever-condition of theft and loss.

10 pts. No one trusts anything or any company in this new insecure world. We're all trying, and no one is any longer believing.

China becomes a pariah state, at last seen for what it really is and really does, to its own people and to others. Disengagement by the free world moves from a so-called impossibility two years ago to staged inevitability for all who can protect themselves.

10 pts. It's now called "friendshoring," and an increasing cascade of Western companies are doing it, with factories moving out of China. Even Apple is getting the idea.

SpaceX turns out to be well-named, since it now owns the commercial-space space. No one else is even close, from Virgin to NASA to Boeing and the Launch Alliance. Outside the Earth's atmosphere, Elon is an emperor.

10 pts. As Boeing and the United Launch Alliance continued to fail launches, and even NASA had similar issues with tech and timing, SpaceX proved it is the only time- and performance-reliable team in the US, even as rocket size, power, and missions grow at a furious pace. Hats off to Elon & Co.

Consumer spending goes up in the West, as too many years in COVID isolation drives enhanced consumption, particularly of luxury items, for oneself. This category is led by cars, cars, cars, and cars, with lots of expensive art, rare scotch, and other collectibles close behind as the category of Alternative Assets investment explodes, hedging against inflation.

10 pts. As pressure on car sales went ballistic, so did prices - for new cars, and then even more for used cars. Alternative asset price growth, from Paul Allen's fine-art auction at Christie's NYC to prices for fine whiskies, all reached record levels.

The not-so-well-hidden internal contraction and/or collapse of China's domestic economic machine accelerates, with "tells" moving beyond property development and related markets and into an increasing number of sectors, with higher bankruptcy rates and more desperate (if secret) corporate bailouts by the CCP. There are no private companies now in China. And new dictator-for-life Xi, although worshipped by children brainwashed on Xi Thought, is no longer the popular guy he so recently was.

10 pts. Anyone betting on Xi's popularity, at home or abroad, has lost that bet - and China's domestic troubles are now legion, and public.

The climate struggle is joined. Faced with certain damage, agreed science, and the threat of new mega events - and encouraged by international consensus - the world seriously begins the exciting and painful move away from generations of terracide. Things go faster than predicted only a year ago.

10 pts. Yes, this happened, and a good thing, too. Thank you, Vlad, for your help on this.

The world economic war for a middle class becomes a defining, and now public, fight and characterizes a policy pivot away from globalism and the ownership class and toward the neglected goals of reshoring manufacturing, restoring jobs, and increasing middle-class incomes.

10 pts. The dumbest book title of the last century, The World is Flat, is now nothing but a dusty joke in the annals of economic history. Globalism is dead, nationalism is rife everywhere, and most migration is economic, rather than motivated by other causes.