10. Within countries, loyal support for the country’s leadership is demanded, and opposition to the war and other policies is squashed.
11. Direct military combat between major powers occurs.
12. There are big increases in taxes, debt issuance, money creation, FX controls, capital controls, and financial repression to finance the wars. In some cases, markets are shut down.
13. Eventually, one side beats the other and gains indisputable control of the new order, which is designed by the winning side.
I have many indicators suggesting that the monetary order, some domestic political orders, and the geopolitical world order are breaking down. These indicators suggest that we are in a transition stage from the pre-fighting stage to the fighting stage, which is roughly analogous to the 1913-14 and the 1938-39 periods.
World wars don’t always have a clear start date
To be sure, there is nothing precise about these indicators, the picture they paint, or the exact timing. For example, history has taught us that wars don’t always have definitive start dates with big military events followed by clear declarations of war. The Assassination of Archduke Ferdinand, the German invasion of Poland, and the bombing of Pearl Harbor are actually the exceptions. Economic, financial, and military conflicts typically arise before there are clearly declared wars.
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