Looking Ahead to 2026
Fair to say that it’s getting easier to be in the prediction business. So I don’t expect any accolades for what I’m about to propose for the year ahead. We were correct to say that Trump would be re-elected and that he would move with ruthless efficiency to dismantle government agencies and destroy the delicate underpinnings of the U.S. economy with giveaways to the corporate class and the 1% and rampant deregulation. And that he would implement draconian immigration measures and create barriers to obtain entitlements that would thrust millions into poverty.
We were able to make these pronouncements by taking them at their world. If you re-read Project 2025 you’ll be pretty impressed by how much they were able to accomplish in such a short amount of time.
By all dystopian measures, Trump’s first year back in the driver’s seat has been a resounding success.
The amazing thing about the United States isn’t its resiliency, it’s the established advantage that comes from 80 years of capital accumulation. To quote Trump’s favorite president, Andrew Jackson, “to the victor, go the spoils.”
As the clear victor of World War II in so many ways, the U.S. Century began in earnest before the war’s end in Bretton Woods, 1944. I know, I know. “He’s fucking talking about Keynes again.” But hang on, there’s a twist.
U.S. geography makes us virtually un-invadable. Two oceans on the sides and allies (for now) on the top and bottom. Our natural resources make us self-sufficient. And our open immigration policy and commitment to higher education for decades made us the most desirable destination for the world’s top talent. But money makes the world go around and thanks to the efforts of a man named Harry Dexter White, the most valuable natural resource the United States came in the form of the U.S. Dollar.
As the world’s foremost authority on economic matters and chief negotiator for the U.K.—i.e. all of Europe—John Maynard Keynes hatched a plan for an international currency that would benchmark all currencies and provide liquidity for struggling nations and prevent industrialized economies from running roughshod over them. He called it the Bancor. But Harry Dexter White, the senior Treasury official representing the United States, beat the aging economist into submission and steered the conference toward a dollar-centered system rather than the supranational “Bancor” unit.
Because of this maneuver, the United States became the banker to the world. If you wanted to do business you needed dollars. But even the Bretton plan limited the supply of dollars, so when Nixon released the tether to gold in 1971, it allowed us to print unlimited amounts of money. And so long as it didn’t all circulate through the U.S. economy, it wouldn’t necessarily be inflationary. Of course, in the early stages it was but over time we learned how to harness the power of dollar supply. And we used our economic and military might to ensure that investments were made around the world wherever and whenever we pleased.
Trump is the beneficiary of rampant deficit spending and capital flows that he had nothing to do with for eight straight decades. The connection here is that the United States is now running on fumes because in the decades since Ronald Reagan took office, we have deliberately sent our production capabilities overseas. Why? Because we wanted cheap labor and Americans were asking for too much. We deliberately built an economy that works for the upper echelon of society by ensuring that accumulated wealth remained in the private sector among wealthy white male individuals and corporations. The Powell Memorandum come to life. And when service workers became too expensive domestically we farmed that out as well.
So now we have an economy built to service the capital needs of the corporate class and an aging population. Which is why healthcare remains one of the only growth areas of the economy. As such, the expense side of this industry is in the crosshairs of the Trump administration as well.
You see, capital is only allowed to accumulate in the pockets of the elite members of society.
So what does this have to do with 2026? Well, you reap what you sow. Now we enter the “find out” phase of Trump’s “fuck around” plan.
The data will show that holiday sales were only up marginally and that it was driven by higher prices, fueled by credit cards and propped up by the top 10%. So volumes will be down and this will lead to a robust round of January layoffs. Those lucky enough to have decent paying jobs will remain in those jobs and cross their fingers that they’re not in future rounds of cuts. Those out of the job market will stay out of it, gig work will increase and the official unemployment rate will continue to increase by a tenth of a percent each month until the markets can’t take it anymore and there’s a correction in the equities market.
On the debt side of the equation, with $9 trillion in debt coming due in 2026, we’ll have more frequency auctions, and despite the Fed’s best attempts to hold rates down, the long end of the yield curve will bleed out and the short end will fall under pressure as well. He’ll get his man at the Fed—maybe one of the Kevins, Hassett or Warsh, or maybe my dark horse Stephen Miran—but it won’t matter because inflation will remain at around 3% as the result of tariffs and corporate America’s last cash grab because they believe Trump and Bessent’s lie that the American consumer is going to be flush with cash from tax refunds.
Only the refunds will go to paying down credit cards, the corporate earnings season will be slower than expected and the Fed will be reluctant to cut rates again because it will be caught dead center of their dual mandate.
We’ll continue to see a flight to physical stores of value like gold and silver, and eventually the stock market will stabilize with the pundit class and Wall Street seizing on any good news or current lie from some big tech company. There will be more mergers. And a ton more personal and corporate bankruptcies.
At some point, a gasket will blow in a particularly hard hit area of the country and unrest will crop up in some form. The Trump administration will use a heavy hand to quell it and perhaps even lean into some Gulf of Tonkin incident to foment a military operation that distracts us. Mini fires will erupt throughout the country and Trump will continue to act out in ways that make even GOP leaders start to distance themselves from the administration in advance of the midterms. By the summer, we will be in a full blown recession even though we all know we’ve been in one since 2008. We never really recovered. But the numbers will be irrefutable.
Around the world, debt yields will climb higher and higher until one or two nations reaches a tipping point and fears of a new global debt crisis take hold. Central banks, including the United States, will release a new round of quantitative easing that reach 2009 levels but not exactly pandemic levels and we’ll have a resurgence of inflation as Trump goes bananas on our foes and allies alike with threats of sanctions and tariffs and even war.
The man himself will unravel before our eyes, even more so than he currently is, and 25th amendment cries will reach a fever pitch by fall. The Democrats will take back the House in the midterms and the GOP will hold the slimmest of majorities in the Senate and we’ll finally reach deadlock but not before Russell Vought goes into overdrive to shutter one or two major federal agencies. This too will spark a constitutional crisis and threats against the Roberts’ Court will turn the country inside out with executive orders from the White House attempting to turn us into a police state.
Wall Street will somehow regain its footing toward the end of the year, even though the AI capital bubble will have deflated long before that because the cheap and easy money coming from the government will have nowhere else to go.
And at some point there will be an event on the world stage that will cause a momentary spike in oil prices. It won’t last long because we’ll still be oversupplied through most of 2026, but this will fuel inflationary fears even though prices will have declined sharply toward the back half of the year because, you know, recession.
Wish I had better news. A happier prediction. We put our hand on the stove and got burned in 2016. And somehow, we forgot the pain and so we did it again. There will be people who make a bloody fortune in the months ahead because they know how to make money from misery. But mostly it will be misery. And the one person who will have prevented the next Great Depression, complete and utter catastrophe, will be Harry Dexter White. The man who gave us the gift of unlimited money. Who gets it and what it’s worth…These will be the central questions of the Trump era.
