In recent years, I have analyzed several long-term cycles, including demographic, economic, weather, war, inflation, and interest rate cycles. To my surprise, they all appear to converge around 2028. While geopolitical tensions will likely remain tense in 2025, the ultimate crisis may emerge as these cycles align.
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Simon Hunt, CEO of Simon Hunt Strategic Services, on January 11, 2025.
US Economy and US Stock Market in 2025
The US economy is weaker than portrayed. Employment data, revised down for the first quarter, shows a likely weak second quarter, with retail sales, adjusted for inflation, declining last year. Big US companies will be laying off thousands. The Biden administration has inflated economic indicators, but the reality is far bleaker.
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S&P 500 Bull-Trap Reversal, Rotation Fragility, and Cycle Risk in 2025.
I anticipate a sharp stock market drop by September 2025, with the S&P 500, the NASDAQ and tech stocks (Mag 7) falling by 20% to 40%, respectively. By Q4, Trump’s policies—tax cuts, deregulation—will take effect, and governments will likely respond with fiscal and monetary stimulus. Over the next few years, equity, base metal, and precious metal markets may surge. This will be highly inflationary, possibly mirroring the 1980s, when US CPI surpassed 13% and global inflation hit 15%. The key question will be the impact on long-term bond yields. Bond vigilantes will likely push 10-year US Treasury yields into double digits, with similar trends globally (excluding China), leading to a crash in asset prices, especially in an already highly leveraged system with a 360% debt-to-GDP ratio.
I expect US CPI to remain elevated, with the official CPI possibly reaching 13%, mirroring 1980 levels. However, John Williams of Shadow Government Stats estimates the real CPI averaged 10.8% last year.
This persistent inflation will push long-term interest rates into
double digits, likely triggering a crash in the debt-laden global
system. Comparing current inflation to the 1970s, we see a pattern of
volatility, with asset prices potentially deflating before structural inflation resurges, driving CPI to double digits.
Empire Cycle, Risks of War, and the Emergence of a Multipolar World
Today we have two major powers—one established (the US), the other emerging (China)—each with conflicting goals. One seeks to maintain global dominance, while the other rejects that vision. The only resolution could be through a significant crisis, possibly war. Afterward, we might see the emergence of a multipolar world, but this will likely take place in the early to mid-2030s, once we’ve gone through the crisis. The empire cycle, as outlined by voices like Ray Dalio, typically culminates in revolutions, internal conflicts, and proxy wars, followed by political and debt restructuring before a new world order emerges.
Empire Cycle, Risks of War, and the Emergence of a Multipolar World
Today we have two major powers—one established (the US), the other emerging (China)—each with conflicting goals. One seeks to maintain global dominance, while the other rejects that vision. The only resolution could be through a significant crisis, possibly war. Afterward, we might see the emergence of a multipolar world, but this will likely take place in the early to mid-2030s, once we’ve gone through the crisis. The empire cycle, as outlined by voices like Ray Dalio, typically culminates in revolutions, internal conflicts, and proxy wars, followed by political and debt restructuring before a new world order emerges.
Geopolitical tensions will continue to simmer through 2027,
with open conflict likely not breaking out until 2028.
with open conflict likely not breaking out until 2028.
The current geopolitical and geoeconomic picture is shaped by several major cycles: Since 1991, and potentially as far back as 1946, the US has sought to weaken Russia in order to control its vast natural resources. Simultaneously, China has emerged as America’s primary competitor, and to maintain hegemony, the US must constrain its rise. A related theme is Washington’s growing concern over the BRICS nations, which, if they mature into a serious rival, could undermine US dominance, particularly over the dollar. The war in Ukraine and tensions in the Middle East fit into this broader geopolitical strategy. Israel has long served as America’s foothold in the Gulf, and a key aim of Trump’s foreign policy could be to disrupt the China-Russia alliance while isolating Iran, given their strong ties. The US has already made progress in Brazil, where key ministries are anti-BRICS and pro-Washington, with President Lula aware of the risks of opposing the US. Despite potential challenges for BRICS under Brazil’s leadership, the group’s recent expansion with Indonesia’s full membership is a significant shift, especially in South Asia.
Geopolitical concerns are at the forefront for many investors, and they’re my primary worry. It’s not a matter of if war will happen, but when. Geopolitical tensions will continue to simmer through 2027, with open conflict likely not breaking out until 2028, though this is my best-case scenario. In the worst-case scenario, Israel, after defeating Hamas and Hezbollah, may decide to attack Iran. In response, Iran would retaliate with overwhelming force, using advanced missile technology, including hypersonic missiles, capable of bypassing Israeli and US defense systems. While the risk of war is high before 2028, I believe open conflict will likely occur no sooner than then.
Weather Cycles, severe Drought in the US, and Global Food Supply Shortages
However, one cycle that remains largely unaddressed but could disrupt Trump’s domestic agenda is the weather cycle. This cycle, particularly the Gleissberg cycle, a 90-year pattern, is aligning with US drought cycles for the first time since the 1930s. This could mirror the impact of the Dust Bowl. As the cycle begins to take effect this year, reports from areas like Pennsylvania indicate food shortages—beef and chicken in particular—which could drive soaring food prices by 2026. This will pose significant challenges for Trump’s efforts to regenerate America, especially considering the global nature of this issue, as the US is a major food exporter.
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Sean Hackett on weather cycles, their relationship to price action in agricultural commodities,
and the potential for a major drought in the US in 2025 based on the 89-year Gleissberg cycle. (see also [HERE])
and the potential for a major drought in the US in 2025 based on the 89-year Gleissberg cycle. (see also [HERE])
The weather disruptions are linked to a shift in the Atlantic Ocean’s cycle, transitioning from a 40-year warming phase to a cooling phase starting in 2025. Historical parallels show that this cooling period could cause extreme weather, including shorter growing seasons and disrupted food production. Additionally, the Sun’s quiet phase, along with the 60-year Yoshimura planetary temperature cycle and the 90-year Gleissberg cycle, will likely exacerbate these effects, creating a pattern of climate instability not seen since the early 1600s. This emerging cycle, largely overlooked, could lead to global food supply shortages and soaring food prices, impacting markets, debt, and interest rates.
Food, Crude Oil, Copper, and Gold Prices
The primary drivers of inflation are excess liquidity and rising wages, along with a trend where a larger share of wages is being allocated to capital on corporate balance sheets. Food prices are expected to rise sharply, and by 2026, oil prices are likely to increase despite efforts by President Trump. Disruptions, such as sanctions on Iran, could lead to China sourcing oil from Russia instead.
By 2028, oil prices could surpass $150. Once inflation cycles begin, they often become self-perpetuating as people hedge by buying in advance and companies stockpile goods. For example, copper prices could double from $7,000 to $14,000 by late 2027, reflecting the inflationary dynamics at play.
While
commodities are underperforming equities, they are relatively cheap and
primed for a rebound, especially with inflationary pressures. Precious
metals have already shown strength, and sectors like energy and food may
follow, particularly if weather disruptions occur. Although we won't enter a supercycle until the early 2030s, we could see a two-year commodity boom. This period will set the stage for a return to 4% global GDP growth, marking the true supercycle.
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Gold had a remarkable 40% rise last year, signaling inflation concerns and currency instability. Central banks are diversifying into tangible assets like gold, and both China and Russia hold significant, underreported gold reserves. If China’s currency faces pressure, it could announce gold backing, possibly from its 25,000 tons of gold. Russia holds about 12,000 tons. The BRICS nations may also introduce a gold-backed currency in the next five years, further driving gold's upward trajectory over the next decade.
Dollar
The dollar, often referred to as the "king of currencies," is expected to peak around 110 on the dollar index in the coming months before beginning a decline. By the end of 2025, it may hover closer to 90, and by 2026, closer to 80. By 2028, the dollar could fall as low as 65, marking a substantial decline ahead. Policies such as trade tariffs could impact the dollar, with some close to the Trump camp suggesting he may favor a weaker dollar to boost exports. However, the broader trend is clear: increasing trade among BRICS nations, excluding the dollar, will reduce demand for the currency.
China
Despite recent challenges, the Chinese equity market has surged, suggesting potential for an inflection point. A key shift in China is the transition to collective decision-making, moving away from President Xi’s sole influence, likely driving fiscal and monetary expansion. I expect a sharp recovery in China’s economy in the latter half of 2025, boosting global performance. The Shanghai Composite will likely mirror global market trends—approaching a peak, followed by a correction, and then a bull market into 2028. Despite negative narratives, China’s consumer spending is up 10%, and the property market appears to be bottoming out. Consumption patterns are shifting, but not necessarily unfavorably.
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Although we won't enter a Commodity Supercycle until the early 2030s,
we could see a two-year commodity boom.
Gold had a remarkable 40% rise last year, signaling inflation concerns and currency instability. Central banks are diversifying into tangible assets like gold, and both China and Russia hold significant, underreported gold reserves. If China’s currency faces pressure, it could announce gold backing, possibly from its 25,000 tons of gold. Russia holds about 12,000 tons. The BRICS nations may also introduce a gold-backed currency in the next five years, further driving gold's upward trajectory over the next decade.
Dollar
The dollar, often referred to as the "king of currencies," is expected to peak around 110 on the dollar index in the coming months before beginning a decline. By the end of 2025, it may hover closer to 90, and by 2026, closer to 80. By 2028, the dollar could fall as low as 65, marking a substantial decline ahead. Policies such as trade tariffs could impact the dollar, with some close to the Trump camp suggesting he may favor a weaker dollar to boost exports. However, the broader trend is clear: increasing trade among BRICS nations, excluding the dollar, will reduce demand for the currency.
China
Despite recent challenges, the Chinese equity market has surged, suggesting potential for an inflection point. A key shift in China is the transition to collective decision-making, moving away from President Xi’s sole influence, likely driving fiscal and monetary expansion. I expect a sharp recovery in China’s economy in the latter half of 2025, boosting global performance. The Shanghai Composite will likely mirror global market trends—approaching a peak, followed by a correction, and then a bull market into 2028. Despite negative narratives, China’s consumer spending is up 10%, and the property market appears to be bottoming out. Consumption patterns are shifting, but not necessarily unfavorably.
See also: