But­ting heads.

The McLeod River Post - - Front Page - Ian McInnes The McLeod River Post

The count­down is on. U.S. Pres­i­dent Elect Don­ald Trump is ex­pected to take of­fice on Jan­uary 20, 2017. I must ad­mit after the Brexit mar­ket re­ac­tion I was ex­pect­ing a lot more on the po­ten­tial, “Trump,” ef­fect. Maybe it’s hope that things will turn out OK. I guess it’s a bit like a rab­bit stand­ing still in a field and hop­ing the fox won’t see it.

I think things will start OK then start to un­ravel. Hav­ing a coun­try run by busi­ness­man in­stead of politi­cians is cer­tainly a change. There are al­ready in­di­ca­tions of pro­tec­tive poli­cies, which may be con­ta­gious glob­ally. We did this in the 1920s and 1930s folks and we all know where that went.

I ex­pect Trump and China to butt heads. This is likely go­ing to come as a shock for China as it has been ag­gres­sive, par­tic­u­larly in the South China Sea. China will have more cun­ning plans than Baldric (for Black­ad­der fans) and will likely have to amend or tear some up in the face of a U.S. show­down. Will it come to a shoot­ing war? Prob­a­bly not but it could. I ex­pect North Korea to more ag­gres­sive and could be a proxy ag­gres­sor for its friendly neigh­bour.

As for Rus­sia and the new U.S. ad­min­is­tra­tion. It’s all smiles right now. I don’t ex­pect it to last and I wouldn’t be sur­prised to see Rus­sia test NATO’s re­solve.

The price of oil has breached US$50 and trades at the time of writ­ing in a US$50-$55 range. If and when, and I ex­pect the lat­ter, if be­comes clear that oil pro­duc­tion cuts are not ac­tual or prov­able we could see a de­cline again. In the mean­time, shale pro­duc­ers must be hedg­ing the hell out of prices and go­ing for broke to take mar­ket share while they can.

The U.S. Fed­eral Re­serve has raised rates 25 ba­sis points. It had to for face sav­ing rea­sons I think. Now it is say­ing there might be an­other three hikes in 2017, we’ll see. That tune got played last year too. One thing to keep an eye on folks, in­fla­tion is mak­ing a come­back. Some is good, more is bad. We had de­fla­tion/stag­na­tion in the 20s fol­lowed by in­fla­tion in the 30s and 40s, some of it was at­trib­uted to print­ing money. What’s QE (quan­ti­ta­tive eas­ing)? Print­ing money to us lesser mor­tals. Does any­one see a sim­i­lar­ity here?

As I ex­pected Italy said no and the Prime Min­is­ter, even­tu­ally re­signed. All eyes are on Italy’s trou­bled banks now and what hap­pens next could trou­ble the Euro, as could Greece. Aside from Italy, the next shock to the Euro­pean Union (EU) is likely to be the gen­eral elec­tion in the Nether­lands in March, which may be be­fore or after the UK trig­ger­ing Ar­ti­cle 50 on Brexit. Stay­ing with the Nether­lands, the so-called populists are out in front ac­cord­ing to the polls and a ma­jor vic­tory could mean ref­er­en­dums on Euro and EU mem­ber­ship.

When and not if Ar­ti­cle 50 is trig­gered by the UK the ne­go­ti­a­tions will start. Global mar­kets are ob­sess­ing whether it will be a hard Brexit, a soft Brexit, a grey Brexit or a black Brexit. I be­lieve that ne­go­tia­tors for the other 27 na­tions may be in pun­ish­ment mode at least to be­gin with. My gut feel­ing is that when push comes to shove the EU needs the UK, es­pe­cially its cash, more than the other way about. I also be­lieve that when it comes to get­ting a con­sen­sus from 27 na­tions, all with dif­fer­ent agen­das, ne­go­ti­a­tions may be lengthy and fruit­less. I be­lieve the UK team may have to take the STICKIT ap­proach to Brexit and just quit.

Just to keep you wor­ry­ing about your job I read re­cently that out­sourc­ing spe­cial­ist Cap­tita is to shed 2,000 jobs, which will be re­placed by, “pro­pri­etary ro­botic so­lu­tions,” nice. I ex­pect such moves to be­come the norm as tech­nol­ogy al­lows.

In­dia’s econ­omy looks to take a hit be­cause of a self-in­flicted wound. While the idea in a ma­jorly opaque cash econ­omy of ban­ning 500 Ru­pee and 1000 Ru­pee notes looks pretty sound the plan­ning and im­ple­men­ta­tion looks to me like a de­ba­cle on a mon­u­men­tal scale.

Ya­hoo has re­vealed that around one bil­lion ac­counts, maybe mine, maybe yours too, were hacked THREE YEARS AGO. The com­pany found out from out­side sources too. RE­ALLY? Is it any won­der why I don’t want to let or­gan­i­sa­tions have my cell num­ber for added se­cu­rity.

Will Kevin O’ Leary run for lead­er­ship of the Con­ser­va­tive Party of Canada? Will he bid for the throne or will he be the power be­hind the throne? Maybe. Will de­bates and in­ter­views make good read­ing and TV for all kinds of rea­sons? I think so.

The bat­tle for Aleppo is al­most over. There have been re­ports of war crimes, in­clud­ing the killing of civil­ians. Once again, the world has stood back and talked while the slaugh­ter goes on. The war will go on. The West has been crit­i­cised for in­ter­ven­tion in Afghanistan, Iraq, Libya and more. Yet here we have not. Is the re­sult not the same? As we ap­proach the sea­son of good will. Why can’t peo­ple just talk their prob­lems out? Why can’t some lead­ers lis­ten to the needs of their peo­ple and work for the com­mon good? Why is cor­rup­tion and greed en­demic? In the words of the

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