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