Tuesday, January 05, 2016


"A New Year beckons and the Financial Times once more indulges in the ritual of forecasting the 12 months ahead. Our experts and commentators set caution to one side and predict what will happen in everything from the US presidential election to the Euro 2016 football tournament. A quick judgment on how they did last year. Ed Crooks correctly forecast that the oil price had further to fall, a brave claim at the end of a year in which it had already halved. Martin Wolf said the ECB would adopt full quantitative easing, which it did. Clive Cookson rightly opined that Ebola would be eliminated in west Africa by the close of 2015. Gideon Rachman said Vladimir Putin would annexe no further territory in Ukraine and Europe. Not many at the end of 2014 were saying that. We got one wrong. Jonathan Ford was among many who assumed the British general election would end in a hung parliament (he went so far as to predict a national government). Otherwise, the fault last year lay not with the answers we gave but the questions we failed to ask. We did not foresee a surge of Isis-sponsored terrorism in France; that Russia would take military action in Syria; and that the migrant crisis would become a grave threat to the EU. In 2016 too, events will happen that are as yet beyond our imagination".
James Blitz, "Forecasting the world in 2016". The Financial Times. 30th December 2015, in www.ft.com.
I cannot pretend to have the omniscience of the great and the good of the Financial Times. However, I can point out that my own prediction list for the year just past was not all together inaccurate: a) that Matushka Russia would be economically hobbled by the decline in oil prices and Western sanctions 1; b) that American economic growth would continue, albeit not to the extent (as I put it: "Look for an overall growth rate of at lease three and half to four percent"; c) In the case of oil, I failed to take into account how catastrophic the commodities depression is, hence my (accurate enough but not on point) statement that: "the price of oil will remain subdued for the entirety of anno domini 2015, not rising any further than sixty to seventy dollars a barrel"; d) in the case of the European Union, my prediction that: "That the European Union will struggle onward in the seemingly eternal muddle that is its economic and political framework", was spot on; e) that Mme. Clinton and ex-Governor Bush would run for the office of President of the United States was accurate enough. Albeit I did not predict that ex-Governor Bush would run a catastrophic race. Nor did I predict (but who did?) the rise in popularity of Mr. Donald Trump.
As per my predictions for anno domini 2016 here goes:
i.) In the American presidential race, assuming (safely I do believe) that Mme. Clinton will be the Democratic party nominee, if the Republican party nominee is Donald Trump (which I do believe is a possibility if not necessarily assured), then look for Mme. Clinton to gain an easy victory. In the absence of a catastrophic terrorist outrage in the United States or a severe recession here in the United States. In the case of the nomination of Texas Senator Cruz, then look for a Clinton victory, not handily but clear enough. Assuming that nothing out of the ordinary happens either at home or abroad. In the case of the nomination of Florida Senator Rubio (which would be something of an electoral upset as of to-day), the race would be very very close with Senator Rubio having the advantage over Mme. Clinton.
ii.) Like those such as George Magnus, I look for the Chinese economy to slow further and further. With the possibility that China's foreign exchange reserve will decline below Three-Trillion dollars. With 'real growth' figures close to if not below four percent per annum 2.
iii.) That the United Kingdom will vote, by a narrow but clear margin to remain in the European Union. Assuming that in the autumn of 2016 a referendum does indeed take place.
iv.) That the Syrian civil war will continue without an serious effort at peacemaking. With the combined efforts of Russia, Persia and its creature Hezbollah being cancelled out by the counter-escalation of the Saudi-lead 'Sunni bloc'. With the Western powers not intervening in such fashion or scale to tip the balance militarily or diplomatically.
v.) That the tensions between Persia and Saudi Arabia (of which this week's breaking off of diplomatic relations between the two countries is evidence for) and its Gulf allies will simmer but not become burn-over into armed conflict of any sorts.
vi.) That the terrorist statelet ISIS will not be defeated militarily and will at the very best be pushed into a narrower territorial space in both Syria and Iraq. With ISIS-inspired terrorist outrages worldwide continuing.
vii.) That Matushka Russia's economy will continue to be in recession. With low oil prices and increased outflow of capital bringing ever closer (but not I believe in 2016) a future 'regime crisis', which will herald the downfall of the Putin regime.
viii.) That the American economy will continue to grow and prosper. Albeit not to the extent that I erroneously predicted one-year ago.
ix.) That the situation in Afghanistan will continue to decline militarily speaking with the Taliban making further and further gains especially in Helmand Province and in other outlying areas of the country.
x.) That the price of oil will not go above fifty-dollar a barrel. With their being a possibility of the price going below Thirty-five dollars a barrel. Something which a 'hard-landing' in China will make much more likely.
1. For my predictions, see: "OUR PREDICTIONS FOR ANNO DOMINI 2015". In Diplomat of the Future. 31st of December 2014, in www.diplomatofthefuture.blogspot.com. For Russia see: Leader, "World economy of so-so growth and fat-tailed risk". The Financial Times. 3 January 2016, in www.ft.com.
2. See: Dan McCrum, Jennifer Hughes and Robin Wigglesworth, "Investors play Chinese numbers game". The Financial Times. 16 October 2015, in www.ft.com.


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