2016 Predictions

The following post originally appeared at the Impact Capitalist.

This is the time of the year for making predictions. While I don’t believe that anyone has a crystal ball, I do believe in patterns. These predictions are based on my understanding of economic and historical patterns, or cycles, that are based on hundreds, if not thousands, of years of research data. In 2015, I published a white paper entitled Don’t Be Surprised: How Business Owners and Investors can Understand – and Take Advantage of – Historical and Economic Cycles discussing similar topics. Please click the link above if you want to read that paper.

It’s possible that my timing may be a bit off, but I do expect all of these cycles to come true. I’ve tried very hard to make these predictions based on my reading of the data, not my personal opinions of what I like or dislike or what I want or don’t want to happen.

  1. Global stock market volatility will continue, if not increase. After a further significant decline, I expect that the major US-based stock markets will rise from late February or early March throughout the rest of 2016. I expect it to be a dramatic increase as well. European, Asian, and Emerging stock markets will not perform well and will likely be at a loss.
  2. This increase in US-based stock markets will have little, if any, correlation to the American Economy. The economic outlook is not good and I do expect the American economy to be in recession. Soon.
  3. Vigilante justice will become more prevalent. This is not just in the cities of Chicago, New York, or Baltimore, as would be expected. But I believe vigilantes to become active in the suburbs as well as small and medium sized cities as well (This should probably go on the predictions for 2017, but vigilante justice will likely become more well-known or pronounced by the 4th quarter of this year).
  4. Ladies and Gentlemen, the President of the United States of America, Mr. Donald Trump.
  5. There will be continued pressure on Capitalism and Capitalists, as Corporatist – or Crony Capitalists – continue to use political means and influence to further erode Americans’ understanding of what true capitalism really is. In fact, there will be polls detailing that more Millennials see capitalism as more of a “dirty word” than socialism. This is being seen in Bernie Sanders’ push for the Democratic nomination for President.
  6. Continued disintegration of “The Establishment.” This includes Republicans, Democrats, Policymakers, Corporatists, Bankers, and pretty much most other “Authorities.” “The people” will continue to get more angry and The Establishment’s power will continue to erode; yet The Establishment will not go quietly into the night. This continued disintegration of The Establishment is one of the many reasons why vigilante justice will increase as the year progresses (which is because of a disintegration of trust) and is also one of the many reasons why I except to see a President Trump. While Trump is a Crony Capitalist, it’s more important to the people that there is a perceived political outsider running for the highest elected office. Mr. Trump could have an epic fail moment as the campaign heats up, but so far it appears that the people are willing to forgive Trump’s gaffs and foibles because of the hatred of The Establishment.
  7. European economies will continue to falter. Some will see dramatic declines as capital leaves (no, capital will flee) Europe as each country deals with the vast amounts of debt and guaranteed payments to its citizenry.
  8. Modern Finance continues to evolve and progress. The year 2016 will be seen as the beginning of the end for the so-called “financial adviser,” as the “financial adviser” will continue to move toward irrelevance. The internet revolution eliminated “stock brokers” when the online trading platforms dropped trading costs from $50-$100 per trade to as little as $3.49 per trade. (Now, we see most platforms for pennies on the dollar). As the 21st century has progressed, “stock brokers” have become “investment consultants” or “financial advisers.” While there is a role for a true consultant or advisor for a family, the need for a paid person whose sole role is to “manage” an investment portfolio is diminishing. (https://intelligent.schwab.com)
  9. Technology changes but human nature (behavior) will not. The Establishment and the anarchists (not together, of course) will continue to push towards a cashless society, but for different reasons. The Establishment wants a cashless society to tax everything it can and to prevent bank runs. The anarchists want a digital currency because they believe this is the way to avoid government intervention. While the world will eventually be run by a global, digital currency, it won’t be in 2016. Yet, Establishment banks and anarchists alike both will make announcements of moves toward digital currencies in 2016. (FYI: Bitcoin is only a harbinger.)
  10. Those who have studied even a small amount of history know that climates around the globe have been changing for millennia. The rallying cry of “Global Warming” has been changed to “Climate Change” based on the fraudulent desire to gain more funds for political advocacy. 2015/2016 will actually be the year(s) when objective scientists look back to see the beginning of a Maunder Minimum, or “Global Cooling.” “When the search for truth is confused with political advocacy, the pursuit of knowledge is reduced to the quest for power.” – Alston Chase
  11. People desire to be free and it is human nature to wish/desire to determine one’s own destiny. This is why the idea of “America,” or the United States of America, has been so compelling. Given this, gun and ammunition sales will continue to increase, despite the desire of many in the federal government to confiscate American’s guns.
  12. The problems in the Middle East are only going to get worse, as the Shia and Sunni Muslims continue to increase both rhetoric and violence against one another. Like the Catholics and Protestants of Northern Ireland, the two Muslim sects will only make matters worse for American foreign policy. See the current feud between Iran (primarily Shia Muslims) and Saudi Arabia (primarily Sunni Muslims). (Unfortunately, American foreign policy will be to be involved in the “peace process.”)
  13. People will continue to accept “being watched.” Privacy is dead.
  14. The battle over increasing the minimum wage and minimum wage laws will increase. Some states will increase the minimum wage and other states will decrease the minimum wage. For example, Matt Bevin, the newly elected Governor of Kentucky, recently changed a decision by the former Kentucky governor. He lowered the state’s minimum wage for government workers and contractors from $10.10 an hour to $7.25 an hour.
    -Hardee’s responds to Minimum wage increases: (http://goo.gl/XFRj6W)
    – Starbucks is taking actions as well: (http://goo.gl/tvdbFb)
  15. The USA’s War on Drugs will begin to be accepted by the majority of Americans as what it really is: a debacle. More and more people will begin to call for the end of the “War.” (http://goo.gl/aDuHAn)
  16. The next Sovereign Debt Crisis has begun. If you thought 2008 was bad, you’re in for a huge surprise. It won’t totally manifest itself in 2016. But beware, it has begun. Fortunately, the worst of it is 1-3 years out. It’s time to get ready to pay the piper.
  17. While there have been many attacks over the last several years on the US’s financial system, a large-scale cyber attack that will finally cause major concern for most Americans will happen, if it’s not already taking place.

Please use this list of predictions as a tool to prepare for the future. Obviously, I can’t guarantee these predictions will come true, but I’m very confident in making these predictions. None of these predictions are offered as financial, legal, or tax advice. However, it probably wouldn’t hurt for you to review your personal financial, legal, and tax situations with your advisors.

Here’s to a 2016 where you can make both an Impact and a Profit.

Mark

amdg

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