Six signs that 2016 will be much worse than 2015
Over the course of 2015 we witnessed several events that had, and will have, negative repercussions on our individual freedom. Orwellian totalitarianism is increasingly creeping into our everyday lives. How much more intrusive will the violations of our liberties get and for how long will the establishment get away with it? These are questions that remain unanswered. With regards to the financial system, no real solution was found to issues such as those in the Eurozone. Furthermore, the financial systems as a whole, once again, got deeper into debt. For how much longer can central banks and governments continue kicking the can down the road without any real reform? I will try to answer these questions and identify trends for 2016 by looking at six key issues that have had an impact this year.
1. Geopolitical developments
We witnessed some troubling geopolitical developments during this past year. From the continuing conflict between Russia and Ukraine, territorial disputes between Japan and China, the escalating proxy war in Syria, the refugee crisis in Europe, the rise of religious tensions all over world to the rise of the Islamic State, the world has become increasingly unstable.
Going into the details of these conflicts is definitely beyond the scope of this article, but the fact is that we are witnessing several developments, all of which have the potential for a wide-scale escalation. We should get ready for a period of increased instability, particularly when it comes to politics and security issues.
2. Totalitarianism is on the rise
he sudden rise of ISIS and its affiliates is a disturbing development that produced mixed feelings, such as fear, rage and sadness amongst many more. Ultimately, they lead to the same result: States seeking more control by curbing individual liberties. One example we see is how, under the guise of fighting terrorism and illicit activities, Western countries are limiting the use of cash. JP Morgan has placed restrictions on the amount of cash that is allowed to be deposited and several European countries have banned large transactions in cash. Looking to the future, it seems that the current situation will continue to get worse and that we are headed towards an Orwellian state, under which no one is entitled to his financial privacy anymore.
On the EU level, a disturbing development is the fact that FRONTEX (the EU agency responsible for border management) has stated that, should the refugee crisis get out of hand, it will intervene to secure the EU borders, even if the respective countries oppose its action. On a global level, the Transatlantic Trade and Investment Partnership (TTIP) says that arbitration courts will have the potential to annul national sovereignty when it comes to jurisprudence. We expect these tendencies of centralization to continue.
3. Greece is “saved” and coming to a country near you?
In the beginning of this year, the topic of a potential “Grexit” dominated news cycles over several weeks. It seemed like a realistic possibility that Greece might leave the Eurozone. Instead, after yet another one billion Euro bailout package, Greece was “saved” and a “Grexit” was off the table (for the time being). Once again, political idiocy prevailed over economic rationale. In the end, delaying the inevitable failure of the Greek financial system is all that was achieved.
More astonishing than the fact that Greece, a country that represents less than one third of one percent of the world GDP, received another bailout package, was how it all played out. A bank holiday was announced, capital controls were implemented, cash withdrawals were massively restricted, the stock market closed and any assets inside the banking system (even safety deposit boxes) were not accessible by their owners. This is an unprecedented level of infringement on private ownership that has never been seen in a modern Western coun
4. Fed hikes interest rate
The Fed hikes interest rates for the first time since the financial crisis of 2008. For the past 7 years we have had an interest rate band between 0-0.25%, which essentially is “money for nothing”. With its decision, the Fed became the first large (and the leading) central bank to effectively hike interest rates. Meanwhile, on the other side of the Atlantic, the ECB cut its deposit rate (slightly) deeper into negative territory and prolonged its QE program that is now expected to continue until March 2017. Since last summer, the media continuously speculated about a rate hike and its timing. So, will interest rates start to normalize after the long-awaited change in monetary policy? We don’t think so! We believe that the main reason the Fed decided to hike rates was to regain some of its lost credibility. For the past seven years the monetary floodgates have been open with no clear positive effect on the real economy. A continuation of zero interest rate policy (ZIRP) would have been an admittance of failure. With this slight rate hike of 25bps, the Fed is trying to show the world that its policy during the financial crisis worked.
5. Defaults surge as global debt explodes
Now with oil hitting rock bottom, some oil producers are operating at a loss and only continue operations to be able to make their interest payments. Standard & Poor’s rating of junk or speculative corporate bonds has gone up to 50% from a previous 40%. Unfortunately, the world did not learn its lesson after the financial crisis and instead of deleveraging, it has accumulated more and more debt, as seen in the chart below. Of course, it’s not only the corporations; governments have not learned their lesson either.
The issue of debt will continue to follow us for some time to come; the house of cards will eventually collapse, but we think that politicians and central bankers have the will to “do whatever it takes” to prolong its eventual demise. What we will likely see in 2016, however, is a massive increase in defaults. Yields for high-yield issuers are already at alarming levels. What exactly will be responsible for the next crisis is hard to foresee. It might come from the possible collapse of the shale industry, the strengthening dollar that will make it very hard for emerging market countries to repay their debts, or a completely unexpected sector (who knew what subprime was back in 2006?).
6. Oil price collapse
Meet the “smart” grenade launcher. The weapon is portable and can be carried to the battlefield by a soldier, or even better, a DARPA killer robot who has orders to search and destroy a specific target which will be identified by facial recognition. Once you are located, the X-25 possess a laser range-finder built in that can detect the distance to the wall or trench that you’re hiding behind and then blow you and your cover to oblivion. Again, there is nowhere to run and hide.
Every Move You Make,
DARPA Will Be Stalking You
And even in the unlikely event that you can slip into firing range of your intended target, theBoomerang countermeasure system uses an array of microphones which will be able to instantly decipher the speed and direction of your shot, based on the muzzle report and the shockwave of the bullet as it zips past. Immediately, Boomerang knows where the shot came from, and even what kind of weapon was utilized. This system will reduce all future sniper missions to a Kamikaze endeavo
China this month tested a new rail-car-mounted long-range missile capable of hitting targets in the United States, according to American intelligence agencies monitoring the test.
Beijing has been developing rail-based missile launchers since 1982, according to declassified CIA documents. The most recent test is a significant milestone for Chinese weapon developers, demonstrating that Beijing is moving forward with deploying the DF-41 on rail cars, in addition to road-mobile launchers, officials told the Free Beacon.
Military analysts say the mobile basing of missiles is designed to complicate preemptive attacks on nuclear forces. The train carrying the missiles includes missile launch cars, a command car, and other system support railcars, all disguised as passenger train cars
Beijing's current warhead stockpile is currently estimated to include around 300 warheads.
China is believed to have obtained rail-mobile missile technology from Ukraine, which, during the Soviet era, built the SS-24 rail-based ICBM, according to a report by Georgetown University’s Asian Arms Control Project.
"If that missile train hosts the DF-41 ICBM it means it will also have a MIRV potential," Karber told the Free Beacon.
"The combination of high-speed mobility, launch cars disguised as civilian passenger trains, tunnel protection and secure reloading of missiles, coupled with multiple warheads, makes the system extremely hard to regulate or verify the number of systems."
The new documentary film “World Order” was aired on Rossiya 1 television channel Sunday. Vladimir Putin was among those interviewed for the documentary. For your convenience Sputnik compiled best bits and pieces of the interview with the Russian president.
Some countries out there have "lost a sense of reality" thinking that they could tell Russia how to conduct its politics. That isn't going to happen, according to Putin.
"I guess that political nouveaux riches have lost a sense of reality… There are some countries and nations that will never accept a secondary role, a role of an occupied country or some kind of a vassal. It will end sooner or later. Soon enough, I guess," Putin said
Geopolitics is an important issue the world has always faced. Putin thinks if the geopolitical struggle cannot be avoided, then it should at least be civilized, with its principles uniformly understood and supervised.
According to Putin, the West has now realized that it made a mistake by supporting an anti-government coup in Ukraine. However, now the West isn't willing to admit it.
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