Richard Poulden, MA, MBA, Barrister-at-law, the well-known leader of Black Swan and other companies, offers his view of the world for the new year. "We are in an era as we transition from the American/Western dominated world to the next. Last year I described the various moves by China to seize control of the world economy and that process is continuing ... exemplified during 2015 by the mad rush to join the Asian Infrastructure Investment Bank in defiance of the USA. We are also seeing massive and dangerous political instability in the Middle East, which seems to be completely misunderstood by Western governments.
There is no sign of real recovery in the world economy. Growth is anemic everywhere. In my view the growth in the U.S. is primarily the bringing forward of demand by effectively zero interest rates. Why wait two years for that new Corvette when it costs you nothing to buy it now? Sure, the U.S. raised rates by 25 basis points but this is negligible in the overall economy. The world stock markets are being led lower by China so it finally looks as though the correction is happening. Currencies are a hard call as, despite the massive QE printing, the dollar has performed well against the other major currencies.
It will probably still be the currency of choice to hold next year. There seem to be no rays of light in the commodities markets overall so this will be a time to watch for those markets to be oversold and buy. We have two major votes ahead of us this year ... the U.S. Presidential Elections and (almost certainly) UK referendum on the EU. The Republicans may well nominate Trump but in the election he will sink, Barry Goldwater like, beneath the Democrat waves. Britain will vote to leave the EU. To the surprise of everyone it will not make a lot of difference and actually to make the change could take many years."
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