Results of 2016: dire predictions that came true

Nowadays there are lots of companies, sociological firms, research centers, agencies, funds, dealing with the predictions of future, including the nearest one. This business turned out to be very popular not only in developed countries that can be proud of their high-tech management technologies, but also in the states whose internal and foreign policy is actively using methods of informational manipulation. Among companies dealing with such spheres of predictions as economics, politics and geopolitics, social life, emergencies and so on, real market behemoths can be named. For example, Bloomberg, one of the biggest world financial news agencies, providing summaries that are needed not only businessmen but also the entire companies. It`s interesting to take a look and see which predictions of this solid and having an international authority agency have come true at the end of 2016. First of all, we will discuss some negative forecasts in the scale of global community that were made by Bloomberg at the end of 2015.

1. “Brexit” that lead to the split of the European Union, Scotland's desire to withdraw from the United Kingdom and the collapse of sterling and British markets.

Brexit

2. The global warming that was officially recognized and referred to world threats of the highest level on the climate conference in Paris. Top management of the leading states could not work out any system solutions allowing to stop global warming. And all this in case that specialists called 2016 the hottest year in the history of meteorological observations.

global warming

3. The decline of world oil prices, when they recalled about $100 per barrel with warm nostalgia in opposition of the cruel reality of $50 -42 per barrel. Among the main reasons were

  • The instability of world political situation that inflicts different countries` economies and the entire world market: wars in Syria and Ukraine, Great Britain`s withdrawal from the European Union, institutional crisis in the Old and New World.
  • Reduction of energy consumption in several countries, first of all in China, linked to the decrease of the economic growth temps.
  • The overheating of hydrocarbonic resources market, too high production volume
  • The success and extension of alternative energetics technologies
  • The influence of natural disasters on oil quotes (droughts, sand storms, cooling, floods and so on)

That all, strictly speaking, has proven true.

oil prices

4. The victory of Donald Trump in US presidential race. He was immediately called “The president of The Discrete States of America “in media. They don`t expect anything good from him neither at home nor in the world – except only Russia, but it isn`t obvious to everybody.

It wasn`t by accident that, as RBC reports, “in a week before the election the group of 370 economists including Nobel laureates Angus Deaton, Oliver Hart, Kenneth Arrow and the Worldwide Bank chief economist Paul Romer issued an open letter in what they summoned not to vote for Trump. They characterized the candidate as “a dangerous and destructive choice” for the country. This letter was signed by almost 800 economists. The authors of the letter point on the fact that Trump believes in decreasing budget deficit with the help of The Environmental Protection Agency elimination while rising the taxes could be a really efficient step. The economists emphasized that in case of his victory Trump will cause «a colossal danger to democratic and economic institutes functioning, and also for the country`s prosperity».

Trump

The fears of several scientists, politicians and public figures are quite natural. First of all , if Trump will succeed in his tax reform, so , @according to the data of the Tax Foundation research group, in ten years it will reduce tax income in budget from $4,4 trillion to 5,9 trillion. The reduction of taxes will lead to severe budget deficit in the USA. According to Committee for a Responsible Federal Budget, Trump`s fiscal policy will lead to the growth of US state public debt on $5,3 trillion in ten years – and it would mean growth to 105% of GDP in comparison to 75% at present.

And the rest of the world shouldn`t expect anything good from Trump, too.

The most dangerous is the fact that “the new US president denies the anthropogenic character of global climate changes and because of it he intends to remove excess restrictions on oil, charcoal and gas production. The suggestions of the elected president to the national primary products producers give up on Obama`s administration Clean Power Plan that suggested the rules for emissions in each state. Trump also stated that the USA will cancel their participation in the Paris Agreement on the climate – a global document aimed to reduce the volume of harmful emissions to the atmosphere. And it will cause a new threat to the environmental safety of the planet.

This unexpected for the majority of investors Trump`s victory has really dumbfounded them because it «causes serious risks for global economy and international financial markets. Financial markets have turned on the panic and getaway in defensive assets mode. The ambiguity period may last more than after Brexit, and it means that shares, raw materials futures and other risk assets can become much cheaper.

Trump`s trade barriers policy, if it comes true, will lead to the breach of US obligations in WTO and may cause a large trade war with China. Besides, while Trump is the president, the USA will hardly ratify the Trans-Pacific Partnership between 12 countries.

Based on BBC and RBC publications.

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