Let me dream a little….
Ok, as we touch down on the greasy runway of 2016, let me throw a few big predictions around.
I know these are long-shots, but there’s no downside to making them. If I get them right, I can point back to this post in a year and remind people how clever I am.
If I’m wrong, the world will move on and no one will remember.
Welcome to the world of economic forecasting.
Anyway, here’s Jon Giaan’s big calls for 2017:
1. 2017 will be the last roll of the dice for Main Stream Media
Pretty much the only profitable business centres that the main stream papers have left are their property sections – most of which is online already. If it wasn’t for real estate, the big papers would be dead already.
The ‘fake news’ controversy – the proliferation of bulls$%t sites pushing all sorts of propaganda – finally gives the MSM the existential justification it needs.
That is, you need respected MSM outlets to help you filter out the bulls$%t. (I know, the irony!)
I expect the MSM to go hard on this angle. Expect some sort of ‘MSM-certified’ badge. Expect public shaming of people who use alternative news sources.
It might work. But if they don’t pull it off they’ll go under in 2018.
2. The Return of Propaganda Politics
You can be sure that politicians the world over are studying Trump’s victory (and how to replicate it).
I think the key message is the way Trump focused on the felt-experience of his voters, pretty much leaving facts to the side. He’s achieved some high-profile, big-ticket wins straight out of the gate, and you can be bet he’ll stay focused on the ‘brand’ of his presidency.
Which is another way of saying he’ll be a propaganda machine.
The other key asset Trump had was authenticity. People believed him, even if they didn’t believe what he said. (Huh? Yep, they’re mutually possible.) Politicians don’t have this authenticity. Politics as a game forces them to constantly speak through their hands. They’re on a hiding to nothing.
Expect more billionaire brand mangers making hay by telling it how it is.
3. Turnbull is toast. Hanson is vegemite.
Turnbull is a lost cause. It is clear he can’t control Abbott and the right, who are all the more emboldened following Trump’s victory. Abbott will take back the leadership in 2017, despite being unpopular and unelectable.
However, if they don’t play it right, Hanson will kill the Liberal party. Recently, Dick Smith was talking to Hanson about immigration. If Smith can get Hanson to focus on the numbers of immigration, not the ethnic mix, then Hanson will have much broader appeal than people realise. Hanson is already polling near 10% in Victoria. A Smith-Hanson ticket would be electoral dynamite.
I think the right of the Liberal party mistake support for Hanson as support for conservative Christian politics. It’s not. It’s a push back against mealy-mouthed politicians who would sell their own mother to China if they could get a good price per kilogram (looking at you again, Andrew Robb, Sam Dastyari). Hanson is popular because she is authentic. She’s like Trump in that sense. (People vote for the person, not the policies.)
The Liberal party will split itself in two trying to appeal to Hanson supporters, and then have their hypocritical arses handed to them regardless.
4. Interest rates have bottomed
I’m talking both here and around the world. Interest rates have gone as low as they’re going to go.
Does that mean I’m suddenly more bullish on the Australian and global economy? Do I suddenly see things in a much rosier light?
Hardly. This is another one we can blame on Donald Trump.
Trump has said he’s gone to work the fiscal levers hard to get the American economy going again. He’s going to spend big and cut taxes. In that sense, he’s an old school Keynesian.
And with Trump’s new approach, we can put a nail in the coffin of Quantitative Easing. Since the GFC, America (and most of the world) has pushed hard on the idea that the way to get things going again was to flood the world with cash.
That was the idea. But it didn’t really work. Rather, banks and firms took the cheap cash and just ploughed it back into their own shares – bidding up the share prices and creating a bit of a share-market bubble. That was kinda great for some people, but it didn’t really get economic activity going again.
I reckon it looks like Trump is going to walk away from all that, and try to spend his way out of trouble. And it will probably work (or at least work better).
That will give the Fed the room it needs to keep bringing rates back to less crazy levels.
That in turn will take pressure of Aussie interest rates. When the US had super low rates, we also had to have lower rates or money would start gushing our way and the Aussie dollar would rise.
So I don’t think this means that rates will rise, but I think it’s the death knell on eight years of rate cuts and the negative interest doctrine… which didn’t really get us anywhere.
And with banks gouging rates at the moment, I think there might be arguments for fixing your rates… though it’s still complicated.
Anyway, there’s four big calls for you. I’m going out on a limb. I’m willing to make myself look like a tit to call it how it is.
But I know you wouldn’t expect anything less from me. And if I ever under-deliver on this front, be sure to pull me up on it.
Hope you had a fantastic year. I’ll be off on a break, but look forward to jumping into more wealth, health and financial freedom with you next year.
All the best from all your team at Knowledge Source,
Got any hot tips for 2017?