2015 – the world becomes a better place

We close the year with our usual “wild predictions”. These should not be taken literally, they are more like extreme scenarios (partly tongue-in-cheek) that are unlikely to actually occur, but would have a large impact and they highlight some real-life trends. Black swans, in other words.

Our immediate impulse was to come up with negative scenarios. 2014 saw plenty of those becoming reality, such as the war in Ukraine or the sudden strengthening of the terror group ISIS. And as we wrote earlier, these may not be coincidences but rather signs that we entering a more troublesome era. Also, negative news usually attract more attention: the average reader is more likely to click on a headline saying “35 thousand children dead in Nigeria” than on “35 thousand children NOT dead in Nigeria because of declining infant mortality”. By the way, the number is roughly correct; this is the annual decline in child mortality in Nigeria.

But on second thought, we decided to try to be positive about 2015 – and still stay engaging. This is partly because it is always more interesting to swim against the tide, and also because there is some chance that 2015 could indeed be a better year than 2014. The fall in oil prices, for example, if maintained, is boosting growth prospects in consumer countries, and leaves less money for exporters to finance (proxy) conflicts.

So let’s see the black swans for 2015:

Eurozone splits. The Mediterranean states of the EU (Greece, Italy, Spain, Portugal) have enough of the strong euro, and decide to exit and introduce their common currency. After debating the name of the new currency for months, they come up with “Libra-Solidus-Denarius”, after the three monetary units of the Carolingian Empire. Or LSD, for short. The LSD devalues immediately, boosting competitiveness and initiating quick economic growth in the region.

Southern Europe is flying high -50 LSD. Source: Barrelperday, Banknoty(EKB)

Death of coal. The idea of a global carbon tax rapidly gains traction in the wake of the apparent failure of emission trading schemes. The US, China and the EU agree to start levying the tax on all emitters from 2017 and to gradually increase the initially low ($10/ton) minimum level. Stock prices of coal mines collapse in the US and the Koch brothers sue President Obama. The EU rather has a debate about increasing subsidies to coal miners.

Down the coal pit. Forrás: ibtimes

Putin breaks under pressure and converts to Buddhism, resigns as president and nominates Mikhail Khodorkovsky as his chosen successor. He says: “This would also get rid of the “bald-hairy rule” of alternating leaders, as two bald guy would follow each other in office”. In the ensuing chaos, nationalist Alexei Navalny (a hairy guy) wins the election.

Bald and hairy and bald and hairy. Source: www.futilitycloset.com,

Pipeline plenty. The South Stream, Nabucco and TAP pipelines all get the go-ahead and are built. As there is not much demand for gas in Europe, they end up exporting mineral water to the arid regions of the Middle East. Global LNG oversupply in the meantime drives European gas prices to US levels, initiating a European industrial renaissance.

Towards new markets. Source: Barrelperday

Peak Chinese ghosts. Information surfaces that the Chinese economy has already accumulated 3 years’ worth of unsold goods, financed by the shadow bank system and local governments and stored in the infamous ghost cities. The oversupply crisis leads to global deflation. The Chinese leadership tries to “pull a Putin” and attempts to invade Taiwan, but it turns out that its navy also exists only on paper. Due to the general unrest in the country, the Chinese leadership is forced to introduce democratic reforms.

Of ghost towns and navies. Source: Reuters

Orban goes real(ity). The Hungarian Prime Minister tries to remedy his sagging popularity by moving into the mansion of the Hungarian Big Brother reality show. Former PM Gyurcsany tries to follow him, but gets voted out by viewers. Orban immediately asks for an interpreter to translate contemporary slang, and in his usual Friday interviews fellow reality show contestants are allocated a special Q+A block. John McCain calls him Big Brother Viktor in a Senate speech.

Surreality show. Source: Barrelperday, Valovilag5.com, Blikk.hu

Smart Phone. IBM collaborated with New Data to introduce a mobile phone with built-in artificial intelligence. The American Medical Association and similar bodies try to ban it, as the built-in health diagnostics app outperforms most generalist doctors. Life expectancy jumps by two years in countries where the phone becomes widespread. A startup writing the winning “intelligent assistant and decision support” software for the phone is touted as the “new Microsoft”.

Dr Watson I presume? Source: mickyhuang.com.br

As always, we welcome our readers’ wild “black swan” ideas in the comments section!

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