Q1 2016 News Trends & Stories

April 14, 2016

Here are the trends and stories from the 1st Quarter that will help you stay informed on current events, particularly the ones likely to impact your time and money.

Economy & Financial Markets

Coming into 2016, the Federal Reserve promoted an expectation that the US economy and employment would grow out of the recession without further quantitative easing. Improving conditions would support quarterly increases in interest rates. Market response to the Fed’s small interest rate increase in late 2015 and global slowdown was sufficiently unnerving that the Fed backed down on further increases in the 1st Quarter. Concerns about the global economy and the strength and stability of the financial markets grew.

Global 3.0

The shift from Global 2.0 (industrial economy) to Global 3.0 (networked economy) is accelerating.

The divergence in economic strength between cities and regions leading in Global 3.0 and other areas is becoming more pronounced. No less than The Economist pointed out that the manner and levels of US corporate establishments profits where unhealthy for the economy. Indeed, consistently above market profits result from an increasingly lethal combination of advanced technology and political corruption.

Invisible to the average person, continued artificial intelligence and automation is significantly shifting the income and employment landscape. Look for more discussions this year regarding minimum incomes or income guarantees in the developed world, as robotics and other forms of automation reduce employment opportunities.

Expect civil drone use to be approved in the US in 2016 resulting in an explosion of domestic applications in retail, agriculture, real estate, and media for the foreseeable future.

Surveillance Capitalism

Every day brings another example of lawlessness in the digital space. In March, business professor Shoshana Zuboff published her article on Surveillance Capital coining a term that brilliantly captures the systemic lawlessness contributing to corporate profits.

Zuboff is publishing a book on this topic next year. Meantime, we are naming her Solari Hero for the 1st Quarter.

Financial Hot Potatoes

After years of central bank and government interventions, and a financial coup d’etat that switched trillions in assets (leaving the liabilities behind) from Global 2.0 to Global 3.0, a highly centralized economy is showing more than a few distress signs.

Negative Interest Rates

In January, the Bank of Japan followed European central banks and lowered its interest rates below zero. Market reports now indicate that approximately $8-10 trillion of European and Japanese sovereign bonds are trading at negative interest rates out to maturities of ten years.

US Budget Hot Potato

For the 20th year in a row the US government declined to produce audited financial statements as required by law, let alone easy access disclosure to citizens for their Congressional district or local communities. The US budget hot potato is being pushed into 2017 after the presidential election.

Pension Fund Hot Potato

In a recent Solari Report, Don Coxe said that the underfunding of pension funds would become the #1 issue for the next US administration. The financial coup d’etat and negative interest rates have turned a problem into a serious crisis that will become apparent as the developed world continues to age.

Commodities & Oil

After crashing throughout 2015, the oil and commodities prices just kept falling. Imagine what life would have been like for consumers in the developed world without these declines! Fossil fuel companies, however, where hurting, with the US coal companies literally being driven into bankruptcy by US policies.

Flows

Equity market performance and merger and IPO volumes all signaled continued slow down. The bright spot was the flow of funds into venture capital as the applications of new technology continued to hold promise to improve productivity in the economy.

Geopolitics

The more central banks and governments assert centralized control of economies, the more our attention is drawn to the politics of resource control and allocations.

The Shift to a Multi-Polar World

Saker has agreed to join us on the Solari Report quarterly to help sort out what it means to move to a multi-polar world. Signs abound about the transition underway. Tensions between the US and Russia continue, with the US actively intervening to block Russia’s move to access capital in the international bond market. The importance of the South China Sea was underscored as tensions grew. China spent the 1st Quarter on a global shopping spree to lock up long-term access to income and resources. This included winning Swiss Sygenta for $43 billion, after the Swiss had turned down a US offer – another indication of the market clout of 1.3 billion consumers. Global frustration with events in the Middle East and Ukraine were voiced by no less that President Obama in a tell-all interview in the Atlantic Monthly.

The Silk Road Grows

Despite the global slowdown, the developing world continues to embrace the future. Increased connection is happening at high speed, whether trains between China and Eurasia cut transport times by more than half, hundreds of millions of Indians get on line or China buys into exchanges to improve connection and liquidity between Asia and the global markets.

EU: What’s Next?

While our personal reports are that Europe is as lovely and charming as ever, the news is full of tensions in the European Union and the enormous pressures from immigration. Summer is coming with a British referendum on the EU and likely increases in potential immigration.

US Presidential Campaign Rocks the World

When the campaign began, I recommended spending no more than ten hours paying attention and voting for someone under 60 years of age. As things turned out, I did not follow my own advice. Trump and Sanders kept creating cracks in the official reality that made for an interesting conversation and gave more people permission to talk about reality. However, the defining quality of the campaign was mind control, inspiring me to name it, “The Kingsman Campaign.” The campaign raised real concerns among investors that America was not in a position to face and address the challenges ahead. One bright spot – Howard Schultz, head of Starbucks, reminded us that what is important is not the decisions we make every four years, but the ones we make every day. Indeed, consumer pressures are bringing positive changes in many areas, including GMO labeling.

Assassinations & Covert Operations Get Obvious

Lawlessness is not limited to the digital space. Awareness is growing of the use of covert operations and assassinations to implement centralized control as various cartels and factions compete.

Science &Technology

The 1st Quarter was full of indications that the energy model is changing, with projections of renewables growth showing sharp increases over the next five years. Clearly technology is driving the shift from Global 2.0 to Global 3.0.

The Space-Based Economy

Our theme for the 2015 Annual Wrap Up published in January was “Space, Here We Go.” Sure enough, signs of the space-based economy are everywhere. Lockheed Martin, the leading defense contractor, announced the formation of an energy group. What will be fascinating to see is whether the new energy comes from the oil and gas industry or from the companies, such as Lockheed, that have managed the black budget for decades. A recent Boeing ad indicated that in 100 years our electricity would be supplied by solar power plants in the orbital platform. The implication is that aeronautics and satellites may be more important to our future energy sources than drilling.

Health Freedom

Reality is busting through the official reality throughout the health sector and the centralized team is pushing back hard. Fights over cancer treatments, vaccines and GMOs are escalating. However, the momentum is gathering behind the truth, helped by the inability of developed economies to fund the pharmaceutical vision. Expect the underfunding of pension funds and related health care benefits to weigh in heavily for preventive health care and effective natural treatments.

Zero Integrity Systems

How in the world are we going to depend on digital systems that have zero integrity? Nuts! Someone ought to explain to all the people crowing about the “Internet of things” that they are currently building the worlds most frightening battle zone. This is one of the reasons that productivity has flat lined.

The Big Questions

I keep coming back to the big questions, like who is really in charge and why are they behaving this way?

What does Richmond Valentine Want?

In the movie Kingsman: The Secret Service, Samuel Jackson plays a technology entrepreneur who hands out free SIM cards that allow him to mind control individuals and nearby crowds through electromagnetic manipulation delivered through his global satellite system. Whenever anyone asks me what is going to happen in the campaign, my response is, “It depends on what Richmond Valentine wants.” This is what happens when an increasing number of news stories are created by reality TV production companies.

The Future of Cash

Cash is a form of currency that provides citizens with the ultimate luxury: privacy. Take cash away and all transactions can be monitored and tracked. This also means that negative interest rates can be applied with much greater effect.

One of the many benefits of moving to an all digital platform is it eases a shift to cyrptocurrencies. If successful, this shift could significantly reduce governmental liabilities for deposit insurance.

 

The 1st Quarter was intense. My prediction: expect the intensity to increase throughout the 2nd Quarter and 2016.

Thanks to all the subscribers who sent great story suggestions in the 1st Quarter!