The Polarization of American Politics Will Intensify
As the battle for the White House heats up, it’s becoming obvious that ideologically, Republicans and Democrats haven’t been this far apart since the Civil War—and the gap is growing.
No matter who lives at 1600 Pennsylvania Ave in the Decade of Disruption, this polarization will continue to dog a dysfunctional Congress, potentially leading to economic grief—see 2013’s fiscal-cliff melodrama.
The Fuse Will Reach the Powder Keg of Government Spending
By 2023, entitlement payments, military spending, and interest will consume 100% of tax revenues. The result? Trillions of dollars of spending cuts, tax increases, and runaway debt.
There have been few signals that candidates are willing to confront this impending crunch before their hands are forced—and all possible solutions will disrupt your life and convulse American society.
The Federal Reserve May Move to Negative Rates
The Fed’s plan to hike rates four times this year lies in the ruins of an ailing global economy. And this year, the Fed’s annual stress test on banks incorporates a scenario in which the interest rate on the three-month US Treasury bill becomes negative in Q2 2016 and then declines to -0.5%, languishing there until Q1 2019.
Could this mean the Fed is going to impose negative interest rates in the face of ongoing market fragility? Add in another recession and worldwide currency wars, and the Decade of Disruption is set to pitch severe challenges at your retirement savings and investment returns.
Wealth and Power Shifts from West to East
The end of the American Century has been heralded before, but the coming decade could hold the moment the United States melts from global superpower to just one of many countries.
And as the US looks increasingly inward, there will be a steady, unrelenting push for power from nations and economies worldwide—as well as a ramping up of the Age of Terror.
21st-Century Change Accelerates
New technologies promise to forever change your life—from your job, to your health, to how you spend your retirement.
And not all of these changes will be positive. For example, while new biotech innovations may defeat cancer, the victory could decimate swathes of the healthcare industry.
Investing in a Transformed World
The Decade of Disruption is potentially perilous for investors, with a combination of new and old threats, a world order spinning off its axis, and changing safe havens in the markets.
But despite the unnerving environment we will all be operating in, you can experience disruption positively.