2015 HAS ENDED. WHAT LIES AHEAD IN 2016?

2015 came and gone. There were some ups but there were many downs as well. It anything, 2015 lay the foundations for a crises ridden year ahead.

To recap, 2015 saw the following:

1) The Fed raised its first interest rates in almost a decade. However, this was against a backdrop of a worsening economy. Just as recently, the Chicago PMI fell to a worrisome 42.9, way below the expected 50.
2) The US government finally lifted the ban on oil export.
3) Depressed commodity prices, especially oil which threaten to unravel the debt market with defaults.
3) Towards the end of the year, we saw unprecedented sell off of high yield bond funds
4) The Baltic Index continue to test its lowest lows
5) Precious metals continued their third year of decline despite central banks and retail investors buying
6) The Dow and S&P fell 2.2% and  0.9% respectively in 2015 while the NASDAQ was up 5.7%. The broader Russell 2000 fell 5.7% for the year.
7) US$ stayed strong while other currencies, especially emerging economy currencies fell.
8) Major economies such as Brazil, Canada and Russia fell into recession. If anything, EU and Japan failed to inspire despite the QE implemented while China looked set to have a hard landing
9) Geopolitical tension rose to a new high in the Middle East and spilled over into the EU as terrorists became a clear and present threat.

Yes, the sequence of events leading to 2016 do not look too bright I am afraid. In the immediate future we could likely see the following:

1) Further distress in the shale oil industry which could cause a series of defaults
2) Unraveling of high yield bonds which could threaten the financial derivatives market
3) Q4 2015 could see earnings drop in many companies in the S&P 500 due to a host of issues, such as a strong US$, heavy debts and a worsening manufacturing sector
4) Further defaults are expected in China due to worsening economic situation and lower revenue from exports.
5) A US debt which could spiral out of control which could push the government 's debt past US$20 trillion (as at end of December 2015 the debt stood at US$18,8 trillion). On top of that, the debt levels of EU nations, Japan, China and emerging economies continue to rise.
6) All the above will culminate in a full blown global debt crisis which  
7) Geopolitical tension could turn for the worse, with an impending war involving nations

Certainly it makes good sense to take profit now while the stock market still hovers at near record levels. Retain some cash, while diversifying your portfolio into gold and silver mining stocks, gold and silver ETFs, and ETFs which short the markets (do need to exercise care in short ETFs as the Fed may surprise with a QE4. The other option is to invest directly in physical god and silver.