2015: Old Haymaker's Almanac.

Once again it’s the time of year when the chattering classes give us the benefit of their predictions for the next twelve months. Most will be in the ‘to hell in a handcart’ variety so as not to encourage  an unacceptable outbreak of cheerfulness.

 

So what’s my best guess on how the new year will turn out?

 

First up, Russia.

 

Vlad the Invader will be advised to fasten his seatbelt; he’s in for a bumpy ride. He gives a whole new meaning to the old cliché ‘between a rock and a hard place’.

 

The rock is economic. The rouble is crashing. There is double digit inflation. People with money are getting out of the banks fast. Capital flight is huge (much of it to London, thanks Vlad).The banks are facing ‘the crunch’; already one has had to be bailed out. Bonds are looking at ‘junk’ status. Food prices are soaring partly because of the rouble’s troubles and partly because of Putin’s crackpot counter sanctions against EU food exports. Industry is winding down and car production has been all but scrubbed, making it difficult for the ordinary Russian to buy a new car.

 

Putin reckons the Russian people will tighten their belts until they cut themselves in half, as they did in 1940.

 

Dream on, Vlad. This is not 1940 and it’s not Stalingrad. It is not Communist; it is bourgeois. A huge number of Russians have got accustomed to Western living standards, cars, luxury goods, foreign travel. Do you really think that they will give that up just to massage your ego?

 

His major asset, oil, is now trading at less about half  Russia’s break-even price which means that repayment of short-term foreign debt is at risk and the budget has been decimated. If there is a default Russia could be back to 1998 with financial collapse and hyper-inflation.

 

The hard-place is the Ukraine.

 

If Putin doesn’t back off he is facing an economic crisis of humungous proportions. If he does his prestige will collapse along with his standing amongst the Russian people. That could be the             occasion for a putsch. If you are naïve enough to believe the polls, he has an 85% popular approval rating. But when life for ordinary Russians becomes exceptionally hard, as is possible during the ferocious Russian winter we can anticipate a rapid rise in discontent leading to street demos such as we have just seen in Moscow.

 

His main props, the oligarchs, must surely be getting uneasy. Some who were previously close to Putin have fallen out of favour and been either jailed or bankrupted.

 

His Stalinesque approach to political opposition is illustrated by the case of Alexei Navalny, Putin’s main political opponent. He has been given a suspended sentence (possibly much to Putin’s annoyance) for defrauding two firms. There appears to be a total lack of evidence, not that this is of particular importance in the Russian judicial system. One of the firms, a French cosmetics company, said that it was entirely unaware of any fraud. His brother got three and a half years; intimidation of the whole family is part of the game.         

 

Vladimir Yevtushenkov was once one of Russia’s richest men, one of the inner cabal. Then he was falsely accused of money-laundering. The case was dropped      ; even Putin acknowledged that there was no case to answer. That didn’t stop him from stripping Yevtushenkov of his huge interest in the Bashneft oil company which was promptly given to Rosneft which is headed by one of Putin’s cronies.

A

nd what of the oil price which is so critical to Russia’s economic welfare?

T

he last time a fall of this magnitude happened was between 1986 and 1999. It had dramatic  geopolitical fall-out. The Soviet Union collapsed. Iraq invaded Kuwait. Yasser Arafat, deprived of his Soviet ally and Arab money, agreed to recognise Israel.

 

Now there may be an element of history repeating itself. One of the factors in the rapprochement between the US and Cuba maybe due to Castro’s fear that he is about to lose his 100,000 bpd of subsidised oil from Venezuela, which itself is a basket-case. Algeria, Iran, and the Gulf States need high oil prices to grub-stake their own populations sothat they don’t get silly ideas about ‘democracy’. Egypt needs Arab oil money to prop it up during its present mess.

 

And on the brighter side, ISIS will lose a large chunk of its oil-smuggling money.

 

The ‘experts’, are predicting that Brent crude will fall to below $50 or rise to something like former prices. Don’t bet the farm on either.

 

An easier prediction is that we will continue to see the growth of far-right and far-left parties in Europe, especially where there is strong opposition to the euro -  which is most of them.

 

In France the National Front is gaining strength quickly. 2014 was its best year yet and Le Pen is front-runner for the 2017 Presidential elections. The Swedish Democrat party, which has been accused of neo-Nazism, holds the balance of power, and the far-right Jobbik party in Hungary is Hungary’s third-largest party, winning 20% of the vote at the last election. In Austria the far-right Freedom party had its best year in the EU elections since 1999. The Marxist Podemos movement in Spain is rapidly gaining strength against a background of 54% youth unemployment. Russia is backing nationalist parties in Europe including funding the NF in France; its own ideology is extreme nationalism.       

 

The prediction for the USA is rather mundane. Obama’s hand on the tiller, if it was ever there, will become ever more palsied. Meanwhile the American economy will continue to       surge despite the best efforts of Congress which has little interest outside Washington and the endless manoeuvring for power, influence and dollars.

 

The UK scenario will be much more interesting.

I

t is entering one of the most turbulent political situation since WW2. Forget the opinion polls.  The only one that counts takes place in May. On present showing I would put my money on a small but workable majority for the Tories, obliteration for the Lid-Dems, single-figure seats for UKIP, a loss of at least 40 seats by Labour, and a similar gain by SNP, although the Scottish bloodbath predicted by the Fat Boys of Peckham is hype, not serious politics.

 

The nightmare outcome will be SNP holding the balance of power and forming a coalition with Labour as the Government, notwithstanding its rejection by the English. Already the Scots have registered their arrogant demands such as the closure of Faslane and the removal of all nukes from Scottish soil – the defence and security policy for the whole of the United Kingdom being dictated by a gang of Scotch nats. And they have made it plain that if Cameron introduces a Bill to re-legalise fox hunting they will oppose it. That there is no fox hunting in Scotland gives a vivid insight into their mind-set.

 

If this comes to pass, listen out for the sound of breaking glass.