The inflated balloon which are the world markets are starting to see some of the air come out of them. With real creditor nations needing cash to maintain their own people and economies the debtor nations are going to have to tread water more on their own to stay afloat.

World Trade remains at best stagnant so where if anywhere is cost push inflation coming from. So let's look forward for the next year and given these long term trends see where the speed bumps will come.

Government bond yield curves will continue to flatten. There is no inflationary pressure yet even from labour. If the supply of workers dries up in any one market jobs will be exported.

Low grade credit spreads will see their curves steepen. High grade especially AA and above will tighten. Default rates will rise and banks will be rescheduling.

There is a danger in certain markets and yet again good credits will be turned down in order to support weaker credits as certain countries indigenous banks stave off going to their governments for assistance. Australia again gets closer to the awaiting abyss.

High dividend stocks with low grade earnings will remain under pressure. The lean and mean manufacturers continue to increase their dominance. Expect the Japanese manufactures to continue to do well. China will continue to dominate world developments as it starts to acquire companies abroad. Rumours of more delays and paperwork on exporting capital from China from the new year only increases the rush now.

Stock markets continue to go nowhere. However cash rich companies will out perform the high debtor ones. The opportunities will only become greater for audacious acquisitions.

It's going to be a very interesting and stress fuelled year next year. For many the debt mountain will continue to rise as deflation remains dominant. Long live volatility.

I suspect it will be 2017 until the fed moves again.