Xi is here this week and the issue is N Korea. He will have major pressure from Trump to act or the whole trade issue becomes harder to resolve. This one is really dangerous as Kim is nuts and could start a war just to force his position. This is the most dangerous of all the black swans.

So it is going to be a messy year ahead. Anything could happen if one of these black swans lands. The good news is if you are investing in the US, it is the one safe place left on earth to park your money. Maybe Europe will be OK if Le Pen loses big, but I would not bet that. The EU still has huge structural issues and despite the economy improving, these problems persist, and will only get worse if Brexit becomes as rancorous as it is likely to be

The views expressed are the author's own.

Brexit has been triggered and the final outcome is very unclear. Chances are high that it will be a hard Brexit, but it is way too early to tell. The EU cannot let the UK off softly, or many more will leave. The UK cannot agree to a large payment nor to allowing free entry to the UK for anyone from the EU which is what the vote was largely about. Meantime, the UK economy is doing nicely, and has not yet been hurt by Brexit. In fact, several major companies have announced expansions in the UK. Inflation due to the drop in the pound has been partially offset by rising wages, so consumers have not been nearly as hard hit as projected. The lower pound has created a material increase in exports, so jobs are plentiful. None of the banks are up and leaving, nor will they. Some staff will be moved to Dublin and maybe some to Frankfurt, but the London capital markets will remain where they are. The EU cannot afford to disrupt world capital markets by shutting out London. On top of all this is the French election which could create other major problems for the EU.

The French election is just a few weeks away, and it is definitely possible Le Pen could win enough votes to be president or, if not, to be a major force in French politics. If she wins then everything changes for the EU. She says she wants Frexit, and that would completely blow the negotiating position of the EU on Brexit. Assuming she cannot win, which is what you read and hear from pollsters and the press, is reminiscent of what those same people said of Trump winning. Just because Wilders did not win has nothing to do with France. Completely different calculus. He was a complete nut. She may have far right positions, but she is not her father, and is much more sophisticated about her campaign. If she wins, the Euro tanks and currency markets become volatile. The UK will look good to investors and bankers. Add to all of this, Putin is throwing all he has into seeing her elected, and he may be able to influence the outcome. France is not the US.

There is much speculation all of a sudden that there will be a new Gaza war this summer. This time if it happens, the US will be a very strong supporter of Israel and will likely provide all sorts of direct and indirect help. In addition, there will be heavy pressure on the army to finish the job once and for all. The UN will, as usual, claim Israel is wrong, but this time the US will stand by Israel unlike Obama. If there is a war, it could completely change the calculus of the Mideast. Egypt will help Israel and Hamas might be defeated finally. If so, then maybe there is a chance for real peace with the Palestinians. Anything could happen in this situation, good or horrible.

The US military has now engaged in Yemen and in Syria and Iraq. Mattis is implementing a new aggressive plan to defeat ISIS and to push back Iran. It is all different now. Iran will not be able to do as it wishes as it did with Obama. The chance of a military confrontation in the Gulf, Syria or Yemen, or in Iraq is real. The one issue to resolve is Turkey and its role in Syria vs the Kurds. The Saudis and UAE are already involved working with Israel secretly against Iran, and now the US will work with both in a major way. This whole situation is complicated by Russia in Syria, and someone will have to back down, and it is not going to be the US. Once Raqqa falls, then the real test with Russia will begin.

Xi is here this week and the issue is N Korea. He will have major pressure from Trump to act or the whole trade issue becomes harder to resolve. This one is really dangerous as Kim is nuts and could start a war just to force his position. This is the most dangerous of all the black swans.

So it is going to be a messy year ahead. Anything could happen if one of these black swans lands. The good news is if you are investing in the US, it is the one safe place left on earth to park your money. Maybe Europe will be OK if Le Pen loses big, but I would not bet that. The EU still has huge structural issues and despite the economy improving, these problems persist, and will only get worse if Brexit becomes as rancorous as it is likely to be

The views expressed are the author's own.