### Foreword

Before I start, I will first like to say that this list will be a series of articles as I prefer making bite-sized posts (as much as possible, 5 minutes reads). There will be a total of 3 parts, the first part covers events that may take a longer time (years even decades) to play out. In the second part, I will be talking about events that might come sooner than you think. And finally in the last part, the events might have already happened and we are just waiting to see the potential fallout.

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### Black Swans

The term "Black Swan" is popularized by Nassim Nicholas Taleb, the writer of "The Black Swan" and a few other books on how randomness affects the market. 

<center>![black swan.png](https://cdn.steemitimages.com/DQme682txstquWjfh2A4YiBTrZSxCdgEHr114kwYy9iKDVh/image.png)</center>
*[Source](https://commons.wikimedia.org/wiki/File:Black_Swan_bg.jpg)*

Based on [Wikipedia](https://en.wikipedia.org/wiki/Black_swan_theory),
>Black swan is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying that presumed black swans did not exist – a saying that became reinterpreted to teach a different lesson after black swans were discovered in the wild. 

It is important to note that black swan events is also about perspective. An event can be a black swan to me but not to you. 

For example, if you have watched [Netflix's "The Big Short"](https://www.imdb.com/title/tt1596363/), you will know that while the Subprime crisis came as a surprise to most of the world, there were still people who correctly anticipated it and profited from it. 

In "The Black Swan" book itself, Nassim Nicholas Taleb used the analogy of a turkey and a turkey farmer. The turkey being fed everyday will never be able to imagine what when Thanksgiving Day is here, it will land on a plate. But to the turkey farmer, this is something that is expected. Hence, black swan events is about perspective.

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### A list of possible black swan events

Like most others, I am unable to predict black swan events. Here, I will only attempt to guess some events that might happen and potentially lead to detrimental effects on the financial markets. As I said, this is just part 1 and there will be 2 other parts.

#### Escalation of trade war

<center>![trade war.png](https://cdn.steemitimages.com/DQmbJYYvVE6EPAVb4dxJKjAbap78vQ8FB7pC5uNe92WmcU9/image.png)</center>
*[Source](https://pxhere.com/en/photo/1444957)*

Recently there has been [news of trade deals between the USA and China](https://www.channelnewsasia.com/news/asia/us-china-trade-war-deal-substantial-progress-liu-he-12017104). However, that does not mean that the trade war is over. The root cause of the trade war is ultimately a result of rivalry between the 2 great nations. 

In the book "Destined for War", Graham Allison explored the concept of [Thucydides's Trap](https://foreignpolicy.com/2017/06/09/the-thucydides-trap/). Thucydides believes that when 2 great powers clash, the likelihood of war is higher than not. We live in a world where China is a rising super power challenging the existing power of USA. For the world to not take the path of war, it will require both countries to compromise, especially for the existing super power to acknowledge that they may not be able to be the leader anymore. Is that a compromise which the USA is willing to take? 

Without compromise, the rivalry may escalate. Starting with trade war, to currency war, to proxy/cold war, to minor conflict and finally all-out war. And when such conflict is escalated, the global financial market is sure to be destabilized. The trade war itself has dealt quite a substantial blow to some industries. Imagine a currency war where both countries aim to destabilize the other's currency. 

Though the possibility seem slim, it is still a potential black swan event that might happen. I just hope it doesn't happen in my lifetime.

#### Climate change

One may argue that climate change is a known problem and should not be considered a black swan. I will counter argue that even though climate change is happening, the world does not seem to be doing enough to stop it. 

Rising sea level, extreme weathers and more frequent natural disasters are all [effects of climate change](https://www.climate-change-guide.com/effects-of-climate-change.html). However, the world seems to be tackling all these symptoms of climate change but not solving the root of the problem. 

<center>![wildfire.png](https://cdn.steemitimages.com/DQmUpLLoewU64YKwB4pBjefbHsHH4VSVKyDwxAozcTPLoVe/image.png)</center>
*[Source](https://www.flickr.com/photos/npsclimatechange/14503287131)*

In a recent report from the [Intergovernmental Panel on Climate Change says we can expect the oceans to rise between 10 and 30 inches (26 to 77 centimeters) by 2100 with temperatures warming 1.5 °C](https://www.ipcc.ch/sr15/). With more than 100 million people live within 1 meter (about 3 feet) of sea level that means that many of them will be displaced by if nothing is done by then. 

In Singapore, the [effects of climate change was brought up by Prime Minister Lee Hsien Loong as one of the existential threats to the country](https://www.channelnewsasia.com/news/singapore/ndr-2019-climate-change-impact-singapore-greatest-threat-sea-11819382). Though it can be still decades away for us to see the impact, if nothing is done now, it might just be too late when the effects are seen.

When the effects of climate change are seen, there might be a global food shortage and land scarcity. Inevitably, this will lead to a squeeze in the economy and those countries that failed to plan will likely suffer the most.

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### Conclusion

As mentioned, black swan events are about perspective. So the more perspectives you are exposed to, the more you will be prepared for these rare events. In this article, I talked about the clash between a rising superpower and the existing superpower. In addition, I also covered climate change. 

These events will take a long time to play out, however, the effects can be seen. We are tackling the isolated symptoms of these problems but not addressing the actual problems. If we do not start to plan for the ultimate consequences, that may only come after our lifetime, future generations will suffer.

***P.S. If you like this post, have a [look at part 2 as well](https://www.steemleo.com/economy/@culgin/a-list-of-possible-black-swans-part-2). Thank you!***

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#### The "Raise to 50" Initiative

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This article is created on the Steem blockchain. Check this series of posts to learn more about writing on an immutable and censorship-resistant content platform:
- [What is Steem? - My Interpretation](https://steempeak.com/steem/@culgin/what-is-steem-my-interpretation)
- [Steem Thoughts - Traditional Apps vs Steem Apps](https://steempeak.com/steem/@culgin/steem-thoughts---traditional-apps-vs-steem-apps)
- [Steem Thoughts - A Fat or Thin Protocol?](https://steempeak.com/@culgin/steem-thoughts---is-steem-a-fat-protocol-or-a-thin-protocol)
- [Steem Thoughts - There is Inequitable Value Between Users and Apps](https://steempeak.com/@culgin/steem-thoughts---inequitable-value-between-users-and-apps)
- [Make my votes count! Use Dustsweeper!](https://steempeak.com/@culgin/make-my-votes-count-use-dustsweeper)
- [What caused STEEM to get dumped? Why I think the worst might be over](https://steempeak.com/steem/@culgin/what-caused-steem-to-get-dumped-why-i-think-the-worst-might-be-over)