Tuesday, December 30, 2008

2009 Forecast

Okay, I'm going to step way out on a limb here and gaze into my cloudy and snow covered crystal ball and make some predictions for the coming year:
  1. Energy costs - they have nowhere to go but up. Kiss the buck and a half a gallon gas goodbye, you'll never see it in your lifetime again. Oh, we may have a couple more dips down to this level in the coming months but check back at the end of the year and let me know what you are paying then.
  2. Inflation - well, the current trend is that we are in a pretty strong deflation. The prices of almost everything have dropped this year. But the truth of the matter is that the U.S. government can not operate in a deflationary environment. I mean, holy crap, how can Uncle Sam pay off a $10 trillion deficit with dollars that are actually worth more? Besides, they are now throwing trillions of dollars more to buy out anything that is deemed "too big to fail". Who says the Federal government is not too big to fail? I see us back to double digit inflation by the end of next year. If you own any government bonds or T-bills now is the time to sell.
  3. Unemployment - we haven't even come close to the bottom yet with maybe even double digit numbers the U.S. by the end of the year.
  4. Real estate - yep, still a long way to go on this one as well - probably another 20 to 30 per cent reduction from here.
  5. Food - the prices will go up and the availability will go down. There will be more cases of tainted produce as more corners are cut. If you don't have a garden yet, this summer would be a great time to start and organic is the only way to go.
  6. Crime - 2008 saw crime generally decrease across the U.S. but I think this is turning around as we draw to the end of the year. Look for much higher burglary, robbery and home invasion rates next year. If you do not have a gun safe this would be a good time to purchase one and trade in some of those soon to be worthless FRN's.
  7. Stimulus checks - Oh boy, this will cause a real firestorm. According to my copy of Turbotax, the $1,200 "stimulus check" that I got last year is now causing my 2008 income tax to be $1,200 more than if I had not received it. What this means if Turbotax is correct (and I have not been able to refute it yet) is that Uncle Scrooge did nothing more that give us an interest free cash advance that it now wants back!!
Yes, that's a lot of gloom and doom for 2009. My mantra is the 3 G's - "gold, guns and gardens".
I believe that once we flush the poison from the system that the medium term future looks pretty darn promising. I look for techology to make some significant advances in the next few years to start to turn things around.

Happy New Year!

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