I have been spending a lot of time lately trying to figure out what's really go to happen. I find a lot of speculation, mostly Chicken Little types,
prognostication, and rumors. Its really hard to sort through it all.
When word gets back to me that this or that group expected a collapse on this or that date, and it doesn't take place, I wonder. When that happens
again and again, I have to try and get to the bottom of it.
There are a number of possibilities:
1) The world is full of confabulators that like to make up gloom and doom stories... Except a lot of them really seem to be aiming for honesty. There
really are a lot of reasons why the system can't hold together much longer.
2) The world is really a wonderfully stable place, CNBC is right, the next rally is any day now. Better times are just around the corner. Conspiracy
Web sites will go the way of 90's Militia's...Yeah, right!
3) There really are some groups that want to bring it all down, but there are other forces that keep them from pulling it off.
I tend to go with #3, but what are the forces that we are dealing with? I think I have some idea, but hesitate to lay it out. Nobody would believe
With that in mind, I will l say I don't see the predicted meltdown this year. I think over the coming months we will see a slowing of the jobless
claims as explosive monetary growth takes effect. MSM will begin to shout the recovery is here! The dollar will improve against other currencies.
Commodities will begin to rocket upwards. Stocks that have slid to rather low levels will recover.See
Robin Landry's Predictions
And, once we get down to whatever this bottom is going to be, there's a fair chance of a barn-burner smoker of a rally which should propel the Dow
back up to nearly 10,000....and maybe even above.
A 10,000 DOW is likely IMHO. At the same time there will be a flight out of Treasuries that will drive up interest rates. Unemployment will not drop
much, certainly not enough to produce real recovery. It will be claimed that housing prices have stabilized, but foreclosure rate will remain high.
Buyers will be using all that funny money like the Germans did in Eastern Europe in the 20's.(They walked in with bag fulls of Marks and bought up
property at "bargain" prices).
By the end of the year the Federal Government will be in trouble, as it will no longer be able to roll over short term debt at bargain rates.
Compounding the pressure on Treasuries will be China spending more at home in an attempt to keep their own people happy. Treasuries won't collapse
immediately, as rising interest rates will make them appear attractive. At some point, the Federal Government will default. Even this won't produce
an immediate collapse into chaos. There will be International Summits to try an put it all together again.
By summer,I see Oil back up to about $100 per Barrel, Gold at $1100-$1200, and other commodities back close to peaks. A late,wet spring in the
Midwest will drive up agricultural prices. Still, it won't be demand as much as a bubble from money flowing out of cash. Stagflation will be in
full force. People will be saying "if this is recovery, why is it passing me by"? There will be demonstrations, even maybe some riots. If martial
law is declared, I and don't believe its coming this summer, it will be obvious to all that its an over reaction Even Government itself will oppose
it. Toward the end of this year it will be more and more impossible to keep it all together.
All bets are off if some big unforeseen crises inserts itself. As the world economy deteriorates, this will become more and more likely.
The bottom line is you have a little more time to get your act together, get out of the big cities, grow a garden, and get ready for survival mode.
It may well be necessary in 2009 or 2010, but this year.