Here are what could
happen or already happened in 2011..
1.There Will Be No
Recovery in the US: As a nation, USA will borrow about $1.8
trillion at all government levels (Federal, State and Local), of
which roughly half will be by way of money printing. Simply put,
the answer to a problem of debt is not more of it. One day soon
enough USA will have to live within its means.. and the US will not
do it voluntarily but at the point of a bond market's spear like
Greece. The American people will begin to understand in 2011 that
the only recovery thats happening is on Wall Street. Look for the
U6 measurement of unemployment to stay above it's current
17%.
2. Muni Bond
Implosions: With the end of the Build America Bonds program.. which
was an important financial tool for local governments.. and the
election of a Republican House, it seems that pretty much all
Federal aid to state and local governments will end. With this,
look for states to balance their budgets by cuts to local
governments. I think dozens of cities and counties will bite the
dust financially this year, either with a formal declaration of
bankruptcy or by simply falling dramatically behind on their bills.
California, Illinois, Michigan, Florida, Nevada and New York cities
and counties look particularly vulnerable. Look for Obama to try..
but fail.. to throw them a lifeline. Bernanke may also begin
purchasing Muni's. These failures will shake ordinary
Americans.
3. Euro Crisis v2.0..
The EU will continue its financial collapse, as nations like Spain,
Portugal, and Italy will join Greece and Ireland in facing the
stark choice between (Option 1) bailing out THEIR banksters or
(Option 2) having THEIR nation go bankrupt. The IMF/World Bank
model of "rescuing" these EU nations were perfected on the
so-called Third World nations such as Argentina (viz., John
Perkins' book, "Confessions of an Economic Hitman"). In 2001,
Argentina defaulted on its IMF loans, i.e., it was forced to take
Option 2, and its people suffered tremendously as the majority of
its middle class was literally wiped out overnight. The Banksters
in Argentina (with such strange and exotic names like JPMorgan
Chase, Citibank, etc.) were able to fly out their billions of USD
on private jets before the forced conversion and devaluation of the
Argentina pesos/savings were implemented on the masses. Millions of
Argentineans keep their savings as USD in their banks before the
collapse. When the forced conversion and devaluation of those USD
savings were imposed on its citizens, the banks were closed and
ATMs withdrawals were limited to a few hundred pesos (less than $50
USD) per person per day. Overnight, Argentineans saw their savings
lose over 75% in value (the peso went from 1:1 to 4:1, requiring 4
pesos to buy 1 USD overnight). And then the multi-national
corporations came in like financial vultures and bought up the
natural resources and public utilities for pennies on the USD. THAT
is IMF's Option 2 for Spain, Portugal, and Italy. Option 1 is long
term financial servitude and slavery for the citizens of the
bankrupt country as is happening to Ireland. The EU/ECB/IMF plans
to deal with the cascade of bad debts, overleveraged banks and
overindebted governments is suspect. The EU's central bank, the
European Central Bank, has essentially reached the limits of what
it can do. Look for Spain, which needs to borrow $400 billion this
year.. much of it in the first quarter.. to hit the wall and need
to be bailed out.
4.Market will
continue it's bull run into Mar 2011 with oil sky rocketing to $100
or more.When the above 1,2 &3 happen,then out of a sudden,
stock market begin to plunge and will plunge all the way to the
lowest seen in decades. USD will reverse and begin it's upward
trend as the whole world starts to flock into safe haven currency.
Ben of the fed and his master Obama and Timothy are now the most
hated people in the US and they are no longer in good term due to
deterioting economy. World real estate properties will also crash
and unemployment rates shoot through the sky. Countries will starts
to practice protectionism and interest rates starts to rise
rapidly. Cash becomes the rare commodity and many who are in debts
will become bankrupts and social unrest will increase. Crimes and
suicides will also rise and this will continue for at least another
7 years
5.QE 3.0.. the MBS
Edition: I look for Bernanke to begin purchases of MBS in summer;
look for it to be in the neighborhood of $500 billion. The state of
the US housing market will become dire by mid summer, threatening
the health of many big banks.
6. The major export
nations like China, Russia, Brazil, India, Argentina, and others
will engage in and increase their non USD-denominated trading among
themselves, as exemplified by the recent China-Russia trade
agreements whereby they would start trading in Rubles and Yuans,
and not use USD as is typically transacted in international trades
for commodities and oil. This will put increasing devaluation
pressures on the USD. So, look forward to the US Dollar Index to
drop further from the low 80s now to the low 70s or even lower in
2011.
7. Inflation will run
rampant in China as it is already doing so with retail food prices.
Unless China allows its Yuan to appreciate (increase in
value) against the ever falling USD, rampant inflation in China
will continue its course unabated. If China allows its Yuan to
appreciate by any significant amount (7% or more), such an action
will DECIMATE its export industries and manufacturers, because of
the extremely thin profit margins that their exporters have to work
with. China will raise its interest rates to try to stop inflation
but that will not do the job. In fact, raising interest rates will
only cause more foreign currencies to go into China in search of
higher yields, unless China imposes strict restrictions on the
importation of foreign currencies and investments.
8. The Chinese real
estate market, the last investment vehicle in China for those
Chinese with money, will also begin its collapse suddenly, hitting
hard cities like Shanghai, Beijing, Fuzhou, etc. According to a
very recent article by UK's Daily Mail Online, there are as many as
64 MILLION empty homes in China with no one occupying these brand
new homes! This China real estate crash will have serious
implications for the real estate market in Vancouver. There won't
be m/any Chinese millionaires plunking down $1+ million CASH for
buying real estate in Vancouver, as has been the case over the
recent years.
9.There will be
violent weather episodes all over the globe. The La Nina condition
that is now dominating global weather is the strongest in 50 years.
This will make a dramatic shift to El Nino conditions this summer.
This will set the stage for a very big Atlantic hurricane year.
There will 12 named storms. Two cat. 4 storms will hit the
mainland.
10. Food prices. A
Jan. 3 Times of India headline raised a question in many an Asian
mind: “Can government do nothing legally to check prices?” The
answer is, Not much. The United Nations’ Food and Agriculture
Organization predicts that the global cost of importing foodstuffs
totaled $1.026 trillion in 2010, compared with $893 billion in
2009. We haven’t seen anything yet. Imbalances in supply and demand
and regional trade rigidities will accelerate the trend, swamping
developing nations with the most basic of problems: Filling the
bellies of those powering their economic rise. Rising costs for
cooking-oil, rice and fish may mean little to the average Goldman
Sachs Group Inc. staffer. To a family living on $3 a day and
already spending two-thirds of income on food, they are
devastating. Rising wealth disparities could foreshadow a year of
tensions, as failed harvests and inflation cause famines, riots,
hoarding and trade wars worldwide. The bubble here would be one in
human suffering.
11. Silver and gold
will continue to climb in 2011. Silver will increase much more than
gold in 2011, as the "Crash JP Morgan, Buy Silver" viral campaign
started by Max Kaiser in early November will take off exponentially
in 2011. Silver will breach $50 per ounce in 2011. Commodities: I
believe commodities will have an up year as the economic surge in
Asia continues. If the Euro Crisis is serious enough, it could
bring commodities downward as the US Dollar surges. Look for crude
to hit $100, silver to hit $35 and wheat to hit $8.50 again.
Americans will grumble loudly as gasoline approaches $3.50/gal and
grocery bills are higher, due in large part to Mr.Bernanke's
printing presses.
12.Wake-Up Call The
people of all nations, having become convinced of the inability of
leaders and know-it-all "arbiters of everything" to fulfill their
promises, will do more than just question authority, they will defy
it. The seeds of revolution will be sown.
13.Youth of the World
Unite University degrees in hand yet out of work, in debt and with
no prospects on the horizon, feeling betrayed and angry, young
adults and 20-somethings are mad as hell, and they're not going to
take it anymore. Not mature enough to control their impulses, the
confrontations they engage in will escalate
disproportionately.
14. Crack-Up 2011 In
2011, with the bailout funds and arsenal of other schemes to prop
up the economy depleted, teetering economies will collapse,
currency wars will ensue, trade barriers will be erected, economic
unions will splinter, and the onset of the "Greatest Depression"
will be recognized by everyone.
15. Beware of Black
Swans: The world is a complex and dangerous place and has an
exceedingly fragile economic system. One good shove will likely be
enough to send the world's economy over the edge. A new Korean War,
a war with Iran, a revolution in Greece or even an angry Mother
Earth might be enough to send us all into an economic apocalypse
thanks to the monstrous debt levels and credit default swaps. In
2002, the world's total debt was $60 trillion. This year, that
amount reached $188 trillion, nevermind the hundreds of trillions
more in credit default swaps. As I have always said, one day this
will end very badly and very quickly...
ok... i like this analysis... very detailed.
