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...
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...
