Saturday, January 14, 2006

Predictions for 2006

At some time in the future, when historians look back at 2006, I believe they will see an inflection point, as 2006 will be the year of change for the US economy. Far too many economic imbalances exist and although we probably wont see a dramatic crash, we will experience major adjustments in 2006. These adjustments will set the stage for an uncertain economic future and the outcome, several years down the road, could be extremely painful for the consumer, America and the world.

Here is what I predict for 2006:

-Fed Rates will be increased at least twice more

-Long-term rates will increase due to foreign Central Bank diversification and dollar pullout after the Fed's last increase of the year

-The US Dollar will begin a long-term decline against Euro,Yen/others

-Housing will continue to slow in overheated markets (Not crash--yet)

-Oil will flirt with, if not exceed $90 a barrel come summer; $3 gas

-Gold will break through $650 an ounce

-Silver will touch, if not exceed $11 oz

-Stock market will stagnate and go no where

-Consumer confidence will decline

-Ben "Helicopter" Bernanke will experience a crisis of some sort

-Helicopter Ben will print massive amounts of money--after M3 publication
is ceased

-Inflation will rise substantially

-Consumers will begin spending pullback later in the year

-Early 2007 Recession

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