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Saturday, December 31, 2011

Predictions for 2012

I'm predicting that at least one of these things will happen in 2012.  And I'm predicting that any one of these will tip the world economy into undeniable recession, promulgating another massive round of money printing, which will cause that value of many currencies to collapse and gold to soar.

1) A major bank failure, which because of counterparty risk, will bring down a number of banks and insurance companies in a domino effect.  The Fed and the EU will be forced to print massively in order to bailout these Too Big Too Fail Institutions.

2) Austerity programs in Europe will cause at least one EU country to break up through violent civil disobedience/war which will cause a breakup and reorganization of the EU accompanied by bank failures and massive EU currency printing - supported, of course, by Fed printing.

3) War breaks out in the middle East - in any number of places - sending the price of oil soaring - resulting in a massive slowdown of consumer activity along with massive Fed printing to support another ramp up of the military in order for the US to intervene.

4) A single rogue trader at a mid sized hedge fund will be found to have incurred a multi trillion dollar loss in the Credit Default Swap Market (or some similar derivatives market) and the counterparty fall out brings down several banks and insurance companies.  See prediction 1.

5) A series of well timed terrorist actions at malls and train stations bring consumer activity to a standstill pushing the US economy over the brink into recession, and causing the rise of local militias to patrol and bully our neighborhoods until the government declares martial law.

6) A belligerent US congress, at a loss on how to stimulate the economy, decides to try to scapegoat China, and in a fit of anger China boycotts US debt, and declares all Chinese contracts must be settled without dollars.  The US rates sky rocket, the US dollar crashes, and the Fed and the EU must print like crazy until the currencies collapse.

7) real unemployment creeps up to 25 - 30 percent of eligible workers, leading to massive civil unrest, riots, looting and martial law which causes an international loss of faith in the safe haven of the US markets and the US dollar.,

8) The Giants defensive line and running game come together at just the right moment leading them to another improbable super bowl win.

9) Dwayne Wade sprains his ankle, and Lebron James, left to pilot the Heat on his own, wilts under the pressure and the Heat lose in the first round of the playoffs  (we can dream, can't we?)

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