Predictions For 2010
The National Inflation Association is pleased to announce its top 10 predictions for 2010 .
1) We will learn the 2009 holiday shopping season was a bust.
The Commerce Department reported seasonally adjusted November retail sales up 1.3% from October. However, if you apply the average seasonal adjustments that were used during the years 2006 and 2007, which account for a normal spike in November sales due to the holiday shopping season, retail sales were actually down 1.3% in November.
NIA believes any year-over-year increase in 2009 holiday season retail sales will be bottom bouncing from 2008 and not an indication of an economic recovery. Most likely, adjusted for inflation, retail sales will be flat over a year ago. We expect to see a sharp sell off in many retail stocks, as a full economic recovery appears to be already priced into their share prices.
2) We will see a major decline in the Dow/Gold ratio.
The Dow/Gold ratio is currently 9.3, having bounced from the low of 7 it saw in early 2009. We are likely to see a decline in the Dow/Gold ratio to below 7 in 2010.
Many people who have bought U.S. stocks on the bet of an economic recovery, will soon realize the economy is not recovering and stocks have been rallying only due to inflation. Although some people selling stocks may once again mistakenly move to the U.S. dollar as a safe haven, we believe an increasing amount of people will avoid the U.S. dollar and buy gold as a safe haven.
3) We will see a sharp decline in the Gold/Silver ratio.
The Gold/Silver ratio is currently 64, above the average of the past 100 years of 50. Between the years 1,000 and 1,873 when silver was used as real money, the Gold/Silver ratio traded between 10 and 16. In recent history, the Gold/Silver ratio dipped below 20 on two occasions, once in 1968 and once again in 1980.
NIA believes silver prices will continue to outperform gold in 2010, as the world once again begins looking at silver as money, instead of just an industrial metal. The Gold/Silver ratio could decline to below 50 in 2010.
4) The U.S. Dollar Index will see short-term bounce, then huge crash.
We are at a point where there are more people who are bearish on the U.S. dollar than ever before, which means from a technical standpoint it is overdue for a short-term bounce. However, we would not consider going long the dollar even as a trade. A huge crash in the U.S. dollar could occur at any time.
The world has become flooded with U.S. dollars. Foreigners currently hold over $10 trillion in dollar-denominated assets that can be dumped at any time. With the Federal Reserve continuing to expand its monetary base to record highs, as soon as banks begin lending their excess reserves we could see a spike in consumer prices and a rush to get out of U.S. dollars.
5) Oil will rise back above $100 per barrel.
December 22nd, 2009 at 2:22 am
Seriously,if this doesn't make you listen to M.D. and prepare,you're a total waste. If just oil rises to $100 a barrel the U.S. economy will be decimated and Uncle Sugar will institute his controls for good & we will be screwed. People it is seriously coming,we better be ready.
December 22nd, 2009 at 2:52 pm
Hmmm – I believe it about Christmas being a bust. We decided gifts for the kids only in our (large) family – and I got them all silver bullion coins.
December 23rd, 2009 at 1:11 am
I SAY LETS FORGET THIS CRAP FOR A FEW DAYS AND ENJOY CHRISTMAS EVERYBODY.MERRY CHRISTMAS.FROM JAY IN NC
December 23rd, 2009 at 4:28 pm
SKIDDLEKAT HERE…HUMM I DOUBT THAT SHARING INFO DAILY IS CRAP.THE DAY THAT ONE LOOKS FOR ADVICE AND IT ISNT THERE MAY BE A GLOOMY OUTCOME FOR THAT ONE PERSON OR FAMILY..I DONT KNOW OR HAVE ALL THE ANSWERS AND I'M SEARCHING DAILY FOR TIPS AND KNOWLEDGE FROM OTHERS FROM THIS SITE AND MANY OTHERS…THIS ISNT A RANT, JUST MY 2 CENTS WORTH…MERRY CHRISTMAS TO ALL AND SHOW KINDNESS TO OUR FELLOW MAN..GOD BLESS
December 24th, 2009 at 7:15 am
All I want for Christmas is a non-communist President and a Congressman who isn't a lying traitorous scumbag. Oh, and a pony.
December 25th, 2009 at 8:56 pm
ANON.11;28 I WASNT TALKING ABOUT THE BLOG AS CRAP,I WAS REFERRING TO THE NEWS AND OBAMA.THE JUNK HE IS SHOVING WAS MY CONCERN.I HOPE IT WAS NOT MISLEADING MY FRIEND.FROM JAY IN NC
January 3rd, 2010 at 6:24 am
Aside from the nit about oil prices and maybe the Volcker prediction the rest of that list is complete crap. Show me your predictive data set.
/Econ Major
//No longer wonders why people think libertarians are nutty. Some of them ARE.