GAZING INTO THE CRYSTALL BALL FOR 2010

(Navin Doshi, Jan, 17th, 2010)    

Gerald Celente, who predicted the crash of 2008 and 2009, publishes a trend research report for his clients. Here are his predictions and probable future trends: The stock market will crash again in the later part of 2010. Printing trillions of dollars that don’t have real value in the end won’t be helpful. Central banks of Western countries have been loaning commercial banks money at an interest rate of zero in exchange for their worthless mortgage-backed securities. Banks in turn buy secured government bonds instead of lending to cash-starved small businesses. 2010 will see the exhaustion of stimulus money, causing the market to crash and sending reverberations all over the world. The Federal Deposit Insurance Company (FDIC) is broke. They’re relying on three year’s worth of insurance premiums from banks just to stay alive. As central banks keep printing more money, currencies will get clobbered; the winner will be precious metals.

Neosurvivalism: Today’s Darwinian survivors are average people making intelligent decisions to prepare for the worst.   We must be self-sustaining, doing our best to make it on our own. A commitment to neighbors and community will be the only way for everyone to survive, as we need to help each other get through this crisis. The human population was about one billion a century ago.  Our population has increased by about 5 billion people. Naturally, there aren’t enough jobs to go around, and as supplies deplete, the welcoming attitude for immigrants that had existed before will deplete as well. More and more countries are going to focus on kicking out illegal immigrants in the struggle for resources.  

TB ( Too Big) or not TB: Right now, 34% of the adults in the U.S. are considered obese, and in a mere eight years it is expected to reach 40%. Jobless people of the 2010 depression have much bigger waistlines than those of the 1930s depression. The business of shaping people up will grow with America’s waistlines, and even the government will get involved. A trend toward elegance will emerge as people strive to compete for jobs. Everyone is trying to look their best and do their best. Quality counts. Art, architecture, and elegance will get more prominence to lift up the depressed spirit. Bigger is not better in fashion, food, and entertainment.   If two candidates for a job are on the same level but one is obese, no matter how unjust one might find it to be, the employer has enough to worry about without considering the higher health insurance cost and taxes due to obesity. I would add that TB has become a health care issue when they discover that the smaller people of Kerala, India, are healthier than the big people of Washington D.C.                                                                                        

Innovation: Celente claims that we can expect our own people’s minds to go into high gear in the rough times. He predicts that technology will reach out to the lower socio-economic strata. Making the best with the least is becoming the new goal. I would suggest if we look east, we see cheaper creations of the highest technology inspired by India’s $2200 Nano car and $70 refrigerator. Contrary to popular belief, this is not merely a green movement, but a smart one, and the U.S. could be at the forefront of it.  

Not Made In China: As was previously stated, people are going to have to realize how important it is to support one’s community and neighbors to live a higher standard of life. Even now we can see the influx of farmer’s markets and the resurgence in popularity of the “mom and pop shop.” Celente says “China will become a great pariah as they undercut even the poorest of nations with their products. And so, barriers of trade protectionism will shoot up, which many may think will hurt the economy, but it’s a fallacy. Expect to see more “Made in YOUR COUNTRY" products as long as small manufacturers can market their products well.”  

New Communication Technologies Over Old News: What with the investigative journalism scandals and lack of real news (as opposed to celebrity gossip), people have begun to look elsewhere for the truth.  Celente says that “as long as we have net neutrality,” NBC, CBS, and other similar networks will either go under or “go web-only.” People are beginning to see that they need to take care of themselves and know the truth so as to survive.  

Is It Written In The Stars? – Arch Crawford bases most of his projections through the use of astrology. Crawford sees not just another crash this year but dramatic societal changes to go with it. In his words, "We will do everything but guarantee you that stocks will crash worldwide within three months of August 1st (that is between May 1 and November 1). It is expected that technical market analysis of data generated by current market action will assist in pinpointing most danger/opportunity as critical moments approach. The fate of the world is in the balance!" While we don’t know Crawford’s track record, we, too are concerned about societal strains produced by the strident populist posturing in Washington and elsewhere. We also think this could be a year of food shortages which will strain the lower strata of society. There could be an unusual second quarter that needs to be watched carefully. Institutions, with the backing of the government, have been able to manage markets so far after the March 2009 crash. They can do so indefinitely as long as they have a control over the reserve currency, the dollar.  

Yes, with their power of printing money they can prevent a crash and manage the market movement within an accept able band. T here is nothing I see out there that would make me change my view about the precious metals market. Banks and governments only have one choice: "Inflate or die!" Or even “Inflate and die” if they lose control walking on the razor’s edge. Any move to withdraw liquidity from the market by increasing interest rates would kill the equity marks stone cold dead in a heartbeat. This is a lose-lose situation for the banks and the government of their own making. On one side of the fence is death by hyper -inflation... and on the other hand is death by deflation. Banks and governments have always preferred the inflationary side... except for former Fed chairman Paul Volker who raised rates and killed inflation back in the early 1980s, and saved the dollar in the process... but this isn't the 1980s... and that option seems unlikely. The last nine years in a row have been 'up' years for precious metals in U.S. dollar terms... and, considering the current situation, chances are 2010 should also be an up year. However there is a significant probability that governments could lose control over the economy due to some unexpected, unforeseen Black Swan event like a 9/11 attack. They still are not able to bring unemployment under control.  

Barron’s editorial (01/18/2010) refers to research funded by the MacArthur Foundation, and deliberated by 21 experts on U.S. fiscal policies for two years. The final outcome is the publication of the book titled, Choosing the Nation’s Fiscal Future, also available on the website www.nap.org . The conclusion is essentially the same as in the article I wrote, Sweat Think, and Philosophize, dated September 2008 and posted on www.nalandainternational.org . With the increasing debt load due to the expanded health care and social security programs vastly more burdensome than the debt for World War II- the more likely outcome could be wild inflation, or being forced to borrow in another currency at a much higher interest rate.   So in matters of investment, one needs to be cautious, nimble, and agile. It is indeed a good idea to store essential commodities. In an inflationary climate, it would become difficult to buy them since they become unavailable quickly. Maybe your own intuition, dear friend, could help you propel through this crisis the country is going through.  

(Mr. Doshi is a writer, trader and philanthropist. His articles are posted at www.nalandainternational.org )