2013 Predictions:
Predictions are no rocket science. What you do today decides
what you get tomorrow. When you see leaders of some country speaking that
“Doubling GDP/Capita is target” and of course take meaningful steps Prediction
that country has bright feature is no rocket science.
Similarly say in any other country if
you see massive angry and frustrated mobs protesting. Government talking more
to Central bank (than people) that too for reducing interest rate (Which
profits only some class of society impoverishing all other). Predicting that
there will be further inflation, currency crisis or at worse military coup is
no rocket science as well.
Anyway. Let’s talk about specifics.
US :
From a better 2012 US is entering in complex but positive 2013.
Wall St :
“No meaningful tax rise will be imposed on anyone for say
next 2-3 years after then when everything will look nice and great that will be a time to raise tax on
wealthy. “ This will be sold to people in some words. It may jolt Wall Street
for some time.
On Main Street:
Along with small firms big firms are also thinking about reverting
Outsourcing.
That may create more opportunities. However it won’t happen
in 2013 in a big way.
But it will start for sure. To add this is not due to any
Government pressure or patriotic feeling etc... but purely due to business
reasons. In coming weeks we will publish an article (Why the Bubble of
outsourcing may be about to burst). We will cover more detail in that.
However US will need to show lot more flexibility &
openness in tax reforms, less regulation, friendly immigration, to welcome this
insourcing movement which is at infancy stage. This is not easy. But there are no easy ways
either.
Still US will continue to be cleanest dirty shirt in world. In
near and longish midterm...
China:
Yes these days China come 2nd.
Hu Jintao. Man responsible for china’s revival from 3rd
world to most promising country in 21st century recently said “We
need to double GDP/Capita”. This was a very promising statement by a very very
Promising person.
More importantly he is not just doing it by Printing money
and sending Directly to Bank account of poor. But he is doing a lot more in
improving productive capacity of his country.
The insourcing movement triggering form US will definitely
hurt china in midterm but that’s not going to happen tomorrow. So China will
continue to hold status of “World’s Manufacturer” for this year.
At economic side since the monitory tightening has stopped,
bubbles will continue in real estate to grow but of course not without bursting
eventually. Also it will be interesting to see if they can revert slowdown with
monitory tools this time.
Europe:
This is same like what it was last year. It’s a Volcano
which will erupt any day. An uncontrolled announcement followed by controlled
kick out of nation / nations form “Eurozone” is a small but distinct possibility
this year. That may spread panic sell on Euro.
U.K.:
Recently UK was ranked No 1 as global “Soft Power” rightly
so... The dooming financial sector will of course creates problem for City of
London. But I guess since City of London has seen many such seasons it will
change itself to whatever comes next. Of course UK may never influence world
the way they used to. But it seems they will still maintain their “Soft Power”
status for a good time to come.
Japan:
I expect something here in coming years (Say starting
2013….). I guess Japan is losing its patience on economic choke. I am not sure
what exactly that will be. But I am getting feeling of something big is about
to come from here. Let’s just hope that it’s positive.
Canada:
Baring real estate Bubble Canada is in great shape. Commodities
may suffer in very near term (2013) and it will impact Canada. Long term
outlook for Commodities and Canada is very positive. To add due to its
immigration friendly policies, country is becoming more attractive than rest of
western world to many ambitious immigrants.
India:
“The surest way to ruin a man who doesn’t know how to handle
money is to give him some. - George Bernard Shaw” and that’s what new “Pure
Magic Cash Deposit Schemes” will do.
Since same Harvard and Cambridge educated people are running
nation, I guess all last year’s predictions * 0.2 / 0.5 will be this year e.g.
last year I predicted that over 5 years INR may touch 70 levels. Let’s say this
year over 4 or 5 years INR may hit century over USD.
Anyways to end up on Positive note, let’s hope that we all world citizens remain healthy, get loved from our loved ones, get better opportunities and fulfill all our dreams with hard work. May god bless us all!!
Thanks - Author
----------------------------------historic reference ..
Economic Predictions for 2012.
Post 2008 we are in world with different Economic Cycles across countries. Hence phases will differ some will enter boom others doom.
1) US:
# I think this can be a positive year for US.
# Key Reason for this is Dollar Index. Despite Stimulus and rising M2, Dollar Index forecast for 2012 is looking good.
# Many small companies are planning to bring manufacturing Back in US from China typically companies with revenue under a billion USD. This will help job creation to a great extent.
# Twist however will come in Financial Sector if Euro / Europe collapse. lots of Credit Default Swaps would turn into major risk.
# However baring risk to Financial community and sick Real other sectors like Retail,
Healthcare, Manufacturing, will do relatively good.
# Cheaper valuations for land, transparent transactions, amazing infrastructure, capital welcome approach, no corruption at common man & medium scale corporate level will attract capital and new start-up.
# In short for incy wincy spider it can be a great year.
# In general comparing other world I believe this will be a good year for US.
2) China:
# Here situation will be bit tough this year as interest rates may become pin to Real estate and many weak industries.
# Strained relations with US will be another issue for China and they may endup in mute mode at some stage.
# It will be difficult to say if bubble of real estate + Overheating will burst this year or next year but in either case I Don't see this as very comfortable year for China.
3) Europe:
# Better not to predict anything here. I hope they will be able to avoid "Unthinkable" but if not it will be terrible year for Europe and in fact whole world.
# Technical Damage for Euro is very bad. Rather than Germany improving Euro's Image, Euro is damaging Germany's image.
# Good part of Europe's challenges is it's keeping commodities prices under control.
# In other words if Europe can convince world that their issues are over, commodities boom will resume. Currently shaky Euro zone has hit pause button for it.
# In an event of "Unthinkable" I suspect it to go beyond financial isolation and would not be surprised if it becomes too bitter and possibly even with bites.
4) India
# This seems to be another tough year for India.
# Although Government and Central bank are convinced about inflation direction as south, I am bit skeptic about it. I don't think they will be able to lower interest rates considerably amid inflationary pressure in system and then it can very well become pin to long awaited "Real estate Burst".
# In my opinion reason for reduced rather not increased inflation in India as of now is Euro zone chaos. If Euro zone is declared healthy, inflation wave 2 will hit India (It will be ugly). Weak currency, worsening budget, trade deficits will add to problem of inflation.
# I think once they realize that inflation solving is something real tough, they will change it's measure & formula.
# In last year's predictions, I had mentioned about looming currency crisis although I was wrong in timing, and I was expecting it few years later. With this given numbers now, I am worried that USD vs INR may have another serious correction in coming years (3-5 years from now..) driving INR all way down to 70 - 80 or even lower Level.
# In addition to brain drain we may have HNI (High Networth Individual) drain as well.
Despite all these negatives for India, greatest achievement of India over last decade is India atleast at perception level is able to decouple form phrase "India and Pakistan" (Not to say wrong about Pakistan what I mean is those 2 Asian Rivals always fighting was Image then) and is able to make a new jargon "India and China" (Which mean those 2 Asian emerging economies which can one day be real powerful).
While Jim O'Neill's paper on BRIC was definitely a turning point for this to happen, another important factor was increasing number and importance of Indian Diaspora across western world.
Predicting for them, I believe there will be big red carpet for them very soon in developed economies like western world and even Japan.
In General
# I am not worried about recession as too many people talking about it.. I think it's fight between gloom and boom but I don't see doom in US at least. In China, India there can be hard lending led burst in some sectors but overall it will be year with mixed feelings (gloom & boom). Of Course Europe can give very negative surprise but assuming they won't; it will be Ok year. At Geo-political level also although pressures are developing, like Iran vs West, India vs China, US vs China, between Korean rivals, I hope they won't burst this year at least.
Thanks
Author
Historic Records.....
Economic Predictions for 2011
1) US : Situation is unusually complex here. An engine of Global Economy has certainly lagged against his counterparts this time. In Eight Phase Economic Cycle US is stuck between Phase 1. Phase 2,3,4 is just not happening. More importantly there is no clear sign of will it take months /years to reach Phase 2 or will some events drive US to accelerated Economic Activity. In my opinion at some stage it will accelerate with some engine like "Green Energy" / "Real Estate again" / something. If it happens, as you know there is Trillion Dollar Lubricant Present to make it "Hyper Bubble". If it doesn't Unemployment may continue to Grow leading to protectionism QE 3, QE 4, QE 5 will continue ... In Either case I think 2011 will neither be a very good nor very bad year for US.
2) India : Inflation will continue to rise so will Interest Rates. For end Customer Interest Rate will increase by 1% - 3% upto Dec 2011. However Home Prices will also grow / remain steady in nominal terms / Atlease I don't see major crash in 2011 (although it's absolutely inevitable in near future), resulting no pinch for common man (Who has bought home). Private sector will continue to be concerned over macroeconomic situation and hence wage increase should remain conservative but internal competition is high so there will be increase in nominal terms. Also capital inflows will allow govt to spend more. Despite good Rain, Food prices will never return to it's 2007- 2008 level due to inflation. BSE Sensex will continue to make new all time high and I won't be surprised to see 25000 + on Sensex. INR will continue to appreciate 3--5% Year on Year in USD terms.
3) United Kingdom: Inflation will be growing concern again. Interest Rates will break from .5 and will start marching upwards. U.K. is doing lots of things together like austerity, encouraging local manufacturing, asking Home office to be stricter. So it will be interesting time to come. Although Jim Rogers a very big international name is openly saying "UK is finished in 4 Years", I personally believe that U.K. will emerge from possible collapse very quickly / even may obviate it. Reason I believe so is U.K has capacity to realistically understand it's threats and limitations and take tough decisions.
4) Europe: In April 2010 I had written post on our Blog for PIIGS in Line to Collapse Out of PIIGS, Greece and Ireland Have admitted issues with debt, others (Portugal, Italy, Spain) will admit it in 2011 / 2012 time frame. This will increase anger in those countries due to forces austerity measures and it will come in form of Protests on Road. Also anger will come on road in countries who are technically bailing these nations out. At some stage (possibly when they ask for re-bailout e.g. say Greece ask for money again, It may be asked to leave Euro) Although I don't see it happening in 2011.
5) China : This is one country if change it's policy can make all above predictions wrong. Assuming China will continue it's policy, inflation will be concern in China. They will keep on increasing interest rates and will allow currency to appreciate a bit as well. In general Chinese Economy might slow due to limited demand from Western world but I don't force Crash in 2011 simply because interest rates haven't reach to a point where they can crash the system.
In General World : I do not see 2011 as a very doom year for world. Inflation will be there but it's a Decade of Inflation which is just starting so nothing very specific about it. Europe will continue to have problems and despite that rest of world will continue to do OK. Equity might do surprisingly well during some time. Although there will be lot of pressure behind the curtains. I think hyper bubble will starts blowing in full swing, like it has started in China, India. it will cover whole world and till we are inside this Hyper bubble chances of major geopolitical War will be less atleast in 2011. Commodities will continue to do good across world in other words systematic paper currency debasement will continue.
Thanks
Author
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Long Term Predictions....
Economic Predictions For decade to come from 01 Jan 2010.
We divide the upcoming era in 3 Stages. Though timelines may change we believe all these 3 "era" are absolutely inevitable.
1) Economy Lift up, fly era. (~2011~2017)
2) Next Major Crash / Total Collapse of Economy and Possible War. (~2017~2025)
3) World after that. (~2025 Onwards..)
Based on our Research and study we predict some Positive and Some Negative Predictions in time to come.
Economy Lift up, Fly High era. (2011- 2017)
1) Stock Markets wil go UP UP UP !!! although Inflation will be concern for time to come. It may trigger in 2011 / 12 in western world. In Developing world it has already triggered.
2) However society that accepted "every month increasing coast of home as growth" will accept costly food and cloths, and everything else also as Growth. As money flow in general will be huge so it will be considered as "Boom" period.
3) To tame inflation Central banks will raise interest rates slowly but they will never raise it too aggressively and will never let any bank fail.
Next Major Crash / Total Collapse of Economy, possible Big War. (2017-2025)
(Prediction 1 is assuming Prediction 5 - Prediction 8 remains masked till 2016-2017 When I believe next crisis would happen.)
Boom era mentioned above will widen gap between trade imbalance. Inflation which would have been not toxic due to wage hike will become toxic by 2017. Raising Interest rates + Inflation will make Middle class very uncomfortable by 2017. It will just look like (Hyperinflation).
5) Alternate World Reserve currency will be push from other countries. Not Just Chinese RMB but infact Japanese Yen, Euro (If managed well), Canadian Dollar, Singapore Dollar, Swedish kronor, Can become a basket of currencies for Global Trade (as all these are paper currencies anyway).
6) Push for alternate reserve currency will further lead to pressure, protectionism, trade wars, and possible big wars.
7) At some stage "global trade" may come to stand still; may be except Oil which will be traded at Very Very high rates.
8) All this DE-Globalization and possible war will lead to a depression like situation.
World after Crash / Currency Reform. (2025 Onwards..)
9) However since it will be something like 2017 or 2025 and not 1930, Depression will hopefully end early.
10) After a "reality pause", New global trade system will emerge that will be based on principal of "daily / monthly trade balance" or even barter systems.
11) Currency Values will reset. New currencies will emerge that will be backed by Metals / Some commodities. World will never repeat mistake to go for paper currencies at least till next few years...
12) All countries will undergo major economic re-structuring by which consumer goods will be manufactured locally and countries will compete to export only hi-tech products.
13) Countries with innovation, great technologies, entrepreneurship will still lead the path. "Export will be based on only Highly specialized items". e.g Countries will still buy Intel chip, apple products but consumer goods i.e. cloths, shoes, bags and hats will be manufactured locally.
14) This may mean some pain initially and even lower standard of living across world. However once the system gets stable, everyone will eventually be OK.
15) With tight integration of Money with bullion, Credit growth will be limited.
16) In some countries however the set back of next crash may get misinterpreted and they may lead to path of Isolationism and even possibly Socialism or even Dictatorship.
Social Predictions
Social structure is much more complex then economic structure. It has many layers and dimensions.
While Social structure at cross Religious, Racial, Communal level is bound to get better or worse in sync with economy, Family Structure will have exact opposite impact.
e.g. There will be growth in divorce rate from 2011 - 2017. However post 2017 there can be dramatic changes and people may willingly stay together. They will share pain and joy. Though business and hence "busyness" of individual may come to stand still, the love and emotional involvement will grow exponentially. Sharing and caring will become the theme as opposed to individual space, privacy and freedom.
On the top of this once currency reforms happen and business grow once again, social structure will remain better for a considerable time due to honest monitory policy.
Industry Specific Predictions
Agriculture, Mining will be great business for time to come, along with that selective IT businesses will continue doing good. Manufacturing, Service Sector, Financial sector will have great time till music is on. But next time the train Stop, Financial Sector will shrink like never before. It can go to a level where there will be only few nationalized banks that does basic banking business.
Comments, Suggestions are welcome.
Thanks
Author
Historic Records.....
Economic Predictions for 2011
1) US : Situation is unusually complex here. An engine of Global Economy has certainly lagged against his counterparts this time. In Eight Phase Economic Cycle US is stuck between Phase 1. Phase 2,3,4 is just not happening. More importantly there is no clear sign of will it take months /years to reach Phase 2 or will some events drive US to accelerated Economic Activity. In my opinion at some stage it will accelerate with some engine like "Green Energy" / "Real Estate again" / something. If it happens, as you know there is Trillion Dollar Lubricant Present to make it "Hyper Bubble". If it doesn't Unemployment may continue to Grow leading to protectionism QE 3, QE 4, QE 5 will continue ... In Either case I think 2011 will neither be a very good nor very bad year for US.
2) India : Inflation will continue to rise so will Interest Rates. For end Customer Interest Rate will increase by 1% - 3% upto Dec 2011. However Home Prices will also grow / remain steady in nominal terms / Atlease I don't see major crash in 2011 (although it's absolutely inevitable in near future), resulting no pinch for common man (Who has bought home). Private sector will continue to be concerned over macroeconomic situation and hence wage increase should remain conservative but internal competition is high so there will be increase in nominal terms. Also capital inflows will allow govt to spend more. Despite good Rain, Food prices will never return to it's 2007- 2008 level due to inflation. BSE Sensex will continue to make new all time high and I won't be surprised to see 25000 + on Sensex. INR will continue to appreciate 3--5% Year on Year in USD terms.
3) United Kingdom: Inflation will be growing concern again. Interest Rates will break from .5 and will start marching upwards. U.K. is doing lots of things together like austerity, encouraging local manufacturing, asking Home office to be stricter. So it will be interesting time to come. Although Jim Rogers a very big international name is openly saying "UK is finished in 4 Years", I personally believe that U.K. will emerge from possible collapse very quickly / even may obviate it. Reason I believe so is U.K has capacity to realistically understand it's threats and limitations and take tough decisions.
4) Europe: In April 2010 I had written post on our Blog for PIIGS in Line to Collapse Out of PIIGS, Greece and Ireland Have admitted issues with debt, others (Portugal, Italy, Spain) will admit it in 2011 / 2012 time frame. This will increase anger in those countries due to forces austerity measures and it will come in form of Protests on Road. Also anger will come on road in countries who are technically bailing these nations out. At some stage (possibly when they ask for re-bailout e.g. say Greece ask for money again, It may be asked to leave Euro) Although I don't see it happening in 2011.
5) China : This is one country if change it's policy can make all above predictions wrong. Assuming China will continue it's policy, inflation will be concern in China. They will keep on increasing interest rates and will allow currency to appreciate a bit as well. In general Chinese Economy might slow due to limited demand from Western world but I don't force Crash in 2011 simply because interest rates haven't reach to a point where they can crash the system.
In General World : I do not see 2011 as a very doom year for world. Inflation will be there but it's a Decade of Inflation which is just starting so nothing very specific about it. Europe will continue to have problems and despite that rest of world will continue to do OK. Equity might do surprisingly well during some time. Although there will be lot of pressure behind the curtains. I think hyper bubble will starts blowing in full swing, like it has started in China, India. it will cover whole world and till we are inside this Hyper bubble chances of major geopolitical War will be less atleast in 2011. Commodities will continue to do good across world in other words systematic paper currency debasement will continue.
Thanks
Author
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Long Term Predictions....
Economic Predictions For decade to come from 01 Jan 2010.
We divide the upcoming era in 3 Stages. Though timelines may change we believe all these 3 "era" are absolutely inevitable.
1) Economy Lift up, fly era. (~2011~2017)
2) Next Major Crash / Total Collapse of Economy and Possible War. (~2017~2025)
3) World after that. (~2025 Onwards..)
Based on our Research and study we predict some Positive and Some Negative Predictions in time to come.
Economy Lift up, Fly High era. (2011- 2017)
1) Stock Markets wil go UP UP UP !!! although Inflation will be concern for time to come. It may trigger in 2011 / 12 in western world. In Developing world it has already triggered.
2) However society that accepted "every month increasing coast of home as growth" will accept costly food and cloths, and everything else also as Growth. As money flow in general will be huge so it will be considered as "Boom" period.
3) To tame inflation Central banks will raise interest rates slowly but they will never raise it too aggressively and will never let any bank fail.
Next Major Crash / Total Collapse of Economy, possible Big War. (2017-2025)
(Prediction 1 is assuming Prediction 5 - Prediction 8 remains masked till 2016-2017 When I believe next crisis would happen.)
Boom era mentioned above will widen gap between trade imbalance. Inflation which would have been not toxic due to wage hike will become toxic by 2017. Raising Interest rates + Inflation will make Middle class very uncomfortable by 2017. It will just look like (Hyperinflation).
5) Alternate World Reserve currency will be push from other countries. Not Just Chinese RMB but infact Japanese Yen, Euro (If managed well), Canadian Dollar, Singapore Dollar, Swedish kronor, Can become a basket of currencies for Global Trade (as all these are paper currencies anyway).
6) Push for alternate reserve currency will further lead to pressure, protectionism, trade wars, and possible big wars.
7) At some stage "global trade" may come to stand still; may be except Oil which will be traded at Very Very high rates.
8) All this DE-Globalization and possible war will lead to a depression like situation.
World after Crash / Currency Reform. (2025 Onwards..)
9) However since it will be something like 2017 or 2025 and not 1930, Depression will hopefully end early.
10) After a "reality pause", New global trade system will emerge that will be based on principal of "daily / monthly trade balance" or even barter systems.
11) Currency Values will reset. New currencies will emerge that will be backed by Metals / Some commodities. World will never repeat mistake to go for paper currencies at least till next few years...
12) All countries will undergo major economic re-structuring by which consumer goods will be manufactured locally and countries will compete to export only hi-tech products.
13) Countries with innovation, great technologies, entrepreneurship will still lead the path. "Export will be based on only Highly specialized items". e.g Countries will still buy Intel chip, apple products but consumer goods i.e. cloths, shoes, bags and hats will be manufactured locally.
14) This may mean some pain initially and even lower standard of living across world. However once the system gets stable, everyone will eventually be OK.
15) With tight integration of Money with bullion, Credit growth will be limited.
16) In some countries however the set back of next crash may get misinterpreted and they may lead to path of Isolationism and even possibly Socialism or even Dictatorship.
Social Predictions
Social structure is much more complex then economic structure. It has many layers and dimensions.
While Social structure at cross Religious, Racial, Communal level is bound to get better or worse in sync with economy, Family Structure will have exact opposite impact.
e.g. There will be growth in divorce rate from 2011 - 2017. However post 2017 there can be dramatic changes and people may willingly stay together. They will share pain and joy. Though business and hence "busyness" of individual may come to stand still, the love and emotional involvement will grow exponentially. Sharing and caring will become the theme as opposed to individual space, privacy and freedom.
On the top of this once currency reforms happen and business grow once again, social structure will remain better for a considerable time due to honest monitory policy.
Industry Specific Predictions
Agriculture, Mining will be great business for time to come, along with that selective IT businesses will continue doing good. Manufacturing, Service Sector, Financial sector will have great time till music is on. But next time the train Stop, Financial Sector will shrink like never before. It can go to a level where there will be only few nationalized banks that does basic banking business.
Comments, Suggestions are welcome.
