2011 Predictions

Well, last year the SPX closed 12% higher than the year before but commodities like silver up 77% (SLV), gold 35% (GLD) and coal (KOL) 29% . Other outperforming sectors were the Industrials (XLI) 24%  , retailers (XRT) 35% and consumer discretionary (XLY) 25%,  and there are many other like crude oil and oil services (OIH), Agriculture (DBA, MOO), Soft commodities like sugar, cotton, and rice were up smartly in 2010. Under performers, included Financials, regional banks, bonds and healthcare to name a few. The US Dollar ETF (UUP) was only down 0.7% against other currencies, and we still had a huge move in commodities and stocks.

QE TO INFINITY: As I have been writing for a few weeks now the  FED's plan is not working. So why would they stop printing money. Lets take a look at their goals, they want to keep long end (yield curve) rates low, but they are rising.

• They want housing market to stabilize and grow, not happening.

• Job growth not happening.

• Prevent deflation (what deflation), what about inflation (reference CCI)? 

• Promote business lending not happening.

• Direct results of QE: Promote gains in the stock market (happening) and give people sense of improved wealth.

• Promote consumer spending, happening.

• Dollar debasement and subsequent loss of bond holder confidence. Leading to debt default/ economic crisis. (TBT)
• All these will go up as printing continues: Silver will be over 50 by June (SLV or AGQ), Gold over 1500 (GLD), Copper (JJC), Crude Oil/Energy stocks (XLE), Ag commodities and fertilizer stocks (DBA, MOO), Miners (GDXJ, SIL).

CONTINUED HIGH FINANCE CRIMES/FRAUD: The banksters will continue to rob the tax payer blind, and will get away with it. They will bust people with a nickel bag of weed, but will let banksters steal billions, they will just call it something other than stealing (loop holes, you know how they do this). eg. Bond market primary dealers (GS), Silver Manipulation (JPM and Cronies).

POLITICAL BICKERING AND BLAME GAME (this one my kid could call, he's 10) The politicians will back stab one another and glad-hand at photo op's. The Donkeys and Elephants will swear they will work together but it will be business as usual. Flip-Flopping by President, Senators and Congress, not really a stretch

OIL prices will skyrocket: Alternative energy will be huge as OIL prices (XLE) will skyrocket this year, Clean and Green: nuclear energy (URZ, UEC, CCJ), depleted uranium stores, 25 years of under mining in this sector (I will elaborate in posts to follow); there will be a seed change!

Cold fusion related stocks will flourish (SWC and PAL). There will be the cry for wind and solar, but I don't think anything will pan out there for long-term, too unreliable. Solar, Nat Gas, and wind to gain and lose popularity, as oil goes up and down.

HIGHER UNEMPLOYMENT & HIGHER FOOD PRICES
As there is continued job loss, and food and energy inflation everyone except the rich will be severely strained this will lead to a rise in crime (Hungry bellies will revolt).

Global Food Inflation leading to unrest worldwide, especially the poorer nations.

Higher inflation, you will get less and pay more for the same things, goods and services.

States that are bankrupt will layoff Police and Firemen and our taxes, (state and municipal) will rise (get less, pay more).

THE WORLD WILL BEGIN TO MOVE AWAY FROM KING DOLLAR. We will grow not as a superpower but as a nation of debtors. Loss of status around the world.

END OF JAPANESE BEAR: Finally, the 20 plus year Japanese bear market will end as sales of Toyota(TM), Honda (HMC), and electronic goods from Sony (SNE) and Panasonic(PS) will increase dramatically, sales will be to china, India, Malaysia, Indonesia, Vietnam, and Thailand. Japanese banks like MTU will do very well.

INCREASE IN CYBER CRIME: There will be cyber crime, and cyber espionage and near the end of the year the crazies will come out talking about 2012 and the end of the world etc.

CHANGE IN CHINESE SPENDING CULTURE: Chinese consumers, especially the 20-30's age group will spend more and save less. They will want to eat out more and be more fashionable, Chinese Hip Hop & Gangsta rap will be a craze! Consumers will want less of their own food, they will save less, and spend more and eat more McDonald's and Pizza and look to buy Coach, Gucci and BMW's.

I hope most of this does not happen but hope and 5 bucks won't get me a Cafe latte grande at Starbucks by year end.