Fact, Trends, Forecasts, you’ll find all of it here on a regular basis.
1. INFLATION FEAR NOT AN IMMEDIATE THREAT BUT WATCH OUT IN 2 TO 3 YEARS FROM NOW.
The most recent steps taken by the Obama administration, which resulted in the passing of the (in)famous health care bill, have once again brought upon the big question in the financial markets. How are we going to pay for it all ? Governmental sources claim that there exists a master plan to halt inflationary problems, once they’ll show their ugly rear. Having said that, they do not expect to having to deal with this issue before the end of 2012. Also, it should not be forgotten that the health care plan is not the first angle point for inflation doomsday prophets. The other highly debated program implemented by the Obama administration was the TARP (Troubled Asset Relief Program) Bail-Out from last year, which supposedly brought the downward spiraling economic recession to a screeching halt.
2. CAN GOLD PRICES REALLY DOUBLE UP OVER THE NEXT 5 to 7 YEARS ?
This sounds like a highly unlikely proposition, however don’t dismiss it completely. As we all know, there are certain facts that will continue to drive precious metal prices up the roof, i.e. the above mentioned inflationary fears, lack of trust in the own currency (a weak dollar), an unstable, global political environment. If Iran truly ends up with a nuclear bomb within the next 5 years – and the existing lack of a coherent, international effort to stop this development makes this a more and more likely scenario – might be the reason for the next gold frenzy. Be ready when it happens, because it won’t be incremental but fast and furious.
3. BE CAREFUL WITH ANY NFL RELATED STOCKS OVER THE NEXT YEAR.
There is a change of pace for you. From a nuclear Iran to the quarreling and fragmented owner – player relationships in the most successful sports league in the history of the world. In case you don’t follow football as much as we do, there is a conflict between the players and the team owners that has been brewing for years about a collective bargaining agreement. What does that mean in plain English ? Well, the players want, what they consider to be a fair share of the multi billion dollar business that is the NFL. The owners are claiming that it is getting more and more expensive to run a successful franchise team, especially amidst the difficult economic times facing most middle class families. It also means that is becoming more and more of a possibility that we won’t see any NFL football in 2011, because the owners and the players’ union are not miles but oceans apart in regards to what they want to accomplish for their side. Once that happens, or - because of the psychological nature of the market these days - just the hint of a lock-out or strike the closer we get to September of 2011, the traditional starting month for the NFL, the more likely it will be that NFL approved apparel providers (i.e. Nike) will take a hit when young fans won’t see their idols in “Just do it” gear, leaving them with no sports models to emulate.
You think that’s crazy talk ? Talk to us again when it becomes reality in less than one and a half years from now. You could have made a lot of money by then.
4. THE VALUE OF THE DOLLAR WILL REMAIN LOW.
This administration will do anything and everything to foster the increase of exports, which will only occur if American goods remain inexpensive for buyers overseas. We also believe that the US administration will flex its commercial muscle through diplomatic channels increasingly in the second part of 2010. We just saw in the passing of the health care law that the Obama government will use its majority power in congress to get something through, without taking too many prisoners. No more “Mr. Nice Guy” after the Democrats, in their perception, observed Republican obstructionism for the entire year, since Obama had taken office.
5. THE HOUSING RESCUE MEASURES WILL START SHOWING EFFECT.
Once more this administration is meaning business these days. The big players amongst the banks have been ordered in by the Obama people and they have been read their Miranda rights. The Banks are being “highly” encouraged to reduce principal amounts of “under water” mortgages, where the home owners owe much more money than their houses are worth.
There are obvious incentives as well as “behind the scenes” incentives for Bank of America, Wells Fargo, and the other Biggies in the Bank industry. Let’s not forget, this is not something the Banks have been doing until now. So what does that mean to you? Well, some of the profit centers for these banks won’t look so hot anymore over the next year (decrease in value) but on the other side the stabilization of home values could mean good things are to come for real estate companies and builders which survived the crash of 08’.
H.J. Ryder
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