What are the brave and bold predictions for 2010? It's fairly straightforward really.
1: China will start slowing down. They have been growing like crazy (If you believe the official propaganda) for decades and it appears that they are building in some over capacity. The Global media is starting to pick up on this. Al Jazeera report on Ghost Cities
Does this remind anyone else of the Japanese government paving rivers in an effort to stimulate the economy.
2: Chinese slowdown will start to freak out the commodity bulls. This will cascade through all markets. The next big leg down in equity markets will be led by China.
3: Selling US debt will be the best trade you could make this year. There is basically no yield on T-Bonds. Inflation will rise. Yields will rise. The credit worthiness of the Fed is not in question, but their propensity for printing money will count against them.
4: USD to devalue further against the EUR, but to potentially to gain some ground against the commodity currencies (AUD, NOK, CAD, BRL)
5: Trading carbon credits or any sort of global alliance to fight climate change will become less important as governments in western countries concern themselves with fighting against rising unemployment and deteriorating economies
Finally some predictions for 2010:
“The problem is not solved. They're only making it worse. Countries that take the pain [let bankruptcies correct mistakes] move on. The U.S. is following the Japan model.” Jim Rogers, legendary investor
“The moment this fear of deflation turns into a fear of inflation … interest rates rise will in the long end … we are heading … into stagflation.” George Soros, chairman, Soros Fund Management LLC