Posted on 01/01/2010 8:27:49 AM PST by blam
2010 Economic Trends: Paths Of Least Resistance
by: Steven Hansen
January 01, 2010
I have been reading economic and financial forecasts by many. I am sure you can easily find one who agrees with your outlook – and just as many who have the opposite vision.
Based on economic fundamentals, the trends should be:
* Higher interest rates which will suppress economic activity;
* Higher taxes which will suppress economic activity;
* The evaporation of the stimulus during 2010 which will suppress economic activity;
* As the equities market is anticipating a strong “V”, there should be a correction to the downside;
* Deflation in the face of a weakening economy which should begin revealing in the second half of 2010;
* Weakening of the dollar. Whether this would strengthen or weaken the American economy depends on what happens to the world's economy;
* If world demand remains constant and the dollar weakens, then commodity prices will rise; and
* As no economic driver has yet come forward, the percentage of Americans without jobs will continue to increase throughout the year.
The art in forecasting is timing and intuition of the unknown. Every year forecasters talk about the weakening dollar, yet in 2008 they were wrong and 2009 they were right. The economy cannot be calculated like a physics equation where you simply add the forces. Therefore simply looking at fundamentals gives the wrong answer.
Economists have not learned how to control the economy – and therefore too many economic events are not foreseeable. It only takes one unforeseen economic event to make your forecast wrong.
But instead of focusing on timing and fundamentals, my 2010 forecasts focus on paths of least resistance.
[snip]
I read this long article earlier today on Seeking Alpha. I think it is excellent and well worth the effort of carefully going through. Good post.
Caution, this thread should not be read by young children, college students or anyone suffering depression as symptoms may increase.
He is spot on with his prediction about .Gov intervention in the form of giveaways and make work projects.
That is the Dem/Media Complex’s style, make work jobs, a line around the corner of applicants, TV camera and lots of smiling faces of the soon to be temporarily employed.
Sounds like the Census ads right now.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.