Here are my predictions for 2011:
A. QE-fuelled inflation will force the B of E to raise interest rates. The resulting impact on spending by the public will wipe out the private sector recovery on which the austerity plan was based. In turn, this will force further government spending cutbacks. The only thing keeping the Coalition together will be the Lib Dems' knowledge that they'd be wiped out in a General Election!
B. Greece and/or Ireland will suffer a further economic slowdown, and be unable to meet their debt repayments without further austerity measures. Bondholders will probably take a haircut, losing many billions of euros, causing another global market crash. Only this time, the only money that will be available to rescue the banks will be freshly printed (ie non-existent) money...
I hope someone can show me I'm wrong, but these seem like realistic predictions...
What do you guys think?
Jeff
2011
1. The Government will at some stage announce "The good times are over/ We'll have to tighten our belts/ We'll have to work harder"
2. The rich will continue to get richer.
3. The poor will continue to get poorer.
4. Leeds will disappoint us yet again.
2. The rich will continue to get richer.
3. The poor will continue to get poorer.
4. Leeds will disappoint us yet again.
Things are always unpredictable, but there's no harm in guessing what might happen! 
BTW, the CBI also think interest rates will rise due to inflation: http://www.telegraph.co.uk/finance/news ... sting.html
Jeff
BTW, the CBI also think interest rates will rise due to inflation: http://www.telegraph.co.uk/finance/news ... sting.html
Jeff
Euler wrote:I predict things will be un-predictable.
Taxes are also rising so companies will feed that into the system and a 2.5% rise in VAT will end up being a 3%+ rise once prices are normalised. The only downward pressure on prices will most likely be from a weaker economy. But CPI & RPI has been very subbornly high right through this most recent period. Meanwhile money supply is through the roof.
I'm not sure what you mean about prices being normalised. Are you saying that, in addition to the rise in VAT, the price of goods and services will also rise in line with inflation?Euler wrote:Taxes are also rising so companies will feed that into the system and a 2.5% rise in VAT will end up being a 3%+ rise once prices are normalised.
Indeed.Euler wrote:But CPI & RPI has been very subbornly high right through this most recent period. Meanwhile money supply is through the roof.
I've read that, in the US, businesses haven't been passing on their increased costs to customers, as low consumer demand means that to do so would be unprofitable. But if asset prices keep rising, presumably that situation will only persist for so long...
Jeff
-
thehawk009
- Posts: 22
- Joined: Thu Oct 08, 2009 10:33 am
Saxo Bank — inspired by the black swans of Nassim Taleb — have drawn up their 10 ‘outrageous predictions’ of the year. The idea is that these are unpredictable (eh?) events with potentially massive impact. And, as you might imagine, drawing them up is an admittedly unscientific exercise. Nevertheless, Saxo Bank suggests clients might use them to stress test portfolios, or to think about far out-of-the-money options.
http://ftalphaville.ft.com/blog/2010/12 ... -for-2011/
If you’re wondering about last year – Saxo Bank seems to have been right on three out of its 10 predictions. In previous years they’ve managed four out of 10.
Which of the above will make in 2011? Place yer out of the money options now.
http://ftalphaville.ft.com/blog/2010/12 ... -for-2011/
If you’re wondering about last year – Saxo Bank seems to have been right on three out of its 10 predictions. In previous years they’ve managed four out of 10.
Which of the above will make in 2011? Place yer out of the money options now.
Potential FT article towards the end of 2011:
In the hindsight, 2011 began as under the fog of ice but little did the US Fed, the BoE or the ECB knew exactly how little they know. The QE3 proposed by the Fed’s chief Bernake was approved unnanimously the US congress in March 2011 and with one of the republican senator willing to give knighthood (if such a thing was possible) to Bernanke for coming to the rescue of America.
However, little did the Fed know that the Chinese machinery finally getting to talk and understanding the impact of the gentle request made by the US in the late 2010 would have devastating impact towards the end of 2011.
Towards the middle of 2011, the Chinese authorities finally agrees that it is in the best interest of the world economy is to let the Chinese Yuan float and leave to the market elements to reach its correct price.
As soon as the announcement is made and all controlling mechanism is disbanded, Chinese Yuan is getting spirally out of control is appreciated remarkably quickly afterwards. This meant that imported goods from China is lot dearer to consumer in the US and Europe stroking inflation to 10% within a month.
Inflation then keeps growing at a rapid rate is estimated to have reached 400% on annualized basis as we speak. With little growth in prospect in USA as well as Europe, the unemployment has reached 25% as companies are unable to afford import from overseas especially China and with little or no capacity to produce and export (by taking advantage of relatively low exchange rate) to create jobs, the USA and most of the Europe (except Russia) is on the brink of starvation.
The debt as % of GDP of USA & Europe has reached to an astonishing level that the economists have stopped calculating the impact. The government employed economists haven’t been paid for the last 6 months and are currently looking for alternative employment for survival.
In the hindsight, 2011 began as under the fog of ice but little did the US Fed, the BoE or the ECB knew exactly how little they know. The QE3 proposed by the Fed’s chief Bernake was approved unnanimously the US congress in March 2011 and with one of the republican senator willing to give knighthood (if such a thing was possible) to Bernanke for coming to the rescue of America.
However, little did the Fed know that the Chinese machinery finally getting to talk and understanding the impact of the gentle request made by the US in the late 2010 would have devastating impact towards the end of 2011.
Towards the middle of 2011, the Chinese authorities finally agrees that it is in the best interest of the world economy is to let the Chinese Yuan float and leave to the market elements to reach its correct price.
As soon as the announcement is made and all controlling mechanism is disbanded, Chinese Yuan is getting spirally out of control is appreciated remarkably quickly afterwards. This meant that imported goods from China is lot dearer to consumer in the US and Europe stroking inflation to 10% within a month.
Inflation then keeps growing at a rapid rate is estimated to have reached 400% on annualized basis as we speak. With little growth in prospect in USA as well as Europe, the unemployment has reached 25% as companies are unable to afford import from overseas especially China and with little or no capacity to produce and export (by taking advantage of relatively low exchange rate) to create jobs, the USA and most of the Europe (except Russia) is on the brink of starvation.
The debt as % of GDP of USA & Europe has reached to an astonishing level that the economists have stopped calculating the impact. The government employed economists haven’t been paid for the last 6 months and are currently looking for alternative employment for survival.
I hate to say it, but this apocalyptic vision could come to pass.
It could be argued that, were it not for the bail outs in 2008, the global economy would have collapsed. It could also be argued that the bail outs merely delayed the inevitable, and that the underlying problems remain.
BTW, I'd be more worried about the government employed police and armed forces not being paid than the government employed economists...
Jeff
It could be argued that, were it not for the bail outs in 2008, the global economy would have collapsed. It could also be argued that the bail outs merely delayed the inevitable, and that the underlying problems remain.
BTW, I'd be more worried about the government employed police and armed forces not being paid than the government employed economists...
Jeff
Photon wrote:
The debt as % of GDP of USA & Europe has reached to an astonishing level that the economists have stopped calculating the impact. The government employed economists haven’t been paid for the last 6 months and are currently looking for alternative employment for survival.
Defaulting US cities are another possibility for 2011:
http://www.guardian.co.uk/business/2010 ... -us-cities
Jeff
http://www.guardian.co.uk/business/2010 ... -us-cities
Jeff
Our budget deficit is at a record high:
http://www.telegraph.co.uk/finance/econ ... -high.html
And consumer confidence isn't exactly booming:
http://www.telegraph.co.uk/finance/news ... lapse.html
These things doesn't bode well for 2011...
Jeff
http://www.telegraph.co.uk/finance/econ ... -high.html
And consumer confidence isn't exactly booming:
http://www.telegraph.co.uk/finance/news ... lapse.html
These things doesn't bode well for 2011...
Jeff