Predictions for 2012 (post your own)

[renovator]

I realize I am showing my financial naivety but if one believes that one's holdings are going to tank why doesn't one cut one's losses?

Am I missing a fundamental point?

Again, thank you to regular posters for maintaining an interesting, intelligent and thought-provoking discussion.

Neophyte

Neo thats not naivety that type of thinking will keep you from going broke. I will say that most on here believe once it drops it will rise well past where it was only showing loss in the short term. Only time will tell if were correct .If you have all your investments in the one category its a dangerous thing to do .Im sure most here have the risk spread around to avoid a total loss scenario.

 

[euphoria]

There likely will be an inflation like you say there will be, and the governments will no doubt start printing money, but eventually all that moneys gonna have to be accounted for and thats when the inflation is going to happen.
Like mike maloney claimed, there will be a sharp short term deflation followed by massive inflation.

When a nation is under a crushing debt burden, then it will likely try to print to get out of it.
But the question is, can all this printing stem the deflationary tide that is coming?
Let me try and put it into perspective.

Last QE pumped $600 billion into the markets.
The amount of derivatives in the world is estimated at 1200 trillion (or 1.2 quadrillion).
Look at this:

http://www.childrensmuseum.org/cosmicquest/assets/sun_earth.gif

Now imagine the sun to be twenty times bigger.
That's the size of the last QE vs the amount of derivatives that is now beginning to deflate in a chain reaction.
The important thing about this chain reaction is that it doesn't stop for anything - like dominoes that have already been tipped over.

So, when it becomes painfully clear that the tsunami is breaking, the Fed and every other organisation in the world with a printing press is going to start to print.
But the money doesn't go straight into the hands of the people to cause a hyperinflation - it goes to the big banks and the government first.
Then they'll procrastinate and argue while the tsunami bears down over everything.
Then they'll argue some more, and more.
Finally, they'll do something, maybe give tax breaks or money to people, but by then it will be totally inadequate to deal with the response.
Any inflation the Fed produces could be instantly counteracted by the deflation tsunami (and then some).
And the tsunami is still bearing down, wiping out banks and companies and investors.
At this time, since the deflationary tsunami has not been countered, people will be flocking to the US dollar and US treasuries.
This is because as everything is deflating, the US dollar will be able to buy more of everything, including gold and silver.

Most of us here don't trust governments.
In fact, we are literally banking on them to fail to respond to every crisis.
So, why do we take it on faith that they will be able to respond with flawless efficiency and print us into inflation or hyperinflation?
They've screwed so much up, they can screw this up as well.
In the end they may fail to counter the deflation that is coming.
If that happens, then you will want to be in US dollars.

I'm not saying this will absolutely occur.
In fact, i hope it won't, because I will probably lose a lot more than most other posters on this board.
But, you have to seriously consider the possibility.
We know they are going to print more money. But who has seriously considered the fact that the money printing will be inadequate and fail?
We all just assumed (without thinking too much about it) that the printing will automatically mean inflation.

So derivatives unwind and Governments print and it goes to the banks first and will never be enough to 'fight' the deflation of hundreds of trillions of derivatives unwinding. Agreed.
I pose this, do they need to? To assume that hyperinflation cannot occur because of the mass deflation caused by derivatives assumes that they print and print and the money goes back into derivatives. What if, as is more likely, the 600T winwinds, the government prints say 3T (only 0.06%) of deflation force. I find it unlikely that this 3T will go back into derivatives and will instead move into the 'real' economy, for real goods and services where 3T is still a large number. The derivatives boat will sink, they will print, but the printed money will not go back to the derivatives boat, it will flow to the much much much smaller 'real economy' boat full of real goods and services.

 

[RetardedMonkey]

It is tempting to go out and buying up some USD at the moment and then get back into the AUD when people flock over to the USD.

 

[fishball]

So derivatives unwind and Governments print and it goes to the banks first and will never be enough to 'fight' the deflation of hundreds of trillions of derivatives unwinding. Agreed.
I pose this, do they need to? To assume that hyperinflation cannot occur because of the mass deflation caused by derivatives assumes that they print and print and the money goes back into derivatives. What if, as is more likely, the 600T winwinds, the government prints say 3T (only 0.06%) of deflation force. I find it unlikely that this 3T will go back into derivatives and will instead move into the 'real' economy, for real goods and services where 3T is still a large number. The derivatives boat will sink, they will print, but the printed money will not go back to the derivatives boat, it will flow to the much much much smaller 'real economy' boat full of real goods and services.

I think this is already what is happening now.

With the ECB lending money to banks, the banks are SUPPOSED to buy sovereign debt but they are telling them to fk off :lol:.

Would not surprise me if the banks were buying physical gold instead of debt

 

[neophyte]

Ok, so if one has faith that PM's will do a Phoenix somewhere down the track, the the judgement call is whether or not the price will fall sufficiently to cover in/out spreads and reduce overall cost of ownership.

I realise DCA is also an option but wouldn't that have the effect of unbalancing the portfolio?


Neo

 

[euphoria]

It is tempting to go out and buying up some USD at the moment and then get back into the AUD when people flock over to the USD.

Gold hedges me enough for declining AUD than to speculate on fiat movements in a substantial quantity.

 

[RetardedMonkey]

It is tempting to go out and buying up some USD at the moment and then get back into the AUD when people flock over to the USD.

Gold hedges me enough for declining AUD than to speculate on fiat movements in a substantial quantity.

That's very true actually.

Do love the hedge that gold provides.

Now I just need more :lol:

 

[JulieW]

Greece defaults, which causes another meeting.
Spain defaults. Italy defaults, which means another really big meeting.
Germany announces it is reverting to the Dmark and invites its friends to use the Dmark if they want by buying Dmark bonds
France says f*** you all we ave the franc.
Swiss go back to a franc as well.

Greece, Spain and Italy remain with the Euro but no-one uses it except the governments to pay the pensions and obligations. 100 Euro buys a loaf of bread, or 10 loaves for 1 Dmark. Everyone barters, or uses gold and silver or uses Dmarks. Mainly Dmarks.

Euro printing means major Euro inflation. Dmark remains solid and slowly everyone tries to join the DmarkZone
England prints a lot more pounds. Inflation rises. Ireland adopts the pound. England re-occupies Ireland.
The world begins to hear a new word coined by economists which means deflationary spending of money that has less and less value. The term 'Inflationary Depression' becomes popular in the interim.

The Euro mess means money flows to the Yen and the US dollar. Japan devalues Yen.

2 million Australians trade in wide screen televisions purchased for $900 in 2008 for bigger ones purchased for $600 in 2012. Japan continues to deflate. Exports start dropping. Australia's second largest trading partner drops to fourth place. It's a big drop. Aussie dollar hits 60 cents. Wide screen television sales plummet. SilverStackers swamped with WTB Fractionals posts.

US dollar strength crushes tentative pre-election recovery. US invades someone to ensure current incumbent is re-elected. It usually works and does this time as well.

MF Global model instituted throughout America and fascism is finally implemented by Congressional decree. Private assets are seized. Martial law declared. Massive arrests and internments follow. President congratulated on firm hand in solving the crisis. Private ownership of physical gold outlawed. Alaskan oil fields opened. Gas goes to25cents a gallon and America calms down. The camps remain full. Texas breaks away from the US. They are too heavily armed for the Washington elite to bother stopping them says President in not so many words. Bush family appoints new Texan governor who pledges good working relationship with US. Alex Jones loses appeal on extradition to Washington on charges of raping two college girls.

Mid 2012 China opens its version of comex. Rampant inflation in China ensures gold's trajectory to $3000 an ounce over the following 6 months. Chinese citizens demand physical delivery so gold flows start from Europe. China starts buying silver too.

GB Pound finally fails and is revalued. Riots across England. Queen asks for calm and UK turns off the lights 3 days a week. Daily Mail praises British Spirit.

Europe has another really, really big meeting, but this time they're all laughing at the press conference where they announce that the Germans have agreed to rename the Dmark but Bundesbank will keep control of it. At Christmas the Rothschild's raise a glass to justice for Uncle Louie after all these years. The New European State is officially announced the following week.

Bilderberg 2013 announced for Perth. As the year closes Melbourne Real Estate agents see signs of recovery in the market.

 

[gelxi]

neophyte: Cutting loss is a very logical thing to do!

Even if one believes in holding silver for the long term for wealth preservation, it does make sense to cut loss if one believes that in the near term silver will be devalued, as one can always buy silver again when the price has dropped and buying more silver with the same amount of fiat.

To hold and average down when the price tanks is considered a 'safer' option as this eliminates the risk of market timing. The big risk with selling silver with the view of buying back later when price tanks is that if that the timing is wrong and the price rebounds too quickly, we may end up getting less silver with the same amount of fiat - so one has to be careful with the timing if exercising the latter option.

 

[Earthjade]

What if, as is more likely, the 600T winwinds, the government prints say 3T (only 0.06%) of deflation force. I find it unlikely that this 3T will go back into derivatives and will instead move into the 'real' economy, for real goods and services where 3T is still a large number. The derivatives boat will sink, they will print, but the printed money will not go back to the derivatives boat, it will flow to the much much much smaller 'real economy' boat full of real goods and services.

The first reaction of that hypothetical 3T will be flight to the US dollar and treasuries, not real goods and services.
In a deflation, the dollar strengthens while real goods and services get cheaper because no one wants to buy.
That's the kicker and I'm almost 100% certain this is what is going to happen in the opening stages.

The danger is because debt-based currency is faith-based currency, no one can reliably predict if that USD faith would eventually collapse in light of the bank failures that would follow.
I would place my bet it saying it won't, because deflation means strong US dollar and to attack the dollar at that stage would amount to the world wanting to trash its own on-paper wealth.
The truth of the matter is that while the US is the only one that can print the US dollar, everybody uses it, so it doesn't belong to the US anymore.
Only 1 in 4 holders of US dollars is actually American.

 

[renovator]

Greece defaults, which causes another meeting.
Spain defaults. Italy defaults, which means another really big meeting.
Germany announces it is reverting to the Dmark and invites its friends to use the Dmark if they want by buying Dmark bonds
France says f*** you all we ave the franc.
Swiss go back to a franc as well.

Greece, Spain and Italy remain with the Euro but no-one uses it except the governments to pay the pensions and obligations. 100 Euro buys a loaf of bread, or 10 loaves for 1 Dmark. Everyone barters, or uses gold and silver or uses Dmarks. Mainly Dmarks.

Euro printing means major Euro inflation. Dmark remains solid and slowly everyone tries to join the DmarkZone
England prints a lot more pounds. Inflation rises. Ireland adopts the pound. England re-occupies Ireland.
The world begins to hear a new word coined by economists which means deflationary spending of money that has less and less value. The term 'Inflationary Depression' becomes popular in the interim.

The Euro mess means money flows to the Yen and the US dollar. Japan devalues Yen.

2 million Australians trade in wide screen televisions purchased for $900 in 2008 for bigger ones purchased for $600 in 2012. Japan continues to deflate. Exports start dropping. Australia's second largest trading partner drops to fourth place. It's a big drop. Aussie dollar hits 60 cents. Wide screen television sales plummet. SilverStackers swamped with WTB Fractionals posts.

US dollar strength crushes tentative pre-election recovery. US invades someone to ensure current incumbent is re-elected. It usually works and does this time as well.

MF Global model instituted throughout America and fascism is finally implemented by Congressional decree. Private assets are seized. Martial law declared. Massive arrests and internments follow. President congratulated on firm hand in solving the crisis. Private ownership of physical gold outlawed. Alaskan oil fields opened. Gas goes to25cents a gallon and America calms down. The camps remain full. Texas breaks away from the US. They are too heavily armed for the Washington elite to bother stopping them says President in not so many words. Bush family appoints new Texan governor who pledges good working relationship with US. Alex Jones loses appeal on extradition to Washington on charges of raping two college girls.

Mid 2012 China opens its version of comex. Rampant inflation in China ensures gold's trajectory to $3000 an ounce over the following 6 months. Chinese citizens demand physical delivery so gold flows start from Europe. China starts buying silver too.

GB Pound finally fails and is revalued. Riots across England. Queen asks for calm and UK turns off the lights 3 days a week. Daily Mail praises British Spirit.

Europe has another really, really big meeting, but this time they're all laughing at the press conference where they announce that the Germans have agreed to rename the Dmark but Bundesbank will keep control of it. At Christmas the Rothschild's raise a glass to justice for Uncle Louie after all these years. The New European State is officially announced the following week.

Bilderberg 2013 announced for Perth. As the year closes Melbourne Real Estate agents see signs of recovery in the market.

Well julie i can tell you know whats happening around the globe.I wonder how much of that will come true .You should save that for a look back in a couple of years time you could be the next celente :

 

[col0016]

Wow this is a really interesting, well thought out, thread. If only I could make a competent contribution.

 

[euphoria]

What if, as is more likely, the 600T winwinds, the government prints say 3T (only 0.06%) of deflation force. I find it unlikely that this 3T will go back into derivatives and will instead move into the 'real' economy, for real goods and services where 3T is still a large number. The derivatives boat will sink, they will print, but the printed money will not go back to the derivatives boat, it will flow to the much much much smaller 'real economy' boat full of real goods and services.

The first reaction of that hypothetical 3T will be flight to the US dollar and treasuries, not real goods and services.
In a deflation, the dollar strengthens while real goods and services get cheaper because no one wants to buy.
That's the kicker and I'm almost 100% certain this is what is going to happen in the opening stages.

The danger is because debt-based currency is faith-based currency, no one can reliably predict if that USD faith would eventually collapse in light of the bank failures that would follow.
I would place my bet it saying it won't, because deflation means strong US dollar and to attack the dollar at that stage would amount to the world wanting to trash its own on-paper wealth.
The truth of the matter is that while the US is the only one that can print the US dollar, everybody uses it, so it doesn't belong to the US anymore.
Only 1 in 4 holders of US dollars is actually American.

In the short term I agree. When the focus shifts to the US rather than Europe. You will see much of this 3T going into real goods and services.

 

[neophyte]

Ok, so we're tied to the track by an arm and a leg and we think a train's coming; we can chop those of and live to limp another day or we can hope our ears deceive us.

I guess it all depends on how much we trust our ears, or those of others with supposedly better hearing than ourselves?

Quite a dilemma.

Earthjade, given that you suspect you stand more to lose than most on this board if your hearing's correct, what's the plan?

Neo

 

[hbBear]

Greece defaults, which causes another meeting.
Spain defaults. Italy defaults, which means another really big meeting.
Germany announces it is reverting to the Dmark and invites its friends to use the Dmark if they want by buying Dmark bonds
France says f*** you all we ave the franc.
Swiss go back to a franc as well.

Greece, Spain and Italy remain with the Euro but no-one uses it except the governments to pay the pensions and obligations. 100 Euro buys a loaf of bread, or 10 loaves for 1 Dmark. Everyone barters, or uses gold and silver or uses Dmarks. Mainly Dmarks.

Euro printing means major Euro inflation. Dmark remains solid and slowly everyone tries to join the DmarkZone
England prints a lot more pounds. Inflation rises. Ireland adopts the pound. England re-occupies Ireland.
The world begins to hear a new word coined by economists which means deflationary spending of money that has less and less value. The term 'Inflationary Depression' becomes popular in the interim.

The Euro mess means money flows to the Yen and the US dollar. Japan devalues Yen.

2 million Australians trade in wide screen televisions purchased for $900 in 2008 for bigger ones purchased for $600 in 2012. Japan continues to deflate. Exports start dropping. Australia's second largest trading partner drops to fourth place. It's a big drop. Aussie dollar hits 60 cents. Wide screen television sales plummet. SilverStackers swamped with WTB Fractionals posts.

US dollar strength crushes tentative pre-election recovery. US invades someone to ensure current incumbent is re-elected. It usually works and does this time as well.

MF Global model instituted throughout America and fascism is finally implemented by Congressional decree. Private assets are seized. Martial law declared. Massive arrests and internments follow. President congratulated on firm hand in solving the crisis. Private ownership of physical gold outlawed. Alaskan oil fields opened. Gas goes to25cents a gallon and America calms down. The camps remain full. Texas breaks away from the US. They are too heavily armed for the Washington elite to bother stopping them says President in not so many words. Bush family appoints new Texan governor who pledges good working relationship with US. Alex Jones loses appeal on extradition to Washington on charges of raping two college girls.

Mid 2012 China opens its version of comex. Rampant inflation in China ensures gold's trajectory to $3000 an ounce over the following 6 months. Chinese citizens demand physical delivery so gold flows start from Europe. China starts buying silver too.

GB Pound finally fails and is revalued. Riots across England. Queen asks for calm and UK turns off the lights 3 days a week. Daily Mail praises British Spirit.

Europe has another really, really big meeting, but this time they're all laughing at the press conference where they announce that the Germans have agreed to rename the Dmark but Bundesbank will keep control of it. At Christmas the Rothschild's raise a glass to justice for Uncle Louie after all these years. The New European State is officially announced the following week.

Bilderberg 2013 announced for Perth. As the year closes Melbourne Real Estate agents see signs of recovery in the market.

:lol: Post of the year!! Love it JulieW, I always enjoy your posts

 

[Earthjade]

To play it completely safe, you would want to put your money in two places:

1) Precious metals (for hyperinflation or a QE-induced precious metals bubble)
2) The US dollar (in case of deflation)

But, you need to accept the fact that ONE of these bets is probably going to lose out.
But that's the price you pay for hedging.
Look at the alternatives:

Aussie real estate - in the opening stages of tanking (I'll wait until real estate agents are jumping off buildings before I enter this market).
Equities - no thanks
The Aussie dollar - gets attacked too easily everytime some SHTF moment happens in the world

If however, I could only choose one asset to place all my wealth into, it would be gold.
Gold is actually a pretty sucky inflation hedge. When you look at all the money being added to the supply in the 80s and 90s, gold did nothing.
You wanted to be in stocks at that time where any stockbroker could make a portfolio and come out ahead (leading many to think they knew how to play markets).
But if there is a hyperinflation or, the final upleg of the gold bubble begins (fuelled by speculation and Quantative Easing), then gold is where you want to be.

But gold doesn't do SO badly in a deflation either.
It may not do as well as the US dollar, but it should do better than almost all other asset classes.
Gold was hoarded in the Great Depression and some gold mining stocks grew 500% because they were the only ventures capitalists were willing to finance at that time.

Another good thing about deflation is this would likely mean the Aussie dollar takes a big hit, being seen as a resources-driven currency.
As gold is measured in US dollars, any hit to the gold price is likely to be cushioned by a similar hit to the Aussie dollar.
That's a nice little wealth preserver when term deposits are approaching zero and the stock market is bleeding red.
If the gold price falls slower than the price of everything else in a deflation, then you can actually buy more with your asset.

So in the end, gold is probably the safest all-round bet in both an inflationary or deflationary scenario at this time.
I didn't say silver because while it's likely that silver will track gold like a little brother ON THE WAY UP, if there is a deflation, you'll want to be holding gold because silver should suffer bigger losses going down. This is because the markets still take into account its industrial component. If the world economy shrinks, then the industrial demand for silver also shrinks.

Those are just my thoughts at this time.

 

[Silverfreak]

The way things are going at the moment I reckon by Christmas 2012 silver spot will get down to Au$1.46 and the face value of a 1966 round 50c coin will exceed its silver content value.
SS will be giving the ol' rounds to their kids to go and buy lollies.

I will give you $5 each now, sell up while you still have a chance. :lol:


Poor Alex!

 

[grinners]

Of course, you can try to keep things propped up by printing money for a while, but in the end, it's not the total supply of money in the world that is determining the current situation (because most of what has been printed by Bernanke is still locked up in banks unwilling to lend or parked in US Treasuries).

If the money is in treasuries, then hasn't it been spent; namely as part of the US government budget?

 

[Guest]

Of course, you can try to keep things propped up by printing money for a while, but in the end, it's not the total supply of money in the world that is determining the current situation (because most of what has been printed by Bernanke is still locked up in banks unwilling to lend or parked in US Treasuries).

If the money is in treasuries, then hasn't it been spent; namely as part of the US government budget?

So who is paying all those Govt employees and Armed forces etc ?

 

[Butch]

I've been listening to people here and everywhere else talk about Silver and Gold growing rapidly when the economies/dollar tanks. Now people are losing their balls and saying it's going to drop down to $15-$20. The only way it will do that is if the US $ goes back up to $1.15-$1.20 crossed with the Ozzy. I'm not having a go at either of you as both of you have mentioned the dollar while some just say Silver/Gold will drop.

Earlier this year i penciled in the Ozzy to be around 80c US in 2012, but I think this will now occur in 2013. 87.5c to 92.5cUS for 2012 I think.

Unemployment rate to increase nationally to 6.5% ish. I'm so glad I have the most secure job going(We will never run out of customers) and can stay until retirement if I wish.

Interest rates - When I spoke to the mortgage retention dept to ask for a further decrease a few weeks ago, the guy tried pretty hard to put me off pushing for it. He reckoned rates wouldnt drop again after November and that it wouldnt go below 6% in this cycle. PMSL. I said I know how you guys work. You suck as many as you can with an enticing fixed rate and bang the variable tumbles.
My prediction is that many variable rates will be had at 5% to 5.5% next year and if the world economies/markets(especially Europe) tumble bigtime expect variable rates closer to 4.5%.

I missed out fixing for 3yrs at 5.19% and 5yrs at 5.39% a few years back and if it touches this again, not only will I be fixing, I'll be getting another property fixed also.

Hmm, the property market has been soft for a few years overall now so I cant see massive drops in the low/mid tier level. Expensive properties will get hit by a 10-15%+ drop, while cheaper properties might drop 5-10% in some areas. I'm not one that worries about what my property is worth as its a roof over my head. If its worth $100,000 or $1m its no difference to me. My salary never goes down so bring on lower property prices and interest rates.

I'm busting to buy acreage down south within 18mths so I hope prices soften a little and rates drop another 1.25%.


Scorp

are you an undertaker?

Given the outlook, I'd say a good profession to be in, being a former body snatcher!