1 January 2009

My predictions for 2009 (Kevin McKern)

1) New lows in all markets in real terms before nominal increases as inflation due to a US dollar decline effects US indexes. Hyperstagpression.

2) Strongest economies defined by strong household balance sheets on one side and reasonable current accounts on the trade side, on this basis europe and the euro are revealed to be stronger than realised. Swiss and UK and emerging europe excluded.

3) Social disorder in USA, less in China than expected.

4) The UK and Australia follow Iceland down the weak currency gurgler before the crisis finally focuses on the USA and the question of dollar hegemony itself. Its not the end of the world, only the end of Anglo-dollar finance.

5) Dollar hegemony cracks as treasuries fall. Nations flee peg. Gold goes to 1500, Silver to 40. Massive deflation becomes apparent, but only against liquid financial assets without counterparty risk, that is real money, that is gold and silver. Everywhere else a flight to real assets from dollar holding drives inflation.

6) The equilibrium numeric models of the economy to be totally discredited as we grope for a new economic paradigm.

7) Oil and most commodities do much better than expected, especially agriculture.

8) Gold and silver miners, Newcrest, Lihir, Newmont are the standout stocks. As are Oil stocks are as niche alternate energy stocks.

9) ASX-200 goes below 2800.

10) More pain and yet more pain for years to come. No going back. War and rumour of war.


Patrick said...

Well cast, do you plan on trading any of these predictions?

kevin said...

Long NewCrest and silver, Patrick. Thanks so much for your interest and comments. all the best for 2009. We will all need it.

Patrick said...

What's amazing is that the more violently things change, the faster mutants can evolve.

I own a bit of physical silver meself. I'll look into those stock picks.

Cheers mate!