2013 Predictions

[superfrank]

for the record here are the main predictions from the 2012 thread:

I'm going make a bold prediction for 2012.

I think the West, economically speaking, is like a ship on a collision course with a huge iceberg. If we're lucky, we'll be able to minimise the impact, but we won't be able to avoid it.

Let's say that a banking failure means that people can't withdraw money from their bank accounts. If people have no means to pay their bills, and the army and police force are also without money, then what happens next is anyone's guess...

So my prediction for 2012 is the establishment of a new global economic order, following social unrest on a scale unprecedented in human history. As we saw with Communism in Eastern Europe, economic and political systems can unravel quickly once a tipping point is reached. However, what form the new order would take is anyone's guess...

And to think some people accuse me of excessive positive thinking!

Jeff

I predict the future will be unpredictable.

I predict a General Election due to the coalition breaking down, and a total farce developing as we end up with another hung parliament.

I also predict Arsene Wenger will leave Arsenal to become the manager of England

I predict that central bankers and governments, at the request of the private bankers, will continue to do everything in their power to reflate a broken economic model irrespective of the long term consequences thus further increasing the chances of a crack-up boom.

It's so far been true in 2008, 09, 10 and 11 and we all know they won't change course (follow the trend Jeff!).

from a markets point of view i think there's every chance that things might stay about the same (cue stock market crash on 3rd Jan!).

I reckon, eurozone collapse aside, that the UK may do better in 2012 than commentators think.

I think that 2012 will be a very difficult year. I think a major fall will come when some countries breaak away from the Euro.However, after the shock has passed and it is found that these countries are getting back on their feet there will be an upturn. The same kind of up turn that happened here after leaving the ERM.

Well I think we're going to see the repeat of this in 2012 with an added complication of lower growth.
And I don't think that there will be a break up of euro zone in 2012 which will probably excecebate the situation and delay the inevitable for later generation. I think the politician are too clever by half for this to let happen easily.

The current demand for USD as a safer haven will soon subside and we’re likely to see demand for Japanese Yen, Gold and commodities increase in the mid part of the year. The UK house prices will continue to wobble around current level as its currently in a bind with shortages in housing is met with shortage in credit availability but may explode spectacularly again but probably in 2013.

imho it was a pretty dull year compared to recent years - stock markets went on a bull run in the first 3 months then gave it all up by June before recovering to the March highs by year end.

no EZ break-up, no major crashes, the UK coalition govt still intact and Wenger still at Arsenal!

[superfrank]

here’s my contribution for 2013:

i think that this will be the year when markets accept that western central banks (and Japan’s) are going to “win” the fight against deflation by printing endless amounts of new money to generate inflation.

currency debauchment through inflation is the only thing that can now reduce the colossal amounts of public and private debt, and governments and central banks seem prepared bet the house on QE despite all the obvious risks to the system.

Japan’s new PM Shinzo Abe has suggested that Japan's central bank should print "unlimited yen" to help stoke inflation http://www.bbc.co.uk/news/business-20849204, the US is printing $85Bn a month to finance the budget deficit and the FED, BoJ and BoE will all soon be targeting output rather than their inflation mandates – the ECB will also dream up another couple of complicated schemes that are essentially money printing exercises.

so based on the above i think that 2013 might be a good year for stocks, commodities and bonds (in nominal terms). i also think that precious metals will get going again after 2 years of stagnation.

i still think that currency collapses and hyperinflations are still a real possibility, but not for a few years yet!

politically i reckon this might be the year that the UK coalition splits up – the Liberals will become increasingly desperate to save their political fortunes, and they can’t afford to leave it too late before the next election as they will need time to reposition themselves.

also, Angela Merkel is up for re-election in the Autumn (no leader of a major euro-zone country has been re-elected since the debt crisis began) and if she loses that could cause some real chaos in Europe and in the markets.

SF

[staker72]

Making a prediction is always difficult but hey, that's what we all do here (sometimes we even get it right!) Firstly I don't share the doom and gloom banking collapse/hyperinflation views.
I believe the European/American/Japanese economies world economy will limp along doing just enough to get by.

Each major economy has it's issues, largely down to having too sustained a boom which has caused huge imbalances to arise, particularly with China, but most have started on the road to tackling that.

To some extent USA and UK/European QE is countering the huge reserves built up by China so it isn't particularly inflationary and can be reversed if necessary.. Japanese QE isn't inflationary in Japan although it may be contributing to world inflation.

Specific predictions.

Greece will receive backhanded subsidies from Europe to bring it's economy under control although I doubt the Greeks will be grateful.

Germany will struggle as it realises that an export led economy only works if everybody else imports and China copies the machine tools it currently buys from them. Expect to see them looking to UK as a model but they will work together and be OK in the end.

China will have interesting times as it's costs go up to erode it's advantages, I see pain ahead and its surpluses decline but that will be to the benefit of others.

France will continue on a different path to everybody else and will rattle around for a year or 2 until reality bites and then I expect to see the huge social inequalities and tensions that have build up over the last 20 years combine with an economic crisis (think UK in the 70's on steroids) This will result in either a Thatcher type leader to reinvent them or complete chaos which may even result in British and German intervention, up to and including sending police and troops but that won't spread to the rest of Europe.

Well that's my take anyway, who knows in 2 or 3 years I may remember this post and cringe at how wrong I was.

[Iron]

I predict that the US will hit its so-called fiscal cliff on Monday. Although the fiscal cliff will be painful, perhaps it's the only way that America will get a grip on its debt mountain before it's too late and it ends up like Greece (taking most of the world with it).

Although what I predicted would happen in 2012 didn't happen, I still believe there will be a large day of reckoning sooner or later, particularly if governments like ours and America's persist with their fantasies and don't rein in their spending massively. Take George Osbourne. The man is a class A muppet! He talks a good game when it comes to austerity, but lacks the balls to take tough action.

Jeff

[Euler]

I predict unpredictability again, but hope for a stable 2013.

If we got rid of the politicians I am sure we would all be better off. They spend far too much time and money following ideologies rather than doing what is right for the populace. Will never happen.

I'm keeping close tags on Iceland and Ireland. Too different solutions to the crisis and whichever one comes out on top will likely become the model for others.

Far too much money printing going on, but as Japan has showed the outcome is uncertain. New Gov of the BoE will determine a lot for the Uk this year. Should be an interesting year.

I sense that reduced government spending, higher taxation et all will continue to be a drag on the economy and that rapid economic growth will be elusive.

I think the coalition will stay together as Labour is unelectable with their promise to borrow tons more to overcome the issue of having borrowed far too much in the past.

[Iron]

I agreed with everything you wrote until I got to this bit. The polls consistently point to a massive Labour victory, and if the economy worsens between now and the election (which it will) then I'd have thought the situation will get worse for the Tories. And God help the Tories if Labour ditch Milliband and get a leader who actually has some personality!

People generally believe what they want to believe IMHO, and many people will find comforting the notion that we can make our troubles disappear with some good old fashioned spending (particularly as the view is endorsed by many leading economists such as Paul Krugman). Labour's economic proposals will therefore be very seductive to a great many people.

Jeff

Labour is unelectable with their promise to borrow tons more to overcome the issue of having borrowed far too much in the past.

[Euler]

If Labour win there will be a flood of economic capital out of the UK. But I would imagine lots of people will vote for them because they will borrow tons to give to people who haven't earn't it and don't care.

[Iron]

I agree.

Something else Labour will do is relax border controls, although I'm sure it's nothing to do with the fact that immigrants have a tendency of voting for centre left parties...

Jeff

If Labour win there will be a flood of economic capital out of the UK. But I would imagine lots of people will vote for them because they will borrow tons to give to people who haven't earn't it and don't care.

[Euler]

I was horrified at how previous policy looked like gerrymandering to me. But if never seemed to reach the public agenda.

[superfrank]

I was horrified at how previous policy looked like gerrymandering to me. But if never seemed to reach the public agenda.

they even admitted that the objective of mass, uncontrolled immigration was mainly political after the last election and yet everyone (media included) is just so apathetic on the issue - 'biggest scandal of the last 50 years imho.

i also agree with you about capital flooding from the UK should Labour win the next election - the credit bubble masked their economic stupidity when they were in power, and they had a semi-credible leader in Blair, but they'll be no such luxury next time.

[Iron]

Zerohedge's cheery predictions - http://www.zerohedge.com/news/2012-12-2 ... oing-stink

[herbie]

I predict a riot...oh no that wont happen because tescos nicked it for their xmess tv add campaign... I also predict more rain

[Iron]

I predict that the US will hit its so-called fiscal cliff on Monday.

It gives me no pleasure to say I was right - there will be no vote by midnight Washington time, meaning the US will hit the fiscal cliff.

I hope the American politicians know what they're doing...

Jeff

[Euler]

I hope the American politicians know what they're doing...

Jeff

I predict that statement will never be true!

[Iron]

I predict you'll be proved right!

Not that our lot are any better!

Jeff