Wednesday, December 31, 2014

Fearless Forecasts for 2015

One of the guiding principles of this blog is that I don't make forecasts about how or when monetary system change will take place. I believe it will take place, but don't claim to know the timing or exactly how the change will unfold. I leave those opinions to the experts who are featured here on the blog like Andrew Huszar, Jim Rickards, Nomi Prins, and others.

Just for fun, since we are at the end of 2014 now, I will throw out some "fearless forecasts" for 2015 admitting they could be completely wrong. We'll check back at the end of 2015 to see if I got any right. So, here we go:


1- The IMF will include the Chinese Yuan in the SDR basket of currencies (if I miss this one I will probably have a pretty bad year forecasting wise as this one should be a cinch)

2- The situation in the Ukraine will ramp back up as a focal point of crisis in early 2015 (say by March). The IMF needs $15 billion to keep the Ukraine from defaulting and right now they don't have it. Russia is being pressured at home economically so expect them to make it as hard as possible for the Ukraine to avoid default (to embarass the west). This one should get interesting soon. The threat of a larger military war could increase adding to uncertainty.

3- Some time by late 2015, the threat of another global financial crisis will surface in the media. The threat may or may not be real, but people will think it is real. Media and political pressure will be put on the Republican Congress to do something about it. That something will be to allow reforms at the IMF to give it more funding and ability to respond to the perceived threat. (If this does not happen by late 2016, I think it may not happen at all because the Republican Congress is well setup to take the blame up until the next election).

4- The IMF will hold more meetings to come up with some way to re-balance voting power and influence at the IMF without having to go through the US Congress. (Congress reaction to this will be interesting if the IMF bypasses them by changing the IMF voting rules).

5- Market volatility will go higher in 2015. Stock markets, gold, silver, oil  etc. will have very wide swings up and down. The US stock market will top out for now some time in 2015. This market volatility will lead up to the perceived crisis mentioned in #3 above; perhaps by the fall of 2015 (enough time to establish the Republican Congress as the entity to blame in the mind of the public, but this could easily spill over into 2016).

6- Both the IMF and the BIS will continue to issue warnings about the stability of the financial system and the need for more global oversight and funding at the IMF to deal with "the next crisis". They will have warned us they will say. And they will have. It's just that no one is paying any attention to them.

7- Gold will continue to be controversial. There will be a louder call for gold to return as money by gold advocates, but that won't happen. Gold will still be the ultimate hedge for nations, but not for the public. The general public will view gold as too expensive. If the general public opts to buy precious metals, they will mostly buy silver. If there is no crisis in 2015, the western public will not be interested in gold at all. Silver will still have a chance to do OK due to industrial demand increase for solar power, etc. Either way, silver outperforms gold in 2015. I feel good about getting this one right, whether the price goes up or down :)

8- China and Russia will form an even closer alliance in an effort to diminish US global influence and power. How this turns out will be interesting as the US Congress now is much more nationalistic and potentially confrontational with those countries. Russia and the US will both pressure the EU to be on their side. 

9- Seattle repeats as Super Bowl Champs? We'll see. Just for the record, I am not a Seahawks fan. Just an observer :). I actually like college sports better.

Even if none of the above happen and nothing major happens related to monetary system change in 2015, we will cover what happens here. There is no magic date for major change to happen. It could start happening in 2015 or much later. Time will tell. I do think  #1 above will happen for sure though in 2015. And I feel good about #7 too.

Added note: 

A question I get here is how can the average person prepare for change given that so many different future scenarios are possible? On January 1st 2015 I will have an in depth article that talks about this. It will give the history for why this blog was started, what it hopes to do, and offer some common sense ideas that anyone should be able to use to prepare for whatever happens. This article will also be provided as a Google document in Word format so that it can be easily printed and given to anyone interested. Of course it will be free to anyone who can use it. Please do hand it out to anyone you think can use it.

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