It's that time of year when I like to look back on the year and forward to the new year. Well this year was more than just a little 'poopy' so I am only looking forward. So, here are my prognostications, preceded by my overarching themes.
Theme #1: The US debt at the personal, corporate and government levels are so high, that to drive them down, as has to happen, will cause a long term drag on the US and world economies for at least 3 years.
Theme #2: With Baby-boomers starting to retire (well more slowly now since the stock market crash), there will be a net withdrawal from the markets for at least 10 years.
Theme #3: China and India will face short term recessions as exports drop but will recover in mid-2009.
So, here are my top predictions:
Prediction #1: Productivity and entrepreneurship will increase in North America and Europe as true global competition hits home with the west and people understand the "easy" street they had it during the 1990's and 2000's.
Prediction #2: This is going to be a long and painful recession with a very slow recovery in the west. The recovery in China and India will be much quicker as their domestic markets pick up the slack; They are unlikely to see the double digit growth going forward.
Prediciton #3: The middle east is going to start to see a diminishing monetary hold on the world as alternative energy takes hold (this is more of a 2010+ prediction).
Have a great new years and seasons greetings!
DC
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