2009 Predictions

It may have made more sense to come out with our 2009 predictions at the start of the year, but we are in sluggish mood. However late is better than soon if clarity is added to the mix, and we have had some time to dip our feet into the year's waters and confirm that the economic situation still leaves those waters rather hot, if not scalding.

We made predictions with the idea of freewill in mind, and that, the future depends on man choosing between better and worse options. In essence, choosing the bad option makes the prediction true, but such choices are not written in stone. We can, in kind of Biblical fashion, "turn from our wicked ways" and create an alternate reality.

Of course human nature being as is, we tend to doubt that the better choices are the likely ones.

Without much ado, we predict:

• Russia will implode: Given that their economy was built atop a pit of oil, they will surely get burned so long as barrel prices remain down in the $50 and under range. This should create a lot of turmoil in Russia and former satellites, some of it leaning toward the violent.
• Oil prices should remain below $50 a barrel: This, we assume, will happen so long as the world's economies continue to slow. Tensions between the Middle East and the West will grow.
• Interest rates will rise: With no place to go but up, this is quite a cheap prediction, akin to predicting the rise of the sun. However, wethinks the world will grow less and less eager to finance American spending via the purchase of our bonds without adequate reward in interest.
• Unemployment will rise to 10% by the end of 2009, with growing anger in a population that still won't be quite angry enough to understand the totality of why things have gone as they have.
• Latin America will see an explosion of falling markets and criminal activity in and out of those markets. Mainly because there is so much talk now of those nations having skirted the current problems and that strikes us as highly unlikely; if Iceland can fall, most surely South America can.
• The dollar will weaken against the Euro and by the end of the year the Middle East will have in place it's program to convert to a joint currency, to take effect in 2010.
• Wall Street will reconstitute itself with new firms, and old.

These are not bold predictions, but rather likely ones. Hence no end of the world, no Jesus in the skies, no specific declarations about a coming depression. A lot depends upon how Obama handles the set of choices placed in front of him. Balancing the financial situation here in the United States should prove difficult, but moving in that direction could be the basis of future stability. We bet on nothing.