Posted: Tue Jul 20, 2004 1:33 pm Post subject: Predicting the future
Over the last few months I have analyzed the US economy and I have come to a few conclusions.. The so called 'economic recovery' is very likely at peak. From now on, things will go downhill. There are numerous reasons for this. To name a few: Disappointing job-growth, high inflation, less consumer spending and increasing energy-prices because of tight oil-supply and attacks on pipelines.
I will now make the following bold predictions..
By the end of 2004:
...crude oil has broken new records at $50 or higher a barrel
...the Dow Jones has taken a nose-dive to 9000 levels or lower
...the Nasdaq will be back at 1500 or lower
...the 'Recovering economy' will be back into recession
...gold will trade at levels above $425 / ounce
...the Real Estate-bubble will have popped
...Osama Bin Laden will have been captured (just before the election)
...the Elections will have been postponed because of a 'terror threat'
...there's a chance on a natural gas/heating crisis the coming winter
Posted: Tue Jul 20, 2004 1:59 pm Post subject: hmmmm
I would say that thats a good assesment but I would say oil over $45.00, no real estate bubble collapse yet, dow and nasdaq at 9500 and 1700 or so... If the elections are postponed then we have serious problems other than peak oil...
Postponing the elections would be a serious problem but there is no greater problem facing civilization than peak oil.
I just read on MSN that Greenspan blames high energy prices for inflation and decreased consumer spending but he believes that (high energy prices) is only temporary. Indeed, according to our venerable Fed chief, we are on track for "sustained growth".
With all due respect to Greenspan, sustained growth is the opposite of sustainability.
Aldert, I hope your wrong, but most of your predictions seem likely. Of course, there's the remote possibility that things will dramatically improve in Iraq and the oil will start gushing out of there and we'll be back in "party mode" squandering the future's opportunities.
My vision (perhaps pipe dream?) is that a critical mass of awareness in the noosphere will be reached and new forms of collective organization will happen spontaneously all over the globe.
Yah, I heard Greenspan's speech today and it didn't surprise me that much actually. I didn't expect him to say anything else. Markets don't like to hear bad news.
If Greenspan's words were more along the lines of the following: "Energy-prices are not likely to ease in the coming months and we will see higher inflation and fall back into a new recession" , then I don't think that would have made wallstreet very happy. The stockmarket is very vulnerable at the moment. It would have caused an instant market crash.
I really don't see why oilprices would go down alot in the weeks ahead. Attacks on pipelines and supply-disruptions happen almost weekly now and I don't see why this situation would improve.
Add the fact that OPEC has no spare-capacity left (with Saudi Arabia nearing a peak???) , this essentially means that oilsupply cannot grow no more.
Like you said: "Sustainable growth is the opposite of sustainability."
oh the irony. _________________ PEAK OIL CENTER
http://members.home.nl/peakoil/
If the dudes in the desert decide to blow some big pipeline in Saudi Arabia, things got get much worse at a quicker pace. Otherwise, yeah -- your guess is reasonable.
Posted: Tue Jul 20, 2004 6:53 pm Post subject: Re: Predicting the future
Aldert wrote:
...crude oil has broken new records at $50 or higher a barrel
I agree. One terrorist attack on oil infrastructure in Saudi Arabia could have us there tomorrow. How long we stay above $50 depends on how bad the damage is.
Quote:
...the Dow Jones has taken a nose-dive to 9000 levels or lower
...the Nasdaq will be back at 1500 or lower
If oil is above $50, that is likely.
Quote:
...the 'Recovering economy' will be back into recession
...gold will trade at levels above $425 / ounce
Not sure on those. Maybe, maybe not. Depends on if oil stays high for a long time.
Quote:
...the Real Estate-bubble will have popped
If the fed keeps raising rates, I could see that.
Quote:
...Osama Bin Laden will have been captured (just before the election)
You seem to be implying that Bush already knows where Bin Laden is and is waiting for the right time to pick him up. I find that unlikely. IF the Bush administration knew where Bin Laden was, and lost him later, and then the public found out that Bush was trying to get cute with the capture for an election bounce, there would be a terrible backlash against Bush that would seal his defeat.
For that reason, I believe Bush would not delay the capture at all. They would get Bin Laden the second they could. No delay.
Quote:
...the Elections will have been postponed because of a 'terror threat'
Not likely. A mere threat will not delay election. It would take an actual attack with serious loss of life. A few dozen people killed on a car bomb in the USA WILL NOT delay the election.
A nuclear dirty bomb in the Dallas Cowboys stadium on the Sunday before the electrion WILL delay the election.
Quote:
...there's a chance on a natural gas/heating crisis the coming winter
Could someone point out some facts regarding this...
It seems to me that real estate is one of the most valuable things there is...I mean who doesn't want a piece of land to call their own, etc.?
On the other hand, it makes sense that if people suddenly aren't making any money then they're not going to go out and spend hundreds of thousands of dollars (that they don't even have). IOW, demand for real estate will shock and the bubble bursts. Is that what is being talked about when we mention the real estate bubble?
It seems to me that real estate is one of the most valuable things there is...I mean who doesn't want a piece of land to call their own, etc.?
Yes it is. But how much is it worth?
Think seventies. Think about interest rates around 10%. Then look at the prices. With higher interest rates these kind of prices simply cannot be maintained.
crude oil has broken new records at $50 or higher a barrel
$50 dollar oil is coming. Barring terrorism, a combination of unrelated political/economic disturbances in producing countries (Venezuala anyone?) or the untimely collapse of the Ghawar field in Saudi Arabia, I thing that date will be next spring to summer, unless the global economy craps first. Then add a few more years.
The stockmarket has fluctuated by a few thousand points over the past decade. Analysts wont even think twice if the decline from recent peak is less than 10%. 9K would make them take notice. 8K would start to cause real worry.
Quote:
the 'Recovering economy' will be back into recession
A recession is possible. I doubt it will happen prior to the election, unless forced by external events beyond US control, like our foreign creditors liquidating their ownership of our treasuries (purchased public debt) or unexpected oil shock. Otherwise I think Bush has greased the economy enough via tax cuts, wartime spending and corporate handouts, that it should be able to slide into next year before getting bogged down. Long term fundamentals suck for our economy, but its further out than our election. Unless something comes along first.
I dont follow gold so I wont speculate there
Quote:
the Real Estate-bubble will have popped
That is gonna happen soon enough. Definately if interest rates are raised. Again though- this year or next. I think things stay calm before the election. Then its anyones guess.
Quote:
Osama Bin Laden will have been captured (just before the election)
Unless the US gov't has caught him and has him on ice somewhere, already, the US probably wont be able to catch him for political purposes. If the US legitimatlely catches him in October, then we either got good intel or good luck. Probably the latter. Otherwise, we'll see him when we will see him.
Quote:
the Elections will have been postponed because of a 'terror threat'
Not a chance. I am not sure they would even get cancelled/postponed in the event of... t
This looks like a trial ballon on constitutional rollback. Didn't go over to well.
Quote:
there's a chance on a natural gas/heating crisis the coming winter
Definately. It wont be an actual supply crisis, but it will cost friggin bundle to heat this winter, and that will translate into political and economic pressure.
Personally, I think we will continue to bump along with this anemic economic regime, touted by the Bush admin as a robust economy. What that means is slow and unsteady growth that is distributed unevenly accross the country and economy. A select few will prosper, more will sink, but the vast majority will continue to consider ourselves lucky if we remain stable economically. The growth will continue as long as money keeps flowing into the economy, whether the source is legitimate activity or debt financed, until some force smacks it down. That could be inflation/interest rate increase, foreign flight from our debt market or an oil supply crisis (whether caused by temporary disruption or peak oil).
My bets are on 2005 recession with Kerry or a 2005-2007 recession with a Bush reelection, the main reason being a ramp up of defense spending and potential resumption of the draft an combined with fresh tax cuts.
Either way we're screwed.
But then again we're still screwed by peak oil.
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