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One man's Prediction for 2015
Old 01-02-2015, 07:24 AM   #1
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One man's Prediction for 2015

Right, wrong, or a little bit of both, it's not common for a single article to make wide ranging predictions about the world's economy. Never correct, often wildly off the mark, nonetheless, providing a baseline to see many of the operational factors that could affect what will happen.

While it is easy to reduce the economy and and the markets to a simple supply-demand formula, the wider underlying political and baseline economic factors for the world's nations will, at least, indicate a probable direction as events unfold.

The article does make predictions, but more importantly lays out what has been happening and what could happen as a result. Time will tell, as we watch news headlines confirm or ignore the guesses.

Not a help in planning your portfolio but rather an outline for distant early warning clues to watch for, and further, to watch the direction thereafter.

The year of dollar danger for the world - Telegraph
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Old 01-02-2015, 07:34 AM   #2
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That was one of the better ones I've read!

I did laugh at the opening line: America's closed economy.
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Old 01-02-2015, 09:25 AM   #3
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Oh well, a 20% shake out in the S&P. Inevitable someday but I would like to see some more upside first.
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Old 01-02-2015, 10:24 AM   #4
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I have often stated that the US can, and will continue to, print money. Without repercussion, as the rest of the world is printing it faster that we can. There will never be a danger of SS actually running out.

I used to think we should have a balanced budget, but if our dollar becomes stronger than the entire rest of the world, we suffer the most.

Even a slight bump in rates will cause our exports to get hammered by a even stronger dollar. We could keep our economy going by building ghost cities, or replacing all of our bridges, whether they are needed or not. But it is in our best interests to just keep a weak dollar, and let the rest of the world buy our cheaper goods.
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Old 01-02-2015, 10:30 AM   #5
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Fortunately the US is not an export economy, like several other major economies such as Germany, Japan, and China. We have enough domestic demand to stimulate our own economy. So we aren't hurt by a stronger dollar nearly as much as you might think. Somewhat, but not strongly. And we import a lot, so the stronger dollar really benefits the US consumer.
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Old 01-02-2015, 10:51 AM   #6
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People around the world hoard US currency. We export $$$$.
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Old 01-02-2015, 11:37 AM   #7
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Perhaps the mistake of drilling for shale oil inside the USA. As long as we can export dollars to a gullible world why should we use up fixed resources inside our borders? Buy all of Saudi's oil at $30 a barrel, then when they run out we can drill for our own.
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Old 01-02-2015, 11:40 AM   #8
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Quote:
Originally Posted by audreyh1 View Post
Fortunately the US is not an export economy, like several other major economies such as Germany, Japan, and China. We have enough domestic demand to stimulate our own economy. So we aren't hurt by a stronger dollar nearly as much as you might think. Somewhat, but not strongly. And we import a lot, so the stronger dollar really benefits the US consumer.
Where we are hurt the most, is companies creating manufacturing overseas. When the dollar becomes strong, it is even cheaper to use foreign labor. Or buy foreign made robots to use in the USA rather than use a person. The only reason why everything is 'made in China', is that is cheaper to do so.

If the USD was weaker, everything would be 'Made in the USA'
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Old 01-02-2015, 12:18 PM   #9
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Originally Posted by Fermion View Post
Perhaps the mistake of drilling for shale oil inside the USA. As long as we can export dollars to a gullible world why should we use up fixed resources inside our borders? Buy all of Saudi's oil at $30 a barrel, then when they run out we can drill for our own.
A big part of the reason for the low oil price is the fact that we're drilling our own supply. We're number two in the world behind Saudi Arabia right now, so you won't get one without the other.
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Old 01-02-2015, 01:10 PM   #10
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A big part of the reason for the low oil price is the fact that we're drilling our own supply. We're number two in the world behind Saudi Arabia right now, so you won't get one without the other.
The U.S, is not allowed to export crude oil so all is used internally. But we are ~ 6 million barrels a day short so we still import crude oil from about 20 - 30 different countries, of which Canada and Mexico are #1 & #2 respectively.

What is dropping the futures price of crude oil is the rate of increased worldwide production is rising faster than the rate of increase in worldwide demand.

Countries that operate national oil companies (Venezuela, Iran, Saudi, etc) need the oil revenues to support their national monetary greed. This price drop was coming and the Saudi's accelerated it by announcing they would not cut their production back to level the worldwide price.
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