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Your Crystal Ball - Ten Years From Now?
Old 10-07-2010, 08:03 AM   #1
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Your Crystal Ball - Ten Years From Now?

My wife and I were discussing this very question yesterday, and it occurred to me this would be an interesting place to ask it. Not asking about anyone individually and not looking for political analysis - just what do you think the economy, standard of living, etc. will be like in ten years (and why if you care to).

Prompted by the unusually bad recession we've all been through - has it changed us, or not? Hopefully interesting and thought provoking...
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Old 10-07-2010, 08:49 AM   #2
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We can only base the future on the past. So I would guess there will be ups and downs and some side ways movement. But maybe it'll be different this time! (heh)
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Old 10-07-2010, 08:55 AM   #3
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I've sworn off making any prediction that involves the future...
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Old 10-07-2010, 09:00 AM   #4
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Quote:
Originally Posted by Midpack View Post
- just what do you think the economy, standard of living, etc. will be like in ten years
By October 2020 the USA will be in year 4 of recovery. The stock market bull run will be getting a little long in the tooth and some will say it is a good time to sell. But, this is a secular bull so, it is OK to stay in - buy the dip.
The unemployment rate is 6.47% and while higher than prior to the GR; it is the new norm.

The rich/poor ratio is reverting to the historical norm - prior to 1950 - as more high paying white collar jobs have not come back from the GR .

The education bubble has begun to deflate as people realize even with a college education and a job paying off the debt would take decades.

The VAT is in phase two - phase 1 was the 5% tax; 2 is the raise to 8% - going to 18%. Most people have given up on the idea of saving- VAT and higher income taxes - they live for the day; no more 'live to work'.
35 million people on food stamps - 3 million more than during the GR


A large Chinese investment firm just completed a deal to purchase Rockefeller center in NYC.

Gasoline is $10/gallon, people are glad to have it as OPEC is phasing in the basket of currency approach to buy their oil.

Crime is up across the board but focused in the poorer areas.

Racial tensions are growing between the Latino and black communities. Latinos have moved into traditionally black communities and Latino growth from amnesty and further illegal immigration has made Latinos the dominant financial and political power in those areas

Flags are at half mast for the death of David Hassoloff

Entertainment Tonight's audience surpassed the two Nightly News shows combined (CBS does not do a show).

Home prices are about 10 - 15% above their peak levels.

Kim Il Sung IV elected president of the unified Korea as people seek security.

Google scientist have developed a method of directly connecting your brain to your computer - eyes and hands no longer needed.

I'm 65 - life is good.
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Old 10-07-2010, 09:07 AM   #5
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Dex, where did this vision come from? You are a riot!
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Old 10-07-2010, 09:09 AM   #6
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Negative forces -
1. The US will get a smaller fraction of total world natural resources (oil, lithium, ...) because other nations will be relatively richer.
2. The US will pay more interest to foreigners due to our past borrowing.
3. The income shift (both before and after tax) from the middle to the top will not reverse.* I won't guess whether it will accelerate.
4. The current "well below potential employment" situation will be very slow in working its way out, leaving most Americans with a shortage of assets ten years from now.*
5. Globalization and unskilled immigration will push many Americans' incomes down toward the low end of the global wage.*
6. Population aging means fewer productive workers per mouth to feed. This is a problem for our whole economy, not just Social Security.

Positive forces -
1. Technology will continue to advance - maybe even faster if other nations do more R&D.
2. If you're a worker, population aging may make your labor more valuable, so wages may go up due to localized labor "shortages".

Maybe I'm a pessimist, but I see the negatives outweighing the positives. It think median wages will fall relative to the CPI, but not dramatically (like 1% per year).

In recent years, consumption of middle income US households probably outran their incomes because net household borrowing was increasing. I see this ending, so consumption goes down more than incomes go down.

* These are items that I think could be at least reduced by gov't action. So my prediction includes my belief that gov't won't act because there is no political consensus or political will.
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Old 10-07-2010, 09:10 AM   #7
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Quote:
Originally Posted by 73ss454 View Post
Dex, where did this vision come from? You are a riot!
My crystal ball is in 3D high definition.
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Old 10-07-2010, 09:17 AM   #8
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Quote:
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The US will get a smaller fraction of total world natural resources (oil, lithium, ...)
Mood swings increase...
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Old 10-07-2010, 09:33 AM   #9
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More straightforward question - What have you done personally for the economic situation you see in 10 years?

We may have reached a tipping point where the power of the ultra rich to divert government policy in their direction has become unstoppable. The Russians show what happens in that environment. That is combined with an electorate that is transfixed by slogans and magic fairy dust.

Quote for the day

"They fear, not without reason, that voters are ideologically conservative but operationally liberal -- that voters' cognitive dissonance makes them ardently in favor of shrinking the deficit and as ardently opposed to any measures commensurate with the problem."

That is from George Will.

Everyone is angling to keep their piece of the spending while shifting the taxes to someone else. The country is awash in money. That is why corporations are buying back their own stock. It makes the top guys stock options worth more and also means THEY HAVE NO IDEA HOW TO INVEST TO MAKE MONEY. Its financial manipulation, not investment.

As I read your post you forecast an expansion starting in 2016 (4th year of recovery) But you also say "Home prices are about 10 - 15% above their peak levels."

But since they are 25-30 percent below peak levels now you are suggesting that prices will increase 50% from today's levels.
If these are inflation adjusted prices I have to think its a pipe dream. If you are talking about sustained inflation that is a different story.
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Old 10-07-2010, 09:43 AM   #10
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The federal gvmt will be discussing how to pay for the health care bill that 'nobody' predicted would happen....

The politicians will be saying 'we have record deficits, we need to get them down to less than $2 trillion a year... remember the good ole days when Obama had only $1 trillion deficits?'

There will be a huge push to cut SS and medicare as they will bankrupt the country if we can not get spending under control.

There will be a push for a 'surge' in some Arab country so we can 'end the war'...

The average retiree will retire with $70,000 in savings. There will be a push to increase SS for the 'poor'...

The Republicans will produce a 'Contract with America' saying they should be voted back in... they learned their lesson about spending so much after they won Congress and the Presidency in 2012... they promise not to do it again....

A big storm will have hit New Orleans again... and we will be expected to rebuild it again even though it is below sea level...

The market will be tickling the 20,000 barrier...
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Old 10-07-2010, 09:54 AM   #11
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The demand for health care spending is "infinite" The inefficiencies are enormous. The public understanding of the true costs and cost effectiveness is zero. Slogans are everywhere.

Forget the cost of Obamacare which mostly just brings more people in on the paying side. It's trivial next to medicare and medicaid. Those bills are coming due without any regard to the current change.
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Old 10-07-2010, 10:28 AM   #12
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I will be ERed and running my own quant trading business from some tropical island. After my 6 hour work day, I will have such hard decisions as on which deserted beach I will "picnic" with my exotic girlfriend.
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Old 10-07-2010, 10:44 AM   #13
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Quote:
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(snip) Google scientist have developed a method of directly connecting your brain to your computer - eyes and hands no longer needed. (snip)
It's already possible to hook the brain directly to a computer. In 2008, one experiment had monkeys operating a robotic arm with their thoughts alone. But it's still experimental at this point. Maybe by 2020, brain/computer interfaces will be available for use in humans.
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Old 10-07-2010, 10:46 AM   #14
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My primary concern is the new political power given corporations by the Supreme Court. Given that corporations are international for the most part, it seems like an eventual avenue for allowing foreign interests to set the legislative agenda.
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Old 10-07-2010, 12:30 PM   #15
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If I donīt quit smoking making a prediction could very well be an exercise in futility
When i entered the hospital and while I waited for the surgery all I could think of was.... smoking.
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Old 10-07-2010, 12:37 PM   #16
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Ten years from now (if I'm not hit by a watermelon truck before then), I'll be blowing my social security checks on a new sports car....
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Old 10-07-2010, 12:43 PM   #17
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Hankster will be living in his beautiful Class A motorhome in Arizona. Unfortunately, Dex's $10 per gallon gasoline will leave him stranded there. The snowbird will have become a desert rat
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Old 10-07-2010, 12:57 PM   #18
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After the "Crisis in the bond markets" the US struggles to borrow money and pay it's bills.

All imports are banned. Gasoline and electricity are rare commodities available only to well connected union hacks.

The dollar crashes. Americans flee to Mexico looking for work.

Confiscatory tax rates drive all industry offshore. The only available jobs remaining are government jobs in tax collections and prisons.

President Nancy Pelosi confiscates all IRA and 401k account funds to be used "equitably for those in need". The Supreme Court and Congress are disbanded for lack of funds.

President Nancy Pelosi appeals to Hugo Chavez for help.

Early retirees are deemed to be "enemies of the people" and are ordered back to work on slave labor wind farm camps.
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Old 10-07-2010, 12:59 PM   #19
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Wonder what people's 10-year predictions were 10 years ago... ;-)
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Old 10-07-2010, 01:02 PM   #20
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I won't be making predictions because, back in 2000, there is no way I would have envisioned that 10 years later:

1) my standard of living would be as high as it is now and that I would be FIREd.
2) the world economy would be recovering from a near collapse

So who knows what the next decade will bring. All I can do is hope that my standard of living does not suffer too much and that the economy finds some solid footing by 2020.
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