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2013

Bruce Krasting's picture




 

 

13

 

The following are my thoughts about things that might happen in 2013. This (Link) takes you to a discussion of my forecasts for 2012. I got a number of things right, and some important things wrong.

 

2013

 

- The bulk of the fiscal cliff issues will be pushed into 2013. This sets up a showdown in March when the debt limit can no longer be extended.

Americans will be exhausted by this process. The poll ratings for the Senate, House and Obama will fall to record lows. The commentary from every segment of society will be against the ineffective government the country has. The ratings agencies will chime in with more warnings that the US credit ratings are at risk. Foreign leaders will speak openly that the USA is losing its position of leadership. The foreign and domestic press will have a field day.

The threat of a government shutdown, and a chance for a “Hoover Legacy”, will force the President to fold in March. The resulting “Deal” will bring modest increases in taxes ($800b over ten-years) and introduces real cuts in both Medicare and Social Security (age eligibility, means testing benefits and changes in inflation adjustments). The debt limit will be extended until January of 2015 (after mid-term elections).

Liberals will hate this result, so will conservatives. The reality will be that the steps taken will have very little consequence to the economy, budget or debt profile in the first few years. A set of future promises will have been made to right the ship, but the “Grand Deal” will be well short of what is needed. What will come will be just another kick of the can down the road.

 

- Frustrated by the lack of results on the economy, Japan's Abe will push for the ultimate financial measure; he will call for the Central Bank of Japan to "extinguish" 20% of Japan's public sector debt. This will be the first official step toward the "Platinum Coin" solution to debt. This will be very controversial on a global scale. Liberal economists will love the idea, while conservative thinkers on money will hate it. This defining moment in modern finance will not happen in 2013, but the year will end will the prospect that it will.

 

- Tim Geithner will leave Treasury and join Wilbur Ross. Tim will become a distressed investor in his new private sector life.

 

- The Yen will trade cheap against all crosses and hit a high of USDYEN 98. It will end the year back below 90.

 

- There will be a total of four super-storms that make landfall in 2013. One will hit the USA, the other three will hit Asia.

 

-The European economy will struggle for yet another year. The weak Yen and the overvalued Euro will act as a drag on growth.

 

- The Euro will remain above 1.30 for the first portion of the year, and then weaken, ending the year at 1.20. The high for the year will be 1.37.

 

- Unemployment in Spain will push 30%. Youth unemployment will rise to over 50%. By the end of 2013 serious questions will be raised as to why Spain is tearing itself apart, and would the country be better off out of the Euro. The conclusion, by many Spaniards, will be that it would be better off leaving versus staying. This would represent a big change in thinking, and set up 2014 as the year of the Euro breakup.

 

-Several states will ban the sale of high energy drinks after more evidence the drinks can cause health problems.

 

- The Chevy Volt and the Tesla will not sell well.

 

- The Swiss National Bank will maintain the 1.2000 peg for another year, but 2013 will be the last year of the dirty float for Switzerland.

 

- There will be more lawsuits and premature deaths of professional football players. The NFL will introduce a series of steps to reduce the incidence of concussions. The new rules will change both the equipment players wear, and establish new, severe penalties for late hits (3 point penalty). Fans will not like the results; critics will say that the new measures do not go far enough.

 

- Around mid-year, the Fed will reduce its monthly POMO buys to $60B per month. Later in the year the purchases will be further reduced to $50B a month. The Fed’s balance sheet will increase by $700B (25%) during the year.

 

- The 10-year bond will trade above 2% by June, and stay above this level for the balance of the year. The 30 year will reach 3.75% at one point in the fall.

 

- Gold will trade in a range, below 1800 and above 1400. Boring.

 

- The US housing market will continue to improve, but at a pace that will be slower than that witnessed in 2012.

 

- Obama will force out Ed DeMarco as the head of the FHFA. The President's new appointee will attempt to put together a new debt forgiveness ReFi program for America's underwater home owners. The effort will produce negligible results.

 

- Barge traffic on the Northern Mississippi will be restricted due to low water in February. The drop in traffic will result in higher prices, and spot shortages of raw materials/energy in the upper mid-west. Later in the year agricultural commodity prices will be impacted by higher cost of transportation. The "trains" will be the beneficiary of this.

 

- Inflation will rise modestly in the US. Full year Core CPI will be greater than 2%. When food and energy are included, inflation will push north of 2.5%. At one point during the year Bernanke will refer to the higher rates of inflation, and suggest that this is a sign of "success". He will be widely criticized for this, as there well be evidence that higher inflation is having a negative affect on the bottom 20% in the country.

 

- Tiger Woods will win a major.Rory McIlroy will not have a good season due to new equipment. Jason Dufner will win the FedEx Cup.

 

- Denver will beat Green Bay in the Super Bowl. In the NBA, the Miami will lose to Oklahoma.

 

- The Mars explorer will find carbon.

 

- The US unemployment rate will fall from 7.9% to 7.1% during the year. The widespread conclusion will be that the Fed's effort to reduce unemployment was only marginally successful, and that structural problems in the economy are the real reason for high unemployment. Taken together, these results will undermine the Fed.

 

- Jack Lew will replace Geithner as Treasury Secretary. This choice will be driven by Lew's knowledge and experience with budget matters. But Lew knows nothing of the capital markets and this will be a problem when a non-budget crisis emerges. Lew will say something about the currency markets that causes a big flap. There will be calls for his resignation as a result.

 

- There will be no meaningful gun legislation in the US during 2013. But the threat of new restrictions will keep gun store shelves empty. Gun violence in America will, of course, continue.

 

- The S&P will hit a low of 1,250 and a high of 1,500. It will be an "okay" year for stocks, but nothing special.

 

- China’s GDP will grow by 7%, a rate that is near stall speed. China will continue to create growth through infrastructure spending; more empty cities and trains to nowhere.

 

- China’s new government will crackdown on corruption. The immediate consequences will be a drop in luxury goods consumption and continued capital outflow. There will be arrests and trials of government officials caught with their hands in the jar.

 

- There will be large losses for Chinese citizens who have invested in “Wealth Management” investments that promised returns of 10% a year. The widespread losses will result in social protests.

 

- Merkel will be re-elected as the German Chancellor. But the election results will raise the question of Germany’s political willingness to stay in the EU. The election will be a turning point for the Euro FX rate. The EURUSD will weaken after the election.

 

- Greece will not leave the Euro in 2013. The economy will continue to suffer. In the fall of 2013 the pressure for Grexit will rebuild. The final exit will not come until 1st Q 2014.

 

- Spain will resist a bailout from the ECB for as long as possible. By the end of the summer the pressure in the Spanish bond market will rebuild. The actual bailout will occur at about the same time as the German election. This will hurt Merkel.

 

- When Spain is forced to accept an ECB bailout, the conditionality that is attached to the request will be cosmetic and of no significance to Spain in 2013/14. The "conditionality" will be on future years, not the present. The ECB's Mario Draghi, will deliver "Unlimited bond buying", as promised. The IMF will be a reluctant participant. The markets will end up wondering, “Who’s next?” The surprise answer is that it will be France, not Italy, that will next come under the market’s gaze. (Mario Monti will stay in the political picture in Italy)

 

- French and German politics will worsen further. Socialist France, and Capitalist Germany will move father away from each other. The squabbles between the counties will go public.

 

-Switzerland will fail to get tax treaties with France and Germany on the issue of illegal accounts. Switzerland's refusal to give up the "names" will result in economic penalties imposed by the EU.

 

- Brazil’s inflation rate will push 10%. The country will blame the USA and the Fed’s cheap money policies.

 

- Argentina will default on some of its external debt.

 

- On average, 2013 will be a colder year than 2012 for the globe. Arctic ice melt will be less than that experienced in either 2007 or 2012. La Nina conditions will reoccur in September.

 

- The Mid-West drought will abate somewhat, but annual rainfall will still be below normal. US crop yields will be higher than in 2012. Weather related problems in China, Russia and Argentina will limit crop production. As a result, the global cost of basic food stocks will rise another 10% for the year.

 

- In a complete blow off to his political base, Obama will green-light the Keystone Pipeline and approve “safe” fracking on Federal land.

 

- Faced with new production sources and a generally weak global economy, crude oil prices will drift lower in the early part of the year. But Saudi Arabia will cut production to adjust supply. The low for WTI will be 78. The high will be next fall, at $95. The WTI/Brent spread will widen from $20, to $25.

 

- The cargo shipping industry will continue to struggle with excess capacity and slow growth in global trade. Several public companies will be forced into a restructuring by lenders.

 

- North Korea will fire more rockets over Japan. Iran will have military exercises around the Straits of Hormuz. The US will spend tens of billions on naval costs in the Straits. Israel will talk tough about Iran. But there will be no major hostilities in 2013.

 

- Although there will be no new wars, there will be several periods during the year where the prospect of something happening will look very real. When this happens, there will be spikes in crude. One spike will occur in early summer; Obama will open up the Strategic Petroleum Reserve to stabilize prices.

 

- There will not be another major "Flash Crash" in 2013. However, during the year there will be thousands of examples of individual stock names that suffer from Algo Attacks that last for only a few seconds. The Wall Street Journal will publish numerous articles that describes the Attacks. The SEC will promise a review of market practices on the topic of HFT, nothing will come from that. There will be numerous "fat finger" trades. One of which will cost the firm behind the finger more than $1B.

 

- The Exacta for the Kentucky Derby: Balance the Books & Power Broker.

 

- In the baseball playoffs, the California Angels will beat Tampa Bay, the LA Dodgers will beat Cincinnati. This will set up the first ever "All LA" World Series. The Angles go on to win, but no one outside of SoCal cares, the TV audience is the lowest in years.

 

- The 2012/2013 Hockey season will be completely lost. Pregnancy rates will increase as a result.

 

- Apple will spend a fair bit of next year below $500, but will end the year close to $600.

 

- There will be no financial crisis in 2013 that undermines bank stocks. However, the question will be, “Where’s the upside”. The big move in bank stocks will not be repeated in 2013.

 

- FB will not trade above $31. This busted IPO will continue to be a drag on other tech IPOs.

 

- Daniel Day-Lewis will win Best Actor for Lincoln. A nine year old, Quvenzhane Wallis will get Best Actress. Lincoln will get the award for Best Picture.

 

6615215025_ef12118afb_z

 

 

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Tue, 01/01/2013 - 13:00 | 3112209 pfairley
pfairley's picture

With all these things on his mind....how does Bruce find time to be a sports fan?   I am surprised at the complacency...I do expect Israel to bomb Iran....also I expect some major disruptions over several China Sea issues: CNOOC just announced it is pumping oil in Philippines' & Vietnam's backyard, the Spratley Islands...after drilling for years....By Jan 15, India will send warships to defend a Vietnam joint venture recently sabotaged by China....China warships are supervising the coral & fish pillage of Philippines' Scarborough shoal...the Japan islands issue and Taiwan military strength leave a sizable allied force to confront China....Obama has been trying to ignore it all... worried to cause a recession by standing up to China....Pressure on China to go to Int'l court from orgs like the WTO is strangely lacking...I expect a military flare up to check China's outrageous behavior...and force USA and the west to at least threaten trade sanctions. Vietnam fought China in 1979 and I think is willing to fight again.

Sun, 12/30/2012 - 17:41 | 3107339 10044
10044's picture

Judging by the comments and the rating of this post, I predict Bruce will not be in the prediction business for long.

Sun, 12/30/2012 - 17:29 | 3107308 supafuckinmingster
supafuckinmingster's picture

Crystal ball-ox!!

Sun, 12/30/2012 - 15:59 | 3107061 forrestdweller
forrestdweller's picture

and we will continue to inflate the next bubble; paper money. there is increasingly more money circulating, and as long as we all believe it is worth something, it is worth something. but once the o[pinion starts to shift...

but if it will crash in 2013. probably not. i'd say a bit later.

and after paper money, what will be the next bubble; probably the value of a human life.

 

Sun, 12/30/2012 - 09:51 | 3106245 10044
10044's picture

So you have bond monetization in eu&us, inflation popping up all over the place and gold 1400-1800?? What am I missing here brucey boy?

Sun, 12/30/2012 - 10:06 | 3106262 DeeDeeTwo
DeeDeeTwo's picture

An unemployed man with too much time on his hands makes crazy lists like this. REading them is an even greater waste.

Sun, 12/30/2012 - 09:37 | 3106231 justsayin2u
justsayin2u's picture

From Coyote Blog - dead on - "Obama has absolutely embraced the imperial presidency in a way that might have made Dick Cheney blush.  Accelerated drone war, constant ducking of FOIA and transparency, increased use of treason laws to prosecute whistle blowers, claiming of power to assassinate Americans on the President's say-so, accelerated warrant-less wiretapping, using executive orders to end-run Congress, etc. etc.  And I never guessed how much the media which so frequently criticized  Bush for any expansions in these areas would roll over and accept such activity from a President of their party."  It'll get worse in the years ahead.  Gulags anyone?

Sun, 12/30/2012 - 17:43 | 3107346 NaN
NaN's picture

Intelligent analysis exists but apparently it does not quickly infect minds as fast as polemic sound bites. 

For instance, there was a Harpers article around 2006 by a scholar of executive privilege that stated historical expansions have always been retained, never repudiated. Political party is irrelevant here. The best one can hope for is that the expansion is not used. 

While Obama is responsible for drone attacks (now up to 4 times in one week), he has not invaded another country for pre-emptive reasons.

 

 

Sun, 12/30/2012 - 08:13 | 3106185 Moe Howard
Moe Howard's picture

"Gold will trade in a range, below 1800 and above 1400. Boring."

Bruce makes predictions about gold market. Moron.

 

It may be boring for a person who deals in paper. Seems like a large range to me.

Sun, 12/30/2012 - 01:53 | 3106071 malek
malek's picture

 The NFL will introduce [...] new, severe penalties for late hits (3 point penalty)

LOL - let me add some:
- Defensive players get their place in the spotlight, and finally can expect bribes to turn games (in opponent's favor)
- After a year of ridicule and scandals, the NFL splits into OFL (Original Football League) and FFL (Professional Flag Football League)

 

Sun, 12/30/2012 - 16:40 | 3107161 the grateful un...
the grateful unemployed's picture

private ownership of teams will gradually disappear, and the government (who else?) will bail out these franchises. (If you think government motors was a bad idea, how about the Washington Insiders - new name for the Redskins)

wee have already seen lockouts in NBA, NFL and NHL. real estate prices continue to fall, fewer new stadium deals, and declining television revenue make private ownership less profitable than it was. viewers expect bread and circus as their reward for honoring the empire with their loyalty. and when football players become government employees we can expect more safety gear, less hard hitting, and only two playbooks for the whole league, and they're both the same - oh and neither team can move the ball. lots of tie scores 0-0.)

Sun, 12/30/2012 - 00:33 | 3106006 ptoemmes
ptoemmes's picture

And the Mayans, the Mayans...just maybe the doomish prophecy was off a year.

Plus, you obviously did not coordinate with Karl Denninger ;-)  JK

The way The Heat are playing - Lebron aside -  they may not have the chance to loose to The Thunder in the finals...Knicks anyone?

Go Pack.

 

Pete

 

 

 

Sun, 12/30/2012 - 00:32 | 3106005 mayhem_korner
mayhem_korner's picture

 

 

Great post, Bruce.  I do think you're too middle-of-the-road on your "picks", but at least you're well-informed.  I would probably disagree most with the housing market recovery bit.  There really has been no recovery and I can't see anything on the horizon that would foster anything but further tracking down the deflating bubble.  Mortgage rates are going to struggle to hold current levels, and any rise at all puts that much more pressure on prices - and moves some of the spec buyers out of the mix. 

I think the tail end of 2013 might see some real movement...exposure of the reality of the unrepayable, rapidly expanding debt that underlies the whole house of cards.

Just my 2 cents.

Sun, 12/30/2012 - 00:31 | 3106004 Clowns on Acid
Clowns on Acid's picture

Bruce - Nice effort. Thanks.
But really it "all" boils down to Helicopter Ben. There will be some form of higher income taxes in 2013 in US. Which will have some drag on US economy. If there are some spending cuts, there will be a further drag on US economy.
Sooo....it all comes down to Benny and the Jet Printers. Can he print fast enough to take up the slack from higher US taxes and spending cuts. Any other prognostication is merely a derivative of the aforementioned coin flip.

Perhaps you see this scenario as well and conclude that it will be a wash and ergo a relatively quiet year in the markets.
I think that 2012 will be seen as a quiet year relative to 2013. 2013 will be a very volatile year IMHO. The US has been pressured from both deflationary and inflationary forces. It's a compacted spring from both sides. It will blow one way...and then perhaps the other.
Trust is gone. The Socio-economic fabric is fraying at the edges. Only extreme volatility will eventually bring the calm. But calm appears to be years away.

Sun, 12/30/2012 - 00:06 | 3105973 the grateful un...
the grateful unemployed's picture

and so nothing happens, we kick the can, but since there is no real demand for growth, the money that public debt siphons away from private development is offset. (all economies are running at hyper-over capacity. there is way too much of everything)

i am trying to think of how many communist economies were given five stars by wall street, and later went bankrupt, or nearly so; Russia, Vietnam, China. it always ends badly for the marxists, or the maoists, or uncle Ho, and the Tiger economies of SE asia. kiss China goodbye.

mexico is in its formative 'gangster' era, like the US in the 1930's. bet on mexico. how do you say elliot ness in spanish?

the northern hemisphere fares better than the southern hemisphere, where they grow that leaf that is distilled, and you all love so well. they also make gasoline out of corn, and have some of the worlds biggest slums. the BRICs dissolve.

Spielberg's Lincoln gets laughed off, even with DD Lewis hamming it up. too much exposure for both those guys.

obama stays at the ranch in crawford texas, no one notices.

 

 

 

 

 

Sun, 12/30/2012 - 00:08 | 3105976 Dr. Sandi
Dr. Sandi's picture

 

obama stays at the ranch in crawford texas, no one notices.

I LOVE that!

Sat, 12/29/2012 - 23:42 | 3105944 e2thex
e2thex's picture

Nice post BK.

It nice to know someone is following the Mississippi story.

It's going to be another disappointing year for the people who predicted the abyss for 2012.

Sat, 12/29/2012 - 23:45 | 3105952 Dr. Sandi
Dr. Sandi's picture

Try to be a little optimistic. There are still a couple of days left for everything to be blasted straight back to the hell that spawned it.

Sat, 12/29/2012 - 23:39 | 3105938 the grateful un...
the grateful unemployed's picture

one thing for certain is bruce krasting will keep blogging, overstating the obvious...

Sat, 12/29/2012 - 23:44 | 3105948 Dr. Sandi
Dr. Sandi's picture

Eventually, some of the other 99% will start understanding the obvious.

Sun, 12/30/2012 - 09:05 | 3106207 cosmyccowboy
cosmyccowboy's picture

what? that they are actually part of the 1% if you look at it globally as our dear leader does?

Sun, 12/30/2012 - 01:07 | 3106037 AGuy
AGuy's picture

"Eventually, some of the other 99% will start understanding the obvious."

I doubt it. Even when they are rioting in the streets, they will still not get it. They will be pissed at the wrong people.

 

Sun, 12/30/2012 - 10:09 | 3106267 WTFx10
Sun, 12/30/2012 - 00:09 | 3105980 the grateful un...
the grateful unemployed's picture

its only when the 99% understands the less than obvious than any change can happen (and that is occuring)

Sun, 12/30/2012 - 05:24 | 3106139 Manolo
Manolo's picture

And then, the Arctic will blow up (see link, it's already happening, and I am NOT talking about the Ice) and none of the above will happen the way everyone thinks, life is a bich ... but times are mighty interesting !

http://arctic-news.blogspot.ch/2012/08/charting-mankinds-expressway-to-extinction.html>

 

refering to:

 

 http://en.wikipedia.org/wiki/Clathrate_gun_hypothesis

 

No political or financial BLaBla is going to stop this... wish us all good luck ! (> :) < Maybe the so called "Mayan Calendar" had it right all the time...)

 

Sun, 12/30/2012 - 16:46 | 3107185 the grateful un...
the grateful unemployed's picture

fascinating if you think about, everyone was worried about the release of Co2 due to burning of fossil fuels (millions of years worth of carbon based energy released in a few hundred) now even if we stopped burning fossil fuels the release of methane would continue to acerbate the problem UNLESS we cap and burn this methane. hmmm??

Sat, 12/29/2012 - 23:20 | 3105912 Bloodstock
Bloodstock's picture

I think that, "Owe-bama will go the way of Mama Cass and choke on a tuna fish sanwich." is missing from the predictions.

Sat, 12/29/2012 - 23:43 | 3105946 Dr. Sandi
Dr. Sandi's picture

Time to squish another pop culture fable.

Mama Cass actually died from a heart attack, most likely caused by losing 80 pounds too fast. There was a chicken sandwich sitting there with her name on it, but it was the ticker that did her. Too much like the much skinnier Karen Carpenter, whose bulemia weakened her organs and caused a heart attack.

Interestingly, Cass died in the same flat as Keith Moon. The Grim Reaper punched his ticket with an overdose of Heminevrin, which is a sleep aid that is also used during alcohol withdrawal.

And to close the celebrity coincidence loop, the death flat was owned by singer/songwriter Harry Nilsson.

Nilsson also died of a heart attack in 1994 while working on an album that he took with him to the other side. Nilsson went to Rock & Roll heaven from his home in California, not in the benighted London flat.

Sat, 12/29/2012 - 22:41 | 3105835 justsayin2u
justsayin2u's picture

Obama comes out of the closet and marries a horse while his wife Chewy fights the horse for Bamy's carrot.  The 2 daughters run away with oompa-loompa meth heads that sell them into slavery in the city.

 

Sat, 12/29/2012 - 22:54 | 3105870 Almost Solvent
Almost Solvent's picture

Racist. Level = Alabama

Sat, 12/29/2012 - 23:15 | 3105903 justsayin2u
justsayin2u's picture

You got any idea where "the city" is?

Sat, 12/29/2012 - 23:08 | 3105887 justsayin2u
justsayin2u's picture

Naah.  Just fed up with all the lyinn sacks o shit in washington.  U a goobermint employee suckin off the rest o society?

Sat, 12/29/2012 - 21:41 | 3105738 alfbell
alfbell's picture

Obama will be assassinated by his daughters poisoning his food.

Bernanke will be found dead in a gay bathhouse in NYC (cause of death will be erotic strangulation).

Texas will secede from the USA, its population will 10X and it will become the world's 5th largest economy.

A technical innovation will enable the internal combustion engine to run on dirt. The planet will start shrinking in size and disappear in 2050. Real estate values will soar.

The USD will collapse no longer be the world reserve currency and a new world currency will be created: socks.

The Board of Directors of the BIS and IMF will leave planet earth (along with all the gold) on a Virgin space shuttle and colonize another planet in another solar system.

 

 

Sun, 12/30/2012 - 01:14 | 3106041 AGuy
AGuy's picture

"Texas will secede from the USA, its population will 10X and it will become the world's 5th largest economy."

On the other hand, with all of the liberals fleeing the People's Republic of Kalifornia for Texas, I think they plan on taking over and turning Texas in the next People's Republic. Liberals are like Locusts. They swarm when they see an opportunity to feast on the bountiful. When that region is depleted, them move on to another region.

 

Sat, 12/29/2012 - 20:53 | 3105648 csmith
csmith's picture

How does one get to an "OK" year for stocks with a 1400 top on the S&P?

Yesterday's close was 1402. ZIRP means there's no competition, but a 1.8% total return (current yield plus slightly above normal dividend growth) hardly qualifies as "OK" ???

Sun, 12/30/2012 - 07:52 | 3106174 Bruce Krasting
Bruce Krasting's picture

Well there is one of those "Fat Fingers" I was talking about. I typed 1400, I meant to type 1500.

Stocks will be up 7%, or so, for the year. I fixed it....

b

Sat, 12/29/2012 - 20:39 | 3105617 edwardo1
edwardo1's picture

It'll be Broncos versus The Falcons, but unlike the last time, The Falcons will prevail.

Sun, 12/30/2012 - 00:27 | 3105997 mayhem_korner
mayhem_korner's picture

 

 

Falcons cannot run the ball and cannot play from behind.  Both are needed to advance through the NFC.  They would need to beat 2 of the 3 of  Seattle, Green Bay, and San Francisco.  Not gonna happen. 

Denver's a good pick.  They will be almost impossible to beat in Mile High.  Could be another Brady-Manning AFC championship if the seedings fall right.  But don't count the Ravens out just yet...

Sat, 12/29/2012 - 19:48 | 3105505 The Swedish Chef
The Swedish Chef's picture

ZH needs more Bruce Krastings...

 

But Spains youth unemployment has already passed 50% so I guess your prediction has come true in some sense.

Sat, 12/29/2012 - 21:13 | 3105699 Darkdoc
Darkdoc's picture

Except that Bruce has no concept about the causes of "gun violence" and who causes it the biggest percentage of it, and hence his concern about a lack of a fix is clueless.

 

Sun, 12/30/2012 - 00:10 | 3105979 Clowns on Acid
Clowns on Acid's picture

Darkd - Bruce knows full well. He chooses to ignore it.

Sat, 12/29/2012 - 19:22 | 3105478 zorba THE GREEK
zorba THE GREEK's picture

Gold will definately trade above 1800 at some point in 2013,

probably in the first Q. At some point in 2013, gold will trade

over $2000 and silver over $50. If that does not happen by the

end of 2013, I will mail Bruce a silver eagle and 1/10 oz. gold

eagle. 

Sun, 12/30/2012 - 01:21 | 3106049 AGuy
AGuy's picture

"Gold will definately trade above 1800 at some point in 2013"

Not so sure on that. China may head into recession. Demand for Gold may decline in Asia,  causing PMs to be flat or decline a bit. US may also go into recession too. A US+Asian Recession would likely cause a big fall in PM prices. Personally I would like to see another buying opportunity, like we had between Q4 2008 and Q1 2009.

However I think prices for Guns and Ammo will go up, at least for the next 2 or 3 quarters. Recession + End of Unemployment benefits  (higher crime) + Gun Control + Police force cuts will make consumers load up on Guns and Ammo.

 

 

Sat, 12/29/2012 - 20:51 | 3105639 BigDuke6
BigDuke6's picture

The man wants to talk GOLD.

Hooray and happy NY to you Zorba

Sat, 12/29/2012 - 19:45 | 3105511 willwork4food
willwork4food's picture

Don't under-estimate the power of naked short selling in a sham-fiat fascist market.

Sun, 12/30/2012 - 00:41 | 3106018 mayhem_korner
mayhem_korner's picture

 

 

Agree.  It's hard to know how much dry powder the CBs have to maintain the fleecing of the unaware.  Very possible they could keep PMs in continued smackdown for some time...and 2000 is a pretty big psychological number in terms of the MSM's ability to ignore it. I think zorba hedged with the "1/10 oz".

IMHO, for all the things that gold must overcome to get to 2000, once it does so I would expect it to quickly ramp to 2400 or so as the hounds are unleashed. 

Sat, 12/29/2012 - 18:59 | 3105442 WhiteNight123129
WhiteNight123129's picture

 

1. The gov bonds are in a bubble  ==> They will fall eventuall, in hte next 5-10 years.

2, Governments are at peak intervention in the West, while proving impotent and irrelevant  ==> Drastic change in society in the next 5-10years in the west.

3. The solution proposed by BCG to save the system by reneging on entitlement promisses and at the same time tax more could prove the death penalty for the social democracy system. If there are no benefits and entitlment why pay taxes, just to fund the waste (wars etc..)? This will be a death of post WWI and WWII western political system. It loses any credibility and raison d etre. 

4. Western Central banks have morphed into a mad position and the system is broken. ==> They will have serious problem of credibility ==> Western central bank credibility issues more into all Western currencies are a risk. A new system is coming that is for sure in the 5-10 years.

5. China is making massive progress in training its people into moving into intellectual property economy.  ==> There will be great opportunities in Chinese Equities in the next 5-10 years.

6. The Energy is problem is real, and the fix from shale is uncertain ==> Great volatility in energy prices in the 5 to 10 years.

7. Soft commodities and population forecast have a problem of inconsistency, i.e. we are supposed to produce 60% more food on only 5% more land in hte next decades ==> price rationing population or population decline rationing price.

8. Water shortages will be a problem.

9.Material science is the biggest technological revolution going on right now, just starting.

10. Solar energy is a huge wildcard into the future that could trump everything else, if the price per watt continue to falls in price at teh rate it has in the past.

The Sun is currently sending 6,000-8,000 times our energy needs. The Boeing solar panels have effiency of up 38% that is converting up to 38% of the energy into electricity. Right now the problem is cost, but there are massive economies of scale still to harness, given that the Solar energy is super fragmented and the total energy produced from Solar is still a  tiny fraction of the total, if you multiply by 5 the production of solar panel and concentrate comapnies by 3 times, Solar panel could be at grid parity by 2015 in many areas, and then....

It is a new big bang for the world economy (the bright note), something unmatched in the history of the world except for the invention of writing, domestication of animals and control of fire.

Harnessing the electricity from the Sun at a competitive price is unique because it does not involve ANY conventional thermodynamic process of heat and pressure and turbine or ANY mechanical process, photons to electrons is the process. Photons knock the electron lose and create a direct current. Very very different process than even nuclear which is merely another source of heat. The materials used to produced solar panels are close to 100% reclyclable as the panel ages.  Terrible idea to go short First Solar.

11. Minor metals could benefit widely from explosion of II-VI semiconductors, thin film solar, LED, quantum dots and other exotic material science driven technologies. 

 

 

 

 

 

Sun, 12/30/2012 - 07:22 | 3106167 Lumberjack
Lumberjack's picture

1) First Wind/UPC will fold after trying to break into the solar sector and have their assets bought up by BP/Midwest. A RICO suit will complicate matters.

2) A carbon tax will be implemented by the Obama administration/congress and be challenged in the USSC. The court will rule that it is a tax, (like obamacare and SS), and is thus legal.

3) Offshore wind will be revealed as a cover for various petroleum/gas concerns to acquire drilling rights.

4) an attempt by the State Department to unify the North American electric grid with Canada and Central/South America will flop.

5) Hydroelectric power from Quebec will become very important player in the North-East.

 

 

 

 

 

Sun, 12/30/2012 - 01:57 | 3106074 NaN
NaN's picture

Chiming in on solar futures... 

In sunny regions, a lot of solar power as a supplemental source can be added to offset daytime peaks before it becomes storage-limited.  As supplemental peak power, it is a no-brainer. 

Only half the cost of solar panels installed on home roofs today is for the solid state part (based on as-installed versus wholesale prices), so there is room for performance/price improvement, but not by 10x.  (So far, solar shingles/windows/paint are only in the lab and have low efficiencies.)

Distributed solar power + storage, as an industry, could thrive in the long run with a technology treadmill of efficiency + storage capacity.  Consider incrementally swapping in higher efficiency modules for gathering and storage. Instead of having one 12kw storage system, have 4 3kw units for redundancy and for an upgrade path of one 3kw unit per year.  A trade-in system for recycle + upgrade would smooth out the revenue spikes. 

 

Sat, 12/29/2012 - 18:48 | 3105421 moneybots
moneybots's picture

"Americans will be exhausted by this process. The poll ratings for the Senate, House and Obama will fall to record lows."

 

Why?  The voters just said they want these clowns back in office, after a recent congressional approval rating of 13.  The voters got what they wanted, so there is no reason at all to complain.

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