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Daily Reckoning Predictions for 2005

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  • Daily Reckoning Predictions for 2005

    Hi Guys

    Quote from the Daily Reckoning and their predictions for 2005.

    The bear market that began in January of 2000 is still the dominant force in the stock market. While stocks rose very slightly in dollar terms in 2004, when looked at through the lens of the euro or gold - they fell. In real money, stocks have gone down every year since the bear market began. They will go down again in 2005...perhaps very sharply.

    The dollar is in a bear market too. But predicting the fall of the dollar is too easy and too obvious. The great surprise will be that the dollar either goes down much further, faster than expected...or not as much as expected. In the former case, all Hell breaks loose all at once. In the latter - which we expect - the doors of Hell are pried open very slowly; the dollar falls against gold and oil, more than against foreign currencies. A soft, slow, slump takes hold in the U.S. economy...forcing consumers to stop spending so much, putting the U.S. in recession, and thereby easing pressure on the dollar itself.

    The consumer will probably be near the end of his spending spree in 2005. He is running out of time, out of money, and out of luck.

    It will be a time of deflation, not inflation. Prices for most assets will fall in real terms...even if they go up in dollars. Consumer prices may fall too.

    The major bull market in gold that began in 1998 will continue.

    If these things do not happen as we predict, we will deny we ever said them. More tomorrow.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx