My gut has been right throughout the last couple of years in a lot of things, but I am normally hesitant to make longer range predictions, but, what the hell:
Banks, despite the most recent profits, will continue to bleed money as commercial real estate becomes the other shoe to drop. Many larger banks will require more bailouts mid to late 2009, despite the strings, and smaller banks will continue to bite the dust at a fast clip. There is a good chance that the bailouts will be turned into equity shares, and eventually sold for a profit for the taxpayer. The financial sector will be more regulated, stabilize, and come back in about 2 years.
The Fed, to fight deflation, will continue to pursue some inflationary policies, keeping the cost of oil (held in dollars) high.
The overall US economy will shrink this year, probably at a pace faster than most economists will expect. The Economist predicts -3.2%. My gut says more around -4.5%, because I don't think enough of them are factoring in the coming retail and commercial real estate contraction.
Gold will stay high for many of the reasons that oil will, but will drop like a lead ballon in about 2 years. I will find this highly amusing.
Stocks will likely end the year lower than they are now, probably by another, say 750 points.
At some time in the next couple of years, we will have to back off goverment deficit spending.
Republicans will wander around in the wilderness, re-discover fiscal conservatism, and pick up a few seats in congress. They will continue to drive moderates out of the party, harming their long-term viability. I see the GOP marginalized over time, unless they learn to embrace moderates more than they are doing now.
If the US stimulus includes a massive chunk of investment in energy infrastructure, both in transmission and renewables, we will do better than most think over the next 10 years.
Our debt will start catching up with us though. Taxes will have to be raised, and that load will be shared by a lot of people, not just the rich.
I think that we may have actually permanently changed in a minor cultural way. We will start saving more. This will mitigate the credit crunch at some point, because those savings will be used to pay down debt, and pad banks as people deposit actual cash. Credit will get flowing again as this happens.
Our economy will start growing again, very slowly, in late 2010.
After that our economy will stagnate for pretty much the next two decades or so, with flat to minimal growth, as energy gets more expensive, and our economy adjusts.
As energy gets more expensive, manufacturing will move back to the US slowly, because it becomes cheaper to make things here than to ship them from Asia.
I think there is a good chance that there will be a breakthrough green/renewable energy technology within about 5-10 years. This might be a game-changer. Depending on how revolutionary it is, it would have a substantial positive impact on US economic growth.
The price of a barrel of oil will reach a consistant $100 in about 7 years, and $200 in about 13.