I will go out on a limb: Economic prediction

[RandomGuy]

RG - 4/24/09

Another bit that didn't pan out. Yet.

I will still find it highly amusing when the gold price drops down to more sustainable historical norms. That won't change.

[RandomGuy]

Try two....

http://spurstalk.com/forums/showpost...&postcount=129

[RandomGuy]

Predicting future oil consumption rates and prices can be very tricky because the Chinese economy could crash and burn tomorrow and all of the sudden you have a glut of oil on the market....or conversely, there could be a terror attack on one of the main suppliers or supply line to Europe and all the sudden you have a run on oil, given that none of these scenario happens anytime soon, oil is an finite resource while growth is infinite......depending on the growth of demand the world could be demanding twice as much oil as today in just 20 years.......

Nope.

Demand destruction will kick in, as it already has. People will simply start buying smaller gas-powered vehicles, as they are doing now, and modify a host of other habits collectively, such as getting smaller commutes, or picking modes of transportation that require less or no oil.

The Chinese economy, even were it to crash is rapidly industrializing, and would take a catastrophic crash to change that dynamic to any appreciable degree vis a vis oil demand. I think talk of a "bubble" is vastly overstated.

[MannyIsGod]

At least RG came back, eventually.....everytime Marcus is wrong with one of his predictions he disappears for a year and comes back as another avatar, just like Yoni...in fact, I wouldn't be surprised if Marcus is here now under another one of his 'creative' alias..



Manny will eventually crawl his way back into the club to pass off his gf to other clubbers...

http://www.spurstalk.com/forums/showthread.php?t=8491

[RandomGuy]

http://www.spurstalk.com/forums/showthread.php?t=8491

7. Military Conscription Begins in Summer of 05 -

[SnakeBoy]

I remember a few years back when gas was 1.50/gal RG posted that it would take at least a decade for gas to hit $4 per gallon...I told him it would take Bush just 2 short years or shorter....a few months later gas was $4 oer gallon and RG mysteriously disappeared for almost a year

Yeah it sucked that Bush raised the price of gas. So why is your man Obama raising the price of gas now?

[Agloco]

"Inflation = imbalance in supply and demand"

no, inflation is increase in prices, period.

In mid-2008, we had speculator-driven oil price inflation to $148/barrel, while the world economy, esp the US economy (25% of world oil consumption), was in a recession (same or less demand). There was no imbalance or mismatch in supply and demand, just pure speculation detached from supply/demand actuality, iow, inflation detached from supply and demand.

When post-peak oil hits, then we'll see a horrible mismatch in demand and supply, which is exactly what the oil producers and sellers dream about and buy politicians to deliver by killing oil conservation and oil alternatives development (and denial of carbon-driven anthropogenic global warming). They won't care about the resulting world recession reducing oil demand, because they'll sell less oil at much higher prices, every businessman's dream, at lower volumes.

The short answer: Most experts think that it will come into play sometime between 2010-2015

There is still a huge amount of oil left, but what is left is a lot harder to get at and use.

That is a simple statement with some profound implications.

Another short answer:

Demand will be going up at the same time supply goes down, causing some very strong upward price increases. Oil in ten years or twenty will not be as compe ive price-wise as it is now compared to other forms of energy.

If you want to bet money long term, bet on that somehow. Wind turbine manufacturers, natural gas, solar, and people who know how to build with energy efficiency in mind. I have half a mind to get into consulting along those lines. Did a fun paper for a cost accounting class on solar power in Central Texas, and learned a lot that I have since built on.

I like to tell people we will never run out of oil and watch their reaction. You see, as the supply diminishes, oil will get so expensive that other supplies for energy will be used. We will always have some left, it will just be too expensive for anyone to want it.

Thanks for all of the responses. I think I need some time to let all of that percolate.

[Nbadan]

Another bit that didn't pan out. Yet.

I will still find it highly amusing when the gold price drops down to more sustainable historical norms. That won't change.

so when is your prediction now RG? You gonna predict the rapture next too?

I dog you RG but at least you take chances and stick your neck out on some predictions and I can respect that...in the years that this forum has been around I have never seen Manny make a prediction, economic or otherwise that actually had any teeth to it...that is a snake...

[RandomGuy]

so when is your prediction now RG? You gonna predict the rapture next too?

I dog you RG but at least you take chances and stick your neck out on some predictions and I can respect that...in the years that this forum has been around I have never seen Manny make a prediction, economic or otherwise that actually had any teeth to it...that is a snake...

Honestly, I don't know when gold will tank. The run up in gold has all the earmarks of a classic asset bubble, IMO.

At some point, it will collapse and I think that collapse will be pretty harsh.

If I knew the time, I would short gold somehow.

I don't mind going out on a limb for these things. I am not infallible, and know that some of them won't pan out. It is still fun though, and it does spark some conversation.

[RandomGuy]

I like to tell people we will never run out of oil and watch their reaction. You see, as the supply diminishes, oil will get so expensive that other supplies for energy will be used. We will always have some left, it will just be too expensive for anyone to want it.

That is an important point though. Long before all the oil is pulled out of the ground, we will have moved on to other forms of energy

The thing about peak oil is that the "easy" oil is gone. What is left requires a lot more effort to get out of the ground.

[TeyshaBlue]

so when is your prediction now RG? You gonna predict the rapture next too?

I dog you RG but at least you take chances and stick your neck out on some predictions and I can respect that...in the years that this forum has been around I have never seen Manny make a prediction, economic or otherwise that actually had any teeth to it...that is a snake...

lol @ predictions. You wanna make 'em? Knock yerself out, kid.

That predictions are somehow a metric of bbs quality is fascinating. And by fascinating, I mean re ed.

[RandomGuy]

lol @ predictions. You wanna make 'em? Knock yerself out, kid.

That predictions are somehow a metric of bbs quality is fascinating. And by fascinating, I mean re ed.

I must say though, that it does tend to expose people's mindview to a good extent.

Dan's 2005 predictions were based on his mindset, and some, like conscription in the US, were pretty badly wrong.

The flawed thinking based on ideology comes to the fore most obviously, when Republicans/conservatives predict things like "landslides" for McCain and so forth, or lefties predict quick slides into fascism. Once you start predicting things like that with little to no evidence, you really expose the hacks.

The prediction game has its uses.

, I could even be wrong about gold.

[LnGrrrR]

RG, what do you think about silver? Tons of people in the office buying it up, but I'll stick with various "safe" stocks myself.

[RandomGuy]

RG, what do you think about silver? Tons of people in the office buying it up, but I'll stick with various "safe" stocks myself.

Silver actually is cheap enough to have some industrial uses, so it actually has *some* underlying demand.

But

It is still well above historic norms from what I understand. Haven't been following it nearly as much as gold, but they are so closely linked I don't see one moving in a direction that the othe doesn't go for very long.

I don't see the massive inflation that really makes gold or silver a viable long term asset. The only value in these things has been to provide a shield against inflation.

Absent that inflation, there isn't a need.

We will see a lot of inflation from oil price run ups, but our economy is not as sensitive as it once was to such things.

[Nbadan]

, I could even be wrong about gold

.

No, your right, it's a bubble..


but ...keep buying until around Nov 2012, then watch out...

[Wild Cobra]

Well, one of my first posts on gold; 6/3/09.

From what I heard today in the news, I don't think it can be kept down. I think all precious metals will rise again. The dollar has dropped four days in a row now, to other currencies.

OK, changing my mind... Buy Gold!

This much I know. Compare the gold prices of past and present to currency rates. they should be very similar, ratio wise. If not, gold is likely over valued.

Notice I said all precious metals.

[Agloco]

Silver actually is cheap enough to have some industrial uses, so it actually has *some* underlying demand.

But

It is still well above historic norms from what I understand. Haven't been following it nearly as much as gold, but they are so closely linked I don't see one moving in a direction that the othe doesn't go for very long.

I don't see the massive inflation that really makes gold or silver a viable long term asset. The only value in these things has been to provide a shield against inflation.

Absent that inflation, there isn't a need.

We will see a lot of inflation from oil price run ups, but our economy is not as sensitive as it once was to such things.

Do you see any other inflationary pressures in the near term? How much of an impact does the Feds timing have on such things?

Do you track the other commodities much? I know that it's a volatile sector by nature.

[RandomGuy]

Do you see any other inflationary pressures in the near term? How much of an impact does the Feds timing have on such things?

Do you track the other commodities much? I know that it's a volatile sector by nature.

Near term, it would seem no, especially not with the rather lack lustere economic data recently.

Modest recovery followed by little to no growth for a long, long time.

Looks like oil's fast run up has fallen back somewhat.

[RandomGuy]

I agree that the failures will likely occur as described. The bailouts will cause farther harm, and I doubt taxpayers will see a profit. Corporate en ies will find a way of keeping profits. Afterall, they are friends of the democrats.

Probably

Sounds good

I agree the ballon will pop, but I give it a little longer than the above estimate. Gold value will drop when stocks become preferred again.

I'm still stuck on them hitting as low as 6,000 for the Dow. It is looking like I'm wrong. I just have the gut feeling this administration will make a boneheaded policy that has stock owners running.

No , but do you really think this Marxist president and pork friendly congress will do that?

I've been saying similar for how long? Except I don't believe driving moderates out will harm them I think that will save them. They at least need to drive out the liberals.

Agreed. Any stimulus money spent needs to be on infrastructure. Not social welfare.

A sad fact, and that will be our downfall. As taxes are raised, revenue increases are only temporary. It causes a decline in free market activities, which in turn, reduce revenues to lower levels than they started. As you lose wealth to tax, the tax revenues are reduced!

This should be promoted as a concept for people not to spend beyond their means. Debt itself is not bad, as long as it can be managed properly.

You're more optimistic than I. I don't see it happening that soon with the policies being implemented by this congress and president. I hope you're right about it being that soon.

I disagree here too, unless this president destroys this great nation. Once we get over the bad times, the economy should grow at close to 8% annual, making up for prior losses over time.

Not if corporate and income taxes rise...

remove income tax, move to a consumption based tax, and manufacturing will move back here more readily than any other means of trying to accomplish that.

The prospective financial gains are definitely there now to make more people wanting to develop it. I have a pretty open mind on scientific things. Unless we develop cold fusion, I don't see any cheap energy other than solar and nuclear. Improving the efficiency of solar plants would probably be the best payoff.

Maybe. I say that is really too hard to predict. Up and down, yes. Maintaining? Too many factors to predict that one in my opinion.

Anyone looking for WC predictions can go here.

The U.S. economy will not grow at 8% again in my lifetime.

[RandomGuy]

A sad fact, and that will be our downfall. As taxes are raised, revenue increases are only temporary. It causes a decline in free market activities, which in turn, reduce revenues to lower levels than they started. As you lose wealth to tax, the tax revenues are reduced!

A "fact" eh?

Care to quantify that? or provide some support for this theory?

You seem to be under the impression that once money is taxed, it goes into the government and disappears. It does not.

Frankly, we need to be borrowing as much money as we can right now, and using that to invest in infrastructure while interest rates are so low.

Since borrowing costs are so low the Government is locking in a lot of long-term savings as it replaces 20-30 year old bonds with newer ones with lower rates.

Debt issued at 8.5% in 1990 is being replaced by debt issued at 2% today.

[Nbadan]

RG in 2009

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.

Not quite...

[RandomGuy]

RG in 2009



Not quite...

Yup. That one was definitely wrong.

Gold is still far above historical norms, although if it sustains the price for another few years, then I can only conclude something underlying has changed.

One potential culprit is the fact that they have gold-based ETFs that have come along in the last few years. This does represent some substantial risk for volatility, IMO.

We'll see.

[RandomGuy]

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.

Sort of, but not too insightful. Mostly right.

The Fed, to fight deflation, will continue to pursue some inflationary policies, keeping the cost of oil (held in dollars) high.

Pretty much right.

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.

That was right, especially given the economic data at the time turned out to show the economy was worse than we had thought it was.

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.

Wrong. I will still find it amusing when it plummets.

Stocks will likely end the year lower than they are now, probably by another, say 750 points.

Wrong.

At some time in the next couple of years, we will have to back off goverment deficit spending.

Sadly wrong.

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.

Sadly right, see: tea party freshmen

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.

It didn't. We won't.

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.

Right wing extremism and lack of ability to comprimise in action. Wrong.

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.

We were deleveraging, now we are not. Jury is out.

Our economy will start growing again, very slowly, in late 2010.

Have to re-check, moderately right if memory serves.

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.

This might be turned around by manufacturing. Long long term prediction though. Jury is out.

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.

Panning out, although it is higher labor costs in China that is helping drive. I would say this was wrong, short term.

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.

Seen some tantilizing things starting to happen. Jury is out.

The price of a barrel of oil will reach a consistant $100 in about 7 years, and $200 in about 13.

This was based on an assumption of prices going up about 6%-7% per year.

They exceeded that rate, rather obviously. Speculation or asian demand? Little of both.

[RandomGuy]

China will continue to grow quickly over the next 5 to 10 years, then suffer greatly when the ulative effects of pollution, and an aging population hammers their productivity.

Russia will continue to suck ass, and decline by just about any measure.

North Korea will hang on for a while, and may eventually simply disintegrate within 20 years or so.

Iran's government will moderate somewhat, as the aging zealots of the Revolution die off.

Cuba's communist regime will survive another 10 years or so, and that country will abandon communism, and become rather wealthy in about 25 years.

I don't see the US disintegrating over 40 years as ES does.

Interesting. China thing looks on track.

[RandomGuy]

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.

GOP still wandering.

Coming to a head now. The chickens have come home to roost.