Since many of my Smart Economy blog predictions throughout 2006-2008 have been fairly accurate, several people have emailed me asking for my opinions for 2009. So, falling back on my track record, and stepping out on a limb, I offer my 10 Top Hot predictions for the coming year-2009. Here's what I see in my crystal ball. You don't have to pull an Amazing Kreskin to anticipate many of them.
Global Hot spots? . The world will have to learn new names and cope with unpronounceable places as we see both increased civil demonstrations and riots in Africa, Iceland, Latin America, the EU (UK, Spain,France and Germany), Russia and Asia ( Indonesia). Some places face food shortages, water shortages and energy brown-outs or black-outs. USA demonstrations and riots will get their fair share of media coverage in 2009-2010 as US state governments teeter on the verge of bankruptcy and services are drastically curtailed or eliminated. Socialism, Fascism and Communism make a resurgence. New extremist sects or religions pop up in troubled hot spots. Russia uses its new law on "extremism" at full throttle. A China crackdown follows. Several countries declare insolvency. Creeping global protectionism increases replacing globalization-Watch for new tariffs in India, China, USA and Russia. 2009 Hot spots include a) regions where tensions increase between the USA and China over control of newly discovered oil fields or gas fields or b) regions that witness a jump in arms sales into new moldering geopolitical hot spots ( ie Tiawan, Pakistan, India) by USA, UK, Germany, Sweden, France, Israel, China and Russia.
If we use annual arms sales as a proxy forward indicator of pending global hot spots, where can we expect hotspots in 2009? or later ...top contenders?: Israel, Gaza, Pakistan, India, China-Tiawan, Saudi Arabia, UEA, Egypt, South Korea, Syria, Suddan, Somalia, Venezuala. (You can't fight, attack or defend if you don't have weapons.)
Denizens in Denial: Commenting on a recent trip to Moscow, Richard Florida wonders:
"It will be interesting to see how the first post-superpower generation in the U.S.and Russia handles the looming economic crisis. Judging from the ubiquitous Louis Vuitton purses and InStyle readers in the Moscow airport, populations in both countries appear to be in denial about the prospect of a full-fledged depression. Americans still pacing the malls fervently wish that some combination of government bailouts, Federal Reserve action and the incoming Obama administration will save them. Russians cannot bear to think back to the late 1990s, when they last faced an economic fallout, and have stockpiled savings and foreign reserves in the hopes of avoiding it, even in the event of a stock-market collapse."
The Stock Market? US stock markets (S&P 500) will show signs of one or two day life, gyrating up in monthly 20 % upward swings, fooling some of the bottom-feeder crowd eager to purchase stocks at what they think is the bottom. But overall the S&P will be down a third to a half of what it was in 2008, the good old days. (Down to 400 to 600 vs 870 range in the last week of December 2008) We are likely to see more scandals, more pump and dump schemes.
The US Economy & the Global Economy?: Two options here; Bad or Really Bad. The question is how far will the US economy tank, despite continued government bailouts and stimulations? How many banks could close their doors or merge in the US? Over 100 banks including any one of the top 10 (Citigroup, Bank of America etc), who got TARP bailout funds are still insolvent now. Pubic trust and confidence (or lack of) could start on “run on banks” in 2009.
More than 10 million migrant workers lost their jobs in China during the first 11 months of 2008, Caijing Magazine reported on Dec. 17, citing a Labor Ministry official. The total will likely grow in 2009. The World Bank forecasts that global trade, which grew 6.2 percent in 2008, will shrink by 2.1 percent next year, the first such contraction since 1982.
Next financial bubble to burst? Weak Christmas sales will precipitate the commercial mortgage market bubble to burst by spring or summer of 2009 and the housing crisis and lower property tax and sales tax revenues will force some US State governments to go broke. Resurgence of mom-and-pop corner stores will occur after main street malls start to fail.
Confidence in the US financial system? That’s the big one. Will China, Japan, and the Middle East money run to the perceived safety of the $US dollar and buy new issues of American T-bills when the next global financial crisis hits (pick your bubble) ? Or will everyone abandon ship? Could go either way Milestone Points to Watch: Will the USA economy fare worse then the rest of the world or not? Which country will Obama visit first after he becomes President? China or Canada is my bet. Will the China/US business symbiosis turn into rivalry and conflict, like we saw in 1914 with the UK and Germany?
Obama:Best job in the world ? or worst having Obama ducking for cover ( some are predicting an assassination attempt ) Miracle worker? or Mirage peddler? Jury is still out-It could go either way.
Technology?: Innovation is not just alive and well, but thriving. Opportunity-savvy entrepreneurs will launch brand-new-to-the-world, industry-defining businesses in 2009-2010, despite all the gloom and doom and general lack of credit. Science and technology breakthroughs from 2004-2007 will surface as commercial ventures. Ie 4thgeneration biofuels that reach price parity with fossil fuels.
Business Landscape?: 2/3 of US GDP is driven by consumer spending. Many traditional brands and favorite retail stores and manufacturers will disappear, closing their doors for good in 2009. In the auto sector, the bailouts will only be a temporary stop gap. Will the Big Three merge into the Big Two? Or maybe only a single Big One will be left standing? If global trade doesn’t pick up, even the Walmart’s of the world are vulnerable. (Watch: container traffic volumes into US ports such as Long Beach California and credit default swaps spreads on major brands and players)
Terrorism?:Terrorists, seeking to cease on the economic weakness of the USA launch another ingenious unexpected attack taking the country by surprise; ( Such as outsourced terrorism or what I have coined "surrogate terrorism" - where someone unwittingly does the nasty deed for you, via duel-use smart technology or "biolaundering", where life-threatening pathogens, spores, bacteria or virus sources ( impregnated into online purchased agar media or in other commonly-used reagents) are propagated into a growing community of biohackersin the USA -kitchen table or garage hobbyists, mostly curious college students tinkering with biotechnology, who eventually spread them unknowingly throughout the entire country) Other wild cards...new debates--"Islamo-Fascism", new scape goats.
Will 2009 finally be the year that Osama Bin Laden get apprehended ? If he is caught, I bet it won't be in Afghanistan or Pakistan. But don't expect terrorism to subside.
Bright spots?: New leaders around with globe will emerge offering people hope and comfort, lead by a charismatic Obama. People will turn back to religion or spirituality for comfort in difficult times. Innovation will thrive in niche pockets. Feel-good movies, TV shows and books are winners. Hollywood -reeling from credit problems will be surpassed by largely unknown International film studios. Economic slowdowns and factory shutdowns around the globe will curtail CO2 emissions just like we saw in the years after the collapse of the Soviet Union. As traditional banks close, new sources of financing (online intermediaries linking lenders and borrowers, pawn shops, Islamic banks, the mafia and loan sharks, petro-dollars and sovereign wealth funds and narco-dollars) become the new go to sources of money for startups and bleeding incumbent corporations. Barter on on international level increases. (oil for loans, wheat for rice or vegetable oil etc)This recession / depression will force may people to start thinking about how to live in a zero-growth, sustainable economy.
Check back in December 2009 to see how I did
Walter Derzko--Merry Christmas and a safe healthy and Happy New Year to all our readers !!
UPDATE; Here's a prediction from Niall Ferguson: Chronicle of a decline foretold By Niall Ferguson
Related Posts: 82 Signposts to the current Recession Depression Summary from 2008
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Walter Derzko --"Changing the world, one idea at a time" ©
Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on Smart Technologies in the Smart Economy "
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