Since this eventful year of 2008 is nearly up and I have some free time after graduation, I have decided to update my blog to put some predictions up for the upcoming year. I plan to write voraciously in the new year and as one who has followed the blog can tell, the volume of posts each months continues to rise. Now for the predictions--
1)I predict that Bernard Madoff will not be the biggest crook to come out of the financial mess of the past year. I know that is hard to fathom, but if this comes true it will be the story of the new year.
2)The federal government is going to expand under Obama, but the deficit will shrink in succeeding quarters as the payouts for the wars decrease and the trade balance improves because US demand for imports falls with the weak economy.
3)The Federal Reserve will raise interest rates in the second part of the year to try to gain more buyers for US bonds. The current 0-.25% window is ridiculously low and killing off any propensity to save Americans may have. Just going to the bank and looking at the 3% returns on CDs is depressing.
4)Oil prices will stay low, resulting in social disorder in some petroleum-based economy. The early signs will show when the oil powers have to cancel projects because they budgeted for them at five times the current price. Telling the citizens you cannot build a hospital because you do not have the money does not make many a people happy.
Give your thoughts and have a happy new year
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