A LOOK AHEAD TO 2010:
The next 12 months will be full of surprises due to the continued global economic uncertainty. The year ahead will not be nearly as consistently positive as this year. We are not likely to see the same double digit returns of 2009. The global economic recovery is not as robust as many have forecast. Global growth is not being driven by the North American consumer as has been the case for the past couple of decades. The lack of consumer growth will make this expansion much slower than those seen historically.
The only reason the economy is growing at all is due to the enormous stimulus spending by Government and this can not continue at the current pace for all that much longer. Government debt levels are growing at a record pace causing some Countries such as Greece to implement draconian economic measures in an effort to bring the fiscal hemorrhaging under control. North America is not immune to this escalation in debt which is causing extreme pressure in other regions.
Global central banks are going to be under pressure to keep money flowing freely, but the reality is that this cannot continue and when the taps are being turned down it will be a very unpleasant economic environment for the vast majority of people in the industrialize world. The pain will be nearly as disruptive as the financial meltdown was.
The excesses have been far too extreme for the next stage to be anything but a slow painful climb out of the current situation.
Uncertainty tends to breed contempt and I am certain there will be a substantial amount of contempt as both the central banks and governments change course. Be prepared for very uncertain and unpredictable markets later in 2010. The uncertainty will be centered in North America and Europe, with the only glimmer of economic growth showing up in Asia.
Areas of opportunity are likely to be seen in precious metals as investor’s hedge turmoil, base metals as the Asian economies move forward and the agricultural sector as the emerging economies continue to expand the middle class creating increased demand for a more diversified diet.
Have a safe and profitable New Year, but be careful out there.
The only reason the economy is growing at all is due to the enormous stimulus spending by Government and this can not continue at the current pace for all that much longer. Government debt levels are growing at a record pace causing some Countries such as Greece to implement draconian economic measures in an effort to bring the fiscal hemorrhaging under control. North America is not immune to this escalation in debt which is causing extreme pressure in other regions.
Global central banks are going to be under pressure to keep money flowing freely, but the reality is that this cannot continue and when the taps are being turned down it will be a very unpleasant economic environment for the vast majority of people in the industrialize world. The pain will be nearly as disruptive as the financial meltdown was.
The excesses have been far too extreme for the next stage to be anything but a slow painful climb out of the current situation.
Uncertainty tends to breed contempt and I am certain there will be a substantial amount of contempt as both the central banks and governments change course. Be prepared for very uncertain and unpredictable markets later in 2010. The uncertainty will be centered in North America and Europe, with the only glimmer of economic growth showing up in Asia.
Areas of opportunity are likely to be seen in precious metals as investor’s hedge turmoil, base metals as the Asian economies move forward and the agricultural sector as the emerging economies continue to expand the middle class creating increased demand for a more diversified diet.
Have a safe and profitable New Year, but be careful out there.
posted by Grant | 4:12 PM
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