Looking Ahead

"Never make predictions, especially about the future." - Casey Stengel

As this is the last blog of 2015 it is traditional to look ahead to 2015 and see what the tea leaves hold.  As projections are notoriously haphazard and more often than not incorrect, take this blog as nothing more than tongue in cheek as if we seriously believe that we can forecast the future then we should probably be admitted to the hospital with the padded cells.  With that said here goes!

Oil prices to remain low.  My first prediction is that oil will continue to remain below the expected threshold of $85 a barrel in 2015.  This will be great for the consumer and will continue to provide the US economy with a much needed boost.  By the way this boost will be far more effective than the $4 trillion blown on asinine Federal Reserve money printing solutions and could make a real impact on the economy.

Interest rates will remain below 3% on the 10-year note.  Interest rates will continue to confound the experts who continually say that there is a bubble and that these have to go higher.  For all I know we could could easily see ourselves with a 10-year Note below 2% come year end 2016.

Deflation will continue to plague the rest of the world and will be of concern to the Federal Reserve.  I would not be surprised to see another round of quantitative easing in a vain attempt to reignite inflation but as the majority of the deflationary inputs will be from oil and technological advances, such an attempt will once again fail so it would be best if they kept their backsides firmly on their money printing fingers!

GDP growth will confound the experts and remain lackluster at less than 3%.  Even with the tailwinds of low oil prices and interest rates the consumer will continue to pay down debt rather than go out on a limb for the simple reason that the job market and opportunities will remain in the hands of large business and government which will continue to cripple the middle class thereby reducing spending and continuing the trend of slow growth.

Stock markets will continue their slow grind higher with more and more frequent knee jerk draw downs.  While it pains me to say it I cannot see (unless there is severe deflation which I doubt, or a black swan event which is far more probably and unknown) what will stop the spiral higher.  The only reason I am pained to say it is that I still believe that the higher it goes the more pain will be felt when things are revealed showing the economy to be less rosy than the current market multiples suggest, but for now it appears that the bull market will rage on.

Gold and silver need fear, greed or inflation to propel them higher and until one of those show up it may be a continued struggle for the metals.  That said I still believe in the long term outlook for them but until we get one of those three horsemen it may be one step forward and a knee jerk reaction back down throughout the year.  The gold price breaking below $1,100 an ounce is not off the table but improbable in my view.

So there you have it, my attempt at stabbing at an unknown enemy in a dark room the size of the titanic.  I hope that all of you have an excellent holiday period and I wish you all a very prosperous New Year, I am sure we can all use one!