Top 7 Economic Predictions for the 2020s » Be Ready For Stock Market Crash 2020 (Doug Casey's) - financialanalysis


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Friday, January 3, 2020

Top 7 Economic Predictions for the 2020s » Be Ready For Stock Market Crash 2020 (Doug Casey's)

The task is to make some predictions (although "forecasts" sounds more legitimate) about the Big Picture. OK, I’m game. Let’s write some plausible science fiction, with a tinge of horror story.
#1 Demographics
First, it’s good to remember that demographics have a life of their own. That’s not good from the point of view of those of us of European descent. We’re only 10% of world population and falling rapidly. Worse, it seems we’re responsible for all the world’s problems and therefore aren’t very popular.
In Europe, I expect the ’20s will have a lot of mass migration, the largest in scale since the barbarian invasions of the fifth century. This time there will be millions, then tens of millions, of Africans coming across the Mediterranean, looking for a higher standard of living—like all migrants.
In the United States there will be hundreds of thousands coming up from Central America. A Reconquista movement will develop, to make the Southwest Hispanic again. And young Chicanos and cholos won’t be interested in paying 50% of their incomes to support old white broads on Social Security in New England.
Meanwhile, lots of Mohammedans from Central Asia will migrate north to Russia.
Millions of Chinese will migrate to Africa. The reason for this is that the Chinese have lent scores of billions of dollars to Africans to build seaports, airports, roads, railroads, mines, and other infrastructure as part of their One Belt, One Road Initiative. They’re repossessing these assets and bringing in their own people in order to run them profitably—as well as disperse excess population.
All of these things will be massively destabilizing.
#2 The Greater Depression
The consequence of scores of trillions of new currency units being printed around the world in response to the crisis that began in 2007 will be a catastrophic Greater Depression. Made worse by negative interest rates. Expect massive unemployment, high retail inflation, a collapse of the bond market, and a much lower stock market. Most important, expect a lower standard of living for the average American.
#3 The Election of a Left-Wing Democrat
One consequence of the Greater Depression will be the election of a left-wing Democrat, if not in 2020, then definitely in 2024. The US has been undergoing what amounts to a cultural revolution, because the universities, media, and entertainment have been captured by the memes of cultural Marxism. The last cultural revolution was in the ’60s. This one will be much more serious, with broader participation. In fact, the US is on the ragged edge of a civil war between the Red counties and the Blue counties. They don’t like each other and don’t share the same values. The best solution is separation.
#4 China Implodes
China is on its way to dominating the world this century. The changes in China over the last 30 years are both real and unparalleled in world history. But in the meantime, its financial system—starting with its banks—will implode. Mrs. Wong will be very, very unhappy to find that 50% of her savings has disappeared.#5 The United States Starts a Major War
The US is likely to provoke a major war, partly in an attempt to unite a culturally divided country. But not just a sport war such as we’ve had in Iraq, Syria, and Afghanistan. Probably with China, possibly Russia or Iran. Perhaps with all three. The US won’t do well, since it will find that its aircraft carriers, F-35s, and the like are equivalent to cavalry before WW1 and battleships before WW2.
#6 US Dollar Loses Its Top Status
The US dollar will lose its preeminence and will be treated like a hot potato by foreigners. Trillions will flood back to the US in exchange for whatever is available: land, companies, what have you. This will help take domestic inflation to unprecedented levels. Meanwhile, China, Russia, and numerous other countries want to discard the dollar. It makes no sense to use the currency of your adversary—or enemy. Especially when all dollar transactions have to clear through New York.
Foreign governments have been buying gold in anticipation of this. And the gold price will go considerably higher.
#7 The Singularity
But enough doom and gloom. On the bright side, we’ll approach the Singularity. Many technologies—including artificial intelligence, robotics, space exploration, biotech, genetic engineering, and nanotechnology—are advancing at the rate of Moore’s Law.
As these new technologies come into their own over this decade, the changes they create will be on par with electrification, the automobile, the airplane, and the computer during the 20th century. But all this will happen in a decade or so. These things have the potential to transform the very nature of reality.
What Should You Do?
I can give you a lot of speculations. But in times of radical change the most important thing is to keep what you have.
I suggest three simple actions. Diversify politically and geographically. Buy lots of gold and silver. Have a nice piece of productive land in a reasonably secure jurisdiction.
And get yourself a nice widescreen to watch it all happen. You might as well be entertained…
Editor’s Note: As we enter a new decade, it’s clear the world is facing a severe crisis on multiple fronts that could break out at any moment. It could cause the most significant disaster since the 1930s.
Most people won’t be prepared for what’s coming….This 1 Trigger Could Cause a Recession in the U.S. Economy in 2020.A Recession Could Be Just Around the Corner
Here is a bold claim, but one worth making: 2020 could be a dismal year for the U.S. economy. Investors beware: a recession could be ahead.
While the mainstream media is busy talking about how well the stock market has been performing, know that the U.S. economy isn’t in great shape. In fact, it wouldn’t be wrong to say that the economy is on the edge of a cliff.In 2020, things could fall apart further.
Here’s some perspective.
Look at the Federal Reserve. It’s not as upbeat as it used to be. For 2020, the Fed expects the U.S. economy to grow just two percent.Keep in mind, the Federal Reserve’s estimates tend to be very optimistic. You really have to wonder what will happen in 2020 if those who are generally more optimistic about the future aren’t excited.
Watch the American Consumer
But look beyond the Fed and pay close attention to the economic data. It continues turn dire.
You see, American consumers are leveraged.
As of the third quarter of 2019, aggregate household debt in the U.S. has grown to almost $14.0 trillion. That’s $1.3 trillion higher than the previous peak of $12.7 trillion. Here’s the kicker: consumer debt in the U.S. has been increasing for 21 consecutive quarters.
Don’t forget, debt increasing in the short term is fine, but if it continues to grow, it’s troublesome. If consumers take on more debt, they have to pay more money in order to service that debt. What happens when someone has higher debt payments? They spend less on things they want and need.
Pay attention to the chart below. It plots the debt service payments as a percentage of disposable income for consumers in the United States.
Debt service payments are already moving higher.Broadening the horizon a little bit more, the U.S. economy is heavily reliant on consumers. If consumer spending increases, the U.S. economy improves. If consumers pull back on spending, a recession follows.
How big of a force is the American consumer?
One measure of American consumers’ strength is personal consumption expenditures. On an annual basis, personal consumption expenditures in the U.S. amount to close to $15.0 trillion. The entire U.S. gross domestic product (GDP) is roughly $21.0 trillion, so that means spending by American consumers accounts for about 70% of U.S. GDP.
U.S. Economic Outlook for 2020
Dear reader, I am skeptical going into 2020.
Consumers in the U.S. have taken on a lot of debt. This may not end well for the U.S. economy.
I am keeping a close watch on indicators like consumer sentiment, job numbers, consumer debt, and several others to see the health of the U.S. consumer. If Americans stop spending, a recession will follow very quickly.

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