As many are aware, I’ve successfully predicted five of the last zero total breakdowns of the system. With that record in mind, here are some prognostications for 2011.
By This Time Next Year…
Israel will have bombed someone – An Israeli-led bombing of Iran’s nuclear facilities has seemed imminent since “Mission Accomplished” was declared in Iraq in 2003. Unable to convince Obama to lend it unconditional support, and unwilling to wait for a Christian-Zionist to take the Whitehouse in 2013, Israel will attack alone, like a thief in the night.
The Euro will be down; the dollar, up; the Dow Jones and housing, way down; gold, steady or up – It’s hard to look at the United States’ account deficits, and its unfathomable—certainly unpayable—liabilities and not conclude that the dollar will soon become Zimbabwe-ized. And this is inevitable. But it won’t happen in 2011.
The reality is that the world economy has been operating on a dollar-based currency system since 1944 (with semi-gold convertibility until 1971 and fiat “credibility” thereafter.) At some point, the center (i.e. the dollar) will not hold, but until that spectacular day, I expect the valence currencies surrounding the greenback to crack up first.
So, here’s my prediction: along with a loss of faith in the Euro, by next autumn, it will be clear that “QE” has utterly failed; housing will get closer to a full retracement of the gains of the past decade, and the 2008 lows in the Dow and S&P will be broken through. Everyone will be convinced of “deflation” and falling prices.
It will be the ultimate set-up for hyperinflation.
A major vestige of the Buckley-ite movement will have fallen by the wayside—If American “conservatism” is a movement at all, then it exists on the streets with the Tea Party and online with the various group blogs that have cropped up spontaneously since the Tea Party’s rise in 2009. The neoconservatives, on the other hand, are tacking leftward and increasingly viewing the Tea Partiers, and the Religious Right, as idiots who’ve lost their usefulness.
The tweed-clad redoubts of “respectability” that were established by Buckley and his allies over the past 60 years—ISI, National Review, The New Criterion etc.—are caught in the middle and have increasingly lost their purposes. Places like NR are well funded, but many of the others aren’t. One of them will fall apart before the year’s out.
The mainstream Right will be increasingly polarized between Red State nutjobs and urban neocons. Only a Middle East war could bring them back together again.
Sarah Palin will have won the Iowa Straw Poll and will hold a commanding lead in the 2012 Iowa Caucuses—I’m not really going out on a limb here. Does anyone out there think she’s not running?
A major party or politician in Germany will actively pursue the revival of the Deutschmark—The various sovereign debt crises may lead to the breakup of the EU, but not because Greece, or any of marginal Euro countries will splinter off. As long as Brussels dispenses bailouts, the “PIIGs” have every incentive to stay in the Euro zone—to draw closer to Brussels even. If the EU is to break up, it will be because one of the big countries that pays the bills decides it has had enough.
For the past 60 years, competitors have been able to restrict German independence through vague evocations of Hitler. With the Euro disintegrating, the idea of reviving older, harder currencies will be thrust into the mainstream.
All the best in 2011!