George Washington’s Blog
January 5, 2009
Here are my predictions for 2009. If these predictions sound too gloomy and you don’t buy them, bookmark this, and come back to it later in the year to see whether or not it was right.
After a short rally in the stock markets, lasting somewhere on the order of 1 to 4 months after Obama is inaugurated as President, people will realize that Obama’s stimulus plan isn’t going to work.
Specifically, it will become obvious that we’re in a Great Depression, and that nothing that Bushco or Obamaco did can get us out of it (it may take a while longer for people to realize that what both administrations did actually made the financial crisis much worse).
At that point, the stock market will crash like a waterfall. Mish thinks the crash will leave the S&P at 600. Robert McHugh thinks the crash will drive the S&P to 500 or lower (in McHugh’s worst-case scenario, the S&P could end up at 50).
At around the time of the crash, the bubble in long-term treasuries will burst. Retirees and other people who have socked away their money in treasuries will get hit hard.
The government itself will start massively buying its own long-term treasuries.
Obama will institute numerous "emergency measures" to "restore stability". None of them will be pretty, and none of them will work . . . except to undermine our liberties still further.
Its going to be a bumpy ride.
Note: I am not an investment advisor and this should not be taken as investment advice.