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Prediction for 2012

turbin

Gold Member
Jan 7, 2002
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US are still struggling with high unemployment, low housing sales, but the only good thing is better corp earnings derived from emerging markets... Investors are all focus on the helpless situation in the european markets.. Canadian markets are not doing any better as you should know... China, inflation and housing bubble situation not helping... As a sum, many fund analyst are predicting 2012 will be another choppy year like 2011.

Any comments?
 

bankerboy80

Member
Jan 12, 2007
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I think the US and their markets will prosper in 2012 while most other markets will be flat to declining. The US saw the peek of their troubled times in 09 - 10. Europe has not seen their peek yet and GDP growth in China and India is showing signs of slower growth rates. History is on the side of the US as in every election year except for two, the US market has ended higher. I am not sure what will happen in Canada. There is some troubling signs in the housing market, specifically in BC.
 

turbin

Gold Member
Jan 7, 2002
1,541
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Nothing else to buy besides US dividend paying stocks (I would try to avoid banks)... US High yield bond is looking attractive as well.

I am slightly bullish on gold bullion as well...
 

oil&gas

Well-known member
Apr 16, 2002
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Ghawar
Why rising debt will lead to $10,000 gold

http://www.stockhouse.com/Columnists/2012/Jan/11/Why-rising-debt-will-lead-to-$10,000-gold

Nick Barisheff
11th Jan 2012


Today, Id like to focus on one important idea: the direct relationship
between the rising price of gold and the rising levels of government
debt that result in currency debasement. Since we measure investment
performance in currencies a clear understanding of the outlook for
currencies is critical.

In order to understand golds relationship, its important to understand
that gold is money. It is not simply an industrial commodity like copper,
or zinc. It trades on the currency desks of most major banksnot on their
commodities desks. The turnover at the London Bullion Market Association
is over $37 billion per day, and volume is estimated at five to seven
times that amount clearly, this is not jewellery demand.

The worlds central banks know gold is money: after decades of modest sales
they have become net buyers since 2009. This trend strengthened in 2010
and gained momentum in 2011. They are buying gold as a counterbalance
to their devaluing currencies.

As money, gold has provided the most stable form of wealth preservation
for over three thousand years it still does today. Gold has outperformed
all other asset classes since 2002.

This chart clearly shows that U.S. federal debt (purple) and the
price of gold (gold) are now moving in lockstep. This correlation will
likely continue for the foreseeable future. The red line represents the
repeatedly violated government debt ceilings.

(Chart US Government Debt deleted)

Based on official estimates, Americas debt is projected to reach $23
trillion in 2015 and, if the correlation remains the same, the indicated
gold price would be $2,600 per ounce. However, if history is any example,
its a safe bet that government expenditure estimates will be greatly
exceeded, and the gold price will therefore be much higher.

And its not just the U.S. Most Western economies have reached
unsustainable levels of debt that will be impossible to pay off. Its worth
noting that the U.S. Federal Reserve, unlike the European Central Bank,
can create currency without restriction. The U.S. dollar has been the de
facto world reserve currency for over half a century; the rest of the
worlds currencies are essentially its derivatives. Whether global debt
is in euros or Special Drawing Rights issued by the IMF, the Fed, and
thus indirectly the U.S. taxpayer, may become the lender of last resort.

There are four possible ways to reduce government debt:

One: Grow out of it through increased productivity and increased
exports. This is highly unlikely, as Western economies, and even China,
are poised for recession.

Two: Introduce strict austerity measures to reduce spending. This has the
unwanted short-term effect of increasing unemployment and reducing GDP,
resulting in even higher deficits.

Three: Default on the debt. This will make it difficult to raise future
bond issues.

Four: Issue even more debt, and have the central bank in question simply
create whatever amount of currency is needed.

Most politicians will select option four, since few have the political
will to choose austerity, cutbacks and full economic accountability
over simply creating more and more currency. Almost inevitably, they
will choose to postpone the problem and leave it for someone else to
deal with in the future.

Last August, the world watched as the U.S. government struggled to come to
an agreement on raising the debt ceiling, and was forced to compromise and
delegate the final solution to a super committee. Its lack of political
will earned the country an immediate downgrade from the S&P. Then,
the hastily convened super-committee failed to reach a solution.

In Europe, matters were even worse. Greece did try to write off half
its debt, but Germany and France reminded the Greeks that, if they
did, no one would buy their bonds. The British and Irish implemented
austerity measures that raised unemployment and reduced GDP, resulting
in even higher deficits. The Italians watched their bond yields rise to
seven percent. While the tsunami and related nuclear incident deflected
attention from Japans financial problems, it is a temporary lull, because
Japan has the highest debt to GDP ratio of any of the developed countries.

In order to compensate for slowing growth, governments attempt to devalue
their currencies and thus improve export competitiveness. This can lead
to a global currency war that author and Wall Street/Washington insider
James Rickards discusses in his bestselling new book, Currency Wars. This
process is now well underway.

A recent Congressional Budget Office report predicted the U.S. federal
governments publicly-held debt would top an unsustainable 101 percent
of GDP by 2021. Currently, the official U.S. debt is an astronomical
$15 trillion. Yet this is only the current debt. If the U.S. government
used the same accrual accounting principles that public companies must
use, unfunded liabilities like Social Security and Medicare make the
real debt more than $120 trillion. This represents over $1 million per
taxpayer. Obviously, this amount is impossible to repay.

Its interesting to note that in almost every recorded case of
hyperinflation, the point where inflation exceeds 50 percent a month was
caused by governments trying to compensate for slowing growth through
full-throttle currency creation. This is exactly what we are seeing today.

These events gave me the confidence to title my new book $10,000
Gold. The book connects the many trends that will be directly and
indirectly responsible for both the rising debt and the rising gold
price over the next five years. It will be published this year.

To make matters worse, the irreversible macro trends I discussed in last
years Empire Club speech are still very much in place today. These include
the added costs of retiring baby boomers, systemic unemployment due to
outsourcing of Western jobs through globalization and rising oil prices
due to peak oil. These irreversible trends will increase unemployment,
lower GDP, reduce tax revenues, increase deficits further and force
governments to borrow even greater amounts.

Governments find themselves between the proverbial rock and a hard place,
as even austerity measures tend to negatively impact GDP. As GDP falls
and debt increases, credit downgrades are likely to follow, resulting
in higher bond yields followed by even greater deficits. This becomes
an unstoppable descending spiral.

Loss of purchasing power against gold continued unabated last year. The
U.S. dollar and the British pound have lost over 80 percent of their
purchasing power against gold over the past decade, and the yen, the
euro and the Canadian dollar have lost over 70 percent.

As we remind our clients this is not a typical bull market. Gold is
not rising in value, currencies are losing purchasing power against
gold, and therefore gold can rise as high as currencies can fall. Since
currencies are falling because of increasing debt, gold can rise as high
as government debt can grow.

(Chart Currency Decline deleted)

The sovereign wealth funds as well as the more conservative central banks
will have little choice but to re-allocate to gold in order to outpace
currency depreciation. This is why some central banks, particularly
those of China and India, accelerated their gold buying in 2011, for
a third year in a row, to nearly 500 tonnesabout one-fifth of annual
mine production.

While central banks have been net purchasers of gold since 2009,
the real game changers will be the pension funds and insurance funds,
which at this point hold only 0.3 percent of their vast assets in gold
and mining shares. Continuing losses and growing pension deficits will
make it mandatory for them to eventually include goldthe one asset
class that is negatively correlated to financial assets such as stocks
and bonds. When this happens, there will be a massive shift from over
$200-trillion of global financial assets to the less than $2 trillion
of privately-held bullion.

In considering where gold will be at the end of 2012, I looked back
to my first Empire Club talk of 2005. I said then that it didnt really
matter whether gold closed the year at $400 or $500 an ouncethe trends
were in place to ensure it had much further to rise. Seven years later,
we can say the same thing. It doesnt matter whether gold ends 2012 at
$2,000 or $2,500, because golds final destination will make todays price
seem insignificant.

These can be frightening times, but gold always offers hope. We may
not be able to heal the global economic problems of government debt,
but individuals can protect and even increase their wealth through gold
ownership. Gold bullion ownership, not mining shares, ETFs or other paper
proxy forms of ownership, is an insurance policy against accelerating
currency debasement. We use the analogy that - In the case of fire,
would you rather have a real fire extinguisher or a picture of one?

A number of people have approached me recently and said they wished
they had listened five years ago. They feel they have missed the boat,
that its too late to buy gold. For those who feel that way, let me close
with a Chinese proverb I discovered last year:
The best time to plant a tree is 20 years ago. The second best time
is today.
 

oil&gas

Well-known member
Apr 16, 2002
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Ghawar
Gold is the common denominator

Gordon Pape has this to say on gold.

Gordon Pape
Jan 11, 2012

There is not a lot of consensus about what's going to happen in 2012 but
there was one point on which the three speakers at last week's meeting
of The Empire Club of Canada could agree: Gold will move higher.

The occasion was the Club's 18th Annual Investment Outlook, attended
by several hundred people at Toronto's Fairmount Royal York Hotel. The
presenters were Stephen Harris, head of research, Macquarie Capital
Markets; Nick Barisheff, president of Bullion Management Group; and Fred
Sturm, executive vice-president of Mackenzie Financial and an expert in
natural resource stocks.

Overall, their views on the coming year varied but the common denominator
was their agreement that the price of gold will move higher in 2012. Here
is a summary of their comments.

Stephen Harris
While acknowledging that it will not be an easy year,
Mr. Harris predicted a modest rebound in the stock markets with all of
the growth coming in the first half. He identified five themes that he
believes will predominate in 2012, as follows:

Deleveraging
We are in a long-term deleveraging cycle with governments,
financial institutions, and consumers are all seeking to shed debt. This
process, by definition, ends up being a drag on growth. He does not
foresee a Japanese-style scenario for the U.S. but says it will be a
"long, slow grind".

Sovereign risk
The difficult position facing many governments severely
limits their ability to respond to economic weakness with fiscal
stimulus. The money just isn't there. As a result, monetary policy will
be accommodative for many years. He predicts U.S. interest rates will
remain at current levels until at least 2015 "and a case can be made
for 2020". This will be good for gold but bad for financial institutions
because low rates compress spreads.

Widening growth gap
The rate of GDP growth among developing nations will
continue to outstrip developed countries and the gap will widen. Over the
next five years, the International Monetary Fund predicts that developing
countries will contribute 70 per cent of global growth.

Synchronized easing
Central banks will act in concert to cut interest
rates and/or employ quantitative easing. Falling inflation will facilitate
this; he sees the U.S. inflation rate below 2 per cent by spring while
China's will fall to less than 3 per cent.

Strong corporate profits
Mr. Harris said that profits of non-financial
companies in the U.S. are at 60-year highs and predicted a further 7
per cent rise for S&P 500 companies this year – "and that could be
conservative".

His bottom line: Single-digit returns for stocks over the next few years,
with the TSX hitting 15,000 by June and then pulling back to 13,500; gold
(his top pick) at $2,500 (U.S.) by year-end; and oil at $120 (U.S.). He
advises emphasizing resource stocks in the first half of the year and then
rotating back into defensive issues such as utilities in the second half.

Nick Barisheff
s you might expect given the business he is in,
Mr. Barisheff is also bullish on gold but for somewhat different
reasons. He ties the rise on the gold price directly to the increase
in government debt and displayed a dramatic chart that illustrated
how the two are moving in lock-step. "Gold is not rising in value," he
said. "Currencies are losing their purchasing power in relation to gold."

Mr. Barisheff, who has written a book titled $10,000 Gold which will be
published later this year by John Wiley and Sons Canada, said that if the
unfunded liabilities of social security and Medicare are included real
U.S. debt would be more than $120-trillion – more than $1-million per
taxpayer. He called the accumulation of government debt "an unstoppable
descending spiral".

He concluded: "It doesn't matter whether gold ends 2012 at $2,000 or
$2,500 because gold's final destination will make today's price seem
insignificant."

Fred Sturm
His main theme was that 2012 will see us "move from a year
of high uncertainty to a year of more certainty". That doesn't mean
everything is going to be fine – only that we will be more comfortable
about knowing what is to come.

In this context, people should start taking a longer-term view in making
investment decisions, Mr. Sturm advises. Put the percentage of your
assets you are comfortable with into safe securities and invest the
balance for the long term. Stocks are a good choice, as he believes
market valuations are low at present. Precious metals will continue
their upward rise as long as interest rates stay low.

He did not set any specific targets for 2012 but simply advised the
audience to "go into the year with reasonable prudence but adequate hope".

It's interesting to note that none of the speakers predicted an economic
collapse and a market meltdown in 2012. Even Mr. Barisheff avoided going
that route despite his grave concerns about rising government debt. As
Mr. Sturm put it, referring to the year ahead: "It ain't great but it's
not 2008."

Let's hope he's right.
 

msog87

Banned
Dec 11, 2011
2,071
1
0
US are still struggling with high unemployment, low housing sales, but the only good thing is better corp earnings derived from emerging markets... Investors are all focus on the helpless situation in the european markets.. Canadian markets are not doing any better as you should know... China, inflation and housing bubble situation not helping... As a sum, many fund analyst are predicting 2012 will be another choppy year like 2011.

Any comments?
gonna be qe3 and QE from ecb. volatility will probably retutn in the summer just like 2010, and 2011. looks like we are onto the next rally.
 

39ajaxmale

New member
Jan 13, 2012
632
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Oil&Gas, be wary of stockhouse. They have a heavy pro-gold promotion bias. As a rule, I read them, and dismiss almost half of their commentaries.

What Nick Barisheff talks about comparing the fates of US debt with the price of gold is an age old well known concept.

The US economy, and dollar more specifically is negatively correlated to the price of gold. The basic concept is thus: in turmoil, investors search for a safe haven. If the US economy is what's causing concern, they sell the US dollar, and buy into gold. When the US looks like the 'safer' investment, when there's turmoil in Greece or Europe or Africa, or with Oil Producing companies, people sell out of gold and get into the dollar.

As a rule, investors aren't buying or selling both at the same time.

As a rule, most economists that I've been reading so far this year think that we are in for modest growth, more than half are bullish on gold, but don't expect growth beyond the $2,000 range. I would be more tempted to invest in some gold equities, since they are very behind still based on the gains in bullion from last year. Eventually the equities have to catch up with the gains of the commodity.
 

turbin

Gold Member
Jan 7, 2002
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What about natural gas guys??? HNU have been rallying lately (good for short term day trade due to contango nature) I think this might be a good time to get some natural gas stocks as well since inflationary pressure pushes the cost of production, hence rise in gas prices
 

msog87

Banned
Dec 11, 2011
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gold is going to $5000 without a doubt within the next few years. you aint seen nothing yet tghe currency crisis in the states hasnt begun yet
 

oil&gas

Well-known member
Apr 16, 2002
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What about natural gas guys???
I won't jump into the stocks of most natural gas producers
and I also won't long or short nat gas prices at this time. My guess
is prices would remain low for another year. Having said that I believe
now is a good opportunity to buy into natural gas producers with
significant production in natural gas liquids such as Celtic Exploration
and Progress Energy. It is just a matter of time for natural gas to come
back big time. Production of conventional nat gas could drop like falling
over a cliff absent frantic drilling. And you will see a gradual conversion
to natural gas from diesel fuel for heavy duty vehicles in the coming
years that should lend support to nat gas prices. The appreciation of share
prices of Westport Innovations speak to the prospect of nat gas as a
substitute for gasoline in the near future.
 
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msog87

Banned
Dec 11, 2011
2,071
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What about natural gas guys??? HNU have been rallying lately (good for short term day trade due to contango nature) I think this might be a good time to get some natural gas stocks as well since inflationary pressure pushes the cost of production, hence rise in gas prices
gas rallies ever winter for the most part, the price got extremely oversold, the rally has pretty much topped. if you want to go long on natural gas pick a producer im sure they have been beaten down, however wait until the spring when prices decline from the winter high. you are much better off in oil or precious metals though
 

bill_1279

Active member
Feb 25, 2011
133
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1)real estate in toronto will remain at present prices until 2014. Early 2014 the interest rates will spike, and within 6 months cause condos to decrease in value by 60% (so they will be at 40% value). This decrease in prices will continue for another 3 years at which time they will bottom out at a drop of 80% of their original value. That means a condo that cost 200k now costs 40k. During this time, other residential real estate will fall, but the figures will be 80% and 40%.

2)For the next 5 years, unemployment in canada will increase so that within 5 years we will be in a SEVERE depression. I'm talking 50% unemployment rate.

3)OHIP and all govenment programs will be cut by 50% in the next 5 years. Yes, that means the service goes down by 50%.

4)Within 5 years it will be very difficult to get any job. Even a minimum wage pay job.

5)Within 5 years half all of government employees will be laid off.

6)Within 5 years, there will be very few unions.

WHY?
-globalization
-around the world too many people borrowed too much money
-around the world too many governments borrowed too much money
-the efficiencies of manufacturing in particular robots making products will mean
little labour is needed for manufacturing
-the financial sector around the world since 2008 has screwed up the world,
and nothing has changed. Nothing will stop them from screwing up the world more.
-possible runaway inflation around the world


and people say china will do ok. Really? They already predicted a housing bubble and just say it is postphoned. Also, as china develops and the people increase their standard of living they have to get out of manufacturing jobs. How is china going to build a middle class with 1 billion people? What are these people going to do for a living? I'd like to see them pull this one off.
 

bill_1279

Active member
Feb 25, 2011
133
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28
Rim will die.

I pity the employees at RIM.

I worked for nortel for 26 years. Near the end the nortel execs made all the remaining people work like dogs. The message was 'OH YEAH MAN -- LET'S GET TO IT. LET'S SAVE THE COMPANY--YOU CAN DO IT'. Stupid managers making everyone work in the evening and weekends for free, when the managers all knew, that the management screwed up so badly, that no matter how hard the grunts worked, there's no way we could save the company. But still they made us work like dogs. These managers have no respect for the quality of life.

My advice to RIM employees: Put your feet up, take it easy, read your email in the morning, read it in the evening, and then go home. WORK TO RULE. The company's going down the toilet, and there's nothing you can do about it. Your managers all know it, but just to be cruel they want to make your life as uncomfortable as possible before the company goes under.
 

Night_Hawk2012

New member
Feb 27, 2012
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More up ahead for stocks later on, but market is likely to go through short-term correction first before heading higher. Big players have been selling more than buying recently. So, it is time to book profits now and wait for a better opportunity later on.

 

Big Sleazy

Active member
Sep 13, 2004
3,535
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Rim will die.

I pity the employees at RIM.

I worked for nortel for 26 years. Near the end the nortel execs made all the remaining people work like dogs. The message was 'OH YEAH MAN -- LET'S GET TO IT. LET'S SAVE THE COMPANY--YOU CAN DO IT'. Stupid managers making everyone work in the evening and weekends for free, when the managers all knew, that the management screwed up so badly, that no matter how hard the grunts worked, there's no way we could save the company. But still they made us work like dogs. These managers have no respect for the quality of life.

My advice to RIM employees: Put your feet up, take it easy, read your email in the morning, read it in the evening, and then go home. WORK TO RULE. The company's going down the toilet, and there's nothing you can do about it. Your managers all know it, but just to be cruel they want to make your life as uncomfortable as possible before the company goes under.
I don't think RIM will die. But they're going to have to execute on there new QNX platform next year. Nothing ever goes up forever. I remeber Apple stock at $6.00.

I'm definitely a Gold and Silver bug but only physical. The markets are completely corrupt and I won't play in the paper market again. The Presidents Working Group on Financial Markets goes into the so called free market and naked shorts stocks, bonds, equities, commodities as they see fit. Daily. All to protect the dollar. Anybody that thinks we have free markets anymore is delusional. If it wasn't for interference in the markets daily the fiat currencies around the World would be dead by now and we would be in the worst Depression in the last 100 years. In due time my friends.

BS
 

eqtrader

Banned
Mar 8, 2012
135
0
0
Yep a good friend of mine worked at Nortel almost his entire career too and he told me a similar story. He said he should've seen it coming and search for jobs on company time instead of work like crazy. RIM employees please take note! This is coming from someone who's been in the same situation.


Rim will die.

I pity the employees at RIM.

I worked for nortel for 26 years. Near the end the nortel execs made all the remaining people work like dogs. The message was 'OH YEAH MAN -- LET'S GET TO IT. LET'S SAVE THE COMPANY--YOU CAN DO IT'. Stupid managers making everyone work in the evening and weekends for free, when the managers all knew, that the management screwed up so badly, that no matter how hard the grunts worked, there's no way we could save the company. But still they made us work like dogs. These managers have no respect for the quality of life.

My advice to RIM employees: Put your feet up, take it easy, read your email in the morning, read it in the evening, and then go home. WORK TO RULE. The company's going down the toilet, and there's nothing you can do about it. Your managers all know it, but just to be cruel they want to make your life as uncomfortable as possible before the company goes under.
 

turbin

Gold Member
Jan 7, 2002
1,541
15
38
Toronto
More up ahead for stocks later on, but market is likely to go through short-term correction first before heading higher. Big players have been selling more than buying recently. So, it is time to book profits now and wait for a better opportunity later on.

I like your charting skills... Ur prediction of the pull back is bang on
 
Ashley Madison
Toronto Escorts