Sunday, August 3, 2008

Dire Predictions for 2008

NVDL: Although I don't see these predictions as earth-shattering (there's evidence for all of the 'predictions' already underway, including multiple bank failures and bear markets), it remains a clear reminder of where weare headed.

11. Besides banks, many other players in financial markets are likely to find themselves in financial difficulty in 2008.

13. The stock market probably will decline during 2008.

14. Prices are likely to rise in 2008 for food and energy products. Prices may decline for homes and non-essential goods and services.

15. There is a chance that some type of discontinuity will make financial conditions suddenly take a turn for the worse.
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One of the issues I consider important in my forecast is systemic risk. This relates to the interconnectedness of the system, and predicts that if one part fails, other parts are also likely to fail. Many other articles mention this issue, but rarely address its full ramifications.

This situation of progressively more defaults can be expected when the world is at peak oil; it can also be expected before peak oil, if energy prices rise over an extended period because the quantity of oil available is not sufficient to meet demand at a lower price. This seems to be the position we have been in recently.

3. Long term loans, including those for energy companies, are likely to become less available as awareness of peak oil rises.

4. There is likely to be a serious recession in 2008, deepening as the year goes on.

6. The amount of debt available to consumers is likely to decline.
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