Wednesday, December 30, 2009

2009: Quickie post mortem on predictions

I don’t know if I’m too depressed or too eager but I keep expecting the SHTF each and every year I make these predictions. This year it did not hit the fan so to speak but neither did we find ourselves in a real recovery like the rat bastards in Washington and Ottawa like to tell us we were. The economy continues collapse like a smoldering bonfire just waiting for a red neck with a can of gas to blow it up real good!

I really blew it this year on my predictions for silver and energy, for energy it makes sense as demand fell faster than supply did but I still cannot understand how, with gold going well over $1100 that silver could not hit a mere $20, a number that it took out last year. Silver still has heavy investment demand, silver is still being destroyed, and silver is still being heavily withdrawn from the Comex depositories closing the year down to about 112 million ounces. That said silver’s industrial demand is off and the level and concentration of silver shorts remains criminally high but that should not have kept it from reaching $20 and closing the silver/gold ratio.

If anything silver has gained more potential and volatility as this disparity in prices and ratio continues. Some day it will blow up, we just need to be more patient and continue to accumulate while bargain prices continue. Robert Kiyosaki of Rich Dad fame jumped on the silver wagon this year but typically got it wrong when told people to buy ETFs. Goof! Anyone who knows the real potential of silver knows that it’s the fraud and leverage involved in paper products that allows the prices to be manipulated. Had he really understood the silver story he would have told people to go buy a roll of rounds or a honkin big bar. Still he raised silver’s profile and perhaps some of his simpleton readers will do some additional research.

On the dollar index I was damn close to my prediction until the Dec rally hoofed me in the head.

On the positive side I did hit my highs on gold; I predicted at least $1100 and ending the year above $1050. Yeah for me, that looks pretty accurate. As well I hit my goal for bank failures of about 80 and then blew by it I think ending up at about 140.

Other general predictions fulfilled this year

CPI returning to the positive later in the year

No housing recovery

Increasing unemployment all year

Commercial real-estate would begin to hurt

Obama would prove to be little different than his predecessors, spending money he does not have and warmongering. Anyone who thinks the president runs the country is nuts; he may(but not necessarily) decide who to attack but he’s simply a low paid lackey who doed the banks bidding. If you expect him to hold the guilty responsible for last years fiasco you may as well start digging his grave now because they won't let it happen

Over all I had the trends right just not the scale.

I’ll post up a couple of interesting articles I’ve found as well as my own 2010 predictions in the next day or two.

Happy New Year.


Skye said...

I'm waiting for the US bank default prediction. If I remember right, you are pretty close on that one.

As far as the silver price goes, we have to remember that the physical price is set by the paper price - not the other way around. I'm not saying that's the way it should be - that's just the way that it is.

We know that silver prices should be much higher, but because we are actually purchasing silver, and not just placing highly-leveraged bets on price movements, our movements are not usually detected. This provides a nice cover for us to make our purchases under - although it does expose us to the roller coaster price fluctuations created by dummies who move markets with their billions of borrowed dollars.

Silver is starting to ease down again - providing a great opportunity to buy some more.

It will be interesting to see what happens When the big boys come back from vacation next week.

Sonal Jain said...

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