November 2012 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

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    • On The Economy & Capitalism vs. Socialism

      Today we look at a Pew Research Center survey that polled Americans for their feelings about capitalism versus socialism. The survey included all races, different ages and various income groups. I think it’s safe to say, this survey will SHOCK YOU!

      But before that, let’s take a quick look at the latest economic reports and the consensus view for Thursday’s 3Q GDP report. There is also news that Americans are more optimistic about the economy now than they have been in a decade – but are they really?

      And finally, did you know that the United Nations is planning to hijack the Internet? The UN wants to control the World Wide Web. And it could happen as early as next week. You need to know about this.

    • ...`Til Debt (Limit) Do Us Part

      Last week I discussed the “fiscal cliff” and the political battle that entails. If lawmakers can’t come together for a solution before the end of the year, the economy is almost certainly headed for a recession or worse in 2013 and beyond.

      But there’s a potentially even bigger battle coming up in the next couple of months. We will hit the debt ceiling/limit just ahead. We all saw what a political nightmare that was in the summer of 2011 when Democrats, Republicans and President Obama were deadlocked and the US credit rating was downgraded for the first time ever.

      Well, get ready for the next battle once the fiscal cliff is dealt with (assuming it is). That’s what we’ll discuss today. What’s most interesting this time around is that the Obama administration is pushing for Congress to repeal the debt ceiling limit altogether. Just get rid of it once and for all, they argue.

      Most conservatives will be outraged when they learn that Obama wants to abolish the debt ceiling, and I might agree. On the other hand, Congress has repeatedly raised the debt ceiling for decades, no matter which party was in power, so it might finally be time to seriously discuss some other alternative.

      Following that discussion, we’ll look at the latest budget deficit numbers for fiscal year 2012 that the CBO released last week. For the fourth consecutive year, the budget deficit topped $1 trillion. The national debt is now a staggering $16.2 trillion.


    • Are We Headed Over the "Fiscal Cliff"? Maybe So

      We begin today with some obligatory comments about the election and how we got it wrong. Obviously, I am very discouraged with the outcome of the election. The main mistake Spencer and I made (and others including Gallup, Rasmussen, Pew, Rove, Morris, etc., etc.) in our pre-election analysis was to significantly underestimate the turnout rates among Democrats. The widely-held view that Democrats were unenthused and wouldn’t turn out to vote, as suggested by numerous pollsters, was simply wrong.

      We also we mistakenly believed that the 2008 surge in black, Latino, and young voter turnout would recede in 2012 to “normal” levels, as did most of the major pollsters noted in the previous paragraph. That didn't happen. These high levels of minority and young voter participation are apparently here to stay. Unfortunately, Obama won both the popular vote and the Electoral College comfortably. Following those opening comments, we turn our attention to the so-called "fiscal cliff" that is upon us.

      I'm sure you have heard about the fiscal cliff, but today I will present you with the details, including how much it will affect the economy and how much it will cost you (based on your income level). I will also explain why I think the odds are greater that we will fall off the fiscal cliff this time. Given his election victory, I don't see President Obama willing to compromise much if at all.

      If we do fall off the cliff, a new recession is very likely to happen next year, and that will almost certainly be bearish for stocks. Thus, the stakes are very high in this soon to be knock-down, drag-out!

    • President Romney, VP Biden - It Could Happen

      On this important Election Day, I wonder if my readers are fully aware of what would happen if the presidential election were to end up tonight in an Electoral College (EC) tie. While it’s a remote possibility, there is a scenario where the Obama/Romney battle could come down to a 269/269 tie. It takes a minimum of 270 EC votes to be declared the president.

      In the case of a tie, the US House of Representatives, under authority of the 12th Amendment, decides who is the winner. With the House under Republican control, there’s no question that they would award the victory to Governor Romney.

      But under the same authority, the Senate gets to pick the vice president. With the Senate controlled by the Democrats, it’s a no-brainer that they would pick Joe Biden. That’s how we could see a Romney-Biden administration. Wouldn’t that be crazy!? While this outcome is unlikely, it is not unprecedented, as I will discuss below on this Election Day.

      Next, did you hear that 500 retired Generals and Admirals from the US Armed Forces ran a full-page ad in the Washington Times yesterday endorsing Governor Romney? I have links to the ad and the story behind it at the end today.

      Before we get to all of that, we will take a look at some of the recent economic numbers. For the first time in a good while, there is some encouraging news out there.