The Economic Forecast Newsletter: Volume 3 #23
The Economic Crisis
Following the News of Economic Prophets Who Predicted the Economic Crisis
Special Focus on the US Financial Crisis and
In this issue, we will follow the statements of Med Jones, from the International Institute of Management. Jones is a renowned expert who predicted the financial crisis in June 2006 in a policy white paper, titled “US economy risks and strategies 2007-2017”. In Jan 2007, through a series of press releases and media statements, he challenged the US Presidents' State of the Union Address, the Federal Reserve Chairman, and the top economists at that time. In an interview with Reuters on March, 2007 he warned about the subprime mortgage, financial bankruptcies, and the loss of confidence in the US economy. In September of 2008 all of his predictions came true. When is the bottom of the decline, when is the recovery, how long will it take, how will it look? These are some of the questions that we will try to find answers for.
Why did the world's top economists fail to predict the financial crisis? (Others who missed the crisis, include government leaders, award-winning scientists, market analysts and investors). Was the crisis predictable or was it a Black Swan (unpredictable) event? Are government policy makers competent enough to manage the nation's financial freedom and security? Are economists and their policies helping or hurting our economic growth? Do we need to re-define the education of economic science and the role that economists play in our financial markets, government policies and business regulations?
Who is to blame for the financial crisis? Who contributed to the creation of the crisis? Can they be held responsible for their actions or inactions? Was there a conspiracy by some Wall Street executives and government officials? Do investors have legal cause to seek compensation for damages caused by Wall Street firms?
Who predicted the financial crisis and the ensuing economic crisis? Is there a documented evidence supporting their claims? Were those who warned about the crisis lucky or did they have a clear logic behind their predictions? Can we use their knowledge to predict future crises? What are their future predictions? How do their predictions compare with each other? Where do the experts agree and where do they disagree? How accurate are their economic predictions? Can they be relied on for investment decisions?
Who are the top winners and losers of the financial crisis? Top Investors, economists, intellectuals, government officials, think tanks, and universities that lost or won because of the crisis.
What are the lessons we can learn to avoid future crises? What the the economic policy lessons? What are the investor's lessons? Do we need more or less financial regulations?
Predictions from Top Wall Street Economists
Dean Baker's Predictions
Med Jones' Predictions
Peter Schiff's Predictions
Nouriel Roubini's Predictions
Global Economic Outlook 2011
US Economic Outlook 2011
Global Investment Outlook 2011
GCC Economic Outlook 2011
Lessons from the Global Economic Crisis
CEO Magazine: Expert Who Predicted the Financial Crisis Predicts
Recovery in 2010
Med Jones Warning Reuters Interview - March 2007
White Paper: US Economic Risks and Strategies 2007-2017
Most analysts tend to underestimate or overestimate the growth and decline cycles. Our analysis indicates that 2009 will have mixed results for different industries, the hardest hits will be in the financial, real estate, auto, retail, construction, furniture, airlines, advertising, and disposable income industries (tourism, gaming, hospitality, and travel). The relatively unaffected or growth industries are the export industries, food, alternative energy, education, new technologies, and healthcare. The general economic decline cycle will bottom in 2009 and we could see stability sometime late 2009 or early 2010, then we will be back to modest recovery in late 2010 or early 2011. However, the real estate, construction and financial industries will bottom in 2010, the recovery could start in 2011
The same mindset of borrowing and spending more than we can afford, that led to financial system collapse will risk the collapse of the US economy. Global investors may not want to bail us this time. The other alternative to the sharp decline is to suffer from several decades of stagflation with intermittent periods of declines and growths. However the real economic growth will be negative due to the decline in the dollar value and inflation. It is not unlikely for the US to suffer from a similar crisis to the one we saw in Argentina 10 years ago or the one unfolding now in Latvia.
Med Jones, the Economic Prophet Who Predicted the Economic Crisis Says
Economic Recovery in 2010
Economic Guru Sees
Crisis Bottom in 2009 and Recovery in 2010
Economic Oracles News
Economic expert forecast recovery of
residential real estate decline in 2011
The only way out of this crisis is through the emergency of a new legitimate industry, such as alternative energy, nanotechnology or biotech, which will generate enough tax revenues to pay the debt and attract more capital. The auto industry led the recovery after World War II; the IT industry led the recovery from the Seventies’ financial crisis. Unfortunately the government is doing too little in that area
The U.S. economy got here due to spending money we do not have and not producing enough to pay back the credit. It’s like luxury-living on credit cards, at some point the lenders want their money back. Not to forget that in a new open global economy, the U.S. does not have a competitive monopoly on knowledge, technology, manufacturing, or marketing anymore. Therefore, the growth rate of US production (cars, airplanes, electronics, IT …) is not keeping up with the growth rate of the debt
Economic Prophet Who Predicted the Economic Crisis Says A deeper look into the economy reveals that the painted rosy picture is based on selective facts instead of a neutral assessment of all relevant numbers and economic trends
Credit Card Nation - Should the Government Get Credit
U.S. Government does not commit to reducing federal budget deficits, at some point in time foreign banks could panic and rush to dump their dollars to be the first out of a sinking currency, thus making the economic crisis far worse and recovery more difficult. China has already signaled its intention to decouple the currencies, which will lead to the loss of trillions of dollars in U.S. Treasury value. In order to minimize that loss, the Chinese will have to sell off some of their U.S. holdings. The real danger is how much and how fast China will do so. If they decide to do it quickly, they will prompt huge panic by other lending countries. Investors will have to copy China moves, resulting in a disaster to the dollar value, interest rate, stock market, homeowners and the U.S. economy as a whole.
The Financial Crisis Newsletter
The Economic Crisis Newsletter
Outlining US economic risks and strategies for the next decade. The 3 most common questions are: (1) How did we get here? (2) Why did our top experts miss it? (3) When do you think the economy will recover? The short answers are: (1) Spending on credit without enough production to pay it back (2) Groupthink mindset, and (3) We'll experience more volatility in 2009 on the way to the bottom of the correction cycle. A modest recovery will start in 2010/2011
Although, the stock market will rally and the credit will start flowing again, we have to be aware that the Bad Bank is only a psychological trick. It is like making the rabbit disappear with a magic trick (but it is only hidden out of sight). The saying you could fool most of the people for some of the time is true here. This is not a real solution to the crisis; it is only a transfer of the bad assets from the banks to the government and the tax payers. We all have to pay the price later. Obama's Administration or the next Administration will have to pay the price for the worthless Bad Bank assets, out of control budget deficits, bad dollar value, and even a worse economy
Economic Oracle News Update