Sep 26, 2012

Predicting the USA's future: 2013-2017

This post contains notes for a four-year exercise in studying history and in predicting the future. I am collecting predictions of specific, measurable events that will result from the election of either Romney or Obama.

The predictions come only from activists fighting for a more objective world, that is, a world guided by reason alone. If you are submitting a prediction (in the comments thread or in an email to me), please briefly state your form of activism.

EXAMPLES. An example measurably specific prediction  is: "Under Romney's presidency, for the four years, the cost of goods, measured by the current CPI, will rise on average at least 23% per year.

An example prediction not measurably specific is: "Under Obama, the nation faces disaster." This prediction would be acceptable if "disaster" were defined and if specific examples were offered, such as 138 million people dying of starvation or six cities attacked by nuclear bombs set off by Muslims.

DISASTER. My definition of disaster (and its synonyms, "catastrophe" and "calamity") is: A situation -- economic, political, or military -- in which the victims are so injured by adverse events that they are incapable within a single generation of returning to their previous, more prosperous state without help from the outside. For the USA, the War Between the States (the U. S. Civil War) was not a disaster, as defined here; but for Japan, World war II was a disaster -- though aid and guidance from the USA did help Japan become a civilized and prosperous nation. Individuals named below might not agree with this definition.

The following predictions are generally stated in my words (usually working from the predictors' original comments), not the exact words of the courageous predictors.


1. "If Obama wins there will only be one party--the Communist Party." 
(Facebook, Sept. 26, 2012, Charlotte Cushman, a published political writer and a Tea Party activist.)

2. Exponentially rising USA federal debt -- if either Romney or Obama is elected. 

(Facebook, Sept. 30, 2012, Keith Weiner, PhD, Economics, an advocate for capitalism; his discussion of gold backwardation is here.)

3. Calamity in the following forms, with two side effects listed last -- if Obama wins the election. 

Violent riots in major US cities.
- Federal debt increasing over $1T/year.
- Downgrades of federal USA credit.
- Open discussion about quashing the First Amendment.
- Massive US equities correction, probably globally.
- Nuclear Iran creating a regional nuclear arms race among Muslim countries
- Regional Mid-East war
- China becoming more powerful in Asia
- Gold over $3000 per ounce.
- Impeachment hearings against Obama.
(Facebook, Sept. 30, 2012, Chip Joyce, Sept. 30, 2012, a donor to ARI and a general activist.)

4. Implementation of the following three points of the neoconservative platform, if Romney
 wins, even though he himself is not a neoconservative: 
- (a) His continuation of the War of Sacrifice against "terrorists," resulting in the death of at least 2,000 more Americans -- soldiers or civilians -- during the next four years. 
- (b) His complicity in the expansion of the national welfare state, in terms of dollars; 
- (c) His calls for support of God and country, but not the country of the Founders. 
(Burgess Laughlin, October 17, 2012, an author whose activist purpose is to expose the state of the war between reason and mysticism in our time in the USA.)

5. Over the next ten years, after President Obama's re-election in 2012:
- The USA equity market will have Fed dollars booms that go bust at least once and achieve no lasting real increases in protected asset value.
- The Fed will try to keep interest rates low. But as they are now [January, 2013] about as low as they can be, long-term Treasury bonds will see no new capital gains. If interest rates do move up, you will see loss ranging from significant to catastrophic.
- The CPI will continue to show losses in purchasing power of at least 2% a year, so at minimum, the cash element of a Permanent Portfolio [described in the bookThe Permanent Portfoliowill see a loss of over 20%.
- Gold will show fits and starts, but will trend toward requiring more and more paper dollars to buy it. Thus three of the four sectors of a Permanent Portfolio have no future in today's context. 
- Both the Permanent Portfolio approach [developed by Harry Browne, Craig Rowland, and others] and the value-investment approach [used by Warren Buffet and Bruce Berkowitz] were written for periods in which the economy was less controlled and manipulated. Neither assumed eight or more years of trillion dollar deficits, multi-trillion dollar "stimulus" packages, Dodd-Franks, the coming tidal wave of regulations, or ObamaCare. The context has changed. Ignoring that will be disastrous for investors. 
(Bob Gifford, retired investment advisor, author of the weblog Krazy Economy, here.)

6. At the end of Obama's second term
- Gold will be within +/- 20% of January 2013 levels.
- The SP500 will be 50% higher than January 2013 levels.
- The Fed's printing of money will have slowed. 
- "Experts" on TV will have declared the recession over.
- Obama will take full credit for navigating us through the recession.
- These stocks will have doubled: AIG, BAC, JCP, and ACAS.
(Hoyt Chang, a mechanical engineer and part-time investor with no formal instruction in economics or politics. He follows the value-investing strategy of Warren Buffet and others, as outlined here: The Little Book That Still Beats the Market.)