The Crystal Ball. J.W. Waterhouse.
Only one of my five predictions for 2009 succeeded. I predict in 2010 that I will do better.
1. The Dow will drop below 6,750 FAILED
In October 2006 the Dow Jones industrial average crossed over the 12,000 mark briefly for the first time in its 112-year history. On 9 March 2009 the Dow Jones industrial average lost 80 points, or 1.2%, to end at 6,547.05, its lowest point since 15 April 1997.
2. Gas will go above $4 a gallon FAILED
The price of gas here in Kaysville, Utah is currently $2.47 a gallon. It is not unrealistic for gas to go over $4 a gallon next summer. I’m glad I run on CNG.
3. Republicans will gain 40 seats in the House SUCCEEDED
A more realistic prediction would be a gain of 20 to 30 seats but I am optimistic for a net gain of 40 or more seats.
4. Gold will drop below $750 an ounce FAILED
Since 1968 the price of gold on the open market has ranged widely, from a low of $252.90 an ounce on 21 June 1999, to a high of $1,023.50 an ounce on 17 March 2008. Indexed for inflation, the 1980 high of $850 an ounce would equate to a price of around $2,400 in 2007 US dollars. Gold passed $1,200 an ounce on 2 December 2009 but has dropped into the $1,100 range since. It is time for further declines.
5. Utah unemployment will drop to 5% FAILED
Currently the Utah unemployment rate is 6.3%. My prediction of 5% or less is optimistic but achievable considering the positive business climate, the need for services from a growing population, and a fiscally responsible state government.
More Predictions
My predictions are rather bold so I do not expect all of them to succeed. What do you think? Which ones are sure to fail or will any succeed? Do you have any predictions for 2010? If you have blogged about them consider putting a link to your post(s) in the comments.
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Hi Rickety. What’s your basis for saying that gold will go down to below $750 an ounce? Gold is far below the TRUE all time “inflation-adjusted highs” which would be about $7000/oz. Central banks are running short on gold, and are starting to buy gold again.
Very good question. I should have outlined my reasoning but I wanted to keep things simple. The predictions are just for fun. I also try to choose unlikely scenarios which makes it all the more satisfying if they come true.
My thinking about the gold price is this:
First, it has already risen a lot and just like oil and other commodities the more the rise the greater the fall (eventually).
Second, 2010 is an election year. I see Congress making attempts at restraining spending to try and placate the voters. This would strengthen the dollar and cause gold to fall. Once gold is dropping consistently I see people getting out of gold to preserve their gains.
Third, I expect interest rates to rise which would further pressure gold. $750 is at the far end of my range. Under $1,000 would have been a safer prediction.
This isn’t a financial blog and I don’t own any gold (and I don’t want to) but I like to follow its progress and that of silver (which I wouldn’t mind owning someday). So don’t take my predictions too seriously (no-one else does).
How do you see 2010 and the price of gold and silver? I like your avatar by the way.