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Forecasts for 2007

Posted by Adrian on December 29, 2006

Here is a list of possible events for 2007, I say possible, so nothing is written in stone. But then again, life is uncertain. All these events are based in economic and social/political forecasts.

Disclaimer: These are speculated events, especially market, stock and FX markets. The following should not be used in any financial decisions. Morbius Glass blog does not recommend on acting on any economic forecasts written for 2007.

Economic forecasts for 2007:

The US housing market will further decline to the point of an accepted recession with housing.

This US economy will officially go into recession mid 2007, despite any potential rekindle of the housing market in late 2006 early 2007

The Federal reserve will cut interest rates early 2007, despite high core inflation. This will some what delude the consumer, the Federal Reserve will now be faced with chronic inflation.

Due to loose credit, household debt has skyrocketed. The ‘resilliant’ consumer could face a problem, once wages remain static in 2007 and companies profits may decrease. We may see an inability to pay off accumulated debts. Due to small to non existent pay increases. Unions may find strength again in 2007.

Inflation worldwide will be a major concern, as oil price will increase due to potential instability in the middle east namely Iran.

Europe will further tighten liquidity and excess cash. The European Central Bank will continue too fight inflation.

The end of the housing boom in the US will also follow through trend to Europe and the UK. Housing markets in both Europe and the UK will recede and finish.

Demand for Japanese products will slow, due to the US recession. Higher Oil prices will also effect purchasing power of the US consumer. We may see a return to $70+ a barrel

Markets to watch in 2007, will be technology markets. 2007 may indicate a tech boom again, or recovery from the tech bubble burst in 2000. New technologies, biotechnology and nanotechnology may all emerge as larger markets then previous years. Venture capitalists will be looking for the next big thing, as was the success in DNA research in the early 90’s. Go here for article.

Commodities, long on gold. Precious stones, diamonds will become a new investor based product.

Euro will still remain strong currency throughout 2007, the Yen will continue to decline as will the USD.

Social and political forecasts for 2007

A possible new conflict in the middle east, will Israel or the US be foolish enough to attack Iran? Intrade have got the odds at $6.00 if they attack in March 2007 go here.

Conservatism will die off in the US, although conservative views and politics will rise in Europe. Note recent changes in government from left wing socialist based government’s to right wing conservative governments in Sweden and Holland in 2006

The fall of conservatism and government reinforced 80’s based asset excess and 50’s conservative values that has occurred in the last decade; may be replace by possible mixture of socialism and/or anarcho-capitalism in countries such as Australia and the USA. As the US economy will shift gear and dramatically slow down to a recession, so will countries such as Australia and New Zealand. Governments that have mismanaged their economies and over taxed people and business, may see a backlash. This backlash may occur from a profit decease and a need to lay off staff. Which could entail a need to restructure of their business and become more autonomously based to survive. Using staff and management to help run and maintain the business through a global economic downturn.

Small retail business will return, as mega marts will decrease. The consumer will eventually prefer the community aspect of the local shop again.

Work place will change, and democracy in the workplace Will take place. Similar to Semco, Ricardo Semler experiment with his company in Brazil, go here for info

There will be a divide between the roles of women. Women will be expected to either stop at home and have babies. Or continue on with careers and financially independent prospects. The reemergence of feminism will be used again to solidify a women’s choice. Although feminism will be updated and relevant to the now. What is defined as ‘sexy’, will be now looked upon as a commodity based product. As opposed to sexual. Feminism may have a hard time trying to define female sexuality. As both the commercial appeal of sexy and sexual could become one sexual idenity (power based). There maybe a rethinking of female sexual roles in society.

Religion namely Christianity will attempt to push further into governments in the West. Islam will continue to be used in western counties, by christian right wing groups, that democratic freedom is potentially under siege. Islam will possibly reform and counter allegations to it’s detractors that it wishes to conquer the ‘free world’. Right wing Christianity and Islam will duke it out, but no one will care.

The War on Terror will end with a whimper. Historians will look back at it as one of the great military failures of the West. Iraq will divide in two, on one side the Shia’s and on the other side the Sunnis. Similar to Pakistan and India.

Or, Iran and Syria will be asked by the West to take over, The Arab/Islam world may use this a a collective victory against the West, namely America. It may unify both the Shia’s and Sunnis.

Or, the US sends hundreds of thousands of troops. Which would constitute to a proper invasion

Climate change will be the issue of 2007, as mild winters and hotter summers occur more dramatically. New animals may be included ion the protected list, law suits and claims may also take place against industrial countries – from smaller countries.

Nuclear energy will be the main driving factor in the climate change debate. This debate will divide public opinion worldwide and cause possible backlashes against using nuclear power. If another Nuclear accident occurs in either Europe or the US, it will be checkmate for the debate.

If nuclear power is the short term answer for the climate dilemma. A new nuclear arms race will take place, countries like Australia, Indonesia, Taiwan, Philippines and Japan will all develop nuclear weapons. Asian and the Pacific will eventually be Nuclear armed.

Islamic countries that were not allowed to develop Nuclear programs will see this as a double standard; and will basically go ahead and develop a Nuclear program. This could lead to various wars.

Bird Flu will reappear, plus various other new diseases.


6 Responses to “Forecasts for 2007”

  1. Interesting blog. Interesting list.

    “The fall of conservatism and government reinforced 80’s based asset excess and 50’s conservative values that has occurred in the last decade; may be replace by possible mixture of socialism and/or anarcho-capitalism in countries such as Australia and the USA.”

    This one is one both you and I will no doubt follow. I think that there is already a heavy-dose of anarcho-capitalism influence in the USA, and I suspect it to be at an climax unless troubled times ahead allow it to resurrect. If so, I worry much about neo-fascism.

    I don’t see the US or Australia embracing socalism in the traditional sense of the word, but I would suspect that both (particularly on the far side of crisis) might rediscover some populist roots now seemingly lost.

    The world is an emerging wonder. We do live in “interesting times.”

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  3. zekukith said

    As far as neo fascism. There could be a problem if unemployment becomes a huge issue again. I think it’s festering a bit with the Islam/Muslim backlash. That might fade though. I worry about Europe, it seems far more volatile there, as far as neo fascism.

    I agree, US and Australia may find some ‘left’ connection. I think the unions might find strength again. 2007 is going to be an interesting year.

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