Sunday, July 18, 2010

Forecasts for the Economy and Financial Markets 2010-2012

One of my first essays with forecasts was in the Spring of 2004. In that piece, I had seven specific forecasts. What were they and how have those forecasts fared? Here they are along with my commentary (keep in mind that they were made March 2004).
1. The Dow will go below 6,000.
As of July 2010, this one was wrong.
2. The dollar will drop at least another 25%.
This one came true by early 2008.
3. Gold will hit $1,000 an ounce.
This also came true in early 2008.
4. Silver will hit $50 an ounce.
I was way off on this one but I will consider this forecast as a “work in progress” since I ultimately expect it to hit (and exceed) $50.
5. The real estate/ mortgage bubble will pop.
This is a “big hit”.The real estate market will not have a healthy recovery for at least a few years.
6. We will have a severe recession.
This is also a hit; the recession that became termed “the Great Recession” actually started in December of 2007 and was not considered technically done until 2009.
7. We will surpass 2 million bankruptcies & foreclosures.
This forecast was also a “hit” as we passed 2 million bankruptcies and foreclosures in 2007.

Of the 7 forecasts, 5 were very accurate, one was very close and one was not. All things considered, not a bad forecasting record. When you add in the public forecasts from my national seminars (such as the sub-prime crisis and the commodities bull market), the accuracy rate is actually much higher.

In 2008, I did another forecast article and provided 6 forecasts; here they are again:
   1. You will see an inflationary depression that will be evident by 2010-11.
   2. Unemployment in the private sector will soar into double-digits by 2010.
   3. State and municipal governments will be federal bailout candidates during 2010-2011.
   4. Commodities will start the next leg of their long-term bull market starting in 2009.
   5. We will see oil hit $200 as Peak oil becomes obvious to all during 2009-2012.
   6. International conflicts over natural resources will hit the headlines during 2009-12.

Here is a partial list of my forecasts (the full list appeared in this month’s Prosperity Alert newsletter):
   1. Gold will head to $2,000 and beyond during the next three years
   2. Silver will hit $25 during the next 12 months and soar to $100 by 2012
   3. Oil will be $100 by 2011 and onward to $200 by 2012-2013.
   4. IF THE TAX CUTS EXPIRE…we will have a “greater depression” start by 2011.
   5. The Federal deficit will hit $2 TRILLION during 2011-2013.

Paul Mladjenovic, CFP is a financial seminar leader, author of Stock Investing for Dummies and the editor of the Prosperity Alert newsletter. His main website is  and you can follow Paul at
© 2010 Copyright Paul Mladjenovic - All Rights Reserved Disclaimer.

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