I am not a witch or warlock, nor I am an astrologist. I am not a fortune teller or a tarot card reader. I have no experience in predicting the future, and Nostradamus and I are only related by marriage… Nonetheless, in the last few decades, a new profession evolved. It’s called analyst. When you pronounce “analyst”, please do it carefully and respectfully, due to its supernatural powers, its abilities to predict the future in a strikingly precise way. In fact, so precise, that I’m willing to make a fool out of myself, and try to predict some myself. Who knows? I may get lucky and even have a few correct predictions. Mind you, I will bet absolutely nothing on me being correct. Not a penny. I expect everyone is as careful as I am. Although, you must admit, the analysts don’t have such a great track record, and coming to think about it, neither do you…
Anyway. I read a lot of the financial news lately, I engage in hallway conversation, family discussions, and I get a lot of emails. All indicate that the situation is bad. Global economy is in dire straits. So here is my first prediction: the economy is bad and will get worse before it gets better. This is just the beginning, I’m only warming up here.
My second prediction is that developing countries, unlike what many think and suggest, will go backwards. Developing countries will lose millions of manufacturing jobs, and in order to survive the crisis, will have to invest a large portion of the fortunes they collected during the golden era in infrastructure building, only so that they don’t have to deal with tens of millions of hungry laborers. I can see China, India, Vietnam, various Central and Southern American countries spending trillions of dollars to simple avoid civil unrest.
My third prediction is that the United States of America will end its post-industrial era, and will go back to manufacturing. Indeed, it will be expensive to manufacture in the US, but then again, dealing with ten million unemployed Americans may prove to be even more expensive.
My fourth prediction is that not everyone will survive this crisis. More banks will go bunkers. Small companies will close their gates. I see more consolidation in banking, in high-tech, in car manufacturing, in airlines, in shipping, transportation, electronics, communications. Well everything. The giants will swallow the little ones.
My fifth prediction is that more regulation will be applied. The governments around the world will be more involved in “spreading the wealth” more evenly. I see capitalism changing significantly. Organizations receiving or handling government funds will have to be more transparent, and yes, lean.
My fifth prediction is that many more pyramid schemes, embezzlements, money laundering and alike will be exposed. The reason for that is simple: the pyramids can’t grow now, the investors lost so much, and they look at promises of 10% annual yields with some suspicion. In fact, if I were the government, I would go back ten years and invite all financial organization providing a 10% yield or more continuously in the last ten years to please pay a visit to the local police station…
my sixth prediction is that the Americans and Europeans will become a little more careful when it will come to consumption. They will come more conservative about investments. They will start saving money for the future.
The seventh is more of a hope. I hope that all those who worked hard, looked after their money, didn’t “leverage”, paid their mortgages, consumed conservatively, were responsible and careful, come out of this crisis stronger. I hope that all those who took crazy risks with other people’s money pay full price for the damage they have done.
And last but not least: never pay attention to analysts. Particularly not to those practicing “risk analysis”. They don’t know their asses from their elbows. Like me.
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