Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21
Why Tether USDT, Stable Scam Coins Could COLLAPSE the Crypto Markets - Black Swan 2021 - 6th Jun 21
Stock Market: 4 Tips for Investing in Gold - 6th Jun 21
Apple (AAPL) Summer Correction Stock Trend Analysis - 5th Jun 21
Stock Market Sentiment Speaks: I 'Believe' We Rally Into A June Swoon - 5th Jun 21
Stock Market Russell 2000 After Reaching A Trend Channel High Flags Out - 5th Jun 21
Money Is Cheap, Own Gold - 5th Jun 21
Bitcoin and Ravencoin Cryptos CRASH Bear Market Buying Levels Price Targets - 4th Jun 21
Scan Computers - How to Test New Systems CPU, GPU and Hard Drive Stability With Free Software - 4th Jun 21
Hedge Funds Getting Bullish on Gold - 4th Jun 21
THERE ARE NO SOLUTIONS When the Media is the VIRUS - 4th Jun 21
Investors Who Blindly Trust the ‘Experts’ Will Get Left Behind - 4th Jun 21
US Stock Market Indexes Consolidate Into Flagging Pattern – Watch For Aggressive Trending Soon - 4th Jun 21
Microsoft (MSFT) Stock Trend Analysis - 3rd Jun 21
No More Market Bloodbath – Beyond Cryptos - 3rd Jun 21
Bank run, or run from the banks? - 3rd Jun 21
This Chart Shows When Gold Stocks Will Explode - 3rd Jun 21
The Meaning Behind Gold’s Triple Top - 2nd Jun 21
Stock Market Breakout Or Breakdown – What Does The Next Big Trend Look Like? - 2nd Jun 21
Biden’s Alternate Inflation Universe - 2nd Jun 21
What You Should Know Before Buying Car Insurance - 2nd Jun 21
Amazon (AMZN) Stock Summer Prime Day Discount Sale - 1st Jun 21
Gold Investor's Survival Guide - 1st Jun 21
Silver and Copper to Benefit from Global Electrification Push - 1st Jun 21
Will Gold Shine Under Bidenomics? - 1st Jun 21
Stock Market Buy the Dip, Again?! - 1st Jun 21
Stock Market Consolidation Ahead - 1st Jun 21
Stock Market Summer Correction Review, Crypto CRASH, Bitcoin Bear Market Initial Targets - 31st May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Six critical market forecasts for 2007 !

Commodities / Forecasts & Technical Analysis Dec 15, 2006 - 09:56 PM GMT

By: Money_and_Markets

Commodities With the new year just about two weeks away, I think now is a good time to take stock of where we've been, where we are, and where the markets are going next year. Despite recent gyrations, especially in natural resources prices, the positions in my Real Wealth Report continue to pay off handsomely overall. And the best news is that I expect greater gains next year! Reason: All my models point to 2007 as the point in time when all the powerful forces I've been telling you about converge into some major explosions! So, without further ado, here are my six forecasts for next year ...


Forecast #1:
Washington will hammer China on currency and trade issues, but our deficits will continue to soar to new highs. Treasury Secretary Paulson and Fed Chairman Bernanke are in Beijing right now, trying to get China to strengthen its currency. Mark my words: They will not prevail. China has no reason to strengthen its currency. It will not take any drastic measures to do so — just small baby steps at the very most.

The yuan is a cash cow for China. And the country needs every competitive advantage it can get its hands on to keep boosting its economy and bringing 1.3 billion people into the 21st century. Beijing is not going to jeopardize that ... period.

So don't expect the yuan to appreciate much.

Another thing: Don't expect our trade deficit, now the largest in the world, to shrink much. If anything, the trade deficit might widen to well past the $1 trillion mark in 2007, as U.S. consumers continue to buy products from abroad. And it's not just the trade deficit that could explode higher in 2007. Right now, Washington says the budget deficit is narrowing. But don't fall for it! Deficits, at the right time and place, can be a good thing. But not now, when war, terrorism, rising interest rates, and inflation are also part and parcel of the current economic cycle.

Forecast #2:
The dollar will plunge like there's no tomorrow! All year long, I've been one of the lone analysts saying that the small rally in the dollar would give way to a steep decline by the end of 2006. And that's exactly what's happened.

Look, other central banks around the world are raising interest rates, which means the differences between their rates and ours are narrowing. Add that to the deficit situation I just told you about, and you can see why the dollar is doomed . I think the dollar could easily lose 20% of its value in 2007, setting off a financial crisis the likes of which have not been seen since at least 1987.

Forecast #3:
Naturally, inflation will accelerate higher.

Washington and Wall Street keep trying to convince us that inflation is “benign.” But who are they kidding? If any of you reading this think that inflation is running at a mere 3%, please let me know. From shopping at the grocery store, buying clothing, and paying for my kid's education expenses, I'd say inflation is running more like 6% or 7% already. Heck, prices are rising for just about everything except perhaps electronics goods.

The problem is that the government doesn't want you to think that. So they keep touting their manipulated Consumer Price Index (CPI) — the one that leaves out how much it costs you to drive your car, buy groceries, and basically live everyday. They use this pathetic measure of inflation because so many benefits are tied into it. The lower they can keep the CPI, the better, from their perspective. It means they don't have to raise government benefits like Social Security, Medicare, and other pension payouts. Plus, they hope that by brainwashing people into believing inflation is low, they can create a self-fulfilling prophecy.

Problem is, you can fool some of the people some of the time, but you can't fool all of the people all of the time. When the masses wake up to the real level of inflation, pandemonium will strike and we'll see ...

A complete loss of investor confidence in Washington ... More inflation as consumers start to buy things to avoid even higher prices down the road ...And another plunge in the value of the dollar, setting off a vicious cycle of even higher inflation. Bottom line: Expect more inflation in 2007. Not only here in the U.S., but also around the world, as virtually all central bankers and politicians work the money presses overtime.


Forecast #4:
China and India will exercise ever greater influence on the global economy. I've been saying this since 2003. And it's such a no-brainer that it baffles me why Wall Street still doesn't get it. Maybe I see things clearer because I frequently travel to the Far East. I spend months checking things out firsthand, rather than poking around for bits of info on the Internet.

When I travel to Asia, I talk face to face with local merchants and the customers in their shops. I elbow my way through the crowds of shoppers in the packed marketplaces. I visit modern, well-stocked shopping centers just like in the ones you have in your community. I've seen with my own eyes, and heard with my own ears, what's going on. And let me tell you, the factories in Asia are still humming … the shops are still buzzing … and the consumers are still buying.

In my opinion, this is the beginning. For most countries in Asia, the consumer-driven market is just developing. Up until now, these countries have largely been export-driven, with not much in the way of domestic demand or consumption. But that's changing now ... rapidly. Citibank and Bank of America are set to flood Asian economies with credit cards and revolving debt on everything from homes and autos to computer purchases. Remember, credit is relatively new to Asia, and this switch will help drive domestic demand. The new consumer classes in Asia — rich and getting richer every day — will go bonkers, pushing their economies though the roof.

What that means for investors is that Asia-related stocks (and virtually all natural resources) will move to new record highs yet again.


Click to receive 3 Summaries FREE!

Forecast #5:
Gold is headed past $740. Gold got as high as $733 an ounce in May, missing my target for this year by a minor $7. What's next for gold?

My answer: The bull market in gold is not over ... not by a long shot. How can I be so sure? Well, we have the aforementioned deficit issues, the declining dollar, rising inflation, and soaring economies in Asia. Those are all convincing arguments by themselves. But there's much more ...

At $620 an ounce, gold's current price is dirt-cheap. It has not yet adjusted for the loss of purchasing power in the dollar over the last 20 years, let alone the current plunge.In 2007, I think we will see gold trading close to $1,000 an ounce. And before the yellow metal's bull market is over, we could even see prices at $2,150 an ounce. After all, that's its true-inflation adjusted high from 1980.

Forecast #6:
Oil will hit $100 per barrel!

You have not seen the end of the bull market in oil prices, either. Ditto for oil and gas shares. In fact, many oil and gas companies are trading as if oil prices were still at $40 a barrel. I consider these stocks to be some of the best bargains out there. My view: The price of oil will hit $100 in 2007 because of even more severe supply and demand issues, plus problems with Iran, North Korea, and more.

Now Is the Time to Start Preparing for 2007 ...

There are several steps you should consider taking to prepare your portfolio for 2007. I suggest getting ready now, rather than tomorrow or next week ...

First, absolutely minimize your exposure to the stock market. With the exceptions of the gold and natural resource stocks recommended in my Real Wealth Report , consider getting out of all other stocks now! I wouldn't try to hold on until 2007 to defer taxes on gains you might have. It's not worth the risk. It's always better to pay Uncle Sam his take rather than risk losing hard-earned gains.

Second, continue to keep the bulk of your money in safe, liquid, short-term investments such as money markets. You can get near 5% a year ... even a tad higher in some cases. And by all means, stay out of all long-term bonds, U.S. government or corporate.

Third, if you don't own any gold, I think you're making a huge mistake. In my view, the best way to get a stake in gold is through the streetTRACKS Gold Fund (GLD). Each share represents 1/10 of an ounce of gold. The fund eliminates storage and shipping worries because the gold is held in trust for you. Or, if you'd rather buy a gold stock mutual fund, my two favorites are DWS Gold and Precious Metal (SCGDX) and Tocqueville Gold (TGLDX). As an alternative, look at the Market Vectors Gold Miners ETF (AMEX: GDX). This single investment holds ten of the largest gold miners in the world.

Stay safe and cautious,

By Larry Edelson

P.S. If you want more specific recommendations, take out a subscription to my Real Wealth Report for a modest $99 a year . You'll get a hard-hitting issue every month, plus flash alerts, advance notice of special situations, and more.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.MoneyandMarkets.com


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in