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The Economy : What can we look forward to in 2012 ?

By Stephen Ward BA (Econ), ACII, APMI, APFS, AIFP - Thu 29th Dec 2011

So That’s another year gone! A year ago we were brave enough to make some predictions about what we thought might happen in 2011 with the promise to revisit them to see how right or wrong we were.

We said about 2011:

• Interest rates will remain near zero for a while yet but as 2011 progresses the threat of inflation will become very real and interest rates will rise.

• The US dollar will continue to weaken and Gold will rise further towards $2,000 an ounce.

• Spain and Portugal will both need some form of bailout as the sovereign debt crisis continues.

• Stock markets in the UK, USA and Europe will suffer substantial falls during 2011.

• The pound will continue to strengthen against the euro, perhaps reaching as high as 1.30.

• The UK economy will continue to recover but the worst winter in living memory will be blamed for lower economic growth than originally expected.

• The referendum on changing the electoral system in the UK will result in a “no” vote. Great strains on the coalition government will follow.

• Vince Cable will be “shuffled” from the position of Business Secretary, and will be advised to buy a new hat.

• The Spanish air traffic controllers (the French as well) will cause further chaos.

• As the austerity measures bite further in the UK there will be even more civil unrest.

Well I think we would give ourselves about seven out of nine. But what about our thoughts about the year ahead with a promise once again to see how we did in a year’s time.

So for 2012 we think:

• Interest rates will remain near zero and all the way through 2012 and indeed into 2013.

• The US dollar will weaken further and Gold will rise beyond $2,000 an ounce after a correction in early 2012.

• The Sovereign debt crisis in Europe will deepen further. Germany will allow a wider role for the European Central Bank but it will not be enough to prevent the survival of the Euro in its current form being seriously threatened.

• Global Stock markets will suffer substantial falls during the first half of 2012, recovering only if the Eurozone and US debt crises are contained and addressed. A real risk of a meltdown exists if Governments continue to dither.

• The pound will strengthen against the euro, to beyond 1.20.

• The UK economy will slow to a near standstill or worse with economic forces outside of the UK getting the blame.

• As austerity measures bite further in Europe there will be strikes and civil unrest.

• Austerity measures introduced by the new Spanish Government will cause unemployment to rise towards 25%.

• There will be military intervention in Iran involving Israel and the USA.

As a business it has been another good year for Premier Pension Solutions SL and we are grateful to those who have supported us with their business. We look forward to further exciting times in the pensions’ world during 2012 and wish all our clients and readers a Happy Christmas and New Year.

Comment on this Blog

The working class people need to understand, that the so called republicans and the so called democrats are both working for the same small group of the elite world bankers. The now named1%. The same thing holds true world wide in any two party political system. The power to solve this problem lies in the hands of the working class people. It is a simple solution that would require organization. The working class people are their own worst enemies. There is a way to defeat the elite world bankers at their own game. The working class people need to solve this problem, “What is it essentially that keeps the elite, super wealthy?” The answer is that you do! The solution to that problem is, to just stop doing that. If you have to ask how, you need to think it through. It’s so simple, most people don’t think that it, would work.
James Madison - Fri, 16th Mar 2012

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