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Economic Predictions for 2015

Many economists, some politicians but not many psychics, will make Economic Predictions for 2015. Being a brave sort, here are some economic predictions for 2015:

Extreme volatility in the stock market. Expect a day or two of down day of at least a 5-10% or more – with trading curbs used. Possible “flash crash” or catastrophic hacking event.

Rising U.S. Dollar vs. Yen and Euro. Euro value at end of year €1.05 to $1.00.  Yen value at end of year ¥130 to $1.00. To stimulate their economies, many countries will deflate/devalue their own currencies.

– Greece to leave the EU and/or special concessions to keep Greece in (devaluation of Greek debt, IMF intervention loan.)

– U.S. to have low quarterly GDP rates with one or two negative quartersThe Amateur Economist. Texas enters a recession.

– After small Federal Reserve interest rate rise of .25% in early 2015, no more interest rate increases for 2015.

– World-wide deflation (falling prices) of broad range of commodities throughout 2015. WTI oil to settle and stay in $50-$60/bbl range.

– Chinese economic turmoil. Several large Chinese public companies announce accounting irregularities, which casts doubt over Chinese system of finance and controls and causes investor flight from country.

– China tightens, corrects or devalues Yuan to U.S. Dollar in effort to stimulate economy. Effort to flood U.S. with cheap imports.

– Greatest number of consolidations, mergers, acquisitions and bankruptcies of oil, exploration and production companies since 1980’s.

– U.S. unemployment starts to rise in second/third quarter.

Looks like somewhat of a grim year, economically at least. Though the U.S. did move out of recession several years ago, the country is still quite weak economically – much like a patient after a bad bout of flu. If the economies of Europe, China and/or Japan, were healthier, they could help Uncle Sam up and over the post-flu blues. But they are not now economically healthy themselves.

In summary, 2015 will be a selfish year. Every country or blocks of countries will be looking at their own economic interests and currencies, and not as a global economic system.

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