Economic Forecast For US Economy for 2005 and Beyond

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September 18, 2008

SouthAmerica: In November 2004 I made the following predictions as follows:

Source: Economic Forecast For US Economy for 2005 and Beyond
By:Ricardo C. Amaral
http://www.elitetrader.com/vb/showthread.php?s=&threadid=49982


I also said at that time: “Do yourself a favor make a copy of these predictions and check them again by November 2008 (The new presidential election here in the US), and you will see that I was right in the nose.

I am so confident about my predictions that I am putting them in writing for entire world to see it, as I did in the past. (And I did identify myself, and signed my real name)

Four years later almost all the predictions came to past, but not the prediction about the US stock market financial averages.

As I said before on this forum it seems to me that today the entire American Capitalist System it is on life support and on intensive care.

My predictions were right about what happened to the Fed Funds rate since that time – to the value of the euro vs. the US dollar – about the price of gold – and about what has been happening in the real estate market.

The truth is my stock market financial averages prediction also would have come to past without the massive US government intervention in the US financial markets that has been underway for the couple years.

Without the US government massive interference distorting the entire US financial market with bailout after bailout of companies that should be let go out of business today the S&P 500 probably would be at the 800 to 600 level.

The US government is creating a very distorted US economy with all this US government interference and intervention and now they started their intervention also around the world to make things even worse.

Here is what I wrote and published a few days after the November 2004 US presidential election.


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November 5, 2004

“Economic Forecast for the US Economy for the Year 2005 and Beyond.”
By: Ricardo C. Amaral


If you have been reading most of my articles, then you know that I am very pessimistic about the direction that the US economy is taking.

In my opinion we are heading for a worldwide depression, probably even worse than the depression of the 1930's. The US economy is heading south and it is picking up speed.

The Bush administration's policies are a sure bet for a new economic depression. I have no doubts about that. We have a very weak economic team running economic policy in the country today.

Here are my predictions for the year 2005 and beyond for the US economy:

1) The US dollar should decline further during the year 2005 at least to the range of:
US$ 1.50 - US$ 1.60 equal 1 Euro.

2) Gold should increase in price from the current $440 price to around to $ 500.

3) The stock market should decline in the next 3 to 4 years in the range from 30 to 50 percent from current levels. (There are many reasons for that decline to become reality.)


Market closings for November 5, 2004:

Dow Jones 10,388

Nasdaq 2,039

S&P 500 1,166


Market will trade in the following range in the next 3 to 4 years:

Dow Jones from 7,300 to 5,200

Nasdaq from 1,400 to 1,000

S&P 500 from 800 to 600


4) The real estate bubble will burst in the near future when interest rates starts rising to higher levels. Housing should lose in value from 25 to 40 percent depending where the real estate is located. (The actual price of real estate will decline in real terms, since inflation is very low)

5) To stabilize the US dollar decline, the US Federal Reserve will need to raise the Fed Funds rate to a level between 4 and 5 percent by the end of 2005. As the US Federal Reserve increases the Fed Funds rate at this fast rate, the US economy growth rate will decline accordingly; in turn helping the implosion process of the US economy.

6) Outsourcing American jobs to foreign lands will help the implosion process of the American economy. It is open season on American jobs, and millions of American jobs are leaving the US for cheaper labor places. Americans want equality, in terms of wages, equality is at the 50 cents per hour without company benefits. In the future, Americans will get what they are wishing for.

7) Companies of every size will transfer the responsibility of their pension plans to the US government. Most of the people now receiving pensions from these companies will receive a very large cut on their pension benefits when the pension responsibility is transferred to the US government: Pension Benefit Guaranty Corporation's (PBGC)

These large cuts in pension income will result in a reduction in spending by pensioners, and in another important negative trend to affect the US economy in the coming years. (We are talking about millions of retired people here in the US.)

It is pathetic to see a country such as the United States to decline economically so fast. But gross government mismanagement will do it every time.

Without taking in consideration the US government’s usual published misinformation, the real rate of unemployment in the United States should be in the range of 13 to 15 percent, not the fictitious number published every month by the Labor Department of around 5.6 percent. The unemployment rate will increase drastically in coming months and years, as the US economy continues to deteriorate on its race to the bottom.

After reading one of my articles someone asked me: "Are you able to suggest financial refuge for those of us who are small landowners and investors?"

All I can say is that the risks are too high here in the US today. I would not invest any money in the stock market. The housing bubble is ready to burst. The only place that makes sense to park your money is in U.S. Government securities - "TIPS"
Below is brief information about these US government securities. Better safe than sorry.

Cash is king when the S… hits the fan. If you have cash on hand, after a major market decline, then you can pick up the pieces for a fraction of its previous price.


NOTE: Above are the predictions that I made right after George W. Bush was re-elected. Most of you think that they are silly predictions, and full of gloom and doom. Do yourself a favor make a copy of these predictions and check them again by November 2008 (The new presidential election here in the US), and you will see that I was right in the nose.

I am so confident about my predictions that I am putting them in writing for entire world to see it, as I did in the past. (And I did identify myself, and signed my real name)

Source:
Economic Forecast For US Economy for 2005 and Beyond
By:Ricardo C. Amaral
http://www.elitetrader.com/vb/showthread.php?s=&threadid=49982


**************


Here are some of the responses that I got from some of the members of this forum about my forecast when I made the original posting in May 2005:

It is fun to read what they said at that time about my posting..


Convertibility: “I can't believe I actually read some of this thread. Then again, I can't believe any actually believes any of the shit posted.”


Drsteph: Ditto.


Nazzdack: “Your pessimistically-biased forecasts are boring. We'll export our "Paper Asset Mania" to your country.”


Maxpi: “I know guys that grew up in Marxist Russia. The leaders were continually predicting the collapse of capitalism. It makes sense from their point of view, they can justify all their oppression, inability to deal with the demons and stupidity by the thought that it will be better than to go down with the capaitalists. They think they will wind up looking good at some point IOW but it never happens.”


Cesko: “…now back to U.S. bashing. Most popular sport in the world.”
He will never shut up. I don't think he is into investing, more into spreading leftie bullshit. He is so consistent that I really believe he is getting paid for it.


Jayford: “Long term, its easy Bro, The US buck is hating it.
So give us a trading strategy,
OR shut the FUCK UP, and stop posting!
Targets ?
This is a TRADING FORUM, not investing.
Southamerica, try competing with us Yanks, and post as you trade.
Jay”

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What? Do you really believe that? Did you even read what you wrote? You wrote back in 2004 that the euro would see 1.50-1.60 in 2005....not 2008...you said 2005. In 2005 we saw 1.17 to 1.35 range for the entire year of 2005. You said we would see the stock market drop 30%. We are exactly equal with what the stock market was at when you wrote the article, you did not say the stock market would go up 30% then drop 30% you said the stock market would DROP 30%, so that means a dow that would have to be around 7000 today for that prediction to be right. As for gold...well predicting a 10-15% rise and then seeing it go up as much as 150% i would say constitutes being WAAAAAYYYYY off.

I find it funny that you actually think your predictions were on the nose.

 

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September 18, 2008

SouthAmerica: Reply to peilthetraveler

Here are some more predictions that I made in the past, but I guess according to your point of view they were worth nothing because you could do much better yourself. (at least is what you think)

I am sure that if you had read my article in December 2001 you would also have disregarded the entire article as a bunch of non-sense. But the truth is many fools such as yourself told me that all the predictions were laughable, but none of those guys are saying much these days about my postings.

I am on the record about a letter that I sent to the European Central Bank in December 2001 which was published on “The Brasilians” a Brazilian newspaper and also on Brazzil magazine at that time and I made the following predictions on that letter regarding the exchange rate of the US dollar vs. the euro and also about the value of gold.

When that article was published many people such as yourself called me stupid, ignorant and they laughed about my article. You can read that article at:

In December 2001 I wrote a letter to the president of the European Central Bank (See copy of the original letter below). One month later I received a letter from the European Central Bank (ECB) in response to my letter. In March 2002, I wrote an article which was published on a Brazilian newspaper were I quote my letter and the response of the ECB.

Since I sent the enclosed letter to the president of the European Central Bank in December 2001 the US dollar has declining steadily in value against the Euro, and gold has increased in value from $ 295 to around $ 420 today.

When I wrote that letter to the European Central Bank in December of 2001 many people were predicting that the Euro was going to fall further in relation to the US dollar.

When I published the content of my letter in a newspaper article in March 2002 I received many letters to the editor and emails saying that I was very negative, and that I did not know what I was talking about, and so on. I also wrote an article which was published in June 2002 - “The Euro, Now.” The information that follows I am quoting from that article:

You can read that entire article at:

http://www.elitetrader.com/vb/showt...=president+of+the+European+central#post756042


*************


Here is portion of an article that I wrote in November of 2004 (keep in mind that I wrote that article 4 years ago) that was published on “The Brasilians” in December 2004, and also on Brazzil magazine in February 2005.


It’s 2008. The U.S. Has Dragged the World into a Depression
Written by Ricardo C. Amaral
Brazzil magazine - Sunday, 13 February 2005
http://www.elitetrader.com/vb/showthread.php?s=&threadid=124509

Quoting from that article:

…The First Great Depression of the New Millennium

During the second term of George W. Bush’s presidency, finally all the American mismanagement and mistakes did catch up with the American economy, and a number of trends merged into a perfect storm causing the final meltdown of the US economy.

The American economy went through a downward spiraling out of control implosion. Massive US government budget and trade deficits forced the Federal Reserve Bank to raise interest rates to try to stop the steep decline of the US dollar in world markets against other currencies.

Soon after September 11, 2001 the US dollar started sinking in world markets like the Titanic. The Economist had a Special Report regarding the US dollar on its December 2004 issue - “The disappearing dollar.”

The article said: the decline of the US dollar in the last 3 years makes the United States responsible for the biggest international monetary default in the history of the world.

…The world lost its confidence in the US economy because they realized that the US economy was over leveraged, and would not have the necessary cash flow to pay its bills in the future. The US economy was outsourcing its good paying jobs by the millions to other countries - in the last four years the US economy had exported over 10 million jobs. A flood of US corporations started reincorporating in tax havens to avoid paying US corporate taxes.

To compound the US economic problems, US corporations started repudiating the benefit payments of their pension and health plans. Everybody wanted to pass their pension responsibility to the US government - the trend started with the steel industry, then the airline industry, the major auto manufacturers, and after that, every company with a substantial pension plan. The US government had no choice other than to swallow approximately US$ 600 billion in new pension liabilities.

…the market dynamic of all these events combined to cause a major institutional collapse in the derivatives market, and that started a domino effect in the entire financial system causing a massive meltdown.

Panic among the major holders of US dollar also contributed to the stampede like we had never seen before - and at the end, Chernobyl looked like nothing when compared with the final meltdown of the US dollar, and US economy during the summer of 2006.

*****

Note: After the article had been published I noticed a typo on the last line of the article – It was supposed to read “during the summer of 2008.”

I mentioned to the editor of Brazzil magazine at the time about the typo but he told me that it was too late to make the correction since the magazine had been published online and also in hard copy.

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Please be more specific about the "timing" next time.

 

First off, dont put words in my mouth. I never said the predictions were laughable, stupid or you didnt know what you were talking about. I just said your predictions were WRONG and you should not be bragging about how right you were when you were not right.

Somehow I think you are trying to make people believe your smaller predictions come true so that when you write the big doom & gloom articles they will believe you.

But dont worry...this aint Rome and America will still be around during our grandkids lifetime.

 

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Nazzdack: Please be more specific about the "timing" next time.


*******


September 18, 2008

SouthAmerica: Look I don’t have a crystal ball like Nostradamus.

All I can do is connect the dots and arrive at certain conclusions that make sense to me.
I have been right about the direction and approximate range of interest rates, US dollar exchange rate vs. the euro, about the price of gold (when I wrote about the price of gold people laughed at me because the price of gold at that time had been doing nothing for a long time).

I wrote over and over about the real estate bubble bursting when most people thought that the sky was the limit for real estate prices.

In November of 2004 I wrote an article saying that:

“The world lost its confidence in the US economy because they realized that the US economy was over leveraged, and would not have the necessary cash flow to pay its bills in the future. The US economy was outsourcing its good paying jobs by the millions to other countries - in the last four years the US economy had exported over 10 million jobs. A flood of US corporations started reincorporating in tax havens to avoid paying US corporate taxes.

To compound the US economic problems, US corporations started repudiating the benefit payments of their pension and health plans. Everybody wanted to pass their pension responsibility to the US government - the trend started with the steel industry, then the airline industry, the major auto manufacturers, and after that, every company with a substantial pension plan. The US government had no choice other than to swallow approximately US$ 600 billion in new pension liabilities.

…the market dynamic of all these events combined to cause a major institutional collapse in the derivatives market, and that started a domino effect in the entire financial system causing a massive meltdown.

Panic among the major holders of US dollar also contributed to the stampede like we had never seen before - and at the end, Chernobyl looked like nothing when compared with the final meltdown of the US dollar, and US economy during the summer of 2008.”

The title of the article was “The First Great Depression of the New Millennium.”

Nazzdack you asked me to “Please be more specific about the "timing" next time.”

I can’t be more precise than that because no one can say the depression is going to start on September 17, 2008 at 4 PM.

That is not how a country descend into a Great Depression.

A country descend into a Great Depression one step at the time as one problem affects the other until the entire economic system is spiraling out of control and the system implodes.

We are away overdue for a new Great Depression and the United States financial system is in critical condition right now.

The US government is trying everything on their bag of tricks and they are interfering with the free market adjustments and this massive government intervention is a last resort effort to stop the economic system from spiraling into a major implosion.

The Great Depression already has started for millions and millions of Americans. But it is a slow moving process and things get worse and worse for more and more people as unemployment increases and so on….

.

 

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October 8, 2008

SouthAmerica: Many people laughed about my predictions when I made them in November of 2004.

Anyway, most of the predictions came to past and the last one that had not materialized as yet may finally also come to past.

I had said that market will trade in the following range in the next 3 to 4 years:

Dow Jones = 7,300

Nasdaq = 1,400

S&P 500 = 800

The reason that the market did not reach the levels that I predicted, it is because it was impossible for me to imagine so much US government intervention in an effort to keep the stock market from falling.

The US stock market is being kept from falling much further by artificial means and all kinds of US government interventions.

Even with this massive US government intervention I still have one more month for my prediction to come to past.

The US government on this heavy intervention process is undermining the entire system since nobody can trust any information about the entire financial system because everything is being kept artificially inflated, and nobody knows what is really going on.


*****


November 5, 2004

“Economic Forecast for the US Economy for the Year 2005 and Beyond.”
By: Ricardo C. Amaral


If you have been reading most of my articles, then you know that I am very pessimistic about the direction that the US economy is taking.

In my opinion we are heading for a worldwide depression, probably even worse than the depression of the 1930's. The US economy is heading south and it is picking up speed.

The Bush administration's policies are a sure bet for a new economic depression. I have no doubts about that. We have a very weak economic team running economic policy in the country today.

Here are my predictions for the year 2005 and beyond for the US economy:

1) The US dollar should decline further during the year 2005 at least to the range of: US$ 1.50 - US$ 1.60 equal 1 Euro.

2) Gold should increase in price from the current $440 price to around to $ 500.

3) The stock market should decline in the next 3 to 4 years in the range from 30 to 50 percent from current levels. (There are many reasons for that decline to become reality.)


Market closings for November 5, 2004:

Dow Jones 10,388

Nasdaq 2,039

S&P 500 1,166


Market will trade in the following range in the next 3 to 4 years:

Dow Jones from 7,300 to 5,200

Nasdaq from 1,400 to 1,000

S&P 500 from 800 to 600


4) The real estate bubble will burst in the near future when interest rates starts rising to higher levels. Housing should lose in value from 25 to 40 percent depending where the real estate is located. (The actual price of real estate will decline in real terms, since inflation is very low)

5) To stabilize the US dollar decline, the US Federal Reserve will need to raise the Fed Funds rate to a level between 4 and 5 percent by the end of 2005. As the US Federal Reserve increases the Fed Funds rate at this fast rate, the US economy growth rate will decline accordingly; in turn helping the implosion process of the US economy.

6) Outsourcing American jobs to foreign lands will help the implosion process of the American economy. It is open season on American jobs, and millions of American jobs are leaving the US for cheaper labor places. Americans want equality, in terms of wages, equality is at the 50 cents per hour without company benefits. In the future, Americans will get what they are wishing for.

7) Companies of every size will transfer the responsibility of their pension plans to the US government. Most of the people now receiving pensions from these companies will receive a very large cut on their pension benefits when the pension responsibility is transferred to the US government: Pension Benefit Guaranty Corporation's (PBGC)

These large cuts in pension income will result in a reduction in spending by pensioners, and in another important negative trend to affect the US economy in the coming years. (We are talking about millions of retired people here in the US.)

It is pathetic to see a country such as the United States to decline economically so fast. But gross government mismanagement will do it every time.

Without taking in consideration the US government’s usual published misinformation, the real rate of unemployment in the United States should be in the range of 13 to 15 percent, not the fictitious number published every month by the Labor Department of around 5.6 percent. The unemployment rate will increase drastically in coming months and years, as the US economy continues to deteriorate on its race to the bottom.

After reading one of my articles someone asked me: "Are you able to suggest financial refuge for those of us who are small landowners and investors?"

All I can say is that the risks are too high here in the US today. I would not invest any money in the stock market. The housing bubble is ready to burst. The only place that makes sense to park your money is in U.S. Government securities - "TIPS"

Below is brief information about these US government securities. Better safe than sorry.

Cash is king when the S… hits the fan. If you have cash on hand, after a major market decline, then you can pick up the pieces for a fraction of its previous price.


NOTE: Above are the predictions that I made right after George W. Bush was re-elected. Most of you think that they are silly predictions, and full of gloom and doom. Do yourself a favor make a copy of these predictions and check them again by November 2008 (The new presidential election here in the US), and you will see that I was right in the nose.

I am so confident about my predictions that I am putting them in writing for entire world to see it, as I did in the past. (And I did identify myself, and signed my real name)

Source:
Economic Forecast For US Economy for 2005 and Beyond
By:Ricardo C. Amaral
http://www.elitetrader.com/vb/showt...&threadid=49982


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8) EWZ down to a "dollar and change".

 

Yeah SA, and you predicted that Al Gore would be the Democratic nominee...

 

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Fractals ‘R US: Yeah SA, and you predicted that Al Gore would be the Democratic nominee...


******


October 8, 2008

SouthAmerica: We all lost on that one.

The Al Gore prediction I had made in August 2006, and not 4 years ago when I had made the other predictions.

We ended up with two Mediocre candidates running for president.

Basically it does not matter who wins in November 2008 – we are in big trouble.

That is one prediction that I am sorry it did not materialized – and the United States is going to pay a heavy price for electing a mediocre leader just when the Perfect Storm is hitting this country head on.

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