While my 2012 forecast results were somewhat mixed, the 2013 results should be more accurate.
1) Beginning of a global stock market collapse. As readers may recall from my most recent post, global markets have a valuation of about $52 trillion. Based on the charts, it is my assertion that we will see the markets drop below $40 trillion by the end of 2012.
I am also currently completing a forecast for the S&P 500 that should be finished and published shortly.
2) A spike in gold bullion prices is likely after another month or two of consolidation early in 2013. As the authorities begin to lose control of the gold suppression system maintained by massive short positions of the bullion banks to support the status quo fractional reserve fiat currency system prices will rise quickly. My year end gold target is $2000.
3) Bond market yields among peripheral countries in Europe rise again. Spain, Italy and Portugal look particularly vulnerable. French yields will rise substantially. Even Germany may look at higher rates by the very end of 2013.
4) The Euro finally splinters in 2013. While Greece is the prime candidate from an insolvency viewpoint, Germany may decide it can't continue to bailout everyone else, including, at some point, France. Several other countries are also candidates including Belgium, Ireland, Spain, Slovenia, Portugal and Italy. A full Eurozone breakup is likely by 2014 or 2015.
5) As the European bond market stumbles, money flows out of commodities with crude oil (Brent) dropping below $90, and WTIC falling to $75 barring any substantial Middle East disruptions. Copper looks vulnerable falling to $2.75. The measured move for copper from the charts shows a potential drop of $1.50 from current levels to $2.10. As this seems quite extreme, we will assume a more conservative correction to the $2.75 level.
6) The Japanese bond market remains one of my biggest areas of concern given the extreme level of debt and 2012's experience with the first wave of difficulty in selling bonds. Yields should continue to slowly rise but will have a large impact on government deficits as interest cost balloon.
We may find in the next couple of years that the Japanese experience will be a warning to us all.
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