I had to go back and remind myself of the quick list of predictions that I made for 2013. Overall, not a stellar job. Gold is still in a bull market, but it also suffered horribly over the last 12 months. Japan showed the early signs of what I deem to be big problems, but there was no obvious combustion. There was a taper, despite my best guess, and the unemployment rate moved lower (even if everyone now knows it is a bad measure of success). But, shorting the yen was definitely a winner.
On to 2014…
I think the same themes that I focused on then are in play. We have just moved 12 months closer to the point when everyone else will start to realize it.
-Japan keeps approving more “stimulus” because Abenomics does not do anything except weaken the yen and create cost-push inflation. Wages are stagnant.
-Gold has tested the 2013 low a few times. We’ll know shortly, I think, whether that will hold or $1,000 to $1,100 is the landing spot. Either way, a good value exists in the metal and the better mining stocks. Still, I anticipate that 2014 will be much more generous to the gold bulls than the past two years have been.
-The 10-year closed above 3.00%. That can’t make the Fed happy and is a clear measure of how the bond market is no longer cooperating. Higher rates are bad for housing prices, the stock market, budget deficits, profit margins and all the things that create a desired wealth effect. So, with all of it, I don’t think the Taper is the thing.
-Finally, on a personal note, I expect my endeavors in real estate to evolve.
A happy and healthy new year to all.
