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Arthur Koestler 

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My Predictions For 2017

In the spirit of the Amazing Kreskin, I offer my predictions for 2017. Or maybe it is in the spirit of the Amazing Criswell.

1. I think that China will have to make a hard choice this year, Either they will institute strong currency controls and not allow money to leave China, or the value of the yuan, their currency, will drop dramatically. Saxon Bank, in the spirit of their annual outrageous predictions, predicts this

China understands that it has reached the end of the road of its manufacturing and infrastructure growth phase and, through a massive stimulus from fiscal and monetary policies, opens up capital markets to successfully steer a transition to consumption-led growth. This results in 8% growth in 2017, with the resurgence owing to the growth in the services sector. Euphoria over private consumption-driven growth sees the Shanghai Composite Index double from its 2016 level, surpassing 5,000.

This seems unlikely. Trump will put considerable pressure on China. At the very least US tariffs on Chinese goods will be equal to Chinese tariffs on US goods. This will basically double the tariff rate. 

2. Putin will remarry. He will marry Melania Trump. 

3. I agree with the pundits that say the stock market is overvalued. I think about 30%. But that does not mean the price will fall in 2017. I think that stock prices will go sideways in 2017—probably going down 10%. 

The Witch will Die! 4. Juliette and Nick will get married in the 2016/2017 season. This means that Adaline will die, prob-ably heroically. 

5. ObamaCare will be tweaked, but not abolished. Trump will not be innovative enough to solve the healthcare crisis. The US cannot go on spending 17% of its GDP on healthcare when competitive countries spend 10%. This will be a major failure of the Trump Presidency. 

6. I will move to Russia. (Why? See Number 5.)

7. There will be a settlement in Ukraine because both the West and Russia want one. The Ukrainians would rather kill each other.

8. I will finally get around to doing a podcast, making the name of this blog actually make sense. 

9. The hard money crowd will continue to predict inflation, they will continue to be wrong. The Fed, as it did in December 2015 & 2016, will try to increase interest rates. While the interest rates will technically be higher in that the rate that the Fed will loan money to banks will go up, in reality the strong deflationary pressures will continue and there will be little increase in rates. I doubt the Fed will reduce reserves by the one trillion or so needed to actually increase interest rates. The dollar will continue to be strong. A lot depends on how big a tax cut and how big an infrastructure program Trump gets passed. My guess is that both will be modest. 

10. Rather than make a humorous prediction, I will relate a dream i had two nights ago. It was about a real estate development in which I was involved in some way. The government had changed the rules in the middle of development, causing the project to be unviable. The government officials seemed pleased with what they did, laughing at others misfortune. Everyone else was glum, especially the lawyers. In the dream, I proposed that everyone take a hit, and no one be held totally liable. We would divide whatever was sellable among the principals, and each would pay a share of the bills.  There was general agreement, but one vendor called me a blowhard. Apparently, even though he agreed, he would not be paid in full.  We walked though an uncompleted house to our cars. At the end of the dream there was one principle that seemed unfazed by the disaster. He rode around in his cadillac, smiling as he drove through the mud to his girlfriend's house. In the dream this seems to be my late father. This did not make sense as my father always paid his bills. 

So my interpretation of the dream is that we will have a financial crisis during the Trump administration, but not next year. It will be caused by structural governmental issues. Our "Father," the president, will somehow avoid most of the blame. He will just have to clean up his cadillac. We, the people, will have to pay our "fair" share of the crisis. The working man will be unhappy, but accept his lot. 

A crisis is inevitable. Dream or no dream, we as a nation cannot live beyond our means and not expect some karma. I do not believe in the predictive power of dreams, this was just a dream. I hope.

I will conclude with a long term prediction that combines the odd number approach, a serious prediction, with the even numbered predictions that take a more humorous approach. 

0. Ivanka Trump will more to Florida. She will be elected to Congress. Later she will run for president and get elected as the first woman and first Jewish president. 

Have a great and prosperous New Year. 

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