Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
Students, It’s Time to Prepare Your Finances for the Years Ahead - 25th Jul 17
Stock Market and Gold Stocks Trend Forecast Update - 25th Jul 17
Saving Illinois: Getting More Bang for Its Bucks - 24th Jul 17
3 Stocks Sectors That Will Win in The Fed’s Great Balance-Sheet Unwind - 24th Jul 17
Activist Investors Are Taking Over Wall Street, Procter and Gamble Might Never Remain the Same - 24th Jul 17
Stock Market Still on Track - 24th Jul 17
Last Chance For US Dollar To Rally - 24th Jul 17
UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - 22nd Jul 17
Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts - 22nd Jul 17
Warning: The Fed Is Preparing to Crash the Financial System Again - 21st Jul 17
Gold / Silver Shorts Extreme - 21st Jul 17
GBP/USD Bearish Factors - 21st Jul 17
Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing - 21st Jul 17
Is It Worth Investing in Palladium? - 21st Jul 17
UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - 21st Jul 17
The Fed May Show Trump No Love - 20th Jul 17
The 3 Best Asset Classes To Brace Your Portfolio For The Next Financial Crisis - 20th Jul 17
Gold Stocks and Bonds - Preparing for THE Bottom - 20th Jul 17
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17
The Socionomic Theory of Finance By Robert Prechter - Book Review - 18th Jul 17
Ethereum Versus Bitcoin – Which Cryptocurrency Will Win The War? - 18th Jul 17
Accepting a Society of Government Tyranny - 18th Jul 17
Gold Cheaper Than Buying Greek Villas in 2012 - 18th Jul 17
Why & How to Hedge the Growing Risks of Holding Stocks - 18th Jul 17
Relocation: Everything You Need to do for a Smooth Transition Abroad - 17th Jul 17
A Former Lehman Brothers Trader: It’s Time To Buy Brick And Mortar Retailers - 17th Jul 17
Bank Of England Warns “Bigger Systemic Risk” Now Than 2008 - 17th Jul 17
Bitcoin Price “Deja Vu” Corrective Sequence - 17th Jul 17
Charting New Low in Speculation in Gold and Silver Markets - 17th Jul 17
Bitcoin Crash - Is This The End of Cryptocurrencies? - 17th Jul 17
The Fed's Inflation Nightmare Scenario - 17th Jul 17
Billionaire Investors Backing A Marijuana Boom In 2017 - 17th Jul 17
Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - 17th Jul 17
Gold and Silver Biggest Opportunity Since Late 2015, Last Chance at These Prices - 17th Jul 17
Stock Market More to Go - 17th Jul 17
Emerging Markets & Basic Materials Stocks Breaking Out Together - 16th Jul 17
Stock Market SPX Uptrending Again After Microscopic Correction - 15th Jul 17

Market Oracle FREE Newsletter

Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts

13 Contrarian Economic Predictions For 2017

Politics / Financial Markets 2017 Jan 11, 2017 - 05:39 PM GMT

By: John_Mauldin

Politics

BY JARED DILLIAN : Everyone likes to compile lists of predictions for the new year.

I don’t.

Did you ever notice that when you look at all the failed predictions in any given December, what ended up happening was the opposite of what everyone predicted?

Given that most predictions end up being wrong, why not just take a look at what passes for conventional wisdom and do the opposite?


Warning: many of these involve Trump.

  1. Trump is going to nuke somebody in 2017

It is true that Trump wants to increase, rather than decrease, our nuclear capabilities, which runs pretty much counter to anybody’s idea of what constitutes peaceful behavior in 2017.

The interesting thing about the nuclear threat is that as the popular perception of it has waned since the Cold War, the actual nuclear threat has increased as the number of nuclear weapons has declined.

What if the opposite happens—what if peace breaks out all over in 2017? And what if it is because of Trump?

  1. Trump’s billionaire cabinet is going to turn the United States into a vast plutocracy

The interesting thing is that inequality massively increased under Obama, who was allegedly concerned about the poor. Trump seems concerned about the rich—what if the opposite happens? What if inequality decreases?

There are a lot of good reasons why this would happen, particularly the composition of the Federal Reserve, which is about to get more hawkish no matter what happens. Raise interest rates to something approaching equilibrium, and a lot of this stupid risk-taking activity comes to an end.

  1. We are due for a recession

What if we’re not? Recessions, probabilistically speaking, are independent events. Just because we haven’t had one in eight years doesn’t mean we’re going to have one tomorrow. There’s no reason the expansion can’t continue. The only way we get a recession is if the Fed causes one by ripping rates.

  1. The Fed is full of crap and will never raise rates

People are starting to come around to the idea that the Fed might hike rates some more, but the consensus opinion is that the Fed has a history of overpromising and underdelivering. There is a big blind spot here. It’s the classic boy-who-cried-wolf fable.

  1. International trade is going to collapse under Trump

What if the opposite happens? What if there is actually more trade?

What if Trump doesn’t simply tear up existing treaties but renegotiates them? If we’ve learned anything since the election, it’s that a lot of the things we thought were true about Trump have been all wrong.

  1. The BOJ is out of tools

USDJPY went from 100 to 118 in a heartbeat. It would appear that the BOJ has finally found its most powerful tool—the 10-year rate cap. People have been predicting endless deflation in Japan as long as I can remember. They missed the move in the Nikkei and USDJPY in 2012, and when inflation comes, it’s not likely anyone will get that right, either.

  1. The ECB will continue to do whatever it takes

What if they don’t?

We saw last Tuesday that German inflation is starting to rip.

You can read in Street Freak the implications of a Fillon presidency.

The Eurozone might be breaking out in growth—which might mean the end of radical monetary policy.

  1. Healthcare and education costs will continue to skyrocket well into the future

People are so used to healthcare and education costs going up 15-odd percent a year, that they feel there is no way for the trend to be reversed. Again, a pro-growth, pro-business president introduces some market reforms (in the case of healthcare) and ends subsidies (in the case of education)… problem solved, or at least improved.

  1. Global temperatures will continue to skyrocket

What if they don’t? I understand perfectly well the science behind it. But when everyone believes something, it is almost always wrong.

  1. France, Italy, etc., will never grow

The French workers now have a government-approved right to ignore work-related emails outside of business hours. I’m guessing this is the top tick in stupidity. Wealth is the direct result of work. If you want wealth, you have to work. If you don’t work, you won’t have wealth. I think Europe is getting closer to figuring this out.

There are some really cool trades to put on with this idea.

  • Mexico is screwed, because of Trump

Probably not.

  1. China is going to blow up the world

Everything you read about China is probably false.

  1. The Cubs are going back-to-back in the World Series

I actually believe this. The Cubs will be a dynasty for years to come.

File this away and look at it a year from now.

I bet a lot of my dumb contrarian predictions actually come true, because whatever is the consensus is usually wrong.

Here’s a great tweet:

It’s better to be contrarian for the sake of being contrarian, than to be consensus for the sake of being consensus.

So for 2017, question your assumptions—always, always question your assumptions. Question what people believe to be true. Find the blind spots. Trade accordingly.

Grab This Free Report to See What Lies Ahead in 2017

Now, for a limited time, you can download this free report from Mauldin Economics detailing the rocky roads that lie ahead for three globally important countries in 2017—and how the economic fallout from their coming crises could affect you. Top 3 Economic Surprises for 2017 is required reading for investors and concerned citizens alike. Get your free copy now.

John Mauldin Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife