1. The U.S. will implement QE3/4 when the $600 billion of QE2 is not enough (already it is not enough as admitted by the Fed’s chairman Benjamin Shalom Bernanke recently on CBS’ 60 Minutes). Except it won’t be called as such in the lamestream media. QE3/4 will be in the trillions of U.S. dollars (USD) of quantitative easing, i.e., fake digital money printing from the Fed to sop up unwanted U.S. Treasuries. The unstated and ONLY purpose of QE2 and QE3/4 is to buy up all of the U.S. Treasury debts that the foreign nations are beginning to refuse to buy while they are quietly dumping what they possess on the U.S. and world markets in exchange for real and tangible assets and resources.
2. The major export nations like China, Russia, Brazil, India, Argentina, and others will engage in and increase their non USD-denominated trading among themselves, as exemplified by the recent China-Russia trade agreements whereby they would start trading in Rubles and Yuans, and not use USD as is typically transacted in international trades for commodities and oil. This will put increasing devaluation pressures on the USD. So, look forward to the US Dollar Index to drop further from the low 80s now to the low 70s or even lower in 2011.
3. Retail food prices in the U.S. will increase in the low to medium DOUBLE digit ranges (10% to 40%) for everything from the junk/GMO “foods” served by corporations like McDonald’s to healthy/organic foods supplied by companies like Wholefoods. This will take place noticeably in the first half of 2011.
4. The real estate market in Canada will finally begin its collapse suddenly after the new year celebrations are over, mimicking the real estate crash of the U.S. that began in late 2008. Over heated markets like Vancouver will suffer the most as the average house price there is around $1 million Canadian (the Canadian dollar is almost on par with the USD). The average homeowner in Vancouver is spending about 70% of its BEFORE-tax income on paying mortgages. This financial situation is totally unsustainable. To illustrate a parallel, past example why it is going to be the case: In 2005, the “median” California family spent almost 73% of their AFTER-tax income on their “median” California house ($477,700), and look what happened to the real estate market in California. A 50+% devaluation of the Vancouver real estate market is very likely over the next 1-3 years. But the crash will begin in early half of 2011.
5. The Chinese real estate market, the last investment vehicle in China for those Chinese with money, will also begin its collapse suddenly, hitting hard cities like Shanghai, Beijing, Fuzhou, etc. According to a very recent article by UK’s Daily Mail Online, there are as many as 64 MILLION empty homes in China with no one occupying these brand new homes! This China real estate crash will have serious implications for the real estate market in Vancouver. There won’t be m/any Chinese millionaires plunking down $1+ million CASH for buying real estate in Vancouver, as has been the case over the recent years.
6. Inflation will run rampant in China as it is already doing so with retail food prices. See my recent article (www.rense.com/Currency%20Wars%20For%20Dummies.pdf <http://www.rense.com/Currency%20Wars%20For%20Dummies.pdf> ) as to the real causes of huge inflation in China. Unless China allows its Yuan to appreciate (increase in value) against the ever falling USD, rampant inflation in China will continue its course unabated. If China allows its Yuan to appreciate by any significant amount (7% or more), such an action will DECIMATE its export industries and manufacturers, because of the extremely thin profit margins that their exporters have to work with. China will raise its interest rates to try to stop inflation but that will not do the job. In fact, raising interest rates will only cause more foreign currencies to go into China in search of higher yields, unless China imposes strict restrictions on the importation of foreign currencies and investments.
7. The EU will continue its financial collapse, as nations like Spain, Portugal, and Italy will join Greece and Ireland in facing the stark choice between (Option 1) bailing out THEIR banksters or (Option 2) having THEIR nation go bankrupt. The IMF/World Bank model of “rescuing” these EU nations were perfected on the so-called Third World nations such as Argentina (viz., John Perkins’ book, “Confessions of an Economic Hitman”). In 2001, Argentina defaulted on its IMF loans, i.e., it was forced to take Option 2, and its people suffered tremendously as the majority of its middle class was literally wiped out overnight. The Banksters in Argentina (with such strange and exotic names like JPMorgan Chase, Citibank, etc.) were able to fly out their billions of USD on private jets before the forced conversion and devaluation of the Argentina pesos/savings were implemented on the masses. Millions of Argentineans keep their savings as USD in their banks before the collapse. When the forced conversion and devaluation of those USD savings were imposed on its citizens, the banks were closed and ATMs withdrawals were limited to a few hundred pesos (less than $50 USD) per person per day. Overnight, Argentineans saw their savings lose over 75% in value (the peso went from 1:1 to 4:1, requiring 4 pesos to buy 1 USD overnight). And then the multi-national corporations came in like financial vultures and bought up the natural resources and public utilities for pennies on the USD. THAT is IMF’s Option 2 for Spain, Portugal, and Italy. Option 1 is long term financial servitude and slavery for the citizens of the bankrupt country as is happening to Ireland.
8. Silver and gold will continue to climb in 2011. Silver will increase much more than gold in 2011, as the “Crash JP Morgan, Buy Silver” viral campaign started by Max Kaiser in early November will take off exponentially in 2011. Silver will breach $50 per ounce in 2011.
9. A major war will break out somewhere in the world in 2011 (if not in 2011 then definitely in 2012) involving the U.S. and/or one of its proxy allies, i.e., Israel, South Korea, etc. The very recent massive war exercises conducted by South Korea and the U.S. were meant to provoke a military response from North Korea. Fortunately, the North Koreans didn’t take the bait. This will be the final American Bubble to inflate as the U.S. will try to use “shock and awe” on either North Korea or Iran or even maybe a country in Africa in a futile attempt to bypass and cover up the greatest economic and financial collapse in world’s history.
N cyclical terms, 2010 will likely be consigned into the footnotes of economic history as a year when the economy and the markets surprised on the upside but did little to fundamentally change the post-crisis world.
While global and Malaysian output grew by approximately 5 per cent and 7 per cent respectively, it has petered out quite quickly by the second half of 2010 on the back of slowing growth and multiple structural constraints in the West, coupled with both asset and price inflation pressures in the East.
Far more interesting are the structural footprints of 2010. At the global level, being the "year after (a post-financial apocalypse) tomorrow", by all accounts, we seem to have wasted what was a first-rate crisis.
The relative success of the "war-time" crisis management of 2009 has given way to a more predictable drudgery of low equilibrium outcomes at both national and multi-lateral levels. Pick any of the global common issues of trade, capital flows, financial stability, banking reforms, development, and indeed, climate change. They all fell short, often significantly of the bold and collective leadership the world was crying out for.
Real construction growth for 2011 has been projected at four per cent, OSK Research said in its 2011 report.
It re-rated valuations upwards for the construction sector fuelled by the possibility of an early general election, implementation of the proposed projects under the Economic Transformation Programme and Budget 2011.
In its research note, OSK Research said the top pick was Sunway with a target price of RM2.72 and within the small cap space, AZRB, with a target price of RM1.51.
"Investors should pick Gamuda (TP: RM4.31) for the euphoria over the proposed MRT. Lastly, we recommend Naim (TP: RM5.10) for the Sarawak theme," OSK Research said.
