Long Term and 2013 Predictions for USA and World

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WORLD AND USA.

Science. 

Current world view seems set to be static for the foreseeable future. Lack of significant progress in solving the unsolved mysteries of the cosmic expansion and dark matter mean the current views, now 30 years old, will continue until we achieve some breakthrough. No progress in the grand unified theory or quantum mechanics is likely and one can safely predict this status to continue till 2050 at least. So its a dead end in our lifetimes. Discovery of the Higgs Boson recently means a confirmation of 50 year old thinking process and a certain death for alternative theories for a decade or more. The reopening of the large hadron collider is more likely to emphasise the mysteries of universe expansion and dark matter rather than solve it. 

Unless chance events throw up another Einstein. Unlikely because in the early 20th century, there were 100s of brilliant minds making a 100s of new discoveries of which Einstein was the best. Not so today – nothing like the same situation.Space exploration is unlikely to advance at even the current pace as the money available for it keeps on reducing. Western economies are unable to raise funds for this for a decade. 

Although these are predictions where I would prefer to be proved wrong !

How to profit from it – project past events into the future. History will repeat itself.

Technology. 

The breakneck race of better and better computing devices and more and more integrated networks is likely to continue and be unpredictable even 3 years hence. Still, some points are noticeable. 

1. We are still doing in 2012 what we were doing in 1998, just better and faster and more portable. And more people are doing it. The current internet generation is just a logical progression from the dot com boom. 

2. Devices will continue into smaller and more portable computers and tablets with ever greater processing speeds with ever decreasing power requirements prolonging battery life.

3. Cloud computing and apps will progress further.

Where I see us in 2020.

1. Mobiles. S3/note 2 level will be the entry level phone and will be used by everybody. Prices will drop to where even the poorest can afford it or provided by govt. Likely to serve as money and identity card with biometric tagging of the device to the user.

2. 4 tablet segments of 4 inch, 5.5 inch, 7-8 inch and 10 inch will be standard and used by every one including a-pple (i.e I am a 5.5 inch product from a-pple)

3. The difference between apple and competitors will drop. Even the cheapest tablet will be better than ipad 4 and everyone will have them

4. Desktops will vanish even more and become extinct.

5. Laptops will change into tablet/ultrabook combo – thinner, lighter and dual purpose.

How to profit from it. Sell apple. Buy g00gle and Microsoft stock. Because apple will no longer be able to charge a premium and incremental software improvements which differentiate from the crowd are disappearing. Microsoft has got W8 right and should benefit from future developments in ultrabook tablet combos.

Disruptive technologies.

1. Wearable computing and virtual reality are now having sufficient miniaturization to actually take off. Just like Microsoft in 2002 could not do anything with tablets because of lack of technology but in 2009 could, virtual reality now is in take off mode. In 1998 and recently devices have been a failure because the headgear has been too big and clunky. The google efforts in retinal projection devices will become big in 2013 and beyond with wearable devices with massive computing power, fibreoptic displays using small spectacle sized headsets where pupil sized projection outputs centered using laser positioning and using eyeball movement in addition to head movement will capture a more realistic rendering of the virtual world. It is now possible to have immersive reality experiences and good quality reality rendering to make VR a meaningful technology for gaming and virtual interaction. By 2015 to 2018 I see it being a big hit and optical cabling will be a big part of it, making it expensive. Virtual reality theatres with 3D immersive experience will usher in a new movie experience by 2018. All other movie theatres will vanish. What will start for the rich by 2020 will become a mass phenomenon by 2030.

2. Foldable screens and projection technology will do to screens what LEDs did to the CRT. Small watch sized computing devices projecting their output on to foldable screens or holograms in the air will become the rage for those who cannot afford retina projection. 

3. Handwriting and voice recognition will progresses and will acquire sophisticated learning capability to adapt to the user’s handwriting and voice. Galaxy note S pen like devices will become the input devices of choice by 2014.

4. As the benign nature of radiowaves becomes better recognized and less feared, using them to pick up brain activity will take off. With a combination of surface electrodes and electromagnetic probes, “thinking the word” will be converted into the word on a computer the same as handwriting recognition. First technology demonstrations will probably be ready by 2020 as an input device for the computer. Devices like Geordo la Forge’s visor will combine Bluetooth connections between wearable device in your pocket, earphone, retina projection and brainwave scanner for input device by 2020 and beyond.

5. The possibility of carrying on a conversation using brainwave input device and audio video output into earphone/retinal projection will take us further into AI linking humans and computers together seamlessly. Such conferencing of multiple personalities from many geographies with AI input on the topic will become possible. So talking to a client in USA by an Indian BPO operator can be done without the Indian accent and with computer support pulling up relevant data. Or a video conference between two world leaders will have input from generals and massively parallel AI to get real time data on say current status of global warming or tensions in Persian gulf. This will set the stage for the truly great thinkers to link their minds in a new way, leading to new ways of thinking and problem solving by 2030. 

6. Three dimensional printing will become really big. And will become routine use in online shopping to get a touchy feely look. 

All of these predictions mean a complete change in the way we live starting from 2020 and becoming well integrated into life by 2030. Situation is similar to internet starting in late 1990s and completely changing our life by 2013 in 15 years time. Those who are unable to afford these new technologies will be left further behind = great danger for our country. These new devices will fall in price but it will take till 2030 to fall in price. This will maintain the productivity difference between the poor and the rich from now till 2030.

How to profit from it. Piling on to niche companies can make you a lot of money. Look out for these and get in when the technology is still new and untested, before it becomes mainstream and everyone and his aunt know about it like . The next few years are a good time to watch out for such companies – from recession and churning will always emerge the new wave of technological change.

Other technologies

1. Cars. Nothing new. Will become more expensive. Dont invest in US car makers.

2. Air travel. Nothing new. Will become much much more expensive. Dont invest anywhere.

3. Software. Trend will be bigger clouds. And smaller and more efficient apps. The trend of free software will continue to disrupt revenue streams. Like free AVG and Windows free antivirus etc eliminated the Norton antivirus, word excel and power point will get eliminated as open office like programs do everything for free. Similarly, free apps will eliminate the paid apps. The trend of people working for free to help other people will eliminate the need to pay big bucks for a software service – internet has started the altruism change in people now rather than driven by self interest. ERP and data mining software will get simpler and cheaper off the shelf, reducing revenue. The principle of altruism will dominate the open source movement and eliminate the current leaders of paid software and paid clouds.

4. Viruses. Data elimination viruses will start disrupting life. At least one major hit by 2020 is likely. Will cripple financial data of a significant number of people and organizations (unlike individual hits currently). And this ruin some/massive number of lives. So don’t forget to have physical assets and hard copies of everything in case it is your demat or online account which gets wiped out.

5. Television. Internet TV will become routine pay per episode like Netflix. This is a big wave for the future and will destroy cable and satellite providers

Internet.

1. It will continue to simplify our lives and eliminate need for human interface.

2. Internet TV will become really big. You tube will becomes high definition pay tube and the default TV service in USA. The new generation wont know what is cable TV and what is dish TV. Sell media stocks in USA. I don’t know what to buy – maybe netflicks will get into online TV in a big way – you can read this up.

3. Getting revenue from internet will continue to challenge people as more and more free services will proliferate. Sell software product sellers. 

4. Organized retail will stagnate and reduce as people start preferring the price advantage of online retail. Buy Amazon and Flipcart.

5. A few giants like apple, Microsoft and Google will be investing more and more into protecting their hardware requirements and get into backend integration of their hardware manufacturing. Software and hardware will merge again like IBM – separation of hardware and software will be a thing of the past. Wintel might become a new company merging Windows and Intel – but that depends on the success of Windows 8 and its projected tablet plus laptop devices. Cut throat competition means Samsung has to take over a software company (Google plus Samsung = winning combination - Smoogle ?) while Apple has to buy up Taiwanese manufacturers of its components. Microsoft will try to do it all in USA and import the people instead. This will benefit Indian techies from 2016 onwards. Sell Indian IT for now, buy after 2016 when body shops again come into vogue.

6. The need for metropolitan cities bringing highly skilled people together will vanish. Downtown commercial real estate will not keep its value. The needless expense will be eliminated by the internet. While this possibility has been discussed for years, the present recession and cost cutting will ensure its arrival. As the present generation becomes adult (generation Z) metropolitan life will decline in a big way. So sell REITS in USA. Buy logistics companies. 

7. Urban infrastructure will change from being an agglomeration of skilled people into being transport, warehousing and logistics hubs only. This will also reduce the need for long distance commuting and air travel. Buy shipping and air freight stocks. Sell airlines and car manufacturers.

8. Metropolises will no longer have the high paying jobs needed to support life there. This will start a trend of reverse migration and de-urbanization. No fresh construction will be needed. Sell construction majors. Buy truck and van manufacturers and rail road stocks. 

9. The cities of the future will change from being urban middle class productivity enhancers into being the playgrounds of the super rich. They will be the Las Vegases of the world. Pittsburgh, Chicago, Atlanta, Los Angeles and Detroit will decline. Manhatten will morph from being a center for finance professionals and become a center for the rich and famous. SanFrancisco Bay Area, Las Vegas, Reno, Phoenix and Miami will regain their premium real estate valuations as the retirees move out and the super rich move in. Retirees will be forced to cash out their real estate equity from these places to sustain themselves. The rich will enjoy the good life here. 

10. Elsewhere, this trend will be maximum in London. It will become a playground for the rich from all over the world and as productive jobs get priced out from London because of the rich real estate valuations, the poor and the middle class will move away. Paris, Rome, Barcelona, Madrid and South of France will be other playgrounds of the rich. Germany is already seeing the small businesses of small towns prosper in the last 10 years and the trend will strengthen. London, Manhatten and San Francisco are the safest places in the West to buy up premium property on the cheap at current lower valuations, which are likely to maintain their super luxury tag. Las Vegas is also probably a safe long shot with dirt cheap valuations and massive growth potential. The best place for the same in the rest of the world are likely to be Beijing, Shanghai, Tokyo, Hong Kong, Macau, Singapore, Sidney, and Dubai. Dubai will re-emerge as the hot spot for the rich of the middle east and subcontinent. Good place to buy property on the cheap – best value buy.

11. Internet will continue to level the playing field between developed and backward countries. Buy into emerging markets.

12. Financial companies will see major decline as internet banking and trading destroy them further. The present generation will get their tips from online info and buy and sell online. Brokers, financial companies and banks will see decline and loss of jobs.

Sociology.

1. Major changes. The next generation Z will have grown up on the internet and social networks. 

2. There will be a major decline in productivity of US people as the new generation Z loses skills to mechanical services of the internet. While the service itself will improve, the need for human input will reduce, making human effort less valuable.

3. Education at higher levels will no longer deliver high paying jobs. Their value and fees charged will decline over the next 2 decades – because the fees has to be justified by the job you get by paying the fees. First trends will be visible by 2016. By 2020 even the ivy leagues will be in decline. Education will shift to the social network instead and will be cheap and available without influence of geographic location, social class or other such backgrounds. It will be the great leveller. 

4. Generation Z will be permanently stuck in lower skilled and lower paying jobs than generation Y. This will match their newer skills in online and social networked jobs, but will have less differentiation and less difference between one in USA and in developing countries. Nobody will mind their lesser salaries, because the need for money will reduce because of higher efficiency.

5. There will be a reverse migration from cities into smaller peripheral communities which in turn will again force people into internet networked jobs. 

6. There will be an increasing trend of people helping each other without money – i.e altruism. People will be happy doing things just for the sake of it. This is increasingly seen in the free apps and free internet services like Wikipedia. This will reinforce the lower monetary compensation found acceptable by people. Helping each other will work better in smaller communities rather than in the big impersonal cities. So people with low pay in smaller villages will have a better life than people with similar low pay in big cities and hence reverse migration will be seen over the next 2 decades - since cities are no longer able to deliver better efficiency. Cities will dwindle, small cities will flourish. The recession in economy will precipitate this major trend starting from 2013, becoming a phenomenon by 2016 and being a massive trend by 2020.

7. As smaller towns and villages increase in population, many will get local clannish features. Many in USA will try to cut off from the rest of the world and lead more primitive lives. In the lower pay and less attractive life found in cities, many will find this regression acceptable and shift based on religious belief. Enclaves such as this will be easier to maintain in isolation than in the last 20-30 years and many white supremacists and religious right extremists will form such enclaves. This again will reduce the general productivity of the USA per capita, as these backward thinking communities become unproductive and excluded from society.

8. The biggest reduction in productivity and pay in US will come from competition with the developing countries like India and China because of globalization. 

9. The social networks will provide more emotional support and life will become more and more internet linked. This will again reduce the importance of money in giving satisfaction. The “likes” from online friends will replace money as a source of satisfaction for a free service provided – say a useful piece of software or an interesting story written or song sung.

10. All of this means – reduction of money as the be all and end all of life, as we move towards a Star Trek like situation where there is no money. So the reduction in productivity, lower paying jobs and reduced importance for money will all come together over the next couple of decades to change life for the middle class as we know it.

11. Class war with the new middle class and the super rich will be a big phenomenon. Middle classes will become massive in size, maybe 80% will be called middle class. They will be poorer than current Western middle class. Rich will form a smaller and smaller proportion as only the super rich will have survival advantage to sustain their richness. Class wars will then erupt. Movements of capital induced by such class wars will be a big thing changing the fortunes of many geographies. 

12. By 2016 the stage will be set for the class war without people understanding the underlying economic reasons for the class war – because people are still thinking in the old ways. If the republicans win in 2016, then US will be the place for super rich. If democrats win, then there will be massive flight of capital from out of USA and into enclaves like Switzerland, London, Dubai and other money laundering economies. Hong Kong will be increasingly used by China to tap this floating capital in multiple ways – both as a vacation/residential destination and for funnelling capital into China. In other words, the role of Hong Kong in this regard, which has been traditional for last 100 years, will become more pronounced.

13. English will become the main world language displacing French and German permanently. Spanish and Chinese will be the only other languages.

Medicine:

1. Healthcare will continue to be expensive and as pay levels reduce, it will become more and more unaffordable. This means either a change in the education patterns to make medical education easier or accepting lower levels of pay by doctors. 

2. Reduction of US medical education from 8 to 5 years is likely. This will also reduce the fee levels and the hardships involved in medical education.

3. As life dovetails into the principle of altruism, more and more medicine will be practiced for its noble nature like the physicians of 50 years ago and less and less for money. Since the patients will be unable to pay as before, this will be a self sustaining change.

4. So sell the expensive HMOs – but not immediately for many years since these are only long term trends. Also sell the big pharma – again not for many years. For now HMO and big pharma will do very well. Wait for changes – likely by 2016 if the democrats win. Otherwise by 2010. Buy into Indian generic pharma for short term and long term gains.

5. Drug development costs will have to reduce, since people wont be able to afford current costs. There will be fewer new drug developments. The progresses in medicine will reduce its pace over the next 2 decades

6. At some point, brainy people will come together in the universities and push a more altruistic model of medical discoveries like the physicians of a 100 years ago. The rewards of the work will be the knowledge of a job well done rather than monetary i.e. altruism again. This will also slow down the pace of medical and biology advances (since money is the best known motivator)

7. The complexity of human biology will require another 100 years at least to unravel – both because of the difficulty of the job and the reduced monetary rewards of doing so.

8. Human cloning will be attempted by breakaway societies in secret. Since it wont be the far right of USA (they are Christians), it is likely to be funded in secret in European or Chinese/Korean countries rather than USA. But by 2025 at least, the first human cloning attempt will be likely made and will cause massive furore. The complexity of the job being so great, it will be a crude attempt resulting in creation of a sick baby or clone with significant medical problems. It will likely result in greater efforts at policing. Successful human cloning is still a 100 years away at least.

Jobs: 

1. Significant changes in job trends will be seen in waves lasting a few years each, only to change into the next fancy as society evolves

2. Current trend for next many years: Tech jobs and nursing 

3. As people get used to lower salaries, manufacturing in USA will re-emerge as shipping costs from China will eclipse the local salary costs. This trend is likely by 2020. However, this will more likely be similar to small mill towns of the 20s and 30s – one factory supporting one town kind of situation. This is because the real estate costs of big cities cannot support manufacturing there. Learning these skills in anticipation will be wise for those in their childhood.

4. Sailors, truck drivers, fork lifts and delivery men will proliferate

5. Banks and financial jobs will keep on reducing

6. Real estate, construction, highrise, large scale glazing jobs will keep reducing

7. As cities recede, many city level jobs like garbage men, water supply related jobs etc will reduce. In small towns, people will start doing these things themselves. They will cycle to work and do their own chores and dispose of their own garbage. Greater awareness of their carbon footprint will mean people will do these things out of choice and will be healthier and happier as a result.

8. Average per capita income of USA likely to reduce to 30,000 USD by 2020 and beyond. This is in terms of purchasing power since there will be an inflation event lasting a few years which will wipe out some 20-30% of USD purchasing power somewhere before 2020. Probably from 2016 to 2018 as the fed printing dies down. So even if per capita GDP is 50,000 USD, it will mean only 30,000$ in current terms. We have already seen this situation happening from 2000 to 2012 when per capita income grew less than the GDP growth figures – a disconnect due to globalization. 

9. The trend of rich getting richer and poor getting poorer will change to the early 20th century pattern of very few super rich and massive poor / poorer middle class population by 2020-2025. The middle class will become massively middle – lower and upper middle classes will converge into one super group.

10. Massive population in one social group will use political clout to cut the power of the super rich. This will lead to flight of capital. It will enrich emerging markets and enclaves like Switzerland. As productivity levels across the globe stabilise by 2030-2040, much of the capital will get destroyed as it gets used up in creating infrastructure in emerging markets. By 2030 there will be no enclave for capital to hide – like Swiss banks, channel islands, Bahamas etc. These places will get eliminated as the world converges into one giant super middle class, which is truly middle. By then the central bank fuelled excess liquidity situation would have extinguished itself and thus productivity will dictate the wealth levels.

11. Biggest jobs getting salary haircut: Realtors, finance, lawyers, university professors, doctors happening in that order from 2012 to 2040.

12. Jobs with increasing salary levels: school teachers, tech jobs, nursing, truck drivers.

13. Single biggest change will be management. The nature of top down management from central headquarters will shift to management of disaggregated workforce through social network based management. The number of middle level managers will decrease, and decrease massively. Thus reducing the cost of companies and also reducing the number of high paying jobs. Also, the few who are middle level managers will also become generic across many different sectors – commanding less salary. So a company selling shaving products online and a company managing a BPO and a software company online will all have their production teams. But subsequent levels of managers will have similar HR functions of ensuring employees meeting deadlines. They will be able to move across categories and their domain knowledge requirement will reduce. The nature of HR management will change for ever. Crossing of employees across different middle level management platforms of a single company, currently possible because of company based retraining and changing of responsibilities, will become much less. Instead, marketing, advertising, HR, company strategy, manufacturing will become even more dispersed in location as well as super specialized function. It is likely that pay levels of middle level HR management will be less than the productive employees with domain knowledge. Domain managers will be fewer than now and it will be difficult to move from lower to higher levels – most people will be stuck in the same job without salary increments. 

14. Because of cross utility of management, conglomeration instead of specialization of companies will set in, creating MNC behemoths. There will be few managers in these conglomerates who will receive supra normal salaries and become super rich. Their functioning will also be network based and subject to cut throat competition. Super thinkers will be the only people who can survive this level of competition. Birth in rich family, education in the ivy league – these will lose their value as social networks destroy their value. The many first and second tier employees working from geographically diverse locations will remain stuck in their relatively lower paying jobs for ever. The companies themselves will remain more lean and efficient and hence more profitable. 

15. A social network like management will mean there will be little difference between Atlanta, Seattle, Bucharest, Shanghai or Cudallore – as long as the person is capable enough. This globalization will also ensure lower pay for the US worker at the primary level – the primary level can be situated anywhere. It will also mean little difference between where the manager is located – the manager can be anywhere. Meetings will be in chatrooms because they are more productive than face to face – because decisions taken by a decision maker with considered inputs from his team is better than spur of the moment decisions driven by the decision maker face to face – where he has to worry about “saving face” and being decisive. Those who cannot take the right decisions will not be able to force the issue using authority of their position – and will lose their job. 

16. The trend of social networks replacing management meetings will take quite a while to take place – it will happen when the generation Z is in their 40s and 50s. So by 2040 or 2050 only.

Politics:

1. Now that Democrats have won, there is likely to be zenophobia against immigration ( republican right) combined with anti-outsourcing (of the democratic left). At least one major legislation is likely which will impact our IT companies adversely.

2. Withdrawal of the US into itself will continue. Defence budgets will fall. An increasing participation of UK in global policing and decreasing US presence is likely. Leasing of aircraft carriers from USA to UK/Europe or by Arab dependencies is likely. A lot more of the role of Arab policeman will be played by UK – and Britannia will rule the waves once more. London will be settled by the super rich and this will boost the per capita GDP of UK to higher levels than France or even Germany by 2020 and 2030 respectively.

3. The limitations of drone warfare in policing jobs will become apparent. Those controlling the middle east oil will not be cowed down by drones like the Afghans – who are unproductive tribals without oil or consequence. Iran and the restive populations of the Arab peninsula will not and cannot be controlled by drone attacks. So power projection will continue to require a blue water navy. Which is expensive. Returns for US do not justify the expenditures required. So US is bound to quit the role of globocop.

4. Both US and Russia will continue and increase their role as arms suppliers of the world.

5. The chances of a major US strike against North Korea is now overwhelming. It is almost inevitable. Only question is when. USA simply cannot tolerate the possibility of a Korean nuclear strike against the US mainland or even Hawai. 

6. In the event of US strike on North Korea, South Korea and Japan will face a war and economic turmoil. The chances of these are quite high but should take 2-3 years to play out. A lot depends on whether this happens or not. If it happens, US presence on the Koreas will increase and so reduction of US forces based in Japan and reduction of US involvement in the region will not happen.

7. Recent talk from North Korea about re-unification indicates that pressured on North Korea might be toomuch for it to handle - they also know the danger they face regarding US strikes and know that self interest dictates de-escalation rather than certain annihilation. If north Korean war doesn’t take place, Japan will be increasingly asked to shoulder responsibilities by USA. Leasing of US carriers and nuclear subs by Japan and shift from US to Japanese soldiers in the Korean and South China seas will trend. This will be needed because of decrease in US participation, but bring increased Sino Japanese tensions. 

8. Tensions of Japan vs China will increase surprisingly fast. This will necessitate shift of Japanese capital (largely routed to China through Taiwan) into South Korea and elsewhere to derisk political tensions. USA will increasingly look to Japan and South Korea as counterweight to China because India has failed in this regard. Democrats will never trust India to do its duties.

9. Return of Republicans in 2016 is likely. Since poor economics and immigration/outsourcing will be the main issues in the next election, republicans are likely to win. And for winning they will have to give up support for outsourcing.

10. This time, both democrats and republicans are likely to have weaker candidates. Hillary will have a tough time if she runs and the republican candidate will be better matched. Hopefully, the republicans would have better candidates than their disastrous primary and the poor final selection in Romney. All of this means a close contest. A lot depends on how good a candidate the Republicans get – because if the candidates are equal, Republicans are sure to win.

11. Elsewhere, Cameron is likely to continue and a 10-12 year Conservative and assertive UK is likely. This will fuel London’s rise. If labour or liberals win, then London will rise less than predicted. Christian democrats are likely to dominate the Euro zone.

12. If the republicans return, expect US inflation to rise along with rising interest rates. Dollar will strengthen. US will finally exit the recession in 2018-2020. 

13. If the democrats return, there will be permanent flight of US capital overseas and US will remain in recession.

Economics

1. I am changing my previous prediction of continuing immigration into USA fuelling growth. With my current thought process in favour of permanent reduction of productivity and increasing size of middle class in the 50,000 dollar per annum bracket, it is less likely that US will encourage more immigration. The lower returns on capital spent on higher education will also mean reduced levels of migration into US riding on US college education. 

2. Increasingly, same income levels in USA, Mexico, India and China at similar skill levels will inhibit migration. However, there will be continued migration at the highest levels in the 200,000 dollar pa levels of skill. Most migrations will be for the sake of shifting to a better area of law and order. Mostly this will be from people running from Mexican drug wars. From India, migrants will prefer Singapore, UK and Dubai, unless they are in the super bright category who can only get their level of work in USA. Germany and France will also try to attract the highest performers, in the face of UK’s ascent.

3. US economic output likely to remain stagnant in the absence of immigration. This trend will change only after 2020 or so (not in 2016 as in my previous prediction posted in 2010) – because the democrate won the 2012 election despite all odds because of poor quality candidates from republicans.

4. Growth rates in US from 2012 to 2020 likely to be 2% on average, net of inflation. Sudden inflation in 2016-2018 is likely to wipe out the effect of this growth. So it better to say stagnant GDP of 15-16 trillion dollars.

5. Japan (5-6) and Euro zone (15-20 trillion) will also stay stagnant at current levels largely illo 2020 and beyond.

6. China will grow at 7-8% reducing to 5-6% after 2020. So by 2020 it will be close to 10 trillion and by 2030 it will reach 20 trillion in output. Likely disruptions in pacific peaceful commerce and the effect of increasing oil prices are big caveats which can limit China to 15 trillion output levels – so 15-20 trillion is a safe range. Current projections for China by most commentators are more optimistic than this because they have extrapolated current rates of growth into the future without taking the effect of prolonged recession in US/Euro/Japan, geopolitical tensions and war like situations around China. They have also failed to account for oil price hikes in Brent and reduced requirement for manufactured products by West as well as emerging economies because of social changes reducing consumerism.

7. Oil will shoot by 2014-2015 when despite global recession, the present overcapacity slack is completely taken up by Chinese and other Asian growth. Brent will increase much more than NYMEX because of competition between Euro and China for the same oil. UK will try to substitute with north American oil by 2015 or so because of the disproportionate expenditure it will incur as it progressively takes over the role of global policeman from USA. Any wars will further aggravate this.

Global and US predictions for 2013

Fiscal Cliff = will be successfully climbed in congress (this already happened yesterday after I had posted this in the discussion forum - I had written this a week ago.)

Fed short term rate = same

Long term bonds = same for few months as fed easing continues, then rise to about 4% with a bond sell off (aggravated by tax rises for the rich causing flight of capital)

Dollar index = around 80 for now, likely to reach 85-90 by second half.

Oil = 90 Nymex, 110 Brent for now. Fall to 80 Nymex and 100 Brent after bond sell off in second half

Dow 13000, fall to 12000 by year end

Gold 1700 after fiscal cliff, fall to 1400 in second half

FTSE = static for now, 6500-7000 by year end due to influx of capital into UK

Dax fall to 6000 by year end as German growth slows

SMI rise to 8000 by year end due to influx of capital into Switzerland

Cac fall to 3000 by year end due to poor growth

Nikkei static around 10,000 due to poor growth, 30% chance of 11-12000 due to stimulus effects

Straits rise to around 3500 due to influx of capital

Kospi rise to around 3500 due to excellent performance by Hyndai and Samsung

Hang Seng steady around 22000-23000. Influx of capital and slowing China cancer each other out.

Metals Fall due to recession

Agri Commodities static due to good output 

Weather = mild, no extremes and no freak phenomenon affecting large areas

Global Assets to buy/sell:

1. Buy ING Global real estate fund after hardening of rupee is over. Short term effects seems to indicate good performance in New York and Hong Kong, although long term trend is down

2. Gold mining: Sell

3. Gold in dollars: Sell. Upside limited, downside unlimited

4. Global funds: sell. Limited upside, neutralized by the rising Rupee

5. Emerging market: Avoid. India is the best emerging market to invest in. China maybe you can keep Mirae CHina Advantage fund.

Note: Predictions for India will follow soon

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Venky