Predictions For 2010
By far, the biggest story for 2010 is going to be the economy. Basically, many analysts predict that the economy is going to go into a depression in 2010, which will last for around 10 years, which is about how long depressions usually last. The system is going to have to go through a natural ‘de-leveraging’ cycle, which is a fancy way of saying that all the debt out there has to be wiped clean, and ten years is about how long this is going to take. As the US economy continues to shed jobs, economists are already predicting that unemployment is going to easily go to 11% early next year.
They say that those who do not learn from history are doomed to repeat it, therefore, given the example from the 1930′s it would be a fair statement to make at this time that those to whom money is owed will fair better than those who owe money. Countries like Japan are going to be hardest hit because the ratio of their national debt to GDP is over 2:1, whereas countries like the US in which the national debt is just over 100% of GDP will be less hurt.
Nonetheless, in the US there are definitely going to be record numbers of consumer-related debt defaults as inflation saps purchasing power. China will be hit hardest perhaps as the demand for their exports in the US dries up, while at the same time the US Treasuries they hold become worthless. In Europe, the prospects are less clear as regulatory measures for banks fail to be implemented by the EU, fomenting the worsening of their credit crises by creating bigger and bigger banks. However, countries like Hungary, Latvia, and Greece will be especially hard hit as rampant unemployment dogs their economies along with high levels of debt.
The employment picture is not rosy for those who require training because employers will not have resources to train new employees. The demand for experienced individuals will rise because there will be a natural tendency toward hands-on, problem-solving in an era of zero tolerance for mistakes. Depressions are unlike recessions in that recoveries take place in tiny baby steps rather than in large spurts of growth, however, both are natural economic occurrences and those who are experienced and knowledgeable in how to maneuver in either environment will be in demand.
Government spending will be forced to be reduced simply because of the sheer pressure on the economy exerted by lower wages throughout all sectors. The current debate about the size of government will be solved naturally by economic pressures. A renewed debate will arise in its place, which will be supported by a more realistic approach toward efficiency and education. This is indicative of the natural process of resetting the economic and social fabric back into sync with reality, which most all indications point to it being long overdue.
War is not an unlikely byproduct of this process as many try to cling to the past, however, this will be coupled with leaps in technological innovation as the euphoria over the replacement of the former methods of production and consumption balances out the pessimism arising from the failings of the past.
