Tuesday, December 29, 2009

>How could 2010 possibly be worse than 2009 or 2008?: REAL WEALTH REPORT

2010 Gala Forecast Issue ...

My Top Five 2010 Forecasts!

The financial storm of 2008 and 2009 will go down in the record books as two out of three of the most devastating in history.

Why do I say “two out of three?” Because 2010 promises to be another record year of wild swings, market traps, misguided Wall Street and Washington advice, and based on everything I’m seeing ahead, the most dangerous year of all for investors.

How can that be when 2009 is closing out its final days with signs that the economy and markets are improving?

How could 2010 possibly be worse than 2009 or 2008?
I’ll answer these questions in a moment. First, let’s review where the world has come from before I get to my forecasts and where it’s heading in 2010.

So far in the last two years we’ve seen the failures of Merrill Lynch, Lehman Brothers, Bear Stearns, Wachovia, WaMu, Citigroup, Fannie and Freddie, AIG, GM, Ford, Chrysler, and more. Never mind that all but Lehman were bailed out by Washington, or should I say
you and I, the taxpayers. They failed, period.

Our economy and financial system suffered a massive heart attack and a stroke. But as I will show you, they remain in intensive care and on life support.

We’ve also witnessed a devastating collapse in residential real estate markets, with property prices in some areas of the country down as much as 70% from their pre-crisis highs.

In 2008 and 2009 alone, there were over 7.1 million foreclosures, with another 2.4 million on the horizon for 2010. On December 31 of this year, 1 out of 4 homeowners will find themselves upside down on their homes, owing more than their property is worth.
Their biggest financial asset down the tubes.

We’ve also seen the worst stock market routs since the Great Depression.

The Dow lost 35.9% from its 2007 high to its 2008 low. Then another 26% in the first three months of 2009 before surprising almost everyone and rallying back smartly for the balance of this year — with most investors and analysts completely missing the rally, or worse, getting caught on the short side of the markets.

But even those figures hide the damage done in the markets in 2008 and 2009. All told, in real inflation-adjusted terms, the Dow Industrials lost 50% of its value in 2008 and 2009.

Even worse, from its all-time, inflation- adjusted high which occurred when the Dow was at 11,908 in November 2000 — before the Federal Reserve started printing trillions of dollar of
fiat money — the Dow Industrials have lost an amazing 77.9%. And that’s after giving effect to its rally since March.

At its March low, the Dow had lost nearly 89% of its purchasing power since the year 2000 — rivaling the Great Depression.

Meanwhile …

Gold soared to a record high of $1,226 an ounce, up more than 400% since 2000.

To read the full report: GALA FORECAST