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Economic Predictions - Next Four Years

Donkey Stomped

Today is Nov. 10, 2024. I know that half of the country is alarmed right now. This blog is focused on what I foresee happening over the next four years. I hate to be wrong here, but unfortunately, think these predictions are more likely to happen than not.


Cryptocurrency Catastrophe

Let's be honest. Even those invested in crypto have no idea how it works. The concept is admirable, execution not so much.


Three realities of cryptocurrency:


1) Aside from Ecuador, sovereign governments around the world have no interest in eliminating their ability to manipulate markets and taxes. So when they feel threatened that this power is at stake, laws will quickly change.


2) Many of those who have received power in the previous election will use cryptocurrency to profit for themselves (see the general principles of The Stampede regarding greed). But this isn't too different from many who have started cryptocurrencies and other companies to profit on the ignorance and lottery desires of the population.


3) One bank already went under in the U.S. due to bad bets on cryptocurrency (see Signature Bank). Like with sub-prime mortgages, when regulations are eliminated, good banks today will gamble with the deposits of its customers.


In the end, cryptocurrency will fail (anyone who doesn't think so, please feel free to share how it will succeed). Banks and financial institutions will need bailed out, just like in 2008 (see stock market below).


Inflation Will Skyrocket

Aside from mass deportation of immigrants who perform services all around the country from farming to construction, these services still need done. As mentioned in The Stampede, illegal immigration is against the law and must end. But everyone should brace for the fallout. I'm not sure how if the Trump administration is willing to expand legal immigration numbers to counter the economic fallout of mass deportation.


Second, tariffs. Tariffs are inflationary in nature and will cause runaway prices that we haven't seen since the 30% inflation experienced in 1778. Yeah, so essentially not since the founding of our country. Guess that's the Make America Great Again part. In the simplest form, you can go to Target and buy a 50" TV today for $250. Real nice one too with 4K. Goes without saying that the TV is not made here. To manufacture that TV in the U.S. and be profitable, the U.S. manufacturer would have to sell that TV for more than $250 (otherwise, they would be made here now). What price would they need to sell that TV for? $350? $450? Whatever price it is, it's higher than $250. Then, that U.S. manufacturer needs every imported TV to sell for $1 more. So no longer will you be able to buy a 50" TV for $250. That's inflation. And for anyone thinking that the country of origin pays the tariff, you've been bamboozled. China does no collect taxes or fees for the U.S. government. That tariff will be paid by the importer of record and that price will be tacked onto the product. Doesn't take a genius to understand how it works, I am far from it, you just need to want to understand and take the shroud off.


Interest Rates

Interest rates will rise and home mortgage rates for a 30-year fixed will reach 10%. This is all due to a skyrocketing government debt. People will point to the stock market reaching new highs after the election, but what decreased was the price of bonds (interest goes opposite of price for bonds, and rose). Now, this trend started before the election. Why? Because both parties refuse to make tough decisions and instead put our country at financial risk. This process is only going to compound and interest rates will continue the upward trend.


Stock Market

As of today, the Dow stands at 43,989. Pretty good. It jumped after Nov. 5, because of the expectation that regulations will be eliminated, mergers and acquisitions will get fast tracked to make companies bigger and stronger (more greed), and that the administration will be more favorable to business over labor. All are very likely true. We've seen this movie before with the housing crisis. Greed by a few pretty much forces everyone to join in or risk going under. Regulations are lax at best, but the lies that banks and business have our best interest in mind put us all at risk ... again! My prediction is that we will experience a financial crisis of 2008 proportions by December 2028.


2026 Elections

I doubt that Democrats have a chance to make any meaningful ground. The reality is that Republicans will likely hold the Senate for all four years of Trump's presidency and that means 250+ more federal judges who serve lifetime terms. I foresee the Democrats taking the House in 2026, but that the Republicans hold the Senate. So, policies backed by the administration will affect decisions for at least 37 years (as Nov. 10, 11 judges appointed by Ronald Reagan are still on the federal bench).


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