Last Year's Predictions For 2008: Fed Liquidity and Bank Collapse

I came across these predictions for 2008 that I made back in December of last year for Public Radio International's excellent daily news program, The World (coproduced with the BBC).

I may have placed too much emphasis on water, although water wars (at the very least of the trade variety) lie in our future for sure, and I only predicted one major US bank collapse - who knew?  Interesting to see if the $700 billion bailout will help stabilize the US housing market by the end of the year.

And I truly, truly pray that Mr Barack Obama (who I think has more than a touch of FDR about him) is headed for the White House in January 2009, just as our new daughter is about to be born...although hopefully she will be born first, as her due date is early in the month:-)

Posted at 12/12/2007 4:37:34 PM in What insights and predictions do you have for 2008?

Re: What insights and predictions do you have for 2008?

China will increasingly - and very quietly - buy natural resources from other countries. (I believe that they already own large expanses of Canada's fresh water.) 

China will also, along with other Asian and Middle Eastern countries, purchase large stakes in Western financial institutions. If regulation permits it, China could own at least one major US bank by the end of 2008. 

Water, as others have noted, will become an increasingly precious commodity - perhaps the most precious commodity, ultimately. 

The Euro will at least match the dollar's influence in world markets. China in particular will diversify its foreign currency holdings to a far greater extent. 

The US housing market will reach relative stability by the end of 2008, but only after huge injections of liquidity from the Fed and probably the collapse of at least one major US bank. 

Iraq will hopefully achieve a degree of stability for its people - but only if the US can accept some kind of diplomatic rapprochement with Iran. 

A Democrat, I pray, will be headed to the White House. And one with the strength and compassion to restore the sense of hope that the US had under Clinton's presidency.