Worst...
- HOUSING DOUBLE-DIP of -20%, thanks to spike in foreclosures that were artificially on-hold 2010.
- BOND MARKETS TANK in the US and EuroZone, as over-indebted G20 countries struggle to sell bonds to pay for deficit spending and thus raise rates to attract buyers even though the economies are not strong enough yet to handle higher costs of capital.
- WAR IN KOREA, as S. Korea and USA become fed-up with N. Korea's aggressive antics.
- WAR IN IRAN, as Israel and USA strike preemptively at Iran's nuke facilities, fearing Iran getting "the bomb".
- CYBER-WAR BY CHINA disables critical systems of USA military and exposes its vulnerability.
- USA ECONOMY RECOVERS FASTER than expected, fueled by continued low interest rates thanks to relative strength compared to other developed-economy countries and by the accelerated roll-out of alternative fuels that reduce geopolitical heat and spur economic growth and hiring; taking advantage of this situation, the government embarks on massive infrastructure-rebuilding programs that create jobs and increase demand.
- USA STOCK MARKET BOOMS, going up 20+%, thanks to good economic/employment data and fueled by record amounts of cash in both corporate and personal coffers.
- IRAQ BECOMES MORE STABLE and the USA really does exit as planned.
- AFGHANISTAN IS BROUGHT UNDER CONTROL thanks to history-making counterinsurgency tactics, mastered in Iraq and modified for Afghanistan, are executed prudently and pecisely; Gen. Petraeus' status as a great leader is solidified.
- WEALTH GAP IN USA CLOSES while regulations and taxes remain limited; evidence provided for posterity that Keynesian pump-priming successfully, but temporarily, served the purpose of stopping the economic free-fall and re-igniting growth before more normal market forces take-over.
- WEAK ECONOMIC RECOVER IN USA, but no double-dip recession or second housing-price collapse.
- COMMODITIES, DOLLAR, AND STOCKS all rise, signaling brighter future.
- UNEMPLOYMENT GOES TO 10% as new jobs are not being created fast enough.
- GOP CONGRESS OVERSHOOTS by trying to roll-back most of president Obama's agenda, costing some public opinion points for the Republicans.
- IRAQ INCREASES STABILITY and nurtures its new government, but US troops remain there and are still targeted for attacks by insurgents.
- AFGHANISTAN FLARES-UP as USA tries to maintain a non-kinetic posture and then overreacts to insurgents' attacks in ways that cost unnecessary civilian lives; "Obama's War" starts to look more like an actual war.
- CHINA ALLOWS ITS CURRENCY TO FLOAT as modernists want to be real global player and not be perceived as a manipulative economic bully.
- Avoid long-dated bonds of developed-economy governments.
- Own high-quality stocks around the globe.
- Use global/flexible mutual funds and/or portfolio managers for most or all of your investments.
- Keep 5-15% in cash, in addition to whatever the global/flexible fund managers are doing--dry powder, so to speak, in case of emergency and/or opportunity.
GENERAL FINANCIAL RECOMMENDATIONS:
- Life insurance for your dependents
- Disability insurance for yourself and dependents
- Cash for rainy days
- Retirement savings next, before education and other savings (there's no work-study or SallieMae for retirement)
- Refinance your home and investment properties to lower rates, but don't extend your time-frame too much (if you have 18 years left on a mortgage at 7%, be careful about re-fi to 4.875% if you're then going to be right back at 30 years to go...)
- Give generously if you have extra, accept help gratefully if you need it.
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