1. Gold goes to $2,000 in 2012
I think the eurowill go down and people will start to pile into gold. It's where people obviously are feeling safe. I think it's good as long as it stays over $1,600. It's building a solid base.
2. The housing market stays depressed
The real estate market is all over the map. Obviously there are markets such as Florida, Arizona and Nevada that could continue down for a year two...or three. But some states that have large cities are starting a slow upward movement, such as New York. We still are looking at 2013 or 2014 at least till we stabilize everywhere, but that just means it has stopped going down in the most vulnerable states. Even if housing stabilized in the next couple of years, you're looking at 2023 before we even get back to viable real estate markets throughout the country.
3. Recession or stagflation
There's a 60 percent chance of 2012 recession. If no recession , stagflation will set in.It's either bad or worse when it comes to the economy in 2012, and most of that will be based on what happens in Europe.
4. The great 29-year bull market in bonds ends
It's as simple as this: When you have interest rates this low, eventually inflation starts to come back. And the way you tame inflation is by increasing interest rates. And when interest rates go up, bonds prices go down.
5. Inflation as measured by CPI tops 4.1 percent
For the reasons I just said, you're going to see CPI top 4.1 percent. If inflation should start to rear its head and even go up just a little bit, you should make sure you're protected — and this is where you should start buying TIPS, Treasury-Inflation Protected Securities.
6. The Good Stuff
As you may know, I think about the macro economic picture and I break it down to asset classes. For 2012, I like large value (dividends). Treasury-Inflation Protected Securities will be a homerun if debt gets out of control.