and I send our best wishes for a Happy, Fulfilled and Prosperous
New Year. In what we hope is one of your first emails to be received
this year, we share seven predictions and eleven good resolutions that
we hope can make your life better in 2006.
First, the predictions:
2006 Prediction #1: Not all seven of these predictions will be right.
This is the only prediction I am quite sure of, but each can help you
in your planning for the next 12 months.
2006 Prediction #2: The US dollar will fall. This will create
opportunity for alert investors!
The normal downwards pressures remain in play: huge Federal debt, continued
huge federal deficits, continued trade and current account deficit, increased
entitlement liabilities (Social Security, Medicaid
and pedicare), no increases in tax and not enough economic growth.
In addition March 2006 is the suggested opening date of the Iranian
Oil Bourse and increased oil payments in euro rather than dollars. In
simple terms, this means more demand for euros and less demand for US
dollars. The laws of supply and demand suggest that less demand brings
“In 2005-2006, The Tehran government has developed a plan to begin
competing with New York's NYMEX and London's IPE with respect to
international oil trades - using a euro-denominated international
oil-trading mechanism. This means that without some form of US
intervention, the euro is going to establish a firm foothold in the
international oil trade. Given U.S. debt levels and the stated
neoconservative project for U.S. global domination, Tehran's objective
constitutes an obvious encroachment on U.S. dollar supremacy in the
international oil market.”
“Iran announced in September its petroleum exchange will become
operational by March 2006 “Experts from International Petroleum
Exchange (IPE) and the New York Mercantile Exchange (NYMEX) have
reportedly confirmed the feasibility of the project.”
“Iran - a threat to the petrodollar? Iran's decision to set
up an oil
and associated derivatives market next year has generated a great deal
“This is primarily because of Iran's reported intention to invoice
energy contracts in euros rather than dollars.
“The contention that this could unseat the dollar's dominance as the
de facto currency for oil transactions may be overstated, but this has
not stopped many commentators from linking America's current political
disquiet with Iran to the proposed Iranian Oil Bourse (IOB).”
Prediction #3: Faux will fall as well. This prediction is based on one
simple fact. That’s how I feel. Because I am such a typical boomer
there are 20 or 30 million other people, many with economic and social
clout who probably feel the same way. I am sharing this note from
condo in Naples, Florida and each day I take a walk along the beach
and through neighborhoods that have miles and miles of McMansion
canyon. Am I impressed by the 10,000, 20,000+ square footage French
and Italian villas and chalets? Quite the opposite. There is a feeling
of disdain. This is a different form of obesity. Too much excess. Huge
European castles and mansions on 7,500 feet lots with 15 foot
setbacks? Give me a break. I pondered why these fake euro showcases
and the fact that every restaurant in town is a French, Italian,
German or something bothers me so. Finally, the conclusion came that
there are no roots, no real history, no solid foundations. If I take a
trip to a remote Italian, French or German village and eat at a great
restaurant there, I am immersed in a history and evolution that formed
the food, the service, the building in innumerable ways.
Here most of the Euro, Latin and Asian gobbledygook are just stories
and most of us now are too sophisticated to buy just a tale. Give me a
great restaurant with good, fresh food, grown in and authentic to the
region, cooked and served as it has been locally for decades or
centuries and served by born-there locals any day! Saturday mornings,
you’ll find Merri and me at the local Cuban restaurant dusting off our
Spanish, eating a real Cuban breakfast with real Cuban coffee and
surrounded by Cubanos and paying less than $4 bucks for more than we
Authenticity will rule. Watch for it in 2006!
Prediction #4: The greeting card industry will go through dramatic
change. I am not sure how this will work and what this tidbit of
thought is worth, but I discovered this while preparing Christmas
cards this year. I don’t have anyone’s addresses anymore, just
email and phone numbers. If I were a shareholder of Hallmark cards, I
would be looking hard as I am sure they are. But I am not this a
private company with over 4 billion in sales and 18,000 employees run
by the grandson of the founder. Imagine that!
Prediction #5: Minivans will become fashionable. I suspect there will
be an altered form and an environmentally friendly version, perhaps a
minivan hybrid. Minivans are the most sensible vehicle for a huge
segment of the population. I know. I am about to buy my fifth in a row
over 15 years or so. Each time round I swear I’ll get something
different but when all the facts are put together-cost, convenience,
space, gas consumption, comfort, safety and driving ease, they are
just the best deal. What they lack is image (Merri and I could care
less if people think we are soccer moms) but sales have dwindled due
Practicality along with authenticity will become an image in
itself. Watch for the car company who comes up with just the right
formula that tweaks the image and blends it with all the good stuff.
Prediction #6: Investment banks, stockbrokers and such will prosper.
The first boomers started turning 60 as I send this note. Many are not
prepared for retirement and they will make some dramatic shifts in the
way they live, spend, invest and save. Two of the four shares I hold
are in banks with strong investment banking arms.
Prediction #7: New agers will wane. Back to basics will grow. We’ll
look at this in much more detail as the year rolls on.
There you have it…seven ideas. Right or wrong I hope they stimulate
some thinking in you that makes your life better in 2006.
Tomorrow, we’ll look at eleven resolutions you can keep that will help
you enhance your health and wealth the year through.
Until then, Happy New Year from both of us.
Gary & Merri