MUST READ - Bold Predictions for 2010…
December 9, 2009
Filed under Blog, Business, Property Investing, Share Market
I’ve got something really special for you.
I know you like predictions - so I’m going to give you some.
Let me start off by saying that I have no economic degree, never been to university, failed HSC twice and only in the last 10 years have the lights gone on in regards to investing and business.
Since that time, I’ve turned over millions, invested millions, made millions.
By and large, I’m an investment fanatic because I want to control and invest my own money… and not be a victim to biased advice.
So on that basis, I want to give you a perspective on where I think we are globally and make some bold forecasts going forward for 2010.
I did this recently in October and it makes for very interesting reading.
If you missed that valuable article, click on this link right now and see how my forecasts have turned out even in this short period of time.
http://knowledgesource.com.au/my-predictions-the-next-big-moves/
Now a lot of my views for the local market still hold true.
But I’m looking at big picture now, globally… which will impact where, what and how much of my money I’ll be investing in these new developments.
>> Prediction #1: The American Dollar will get Smashed!
So what? You don’t live there - who cares, right?
You should - “There is gold in them thar hills.”
The American government will not stop printing money. I was recently over there and I can tell you things don’t look good for the Yanks.
Their printing presses will just continue to pump money in to the system until things settle down. That’s the only thing left that they can control… Their Reserve Bank is almost out of bullets by lowering interest rates even lower.
Amazingly, there has been over 120 bank failures and the official unemployment still rising is at 10%+.
In simple, layman terms… The U.S. government have settled on the fact that their only option is to print money and hope they recover fast.
That’s why their currency has devalued and ours has benefitted from that.
Expect the Aussie to be beyond parity half-way through 2010.
If you don’t have a plasma screen, wait 3-4 months and I bet you will get a killer deal. Even cheaper than they are right now. That goes for all forms of electronics.
Sorry, I digress…
Now, what’s the play on this forecast? Because I know that’s what you really want to know, right?
But let me ask you, will you do anything with this information?
Let’s see - time will tell…
Now, because of the acceleration of the US dollar demise, global investors will “crap” themselves and will want to reduce their risk by selling out of the US dollar.
So, the abandonment of the dollar will see tangible assets come back in favour. Real estate, stocks, resources, especially silver, copper and of course gold. When I talk about real estate in this context, I’m talking about the US.
I’ve already started investing in hard US assets in the form of real estate. I believe this is one of the greatest buying opportunities of any asset class I’ve seen for 40 years.
I’m buying properties at $25,000 - $30,000. The last time they were these prices was in the 1970’s. If I told you that you had an opportunity to buy real estate today at 1970’s prices - how much real estate would you buy…?
As much as you could afford. But so many people just hesitate. I understand that, if you don’t do the homework, research… you’ll never know if anything is a bargain or not - correct?
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>> Prediction #2: Gold will reach $1,500 per ounce.
Gold is on its way to that target and is trending up strongly. The central banks, who are moving out of US dollar are moving into gold in a big way.
One country that is highly exposed to the US currency is China… and let me tell you they’re buying gold not by the ounce, but by the tonne… and in Australia’s case they just buy the whole bloody mine.
This forecast has been so obvious to me and others, and again it’s directly attributed to the “money print on demand” mentality of the US government.
The play on this one is simple.
A: Buy gold bullion.
B: Invest in gold stocks.
******** HIGHLY RECOMMENDED ********
Sneaky way to profit in 2010. All done for you.
(Deadline closes deadline, December 17th)
Check this out now:
http://knowledgesource.com.au/jbglobal
****
>> Prediction #3: Oil to go back to $100+
This one will confuse a lot of people because the obvious thought is that oil should come down in value because consumption will follow the economic slide down.
However, the reverse will happen.
Here’s why…
The money to fund oil explorations has literally dried up. This will impact upon the supply and demand principle greatly. I’ve even heard stories that large oil tankers are parked in the sea, unwilling to dock until oil prices rise again.
Crazy, I know. But these sorts of actions will drive oil prices higher.
I expect oil prices to range between $75 and $110 throughout 2010.
Investment play: Buy companies that specialise and have good supply lines of oil.
******** HIGHLY RECOMMENDED ********
Sneaky way to profit in 2010. All done for you.
(Deadline closes deadline, December 17th)
Check this out now:
http://knowledgesource.com.au/jbglobal
****
>> Prediction #4: Economies of China, India and Brazil will grow four times faster than the US. Check this out…
The GDP of the US is growing at 1.5%… Europe is at 1.5%… (at least it’s growing)
China is at 8%… India at 7%… and Brazil at 5%.
What about Australia?
Well, we’re benefiting from the Chinese and Indians and are growing at 3.4%.
China will grow at incredible break-neck pace next year, pushing 10-12% growth. They’ve got a $580 BILLION spending plan that is not being funded by borrowed money (like the Americans), they’ve already got it in cash.
Investment play?
Anybody who sells stuff to China. Sorry to be cryptic, but an obvious one here.
The Australian stock market will be a major beneficiary of China’s growth next year, especially resources.
Also, Asian real estate will grow consistently throughout 2010. Especially places like Indonesia, Vietnam and Thailand… I haven’t bought anything there yet, I’m doing my due diligence and research.
Sidenote: The well-cashed-up Chinese are already making an impact in the Australian property market in a lot of areas. They are single-handedly pushing up prices by 5-10%.
More about this in articles to follow… But here’s a tip.
BIG TIP: Look for the best PUBLIC high-school areas (not private) and you will notice a growing trend of Chinese buyers pushing prices through the roof. I did this 18 months ago and have had almost a 29% increase in value.
(Thank me later on that one)
…There you go, I’ve got more but they’re the big ones for 2010.
So what will you do with this information?
Sit on the fence?
Think about it?
…or will you seriously consider what is currently going on in the world and benefit from it by taking some meaningful action?
Me personally, I’m invested in tangible US assets in real estate and have put a big chunk of cash into the Aussie market.
I’ll be doing more of this going forward.
Hope this helps.
Let me know your thoughts, are you going to sit on the sidelines or take action?
Comment below.
Signed with Success,
Jon Giaan
Knowledge Source
P.S. If you don’t have the time, skill or a large capital base… then you really should be looking at what Justin Beeton is doing for investors, to be able to take advantage of these trends in 2010. http://knowledgesource.com.au/jbglobal
Comments
23 Responses to “MUST READ - Bold Predictions for 2010…”
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hya jon well everything you say is spot on and it will be interesting to see how accurate your predictions are. the problem for me is i dont have the capital to do anything about it simple as that. thank you for your advice and hopefully an oppurtunity to jump on the horse will arise soon
We bought a 2 Bed 2 Bath apartment off the plan in East Perth for 416k 3 years ago. Recently it completed and has a bank valuation of 490k with appraisals of around 550k. There are many Asian buyers in the market and some properties are being bought to house many Asian students coming to Perth.
With the Gorgon and other projects happening in WA
I see a huge opportunity in WA.
Notwithstanding this there are 17000 dwellings coming on to the market in Wa/ Perth? so selection of Real Estate will be critical.
Regards
John Rees
Hi Jon,
I raised my eyebrows at several points you’ve made. However, one aspect that particularly concerns me relates to the fact that one signicant component of GDP is government spending - something you don’t seem to mention
With governments worldwide seemingly hell-bent on spending their taxpayers’ and borrowed money it’s not surprising that some GDP numbers look encouraging - and they will as long as governments keep on spending.
But such numbers are artificial and your assumptions about growth in China, for example, are hard to support when their major markets just aren’t buying. Real growth is achieved through the production and sale of products someone else wants to buy not through investment on infrastructure and stockpiling resources. Yes, the latter keeps some people in jobs and actually raises the GDP (artifically)but doesn’t create real growth such as would come from a thriving private sector.
The bottom line is that all is not well in China nor its major market the USA nor by association in Australia despite the press and polies trying to convince us otherwise.. Government spending money they don’t have, making non-productive investments in infrastructure, offering cheap or ‘free’ money and other inducements (to people to build their debt) is hardly a recipe for longterm prosperity.
Hi Jon
Did you mean China has money to spend and is buying up now or later in 2010? I have two houses in Moura a coal mining town, the mines are playing hard with rents trying to get them down, China has reduced the quantity its buying due to the rise in the Aussi $ , well thats what I have been told anyway. I feel that with a new mine opening early next year and the rail going through, Moura will boom but not sure when in 2010.
I have all my money tied up in those houses and shares that are still rock bottom so can’t invest in US even though I would like to.
2010 is going to be an interesting year.
Jon, sounds very interesting. I like your advise, I plan to sell a number of my Australian shares, take some losses but their minor when you look at the possible gains in the upcomming months. Will also be taking your advise and start looking at purchasing property in the U.S. Buying the property with Superannuation monies means getting about three properties which will give me a good return and looking at your figures three properties completely owned by my super fund means I can control the asset and have very few tax payments. I’m investing for my retirement anyway. Have three new properties in Perth, Brisbane and Melbourne (just completed) and have signed up for two more in Perth, hopefully in those growth areas you’ve spoken about (bought for maximum capital growth. I enjoy your predictions and plan on acting on them more sooner than later, happy investing.
Hi Jon,
I too have been looking at the US market and am interestred in buying. Could you please tell me who you went through to purchase the property and where did you find the properties?
I have been looking on the net and have found some properties in the US in Fort Lauderdale which is a great place.
What sort of rents are being paid?
Thank you,
ann
Hi Jon recently bumped into you at a JB Global Seminar in Melbourne and chatted about JB Global ASX200 Income and Eccelerator Series 2 open now i,m very keen to invest but am wanting your opinion on Capital Guaranteed what does it really mean.Merrill Lynch have a win/win situation they are protected by a bond (insurance)and a call option i believe if things go up or down.As well as interest in advance.Can you give me your take on this .Let me know asap Regards
I agree with Michael Coleman
Yes, the US is trying to stimulate their economy with stimulus packages funded by printed money. Japan has been trying to stimulate their economy for the last 20 years and they are still in recession.
A warning to other economies trying to do the same.
Better to take the hard medicine NOW otherwise if they do recover it will create another asset bubble only bigger which will be an even bigger mess when it bursts.
As far as Australia is concerned we are long over due for a recession. The last one we had was Pauly’s one, the one we had to have, and that was 18 years ago.
There was a program on SBS’s Insight about the debt to equity many people were carrying on their properties and the average was 60-70%
By my standards that is way too high. Where I live…(and I think it is indicative of many inner city suburbs in Australia) the property market took a step back only briefly around the beginning of this year. It was way over bought then. It is now back to where it was before then which sounds like a bubble to me.
If you were to look at it on a chart property has been going up for the last 10 or more years. That is not sustainable…(WD Gann time and price) If a stock commodity currency or asset does a lot of price in a short amount of time then time must catch up. So it needs to retrace or go sideways for at least two thirds of the time. Property does not go up forever. Ask the Japanese.
How can Australia have its trading partners go into recession and not go into recession it self?
You are right Jon the USD will collapse which will force the Fed to raise interest rates. That will be the nail in the coffin cause the already stressed loans will have no where to go but default.
The biggest demographic at the moment are baby boomers (BB) and they are heading into retirement. As they are the biggest group of bods in the last 100 years that is where the bulk of the money is. They are not looking to invest they are looking to protect their nest egg and also retract their spending. That is not going to do wonders for the economy. Look at Harry S. Dent - “The Great Depression Ahead” on You Tube.
They should have let the banking system fail along with the in efficient car manufacturers and started over with a better system.
Yes I think Gold is the way to go and yes the Chinese are buying it buy the truck load. I also have it on good authority that the Chinese government have a campaign running to encourage their citizens to also buy physical gold.
One of the scenarios is that as the GFC hits fever pitch with the collapse of the USD the Chinese government will offer to allow their citizens to mint their gold into legal tender coins.
By doing this they will have doubled their liquidity in their economy over night without causing inflation. Sounds like a smart move to me.
On the subject of buying property in the US, I guess you cant go too much wrong with 1970 property prices. But the US population is about 13 times bigger than Australia.
Would stand to reason their are 13 times more wealthy people over there. If that is the case how come all these bargain properties are available to be snapped up by Australians. Wouldn’t all the wealthy people over there have already started to snap them up given that there are 13 times more of them. Like I said I guess you can’t go too wrong with 1970 prices, maybe, but Detroit also know as the ‘rust belt’ is possibly not going to get back to what it once was.
The troubled car manufacturers there have dropped a lot of brands from their product line which means less jobs less money thus less bods in the area.
Or at least less bods in the area with money.
With the talk of global warming blah blah blah, the future is possibly in electric or certainly hybrid cars. China is currently working on becoming the biggest electric manufacturer at the moment. Yes they are a little ahead of their time, but possibly not by too much.
Hi Jon
With unemployment in the US on the rise and people abandoning their homes due to the inability to repay loans, (hence the banks selling for such low prices) how difficult is it to get tenants into a property I may buy over there? If an area has a high unemployment rate isn’t this where the cheap houses are and if so, who can afford to rent there? You said you were in the US recently - what sort of condition are these cheap properties in? Are they badly vandalised?
As Ann mentioned above, I would also be interested to know how to find these properties? Do you have a website we can look at? Can we talk to an agent over there? I await your knowledgeable advice and read your emails with great interest. Regards, Regina
Hi jon - thank you for your valuable insight - I work independantly in melbourne selling investment property mainly apartments off the plan in high yeild and growth corridors in melbourne. Mosttly to offshore asian investors, that don’t blink twice about the huge potential and return they are currently achieving. Vacancy rates(rentals )especially inner city are at their lowest 1%!! so..if your thinking twice about where to invest some of your hard earned money - I would definitely say melbourne is the place thats going to “keep on keeping on”.in 2010.
Hi Spot-on-Jon!
Except for 2 things: America is bankrupt with a glut of homes whereas Oz is printing far less money by ratio and we have a shortage of 135,000 homes which is increasing each year with 10,000 new people a month. ( 30% from N.Z.)
America is a long way to go to get back rent….. I have a local idea that will return 10% on real estate plus good capital gains. And it will help reduce that 135,000 shortage.
If you or any readers have a spare million and want to make billions in Oz and multi-billions globally, I have a proven and documented invention for you. It will substantially reduce green-house gases and benefit all users of fossil-fuel engines. That’s a lot of engines; and by proving the reduction of their carbon footprint it will probaly become mandatory by govt.edict. Already tested in Sydney
Uni laboratory and Lockheed in California. Call me on (03)5461 3346 anytime. Roger.
Hi John,
Iam from PNG who is extremely intested in owning a property but unfortunately i do not have any funds avaliable so can you pls show me or send me any website contacts for where i can get financial assistance to start of my business and i can repay what i borrow.
If you can introduce me to some Donor or business owner who can lend me some funds to start off my business and i can reimbuse their money.
Your great assistance to my request would be highly appreciated.
Joyce
Hey Jon,
You are absolutely correct my mentor David Norton put me into this some months ago for example he got me to buy rio shares at 48.00 well the rest is history, he has also got me to invest in the united states and argentina we are now looking at brazil,
So yeah stuff is happening
to prosperity
john
Hello John, I met you back in Auckland NZ february this year….
i would like you to tel me if there are any good internet bussiness funding availble for Aus/NZ as i need a financial assistance to start my fist bussiness and property investing.. conatct me by email.. Thanks
keep the good updating you are a champion.
Mohamed ,Auckland NZ
Hi jon,
I am very much amaze at what you are offering, I believe it takes courage for someone like you to be doing all this stuff. You know I would like to venture into investment opportunities that you are informing me about however starting capital is a problem faced at the moment. Please lend me a helping tip to source me kick start investment.
Jone do you see any investment opportunity in PNG? we have multi billion project in LNG project as well as various mining sites opening up with the inclusion of nickle mine opening up by chenese company in Madang. Do you think it worth in investing in real estate here?
For your judgement sir.
please reply through email.
Thanks
Posto
Prediction #1: The American Dollar will get Smashed — Has been for years and is maintaining that trend. Quantative easing will only accelerate the effect.
Prediction #2: Gold will reach $1,500 per ounce. — As the $US depreciates gold can only get stronger look at a chart of USD index against Gold since 2001.
Prediction #3: Oil to go back to $100+ — Again a function of the declining USD
Prediction #4: Economies of China, India and Brazil will grow four times faster than the US. Check this out — This has been the case since 2001
People like Peter Schiff, Gerald Celente, Bob Chapman have been telling us this stuff for years. Anyone who had listened to these guys would of bought Gold at the 2001 lows, missed the Property crash in the USA and would of been buying shares in China, India and Brazil for years.
Youtube has many video’s on them.
“Peter Schiff was right” is well worth a watch. Peter in 2006 trying to warn the public of the coming US property crash.
Even though they are all USA based , you can take a lot out of what they have to say and apply it to Australia.
I’d be very careful putting money into real estate in the USA, there is a lot worse to come there. Real unemployement is over 20% not the phoney 10% the media force upon us ( http://www.shadowstats.com/ ). As of today on just one website there are 13 properties for sale in Detroiot for under $100.00, you could have all 13 of them for $665 USD, they can’t give them away.
Craig
Thanks Jon,
Can you or anyone else suggest a good global currency for online selling next year. Obviously US may not be the best…i was thinking either AUD or Euros?
Any comments please
Thanks
ken
Jon
Big predictions. I’m going to keep them and if they don’t come true, I’m coming back to remind you. In my view you can’t make predictions without qualifying them, otherwise you are so confident they should be taken as gospel.
Nothing in the investment world can be taken as gospel. There is always a downside and we all need to think about what it could be.
Wes.
interested in going the way of gold bullion.
However I don’t have any experience of where to go NOR how much and what quantity to buy?
Suggestions welcome.
Hi Jon
I was wondering how the return would be on properties in the US if the US dollar gets greatly deflated compared to the Australian dollar which would decrease the rental return for us in real terms.
Anne
Jon
Thanks for the tips and I read most of your mails and those are really helpful.
Currently I am a student ,doing part time job and trading in the share market. I am planing to invest in the property market in the future as well but, at the moment I need some advice and some predictions about the Australian share market from you.
Hi Jon,
I would like to know if there is a group in Perth who are investor minded be it whatever method and get together to share knowlege overall just as you do.
One where perhaps anyone can invest privately in the opportunities of others whilst building some leverage to invest and spread their risks.
Perhaps include people who also know where else to go for finances if they banks say decline them as well?
Maybe have means to monitor/chart where one is at and what steps are required to get ahead would also be beneficial for new people who need some good direction for the level they are at and a networking/mentoring group.
Technical knowlege is really what could be most beneficial. I’m observing what’s happening on my street where the Asians are buying blocks with older houses here and bulldozing - yes good public high school at the end of the street.
Please feel free to send me contact details of others who are interested in even forming a group here in Perth. Many thanks
John, Could you please advise the best time for travel to the US?
And when will the right time be to convert my money?