I think the first six months of 2021 will be the most serious downward spiral of what I call "The Phoenix Great Depression." That's my name for the 5 to 7 year long, real world economic slump/depression, that will be the bulk of the "Tumultuous 2020's. Many financial markets are peaking right now, as I begin to write this post at 6:25 am (Pacific) on January 4th, 2021. Unfortunately deaths form the Covid-19 pandemic, and lines at food banks nationwide, are also peaking. That's our dichotomy right now. Soaring stock, crypto, and precious metals markets, and even real estate in major cities. But at the same time, soaring numbers of personal and business bankruptcies and numbers of small businesses struggling and going out of business. Several million people are on the verge of eviction, being helped by moratoriums. We're peaking on the top and bottom of economic indicators at the same time.
Eleven months ago, when nearly everyone thought the financial markets were going to soar, I predicted a 9,800 point drop in the Dow. My predictions for the Dow, S&P 500, and Russell 2000, crazy as they were at the time, all came true in about 8 weeks. My Nasdaq prediction was in the ballpark. My predictions seemed ridiculous in late January, 2020, but were largely right, in direction, if not actual numbers. The The Fed created more new money than in any year in memory, as a response, and market bubbles inflated everywhere. The Fed's push to create absurd levels of new money, is something I dramatically under-estimated. Lesson learned, The Fed's job, it appears, is to prop up poorly run industrial corporations and the stock markets as a whole, into infinity. But it can't prop up everything, forever.
That said, here are my predictions that I think will happen in calendar 2021:
-The total number of American who die from Covid-19/coronavirus will exceed 750,000 by the end of 2021. That's more people than died in the U.S. Civil War. I don't think we'll get the "official" all clear from the virus until at least September 2021. The economic rebound from the pandemic will take much longer than people think.
-I predict the Dow Jones Industrial average will drop below 20,000, again, in 2021. It's at 30,394.93 right now.
-I think the Nasdaq will drop below 10,343 in 2021. It's at 12,877.92 right now. As the markets crash early this year, Big Money will, once again, flood into the top few Nasdaq tech stocks. Let's face it, "The Stock Market," at this point, is really only about ten stocks, FAANG and a few others. The rest don't matter at this point. That's a problem. In the stock market, you're no longer investing in companies, you're investing in The Fed inflating asset bubbles. February thru April will probably be the best opportunity to buy those ten or so stocks in the 2020's. If you're one of the 12 long term investors left in the world, this will be your chance.
-I think Bitcoin will drop below 23,000 in 2021. I also think Bitcoin will soar after that, and become the "Tesla stock" of 2021. Bitcoin 50,000 by year end is likely, and Bitcoin $100,000 would not surprise me. I think cryptos will become the "new stock market" to the Millennials and Gen Z investors/speculators. Cryptos make sense to them, the stock market won't after all the Robinhooders lose their ass in stocks in the next few months.
-I think the S&P 500 will drop below 2,700 in 2021. It's at 3,736.99 right now. It will rebound, but there won't be much of an overall return, especially when you consider the continued devaluing of the dollar, in calendar 2021.
- I think the Russell 2000 will drop below 1,300 in 2021. It's at 1,973.64 right now.
- I think gold will rise above $2,250 an ounce in 2021. It's at $1937.92/ounce right now.
- I think silver will rise about $43 an ounce in 2021. It's at $27.49/ounce right now.
-I think it's highly likely we will see serious food/poverty riots, in one or more major cities, in late spring of 2021. This will be the "darkest before the dawn" moment.
I'm not a financial advisor, and these predictions are my personal opinions. These predictions are for entertainment and education purposes, and should not be considered financial advice. My only personal investment right now is a small number of silver bullion coins.
All that said, if I had to invest in two things right now, that I think will survive the coming crash, and rebound to make a solid return in 2021, those two things would be Bitcoin and silver bullion. My third pick would be the top 2-5 FAANG stocks, and maybe a few other tech stocks.
I think we will finally see a widespread real estate downturn, maybe the true crash that is needed. But the continual flow of hyper-inflated money supply from The Fed may keep real estate from dropping as much as it should.
I'm writing this before the Georgia run-off elections, which will determine who controls the U.S. Senate, have happened, and as Donald Trump, our sitting president, is openly trying to find a way to overturn the election he lost in November. A lot of political craziness could happen in the next three weeks, which could dramatically affect the financial markets, time will tell.
I don't want to touch a character in this post. One big typo, I think the silver price will exceed $43 an ounce in calendar 2021, I didn't mean it would rise by $43. I apologize fo rthat typo.
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