Dusting off the Crystal Ball for 2015

 

Making predictions is usually a fool’s errand so if this looks really bad in 12 months from now, I’ll quit at one try!

Oil is the main story for 2015 and the stunning decline in prices will change many things in the upcoming year. Don’t spend all your gasoline savings in one place!
Oil
It’s a whole new ballgame for oil. Other than for supply disruptions, oil will stay low for years to come. Even if demand rebounds, the Americans know how to get lots of shale oil out of the ground, and quickly. In a sense, US shale oil producers are the new swing producers, not Saudi Arabia, and oil will not rise higher than a profitable level for shale oil producers. That price is currently around $65 but with current prices in the low $50’s and still sinking, shale oil producers will continue to find new ways to get the oil out cheaper so the new ceiling price could be even lower than $65.

If the environment is not a consideration, go out and buy that big gas guzzling SUV because gasoline isn’t going to break the bank for years to come.

Taxes
The new lower pricing for oil will tempt US lawmakers to take advantage of it to raise taxes. They know people will hardly notice a new tax on gasoline or oil, and it can be sold as a conservation measure.

Inflation and interest rates
Numbers will remain low in what I will call “asymmetrical” inflation. Lots of things will go up significantly in price but the average will be held down because of low oil prices as associated goods and services will decline significantly next year.

With a low average inflation rate, interest rates will remain at nearly record lows. If it ticks up, it will be minor.

These things will make the economy look good for the year and it won’t blow up from various bubbles forming now until at least 2016 or later.

Sovereign Debt Defaults
Shaky oil producing countries will default. Venezuela will be first. Iran and Iraq will have a tough time avoiding it. Russia? We don’t want to think about what a wounded bear will do, but tough times are coming to Russia and it may mean not only difficulty paying foreign debt, but political instability will appear in strong protests caused by austerity. Let’s hope it stays contained in the country as one option for them is to start a war to get people to rally around the Kremlin.

US politics
Through no fault of his own, Obama will start to look like an economic genius. Low inflation, cheap gasoline, low interest rates and rising house prices will make many Americans smile again. The stage will be set for a Hillary presidency in 2016.

Canadian politics
Even though the Harper brand is getting well worn out, he will continue to govern Canada after the election, which will be late in the year, not early. The reason that the CPC will win is not because of their own popularity but is mainly because people are scared of Mulcair, while Trudeau just isn’t ready yet and it is unclear if he will ever be ready. The CPC will remain the party of choice for a steady hand on the economic wheel in spite of people having to hold their noses for some of their socially conservative policies.

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Religion
We will see a rise in Islamic moderation. Moderates now see more clearly where fundamentalism leads, and it ain’t pretty.

The Pope will get more bold in his liberal and leftist views.

Institutional church attendance will continue to fall.

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One thought on “Dusting off the Crystal Ball for 2015

  1. There is a huge stir right now that’s about Cdn veterans being manipulated and abused by Harper and his gang. As a vet myself, and pensioner who’s been subject to an unreasonable clawback, and former government bureaucrat when needing money a few decades ago, I have to add that has it not been the story of Cdn politics for nigh 50 years that we’ve not had anyone to really vote for? I quit voting in the 70s when there was, as I read it, no one to vote for in either party. It’s quite possible that the veteran issues will help swing the election in some key ways, but of course that only bears fruit when one plants their X on the ballot. Alas….

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