Having done like John Templeton and prayed for divine guidance, I offer the following general predictions. Unfortunately, my relations with the Almighty are nowhere near as respectable as Templeton's are, and therefore please use your own due diligence and consult Him on your own if you are a Protestant, or ask your priest or rabbi for directions to Him.
1. Despite what he says, Greenspan will continue to provide enough money to make inflation likely.
2. OPEC will not ease much while demand will stay strong, so that oil will remain above $25 and could go much higher.
3. The combination of inflated money supply and high oil will result in fairly rapid markups of prices.
4. The dollar will suffer a decline of 20% or more against other major currencies, especially against a stengthening Euro.
5. The dollar decline will immediately make imports more expensive and put a floor under oil prices denominated in dollars.
6. The Fed will discern "inflation" and raise interest rates further. In today's paper, some banks are already offering better than 7% on long term CDs. Chase is trying to seduce depositors from our local banks with very high savings rates.
7. The minute any general softness develops in the stock markets, money will go into these accounts and CDs.
The final outcome of this, in terms of adjustments of relative values between stocks, commodities, or land, I leave to the fertile imaginations of those on this thread. I hope that at some point the response of the United States will be to seek some form of energy independence through a huge initiative comparable to the Manhattan Project or the Moon Landing.
If I am wrong on any of these points, please take it up with my source of information. I am merely the conduit, a figure of speech that may lend itself to a rude rejoinder.
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