Peter's Financial Predictions For 2016

Here’s fearless (or crazy) Peter’s economic predictions for 2016. The first is a no-brainer. Oil is going to soar. Several things have convinced me of this. The bearishness of the market. When you hear the mainstream media talking about $20 oil you know you’re at or very close to a bottom. On January 15 of this year oil hit a low of $29.15. Oil has fallen 74.8% since June of 2014 when it traded at a high of $115.71. It has fallen 80.2% from the July, 2008 all-time high of around $147.27. The talk is of an oil glut. Where were these people when oil was trading about $100? Besides people were talking oil glut in December, 2008 when it was trading at about $32.40 just as oil was about to soar. About a year later oil traded around $80. That isn’t to say that oil might fall a little more, but it will not stay down.

Natural gas too will also soar and in fact is showing signs right now of being in the early stages of doing just that. Between a high of $6.15 in February, 2014 to a low of $1.68 last month natural gas has fallen 72.7%. If you go back further to December 2005 when natural gas hit a high of $15.39 then it has fallen 89.1%. Natural gas too is seen to be in a glut. It has fallen again in recent days, but I’ve been expecting a correction, before the trend up resumes.

Gold (and silver) too is also going to soar, although that doesn’t mean it still can’t make a new low. If it does it will likely be before the end of January or February at the latest. Mining stocks may lag a bit before they too soar. Whether this turns out to be a bear market rally or a new bull market is too soon to tell. I lean towards a bear market rally that will last several months, although I can see it surprising everyone and turning into the continuation the bull market that began about 2001.

The Canadian dollar closed January 15 at 0.6875 American, the lowest it has been in about 13 years. I’ll go out on a limb and predict it will trade at about 80c American by the end of the year and at about 90c American by the end of 2017. The American dollar is due for a major correction and if, as expected commodities soar then the Canadian dollar should soar with it.

My final prediction is that the depression that I’ve long warned about will start to hit beginning with another stock market crash like we saw in 1929-1932. As I write this the Canadian and American stock markets are down for the first two weeks of the year. I believe they will bounce up again, perhaps make a new all-time high before they start to crash. I believe the Canadian stock market will outperform the American one initially due to rising commodities. Since their all-time highs of last May the DOW and the S&P are both down between 12-13%, while the TSX is down about 24% since its all-time high in August, 2014. The TSX is down about 23% from its 2015 high of last April meeting the definition of a bear market, while the DOW and the S&P are, at present, meeting the definition of a correction.

A NOTE TO SAY THAT THESE ARE MY PERSONAL VIEWS AND THAT I COULD BE WRONG WITH ALL OF SOME OF MY PREDICTIONS.