In July of 2007 on a Nationally Syndicated interview I warned that trying to invest in Real Estate over the next few years would be like trying to catch ‘falling knives’.
I stated that these falling prices and resulting foreclosures would have a serious impact on mortgage companies and the banks causing serious pain in the economy.
I think it is fair to say that this has occurred and then some. I mention this to say along with my other interviews and writings throughout 2008 that my following forecast is not coming out of a blind vacuum, but we’ve been on this track for well over 2 years without any back tracking.
Here is what I see happening in 2009.
1) Real Estate Collapse on another level. Residential Real Estate still has further to fall. The Case-Shiller housing index thinks that there is still 20-25% more to fall in house prices, if this is correct we are only 50% through the housing fall
This is not the worst part, we are just entering the first phase of the commercial Real Estate downturn where we will see more pain being felt throughout the cities.
2) Wave Of Retail Bankruptcies. Many retailers were hoping to recoup severe losses during the holiday shopping season, that did not happen. Sales were horrible and the losses were multiplied. Circuit City has already started liquidation and this is just the beginning.
The chain of bankruptcies will be unstoppable.
3) One or Two Automakers will go into Bankruptcy. Technically they are already bankrupt. The only reason they are operating today is because of your tax dollars bailing them out. However, the problems that exist in this industry would take more than a few billion to solve.
Chrysler is more likely to fail first, but I wouldn’t rule out that both could be in Chapter 11 before the end of ‘09
4) More Bank failures. The Banking Crisis is getting worse everyday. Bank of America and Citigroup released more losses in the Billions today and at the same time the Government gave Bank of America ANOTHER $138 Billion lifeline.
Even though the big banks get the headlines dozens of regional banks are failing and the pace is quickening.
5) Gold Will Hit Record Highs. With all of the troubles facing the economy and the stock market investors are looking for a Safe Haven. Along with the record deficits and the government printing TRILLIONS of US Dollars, foreign nations will be looking to diversify out of U.S. dollars and into GOLD.
I do think Silver will outperform Gold, but it is a lot more volatile.
6) Unemployment will surpass 10%. With the continued layoffs in the general economy continuing to climb along with the coming layoffs in Retail, Automotive, and Financial unemployment will be at least 10%.
If you include those who have given up looking for work you are easily over 15% and in the black community the numbers are really doubled and tripled in some areas.
It is agreed to by just about all of the economist, analyst, bankers, historians, etc...that we are in a Financial Crisis not seen since the Great Depression. I am of the belief that we have entered The Great Depression 2.
It is critical to improve your entrepreneurial skills and your financial skills to survive and thrive in what will be a challenging year.
Bro. Bedford
'Conversations With Black Millionaire Entrepreneurs'
http://www.conversationswithblackmillionai...
Posted By: Bro Bedford
Friday, January 16th 2009 at 5:28PM
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