The Year Ahead. Part One (The World)

Looking back at my predictions for 2011 I have to say that, in contrast with the previous year, I did pretty well. To see last year's forecasts click on: http://jennyantillsblog.blogspot.com/2011/01/year-ahead.html

It is always with trepidation that I embark on this exercise, but as I said last year, old habits die hard, so here we go!

Like almost everyone else, I find it hard to be very positive about the economic outlook for 2012.   I expect at least one or two of the PIIGS to leave the Eurozone, which will cause some severe problems for much of the European, and also some of the British, banking industry.  The associated turmoil will make economic growth hard to achieve in the year to come.  The Euro will however survive, although it will be used by fewer countries this time next year.

These uncertainties will probably mean that the UK stock market, which, under the circumstances, has done well this year, will undergo some sharp setbacks.  I think that these declines will be short lived however due to the fact that for a number of technical reasons shares, particularly of a defensive nature, offer a relatively safe haven when compared to other asset classes.

Against this background, the only practical advice I can give is this:  If going to Southern Europe take some dollars with you and make sure that your arrangements to come home are watertight.  I am no longer in a position to give advice on the stock market!

There are four high profile political elections coming up this year.  In my opinion Boris and Vladimir Putin will win their bids for re-election and Obama and Sarkozy will lose.   Putin’s successful bid to become Russian President once again will be due to continued electoral abuse and the nature of the government’s control of the media*.  I expect the regime’s relative tolerance of opposition parties will be short lived and that trouble lies ahead.

In the UK I believe that the coalition will hold together for another year and that their popularity will hold up surprisingly well.

The year ahead will not be an easy one, but the spirit of the nation should be massively improved by the Queen’s Diamond Jubilee.  I am not so sure about the Olympics...as others have pointed out, for those only marginally interested in the events, the inconveniences involved may well outweigh the pleasures.

Let’s hope in any event that some of the visitors to London in 2012 find their way up to Suffolk and spend some money here!

*This reminds me of a nice Russian joke courtesy of the Moscow Times:

Journalist, to head of large psychiatric hospital:  So all your residents voted for One Russia?  (Putin’s Party)

Doctor:  No, not all.  One voted for Nicholas I, and another for Nicholas II