Market Predictions
In early 2022, we set out market predictions for mid to late 2022 for the Dow Jones average, Nasdaq, Bitcoin, Housing Prices, and Inflation in light of Biden administration and Fed incompetence. How have we fared? The post from February can be found here (later updates on inflation and other matters follow in separate posts here, here and elsewhere). We address potential effects on housing prices here, with an updated post as of September 29 from posts earlier in 2022. Be prepared with a copy of Winning Mortgage, Winning Home from Amazon.
Dow Jones Prediction
The prediction was a 6,000 to 10,000 point drop in the Dow Jones. At the time, the Dow Jones average was around 36,000+. In early October, the Dow Jones has been wobbling around 29,000-30,000. This reflects a drop of 6,000 to 7,000 points, in line with our market predictions for 6-12 months out.
NASDAQ Prediction
The prediction was a 4,000 to 5,000 point drop in the NASDAQ. At the time, the NASDAQ was around 16,000+. In early October, the NASDAQ has been wobbling around 10,500 to 11,000. This reflects a drop of 5,000 to 6,000 points, in line with our market predictions for 6-12 months out.
Bitcoin Prediction
The prediction was a $20,000 drop in price for Bitcoin. At the time, the price of Bitcoin was around $43,000+. In early October, the price of Bitcoin has been wobbling around $18,000 to $20,000. This reflects a price drop of $23,000 to $25,000, in line with our market predictions for 6-12 months out.
Housing Price Predictions
We predicted that interest rates were likely to shoot up to at least the 6% to 7% level. We speculated rates might go higher. Our analysis indicated a rate of 6% to 7% would lead to about a 15% drop in house prices. A rate in the 10%+ range would lead to a drop of perhaps 25+% in housing prices. All this within about a year. The data for the most recent two months shows home prices declining at an annualized rate of about 12-12.5%. This is pretty close to 15% drop in process already and the upcoming data is expected to show accelerating drops in home prices. Will it reach a 25% drop? Stay tuned. Read Winning Mortgage, Winning Home to be prepared and know how to take advantage of the market or get the mortgage you need.
Inflation Predictions
In early 2021, we began calling for the Federal Reserve to quit printing money, stop 0% interest rate policy, reverse its buying of massive amounts of bonds (Quantitative Easing), and focus on the two core missions required of it by law. The Fed did not do any of the above, even while employing 400 economists (400 WRONG economists). We also called for the federal government to stop its massive deficit overspending. It did not and passed three subsequent spending bills totaling more than $4 trillion. We noted that inflation would spike precariously and forcefully if our analysis and predictions were correct.
Our analysis and predictions were completely correct and our expectation of Fed inaction and continued government deficit overspending proved prescient. As a result, inflation spiked to the highest in more than 40 years and will continue to stay elevated for at least two more years. That is unless the Fed sends the economy into a steep recession. That would entail probably 2 million or more job losses. We expect this to happen in early to mid 2023.
Oil Price and Gasoline Price Predictions
We did not make any predictions on oil prices or gasoline prices. In hindsight, this would have been an easy call. The Biden administration immediately canceled pipeline projects, stopped drilling, and attacked energy companies relentlessly. In speeches, Biden and his team specifically called out for energy price increases. As a result, expert analysis shows that about 2-3 million barrels per day of oil and gasoline production have been lost in the US. The Biden administration blames the war in Ukraine. However, foreign oil production and sales of oil remain about where they were prior to the start of the war. There is no other significant factor that caused a spike of more than 100% in gasoline and energy prices than the Biden administration actions. Oil and gasoline prices would have been far lower except for the direct Biden actions. Those actions remain a major factor in inflation and will continue to be there for at least two more years.