One thing I am convinced of. I am now 53, and I will not see for the remainder of my life the value of my house return to the level that identical houses in my neighborhood were selling for in 2006.
Once the present administration gets through socializing the economy of this country, I am far from convinced that the DJIA will return to its previous peak, or even close to it, during my lifetime.
I’ve been predicting Dow 1,000 for some time. I expected to see it around late 2010. I’m now thinking I may see it a lot sooner. (That number, by the way, isn’t just plucked out of thin air. It comes from the similarity between Obama’s policies and Hoover’s, and the record of 1930-1932. Recall, by the way, that the Dow didn’t return to its 1929 peak until 1954—25 years and a World War later.)
Still, I can see an optimistic scenario. Most of the spending and tax increases proposed by Obama won’t take effect until after 2010. If the Republicans trounce the Democrats in the next Congressional elections—which they might, once the American people realize they’ve elected a Marxist—those plans can be canceled, and a set of pro-growth policies put in their place.
But I can also see a more negative scenario. Recall that as much as $100 million of Obama’s campaign cash may have come from the Middle East. Since January 20 his foreign policy has been strikingly pro-Islamic; in fact, it’s been indistinguishable from a foreign policy crafted by Saudi Arabia. Imagine that the Saudis, in Obama, have their Manchurian candidate, who is doing his job of pushing the Dow down and increasing government indebtedness all too well. Once the Dow hits 1000, say, they swoop in and buy most of America’s businesses. By then they also own most of America’s debt. We become indentured servants of the Saudis, who treat us as dhimmis. The financial jihad will have succeeded.
What do I actually believe? I don’t have beliefs about the future—only probability assignments. Right now they’re not looking too good.