During Obamacare, the Republicans said that the Democrats had poisoned the well. During fiscal cliff, the Republicans could be forgiven to think that the Democrats not only poisoned the well, but took it away as well. The Democrats should be celebrating but unfortunately this sets the stage for disunity within the Republican party. The perceived inability of the Republicans to push their agenda will likely split the party into octogenarian Republicans and the young Tea Party. If this happens, the Tea Party would likely do very well in the 2016 elections.
“This means millionaires and billionaires will pay their fair share to reduce the deficit through a combination of permanent tax rate increases and reduced tax benefits.”
Class-warfare rhetoric aside, the politicians will just keep spending, and the people will just have to pay more taxes to keep it going. Just remember, it will not just be millionaires and billionaires in the coming rounds.
Onerous taxes will cause the productive capital of the nation to migrate to tax stable havens. As we said before, Asia especially India and Indonesia should benefit massively in 2013 on this. Asian foreign direct investment (FDI) window will see unprecendented amount of money coming from the three regions suffering from the sovereign debt crisis – Europe, Japan and America. So buy yourself something Asian. Yours truly is bullish Asia this year. The Hong Kong peg looks ready to break this year.
In the years since 2008, central bankers had been printing while the people had been hoarding. Thus, even though Uncle Ben printed trillions, inflation did not rear its ugly head. This will change in 2013. Yours truly expect inflation to return this year. Hyperinflation is impossible because hyperinflation is by definition the total loss of confidence. Unless you plan to disconnect yourself from the world economy, it is impossible to lose confidence in Europe, Japan and America combined. They are the world economy!
If the politicians continue to chase the productive capacity out of the country, we will likely see the migration of the world financial capital to China. Perhaps the Bloomberg state should consult a feng shui master on the planned NYC Staten Island Ferris Wheel for 2015:
We remember that the richest nation in the world, Singapore, changed the initial direction of their ferris wheel for good fortune:
“…The Giant Observation Wheel’s initial modus operandus – showcasing to visitors, first, Singapore’s financial centre before descending with panoramic views of eastern Singapore – drew observations from feng shui geomancers that the Flyer was taking fortune and ‘qi’ (energy) away from the country and turning its back from ready fortune – the financial centre…”
But then, would a Mayor who made his fortunes in Manhattan decide to listen to unscientific feng shui geomancers? Chances are the ferris wheel will be showcasing Bloomberg office at 731 Lexington Avenue first. If that happens, feng shui masters will likely conclude that fortune is migrating away from America.
Happy New Year and may 2013 be another properous year for you and your family.