Inflation is all around us.
Gasoline will trend upward to nearly $4.00 a gallon, and could even surpass it. Every additional gallon of oil pumped out of the ground is more costly than ever to produce. Rising gas prices will further drag the economy down.
Official Washington is doing its best to co-op the Tea Party movement. Freedom Works now controls much of the movement out of headquarters in Washington D.C. This year will decide if the Tea Party becomes as toothless as the modern conservative movement. Tea Party activists will be better served by thinking for themselves and following their hearts than the political establishment.
The National Republican Senatorial Committee saw to it that at least three leading lights of the Tea Party Movement, Christine O’Donnell, Joe Miller and Sharron Angle were defeated. While the NRSC claimed to be working to help all three, reports on the ground report NRSC recommendations and strategy severely damaged these candidates’ chances. Feeling threatened, we predict the NRSC will be even more aggressive in stopping Tea Party candidates in Republican primaries in 2012.
As for the 2012 battle for the White House, we expect official Republican politicians will be planning to nominate a make- no- big- change candidate like they did in 2008. Of the current crop of front runners, only Sarah Palin or Mike Huckabee will rewrite the rule book. But instead of Palin or Huckabee, insider Republicans by the end of 2011 will be well on their way to nominating for President a Mitt Romney or Governor Haley Barbour.
Yet we are optimistic for the long run because of “Herbert Stein’s Law,” which he coined when he said “If something cannot go on forever, it will stop.”
Deficits will end via a sovereign bond crisis in America. This crisis is already brewing in Municipal bonds. Baby Boomers won’t put up with a cut in entitlement benefits, and American taxpayers are rebelling. A more likely outcome is a direct US Government default or a slow motion default via inflation.
With 2011 ahead, sharpen your pencils, make your plans, and live intentionally.
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