Readers of this site know how much I respect Mish’s analysis. We do differ, however, on how this crisis ends. He believes Deflation; I believe Inflation. Time will sort that one out.
Regardless, his projections are worth noting:
Ten Economic and Investment Themes for 2011
1. US Municipal Bankruptcies Head to Center StageLook for Detroit and at least one other city in Michigan to go bankrupt. Also look for increasing discussions regarding bankruptcy from Los Angeles, Miami, Oakland, Houston, and San Diego. Those cities are definitely bankrupt, they just have not admitted it yet. The first major city to go bankrupt will cause a huge stir in the municipal bond market. Best to avoid Munis completely.
2. Sovereign Debt Crisis Hits Europe
The ECB and EU are hoping things return to normal and they can deal with things more calmly in 2013. The markets will not wait. Expect a new Parliament in Ireland to want to renegotiate whatever horrendous deal Prime Minister Brian Cowen agrees to. Portugal and Spain will need bailouts. The surprise play in Europe will be Italy, a country not on…. Continue reading here
