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Do not get surprised to see Iraq situation turning better next year and US Stocks, dollar, budget and trade deficit all improve next year
John Sheldon
Dec. 3, 2006

International think tanks specializing in contrary opinions are now projecting that Iraq situation will improve dramatically next year as US starts handing over the Iraqi security apparatus to Iraqis next year. The insurgency will continue but Iraq will be better place to live. Worldwide opinion poles may change significantly. By 2008 US President George Bush may be a remarkable figure proud of his achievements in Iraq. US military will proudly return in 2008 time frame before the US Presidential election.

What is the impact of that on dollar, gold, stocks, bonds and commodities? We looked at the analytical and quantitative models for the answer. The budget deficit will decline. Gold will collapse. Oil prices will decline. Dollar will have an explosive rally. US stocks will go somewhat higher. US economy will beat all other economies in real inflation adjusted terms. The US trade deficit will go lower. The demand for metals especially still will be lower as some developing economies goes into recession – India and China are noteworthy among them.



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