Prediction: 2012

If this last week's action in world stock markets tells us anything, it's that you shouldn't listen to the media. While rosy reports came in from numerous companies, jobs report data looked fantastic, and Larry Kudlow, Jim Cramer, and other talking heads spoke about the re-emergence of the U.S. economy, stock markets tanked. Failure to use common sense to consider that the stock market was WAY overbought is leading to some horrible predictions. Like Mr. Cramer's insistence that the Dow Jones industrial average is going to 12,000. We'll see 8,000 before we see 12,000.

Which takes me to my prediction, this time for the year 2012. I'm worried about 2012. I truly hope that the U.S. in 2012 does not resemble Greece in 2010, but I honestly have no real confidence that things are going to be back to business as usual by then. In fact, 2012 could very well be worse than 2008, in the stock market and in the economy. Take a quick minute or two to read Robert Kiyosaki's article in Yahoo Finance: 2010: The Best of Times or the Worst? . Mr. Kiyosaki is not someone whom I would consider betting against. In my opinion, his predictions could not only come true, but could also carry over well into 2012. His next Yahoo article was entitled, "Doing the Dead Cat Bounce," also a must read.

I hate to even bring this up, because anyone who reads this will probably think I'm nuts, but I don't believe anyone really reads this anyway so here goes: December 21, 2012. Whether the Mayans actually predicted the world would end on this day, or they simply couldn't read their calendar after this date, I have no idea. Leave that up to the scholars to debate. All I know is that "Y2K" caused many people to panic, so why shouldn't people fear the Mayan prediction as well? Especially if we experience economic and political turmoil in the year 2012, leading up to December 21.

World stock markets are going to suffer over the next few years. Gold will likely see new highs. Why not just wait it out? Keep your hard earned money, your nest egg, your retirement account in cash or gold. Buy some Japanese Yen, perhaps. Just don't own any stocks. On December 22, 2012, buy back in. Do some buying on the Hong Kong exchange, open a brokerage account with Peter Schiff's company, buy some ETFs. You'll be happy you avoided another stock market erosion from 2010-2012 if you do this. Buy, hold, and diversify will truly be dead come 2012.