Politics:
1. Gridlock will typify Washington for 2011. Hardly anything gets done with most GOP bills stalling in the Senate. Some compromise measures go through but they are few and far between. More partisan rancor occurs but little of anything is done to stem the tide.
2. There is a massive fight over raising the debt ceiling with the GOP attaching various amendments to the "must-have" legislation. Most of the amendments pass and this becomes one of the few "bipartisan" things that come out of Congress/
3. The Supreme Court rules that parts of ObamaCare are unconstitutional. However, the entire legislation is not scrapped with only parts of it becoming null and void. Health Insurance goes up 12 - 20 % in one year with little or nothing the Obama Administration can do about it. Health Insurance companies become as hated as banks were in 2008.
4. The following people become big names for the GOP nomination for 2012. Newt Gingrich, Tim Pawlenty, Eric Cantor, David Patreaus and as a big surprise Paul Ryan. Sarah Palin becomes more powerful but does not plan to run in 2012 believing that she is the only one that Obama can beat.
Economy:
1. It is a banner year for the economy as it slowly starts to recover. Retail Sales, Home buildings, Durable Goods Orders, and Industrial Activity will all be markedly higher as companies start to deploy the trillions they have in capital. They are finally free to make decisions without worrying about what will happen in Congress.
2. The stock market roars throughout the year making many consumers feel rich. This pushes up spending as more people save less and spend more on the luxuries of the past. Retail Sales recover from this switch from frugality to luxury.
3. Unemployment drops down to 8% as companies start to hire again. They see growth and new opportunities ahead without interference from Congress or the business-haters at the White House. The EPA and other White House agencies lash out at certain corporations but these actions do not wreck the recovery.
4. Europe continues to limp along with Germany in the lead and the ailing economies still ailing. There are no debt defaults and many European austerity plans start to stabilize things. There are more riots but things start to settle as Europeans start to settle for a bit less than before. European stocks lag their American competitors while the dollar is made artificially weak.
5. The rest of the world grows at very high levels and this includes the emerging markets that are not dependent on European consumption. The order of GDP Growth from highest to lowest is: Brazil, Emerging Markets, China, India, Russia, US, Japan, Germany, rest of the Eurozone.
6. These are the numbers for the various indices at the end of 2011:
Dow: 13,200
NASDAQ: 3500
S&P500: 1700
GDP Growth: 4.5%
Gold: $1150
Silver: $25.50
Oil: $98
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