In the beginning of January last year we made a post about what we predicted will happen in 2009.

2009 is now over. Here is a look back to the predictions and how well we did.

1. The dollar will fall 20% or more against the Chinese yuan.

Verdict: WRONG! The Chinese yuan has staid on the same level in regards to the dollar thanks to the Chinese policy of keeping it fixed to the US dollar (+ some other currencies).

2. The price of gold will be up 10% by the end of the year.

Verdict: WRONG! The price of gold is up 23.4% in 2009. This means that jumped well over the 10% we predicted.

3. The price of oil will stay between 40 and 60 dollars for the most of the year and will rise to as high as 75 dollars/barrel by the end of 2009.

Verdict: CORRECT! The price of oil climbed gradually throughout the year but managed to stay in the 40 to 60 dollars range all the way from January to July. The end of the year saw oil prices rise as high as $79.

4. The Dow Jones Industrial Average will be up about 15%.

Verdict: CORRECT! The Dow Jones Industrial Average was up 19% in 2009. That’s close enough!

5. The world economy will not recover from the financial crisis by the end of 2009.

Verdict: CORRECT! Unemployment rates are the highest in decades. The real estate bubble has not bounced back. The economies of the world are still weak.

6. There will not be any more major bank failures. We will possibly see governments taking proactive steps to save banks and other major companies before they are in actual trouble.

Verdict: CORRECT! Following the failings of 3 major banks in 2008 we have not had any major bank fail in 2009. All the large banks and insurance companies have been saved by the government before they went under. There have however been a large number of smaller banks that have failed and that have not been saved that remain mostly unknown to the public.

7. None of the three big US auto companies will fail in 2009.

Verdict: CORRECT! Despite fears in 2008 and the beginning of 2009 – Ford, General Motors and Chrysler are all here!

8. The housing market does not bounce back.

Verdict: CORRECT! The housing market is down and it doesn’t look like it will bounce back any time soon.

9. Inflation in the US rises.

Verdict: WRONG! According to official figures the inflation plummeted from 3.8% in 2008 to 1.8% in 2009. The USA has however changed how it used to calculate inflation. Using the old method it should be around the 10% figure.

10. Obama’s stimulus package passes in his first months in office.

Verdict: CORRECT! The controversial 800 billion dollar stimulus package was passed in February 2010.

11. More bailout money will be needed by large companies.

Verdict: CORRECT! Bank of America received an additional 20 billion dollar loan  in January 2009 in addition to the 25 billion dollars that bailed them out in October 2008.

12. US economy will not come out of recession.

Verdict: FALSE! The 3rd quarter of 2009 was the first quarter in more than a year that saw economic growth in the US. That means that officially the recession is over. In reality however unemployment rates are highest in decades, consumer fears are still rising and people are saying that it is still a recession.

13. There will be an assassination attempt on Barack Obama. If you won’t hear about it, it is because it will be kept secret.

Verdict: CORRECT! Obviously! Could it have been any other way?

14. Apple will launch a smaller version of the iPhone.

Verdict: FALSE! Although we saw the iPhone 3G S, we are still waiting for a smaller and cooler model. Odds are that we will be waiting for a long time…

15. Financial Jesus will end the year with more than 1000 subscribers.

Verdict: FALSE! 2008 started with a whopping 119 subscribers and ended with 469. We were about 500 users too short.

Total Score

9 out of 15. That is pretty decent if you ask me!

“Never make predictions, especially about the future.”
Casey Stengel

One of the worst things you can do is to predict the future. Your predictions will almost always be wrong and you will look like a fool. Looking back – you have no idea how you couldn’t even predict the simplest of things.

Regardless, here are the predictions of Financial Jesus for 2009.

1. The dollar will fall 20% or more against the Chinese yuan.
2. The price of gold will be up 10% by the end of the year, as uncertain investors will be looking to gold for support.
3. The price of oil will stay between 40 and 60 dollars for the most of the year and will rise to as high as 75 dollars per barrel by the end of 2009.
4. The Dow Jones Industrial Average will be up about 15%. If you correlate this with the falling dollar it will actually mean that those investing in the US will actually lose money.
5. The world economy will not recover from the financial crisis by the end of 2009. We will see the making of an economic crisis that has its roots in the credit crunch of 2008.
6. There will not be any more major bank failures. The governments of the world will not let that happen. We will possibly see governments taking proactive steps to save banks and other major companies before they are in actual trouble.
7. None of the three big US auto companies will fail in 2009. They will get enough help to just “hang in there” for a year or possible more – only then will we see a failure among the big three.
8. The housing market does not bounce back. We will see falling prices throughout next year.
9. Inflation in the US rises. Fears of deflation are largely without grounds and are only fueled by the falling real estate prices. Oil and gas will be on the rise and will therefore help to fuel the inflation.
10. Obama’s stimulus package passes in his first months in office but it fails to address the real problems. This is sadly realized only toward the end of 2009.
11. More bailout money will be needed by large companies. The government can’t deny their help because “everyone will already expect them to help”.
12. US economy will not come out of recession.
13. There will be an assassination attempt on Barack Obama. If you won’t hear about it, it is because it will be kept secret. (Yes, I just made sure that at least 1 prediction will become true)
14. Apple will launch a smaller version of the iPhone. Let’s call it the iPhone nano.
15. Financial Jesus will end the year with more than 1000 subscribers.

“My predictions are notably inaccurate.”
Robert Caro

“I figure lots of predictions is best. People will forget the ones I get wrong and marvel over the rest.”
Alan Cox

What are your predictions for the coming year? Let us know in the comments so we can find the best fortune teller when we sum things up in the end of 2009!