The Economy - Regardless of loud claims of another Great Depression on its way in 2009, that is unlikely to happen unless the US ceases to be regarded as a ‘safehaven’ for the World’s money. The domestic US economy should hold up because there are safety nets in terms of deposit insurance and social services that will help avoid some of the more drastic effects experienced during the Great Depression, and offshore investors will continue to invest in the US, financing the economic restructuring because of its safehaven reputation. Nevertheless, the US Economy will continue to decline until it begins to bottom in Summer or Fall of 2009. The recovery will be slow and may take until late 2010 or longer.

Outlook for Start-Ups – Global economic difficulties favor the flow of investment money to the US. VC money will continue to get more conservative, focusing on companies with revenue history. Wealthy individual investors will underweight hedge funds, the stock market and real estate, and will focus on local small business and start-ups as they did during the 1950s. Smaller Angel Groups will proliferate as a few wealthy friends join together to form investment partnerships. Green products and services, alternative energy, cost cutting technologies in healthcare and manufacturing, and basic businesses will receive their investment., People will favor investment in infrastructure over investment in a managed mutual fund. Investors will want to take a hands-on interest in their investments. They will want to watch ‘their’ bridge being built. They will also want their money to do broad social good so venture philanthropy will expand.

Unemployment – Although reported unemployment at the end of December 2008 is approximately 6.7% or 4.5-million people, many analysts argue that contract workers, consultants and freelancers who have been let go or are unable to find work, plus all those workers who have exceeded their unemployment benefits, bring the real number closer to 12%. In 2009, layoffs in retail, business and consumer services, commercial real estate, consumer durables manufacture and related industries, and State and Local Government will bring reported unemployment to approximately 8.5% with total unemployment, as defined above, ranging as high as 15% by some reports. Industries that will do well and provide employment opportunities are collection agencies, debt restructuring, liquidation services, legal services, green products and services including alternative energy, heavy infrastructure construction, and other similar industries

The Bling-Bomb - Look for luxury goods to lose their attractiveness as people attempt to sell their expensive cars and other belongings for spending money. Only the elite jewelry stores will remain in business while mall jewelers will go out of business. It will become unseemly to display lavish spending and people will be more value conscious in their purchases. While those with significant wealth will continue to buy luxury items, people of average wealth will no longer be a prime target market for upscale products. Similarly, entrepreneurs who display lavish spending habits will receive scrutiny from their investors.

Real Estate – The real estate cycle is historically one of the most reliable, with approximately 17 years cycle length. This would put the next peak in home prices in approximately 2022 and the bottom sometime after approximately 2011. In 2009 commercial real estate will suffer. Shopping malls and downtown areas will have significant numbers of vacant stores. Industrial parks and office buildings will experience similar vacancies and late in 2009 and early 2010 this will begin to benefit business start-ups with move-in promotions and low rents

Big Business – 2009 will mark the loss of some brand name companies similar to the experience of the early 1980s when we lost companies like Sperry, Remington, RCA, Smith-Corona because of the advent of personal computers. Companies seen as more in touch with the environment will rise in their places. New technology that favors increased efficiency in design, construction, maintenance, manufacture, management, and communication will replace older methods.

Small Business – 2009 will be a good year for small business because small business will be able to operate without the burden of legacy costs and layers of bureaucracy. Green products and services, efficient energy technologies, technology that promotes cost efficiencies in the rebuilding of our infrastructure, biotech companies that create cost efficient medical test and treatment products, and new communications products developed out of Web 2.0 will rise to replace old guard companies.

Retirement – History will show that the only generation able to take full advantage of the dream of retirement was the parents of the Baby Boomers. Only a portion of the Baby Boom will retire fully. Most will carry on with part time work and a large percentage will have their own businesses or will invest in local start-ups. Tech and business savvy Boomers will find themselves desired employees because their employers will not have to pay health and retirement benefits. 2009 will mark the beginning of this trend.

Employment Benefits – Another beginning trend will be the gradual disappearance of employer paid health and retirement benefits. Employees will choose continued employment over benefits. The US government will begin the creation of a very modern and highly efficient health system using new technologies currently in development.

North America – With the decline in the price of oil, significant problems have arisen for Mexico and, to some extent, Canada. It may become necessary for the creation of a North American trade currency in order to keep our neighbors economically stable. Whether this will obviate the $US, remains to be seen. With regard to the US economy, some types of manufacturing will return to the US and it will be kept cost competitive by the use of technology. Facilities will decline in price and State and Local Governments will be willing to offer excellent incentives to companies to do their manufacturing domestically.

Miscellaneous Possibilities :

• Dollar Decline – If the $US declines against other currencies it will favor US manufacturing and export of goods and services.
• Higher Energy Costs – If the price of oil rises it will favor US manufacturing, alternative energy development, new oil exploration, North American cooperative trade, technology, and biotechnology.
• Gold Standard – If there is a return to the Gold Standard as a backing to the $US it will favor investment in the US, low or no inflation, gold mining, development of alternative energy, new digital and mechanical technologies, infrastructure, and biotech.