Photo by Shubham Dhage on Unsplash.
It's hard to believe, but 2021 is almost over.
Every year, I decide to have a little fun and come up with a list of ten predictions (that often aren't very obvious or popular) in the following year.
I certainly don’t have a crystal ball, but as a lifelong investor, I believe some things have higher chances of happening than others.
How did I do with my 2021 predictions?
I made
Given the high hit rate in 2021, I expect the new projections to have a solid chance of happening. So without further ado, here are some for 2022.
S&P will breach 5,000
In February, I wrote an article titled,
I simply realized the S&P 500 returns had become a definition of inflation, and people store their wealth in the index.
Investors discovered that the Fed fully controls the stock market, not allowing any meaningful corrections to occur. As a result, the equities will go up as long as the central bankers print money. In other words, if the money supply increases 20% a year, so does the index. Under those circumstances, expecting a 10% gain from the current levels is rather conservative.
The Fed will not Raise Rates Significantly
My equity market prediction even accounts for the potential interest rate hikes. But I'll make the bold prediction that the rates will not go up, and even if they will, the Fed will hike rates marginally.
The global financial system is hugely dependent on money printing, and without the stimulus, it would instantly collapse. The only option for the central bankers is hyper printing from here while keeping the ultra-low interest rates.
US Inflation will Exceed 10%
Official U.S. inflation hit 6.8% in November, which is a 39-year-high. However, real inflation rate is much, much higher. When central bankers pump trillions of dollars into the economy, they simply can’t expect any different outcome.
According to Fed, 36% of all the money printed in the US was printed in the last 15 months.
The more money is in circulation, the less they’re worth.
The central bankers have set the wheels in motion, and there’s no turning back. So don’t be gullible. Get out of cash, sell your bonds and buy hard assets like the S&P 500 or Bitcoin.
Politicians are spending money like a drunken sailor, and inflation will continue to rise to double digits.
Bitcoin will hit $100,000
Bitcoin adoption is growing at a 113% rate, and it’s the fastest adoption of any technology in recorded history. It’s double the speed of the internet growth rate in the 1990s. Coupled with the record-high inflation, we’re going to the other dimension with Bitcoin.
Additionally, it has become a preferred safe-haven asset for most investors. Considering that the market cap of gold is $11 trillion, Bitcoin with less than $1 billion is small compared to gold. I think we can anticipate a 100k price by the end of 2022, which is more than a 100% gain from here.
I reached my target in 2020 and 2021, and I certainly hope to hit it next year as well.
The Housing Market will have Another Double-Digit Gain
In the third quarter of 2021, home prices in the U.S. posted their largest increase ever, rising by 18.5% year over year.
While many experts think the rise in home prices is in a bubble, I'm not sure. It’s important to realize that home prices have also become protection against inflation like stocks or Bitcoin.
People are buying real estate to hedge against devaluating currencies. I predict we'll see another year of double-digit gains in 2022.
Central Banks will Issue CBDCs
I’m no fan of the central bank digital currencies (CBDCs). They’re going to be a disaster for our privacy.
Central banks will circumvent the local fiscal systems and drastically increase taxation through negative interest rates.
They will just take it right out of your wallet. Unfortunately, it seems that the walls are closing in.
China has been working on a digital yuan for several years now, but according to
CBDC Tracker , almost every government on Earth has started developing its own digital currency.
Undoubtedly, some will issue their own CBDC in 2022.
More Countries will Adopt Bitcoin as Legal Tender
The good news is that CBDCs are a lifeboat for Bitcoin. When people face a choice between the CBDC and Bitcoin, they’ll realize that with Bitcoin, they will still be able to control their money.
Some governments are starting to understand it. For instance, El Salvador became the first country to adopt Bitcoin as legal tender instead of developing its own digital currency.
It’s almost inevitable that more countries will follow suit in 2022, especially those suffering from hyperinflation or ruined economies.
Meetings will Move to the Metaverse
The term “metaverse” just jumped into everyone’s mind with Facebook announcing their decision to rebrand their corporate name to Meta. Because of the lockdowns, people spend more time online without human interaction.
Although still a diamond in the rough, the metaverse has a lot to offer for brands, from frictionless virtual shopping to immersive online meetings. Next year, I predict virtual meetings will start moving from 2D to 3D cameras with digital avatars.
French philosopher Nostradamus, too, predicted the same. He envisioned that by 2022 artificial intelligence may rule the computer with a human interface. We often think about the metaverse as something in some distant future, but in reality, we’re closer than we think.
Tesla Stock will Surge Above $1,500
Tesla is not only the most valuable automaker, but it is more valuable than the following five top automakers combined. Yet, I believe Tesla stock will reach $1,500 in 2022. That is almost a 50% upside from here. Here are the key catalysts that will emerge over the course of next year.
First, deliveries estimates have increased to a total of 1.4 million cars. With the global chip shortage, Tesla will benefit and likely sell every car it produces at high margins. Second, Giga Berlin and Giga Texas are getting the green light next year, and Giga Shanghai will expand as well.
Third, the production of Tesla’s Semi-Truck, Cybertruck starts, with 1 million pre-orders. And finally, the new Model Y production will expand in Europe and Texas. Coupled with progression on the Tesla bot and FSD beta, Tesla stock is the gift that keeps on giving.
Lockdowns will not end
It’s been almost 21 months since the first wave of lockdowns. In the beginning, our politicians told us they just needed two weeks to “flatten the curve.” Then they told us the restriction would last just a couple of months until we get the vaccine, and then we return to normal.
Well, here we are almost two years later, entering the third wave of lockdowns and restrictions. Albert Einstein once said, “Blind belief in authority is the greatest enemy of truth.” Lockdowns failed, and our leaders are dishonest. According to
Final Thoughts
Although these predictions are daring and should be taken with a grain of salt, I believe they are all entirely plausible. Also, it never hurts to be prepared and capitalize on the outcome. In other words, the future always depends on how we handle the present.
Here’s to a great 2022!
Disclaimer: The opinions in this article belong to the author alone and should not be considered investment advice.