Special Report

Looking Ahead

A survivor's guide to life in 2014. 

By 1.2.14

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The year 2013 was a remarkable one, with international affairs, American domestic politics, and our economy harmed by the most incompetent and ideological American administration in modern memory — and perhaps in our history. It takes a special man to make Jimmy Carter look good, but President Obama is doing his best.

As we enter 2014, here are a few forecasts, despite Neils Bohr’s warning that “prediction is very difficult, especially if it’s about the future.” Please don’t remind me of these a year from now as my first prediction is that most of these predictions will not come true.

The Economy
The U.S. GDP will grow by 3.2 percent in 2014, less than it should in a recovery from a severe downturn but more than one would expect given the assault on free enterprise that will continue to emanate from the Obama administration.

The S&P 500, after a 30 percent gain in 2013, will be up 9 percent in 2014 despite an increase in long-term interest rates, with the 10-year note ending the year at 3.7 percent.

The U.S. Dollar will gain 6 percent against a basket of major world currencies. Gold will close the year at $1025, after trading under $1000 per ounce.

Oil will trade in a narrow range except for a brief panic due to Middle East instability, ending the year at $90 per barrel. Despite massive production increases, natural gas will end the year at $5/MMBtu, a several-year high, due to increased domestic usage and the beginnings of LNG exporting. Ignorant politicians will call for a ban on exporting American energy.

Unemployment will drop slightly to 6.6 percent, which will continue to mask pessimism and low labor participation rates.

Health Care
The disruption that Obamacare will cause to the health insurance industry in 2014 will be greater than even critics expect at the end of 2013. Halfway through the year, insurers will start warning about large premium increases to come, averaging 30 percent over already unaffordable prices and saying that they will not be able to stay in business without substantial changes.

By the 2014 elections, more than 25 million Americans will have had their health insurance policies canceled, with millions more having lost the ability to see the doctors of their choice.

Stories about the inability of people, whether covered by private insurance, Medicare, or Medicaid to get an appointment with any doctor will become commonplace. Republicans will point to Massachusetts (which has the longest waits in the country to see a physician, and which has the health insurance system most similar to Obamacare) and say, “What did you expect?”

Health insurance companies that had been co-conspirators with the administration in trying to manipulate the market to their advantage will turn on Obamacare after Republicans pass legislation preventing a federal bailout of insurers — even though the president will veto the bill — as insurers’ popularity and stock prices plunge.

By the March 31 Obamacare signup deadline — the administration has said they need 7 million enrollees, with about 40 percent being young and healthy to have a functional market — the total number of people signed up will be 4 million, of which 27 percent will be young and healthy.

Domestic Politics
No significant legislation will pass the Congress in 2014 on major issues such as entitlement reform or immigration, nor to raise the minimum wage. Republicans will try to keep public focus on Obamacare while Democrats will try one issue after another to find one that removes the public’s attention from the health care disaster.

Unable to pass legislation, President Obama’s use of executive orders and regulatory agencies’ rule-making will aggressively attack energy-related businesses, banks, corporate governance, and other pillars of capitalism. Republicans will make noise but not actually try to do anything about it, in part because they will be mostly unable to and in part because they would prefer to have the campaign issue.

Democrats will initially try to guide upcoming debt ceiling debates toward a government shutdown but will realize that they, rather than Republicans, will get the blame this time. Republicans will get at least modest entitlement reform and no changes in income tax rates in exchange for an increase in the debt ceiling. The deal will also include the repeal of at least one Obamacare tax, probably the medical device tax.

Surprisingly, Republicans will get traction (in public opinion) with an Obamacare replacement plan, but one that will leave some of the most truly socialist aspects of the legislation — such as guaranteed issue — in place. Republicans will offer a measure that requires insurers to cover everyone but will allow the exclusion of pre-existing conditions for a limited period of time, thus incentivizing people to buy insurance prior to becoming sick.

In the 2014 elections, Republicans will gain 11 seats in the House of Representatives. While GOP primary battles will be portrayed in the media as a Republican civil war, both Tea Party and establishment Republicans will unite around the eventual victors. In the Senate, a Republican seeking to unseat a vulnerable incumbent Democrat will do something stupid and lose the election, leaving the Senate with a 50/50 tie and Joe Biden casting tie-breaking votes for an exceptionally painful two years.

Support of Democrats by voters under the age of 30 will plunge.

A liberal justice will retire from the Supreme Court of the United States in 2014, giving the specific reason that he or she wants to make sure President Obama can confirm a replacement who shares their views. Harry Reid will extend the “nuclear option” to Supreme Court justices.

At year’s end, Hillary Clinton will formally announce her candidacy for president, as if giving Americans a giant national Christmas present — but really a lump of coal. Barack Obama will offer half-hearted support, with faux compliments about Clinton’s work as Secretary of State, which will do more to remind people of Benghazi than anything else.

Chris Christie will remain the Republican front-runner, with Tea Party groups disinclined to support someone they don’t trust to be a true conservative but also understanding the importance of the GOP fielding a candidate who can beat Hillary. Conservatives will be looking to Rand Paul. By the end of 2014, the Republican presidential situation will be slightly clearer than it is at the end of 2013 with Marco Rubio, Ted Cruz, Jeb Bush, and Paul Ryan out of the running.

Having more focus on Hillary than on any particular Republican will work to the GOP’s benefit and Hillary’s “unfavorables” will remain too high for Democrats’ comfort, including her polling no higher among women than the usual Democrat-Republican gender gap.

Chris Christie will successfully lure a major investment bank to relocate its headquarters to New Jersey once newly elected NYC Mayor Bill de Blasio begins to channel French President Hollande (about whom more in a moment.) New York City’s black and Hispanic communities will protest de Blasio’s ending of “stop and frisk” policing in their neighborhoods after an increase in violent crime.

Colorado Governor John Hickenlooper will lose re-election and take a job with former NYC Mayor Michael Bloomberg trying to deny 2nd Amendment rights nationwide.

International Affairs
The next center of chaos will be Lebanon, with a proxy war between Iran and Saudi Arabia weakening (but not destroying) Hezbollah. Shi’ite terrorists (especially Hezbollah) will try to draw Israel into the conflict, with only brief success. Palestinian terrorists will think that Israel is distracted and will attack Israeli settlements, leading to rapid and severe retaliation by the IDF. President Obama will play golf.

Iran will move inexorably but slowly (at least as far as inspectors can tell) toward a nuclear weapon but will not do anything that looks like “breakout,” thus keeping Israel from launching a military strike. Israel’s calculation will primarily be based on knowing that President Obama’s middle name is Hussein for a reason. Congress will pass additional sanctions which Obama will veto, but Iran, despite prior threats, will agree to continue with their agreement because European countries will not follow Congress’s suit, too happy to be making money trading with the world’s leading state sponsor of terrorism.

Saudi Arabia will begin progress toward its own nuclear weapons program. President Obama will insist on sanctions. Congress will not oblige.

The fighting between North African governments and local Islamic radical groups will be increasingly bloody and brutal, with repeated stories of torture committed by both sides.

The influence of the U.S. in international affairs will diminish with astonishing rapidity, making 2013 look like a good year on that score. The American public will mostly not notice. President Obama will play golf.

Great Britain will start making it more difficult for Islamist radicals to remain in the country, and for immigrants to get generous welfare benefits.

The French citizenry will briefly protest the collapse of economic growth following the full impact of President Hollande’s “soak the rich” tax policy. French public sector unions will counter-protest, and the country will get what it deserves.

Syrian president Bashar al Assad will survive an assassination attempt but will sustain injury.

China, like every other nation unafraid of President Obama, will step up its militaristic behavior in the East China Sea, forcing a civilian plane to land in China. President Obama will play golf.

Immediately after the Olympic Games end (more on this in a moment), Vladimir Putin will rain fire on Dagestan, taking advantage of Barack Obama’s second-term “flexibility.”

Sports
On February 2, Peyton Manning and the Denver Broncos will defeat the Seattle Seahawks to win Super Bowl XLVIII and cement Manning’s position as the greatest quarterback in NFL history.

One week later, the Winter Olympics in Sochi, Russia, will get the lowest TV ratings of any Olympic Games in a generation and will not be hit by a terrorist attack — but somewhere else in Russia will be. U.S. television networks will devote a large percentage of their Olympic coverage to “progress” on “gay rights,” with specials about Billie Jean King and Brian Boitano, causing Duck Dynasty to reach record viewership.

Next year, both the Washington Redskins and the Houston Texans will have winning seasons.

The Miami Heat will repeat as NBA champs. The Chicago Black Hawks will win the Stanley Cup. The Chicago Cubs will win the National League Pennant but lose the World Series to a team from west of the Mississippi.

Other Stuff
The average Arctic sea ice extent will be the highest in a decade, prompting global warning and anti-capitalist loon Leonardo DiCaprio not to waiver one iota from genuflecting at every image of Algore. Mr. Gore comments that statistics can be misleading, especially statistics that don’t confirm that what he tells us is True.

As “mainstream” media outlets move from slavish devotion to Barack Obama to slavish flogging for Hillary Clinton, Fox News’ dominance will increase, rumors will surface of MSNBC no longer being viable for its parent company, conservative talk radio will continue to do well while liberal talk radio stations change to Spanish music and sports, and the New York Times will lose whatever credibility it has left outside of Manhattan. December’s “investigative journalism” about Benghazi was a good start down that road.

3D printers will become affordable for many Americans, giving Michael Bloomberg and the TSA nightmares about home-printed non-metallic guns. A media outlet will sneak one through airport security to encourage lawmakers to ban purchase of the machines other than by businesses. They will succeed in California and Maryland.

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About the Author
Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver's NewsRadio 850 KOA on Saturday mornings from 6 AM to 9 AM. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.