January 10th, 2022

You Won’t Believe These 2022 Predictions

Dear Rebel Investor,

It was your typical holiday party.

Eggnog… sugar cookies… ugly sweaters…

This party had it all.

A number of good friends who know I write about the markets were there.

What, I was asked, did I think 2022 has in store for us retail investors?

Would pot stocks take off?

How about gold and silver – would they make a runup?

Would inflation get worse?

Well… of course I have no divine superpowers that allow me to see into the future.

But I do have plenty of opinions about what will happen in 2022.

Here are five predictions for 2022 to get started:

1. California Governor Gavin Newsom will slash taxes he currently levies on his state’s legal marijuana industry

Executives from the industry have warned him that if he doesn’t, the industry may collapse.

Specifically, they want the governor to lift the grower cultivation tax, give the industry a three-year holiday from the excise tax, and allow the expansion of state-wide legal retail shops.

The crux of the problem is the state’s illegal cannabis industry.

Because illegal growers pay no taxes, they’re able to sell marijuana for much less than the highly taxed legal industry.

I think it would be a political disaster for Newsom if the state’s legal cannabis industry went belly-up, as critics would point to that as a massive failure of leadership.

And if I’m right in this prediction, look for pot stocks to take off.

2. The current U.S. labor shortage will get a lot better in 2022

I say this because, IMO, most people who have voluntarily been out of work in 2021 will have to face hard financial realities that can only be solved by money.

Sure, you’ve read a lot of feel-good stories about people who have wisely taken their time off from work to transition into new careers or businesses.

But most people don’t have the drive to do that. And as their bills continue to stack up, I think many of them will swallow their pride and go back to work.

3. The polarization of America will get worse

Battle lines for 2022 Congressional elections are already being drawn.

And Republicans have made it clear that, if they regain the House of Representatives, they’ll start looking for ways to make life more difficult for the Biden Administration.

For example, House Republican Leader Kevin McCarthy said he would order the House to:

  • Examine all records related to the Biden Administration’s Afghanistan    withdrawal
  • Pursue an alleged IRS leak of select billionaires’ tax information to ProPublica
  • Launch an inquiry into the origins of the COVID-19 virus

McCarthy’s announcement has surely pleased conservative Americans… and ignited more liberal hatred for them.

As we get closer to the 2022 elections, look for more vitriol from liberals and conservatives, as both are painting these elections as a battle that will determine if America survives.

Hardly a recipe for compromise, right?

4. There will be no national COVID-19 lockdowns in the U.S.

The reason I say this is because another lockdown would likely take the American economy and throw it into the toilet.

And I just think it would be too risky politically for the Democrats to be seen as the reason for such a disaster.

As a side note, internationally – especially in places like Australia, Austria and Germany, where lockdowns and mandates are super strict – I think you’ll see more people taking to the streets to protest.

5. China will continue to weasel its way into Afghanistan (like it did in Africa).

Already China’s starting to loan money to Afghanistan in an effort to curry favor from its leaders.

Why?

For one, Afghanistan could be a key link between China’s interest in Central Asia and the shipping lanes in the Indian Ocean.

Afghanistan is also rich in terms of mineral deposits.

These include iron, copper, lithium, rare earth elements, cobalt, bauxite, mercury, uranium and chromium.

Obviously China would like to have access to all that.

So why wouldn’t they try to fill the vacuum President Biden’s withdrawal from Afghanistan created?

Okay, that’s enough for now.

In my next newsletter, I’ll have five more predictions.

So stay tuned… and Happy New Year!

Doug Fogel
Contributing Editor, Dear Retail Investors

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