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NEW YORK (
TheStreet) -- The past several years, I've been asked to write a year-end column that attempts to predict some of what will happen in the ensuing year. I've delivered these columns reluctantly as I have never been a fan of trying to prognosticate the future.
This year, no one asked, but I'm delivering it anyway. Take it all with a grain of salt. If it's anything close to past years, one-third of these calls will come true, one-third will be miserably wrong, and one-third will be half right and half wrong.
The "Fiscal Cliff" will be a nonevent in the short term. Painfully, this has been nearly every pundit's focus over the past several months; no deal has been done yet, and there are just days left in 2012.
Although there's still a possibility of some type of agreement being reached before we ring in 2013, even if we "go over the cliff," the effects will be short-term. The world will not end, and the
Dow won't go to 5000.
There may be some volatility, but this will end up being a more modern version of Y2K. I do have longer-term fears, however, because I believe that the proverbial can will be kicked down the road yet again on entitlement reform and spending cuts. Most everyone fears the molehill (fiscal cliff); I fear the mountain (unsustainable spending and debt).
Gold and silver will shine. Although metals' performance overall for 2012 was disappointing, I still believe they'll do well in an environment where uncertainty reigns and the U.S. government continues to run the monetary printing presses on overdrive.
Some gold bulls are beginning to disappear, but I don't believe that the run is over. How about $2,000-an-ounce gold and $40-an-ounce silver sometime in 2013? Incidentally, I made the same call last year and was dead wrong. Although it's very difficult to predict the price of anything in a 365-day period, in the longer term, the continual flood of dollars will mean higher metals prices. Once our fiscal issues come home to roost, Uncle Sam will do what it does best -- attempt to inflate our way out of it.