Oil Heading Up I believe not only are we going to see oil finally breach the magical $100 mark, but I believe it’s going to trade up temporarily into the $110-112 range when one or more major international stories develop. The growing global thirst for oil is not going to be significantly dampened by the U.S. downturn, and China and India are quickly picking up any slack that is being created by the U.S. slowdown. Don’t bet against oil — it WILL go higher (and gas will also hit $10 this year — watch what happens to Alberta’s economy when that happens!) Oil will trade generally between $88-90 on the low side, and will go into the triple digits and remain there on and off throughout 2008. I also expect we’ll see at least one major international crisis occur, likely to involve Iran, and that will drive prices higher. Gold To See 4 Digits I continue to believe that we’ll see gold break through the $1,000 mark in 2008, driven by the massive (unreported) inflation we’re continuing to see. Gold’s up about 25% in 2007, and I believe we’re going to see a similar rise in 2008. With the weakening global respect in the U.S. dollar as a ‘safe’ currency, I believe more investors will seek protection by getting into gold, driving it up into the quadruple digits. Canadian $ Strength Even though I think that the run-up in late 2007 of the Canadian $ against the U.S. dollar was overdone, I do believe that the Canadian $ will continue to trade at, or above, parity for most of 2008. As well, if more significant fall out occurs in the credit markets, and the U.S. economy weakens faster than expected, this will cause the Federal Reserve to adjust rates down even further, resulting in a surge of the Canadian $. I expect we’ll see it hit $1.10 against the U.S. dollar again sometime in 2008, but I do expect it will trade near parity for most of the year. Conservatives Will Continue To Lead Alberta Even with some of the negative press and volatility the Stelmach government has experienced in 2007, there is no doubt that Stelmach will receive his first official mandate from the people of Alberta in the 2008 Elections, and will continue on his reign of power as the Premier of Alberta. The cabinet will not change dramatically in 2008, and by mid 2008, the “Royalty Review” will be something no one even remembers. Canadian Interest Rates Being caught between a rock and a hard place, Canada can’t increase interest rates because that would attract more money into the CDN $, driving it up even higher. However, the currently high dollar is hurting the manufacturing & exporting industries in Ontario, resulting in slower growth. At the same time, the Western provinces continue to fire on all cylinders, so the Bank of Canada can’t reduce rates to help Ontario, because that would drive the Western economies even hotter and faster. As a result, I expect the Bank of Canada will only cut interest rates one more 1/4 point in the 1st half of 2008, and then remain on the sidelines. This bodes extremely well for real estate investors as capital remains inexpensive, and will not dampen economic growth in the West. U.S. Interest Rates The U.S. Federal Reserve has absolutely no choice but to cut interest rates further in 2008. I expect we’ll see a full percentage cut in 2008, while the U.S. economy sputters and growth slows even more than it already has. The inevitable result of lower interest rates will be a continuing weak dollar, leading the U.S. dollar to record lows against most other major currencies. Canadian Real Estate Market I expect that 2008 will be the year of moderation, but sustained growth. I expect that the overall national average home prices will increase by 4-5% in 2008, with some areas being much stronger (mostly in the West), while other markets incur negative growth (watch areas heavily reliant on manufacturing and exporting, like Windsor). Alberta Real Estate Market After taking a much-need break from the unprecedented price increases in the last 3 years, Alberta’s real estate market will moderate to more sustainable levels. I expect that overall, the Alberta market will outpace the national market by double, resulting in an overall price increase in Alberta of approximately 8-10%. Calgary Real Estate Market Regardless of so many people suggesting the Calgary market is ‘over’, the weakness we’ve recently seen will be temporary, and in the spring, inventory will return to more reasonable levels as significant in-migration continues, and Calgary remains as the leading population magnet in the province. The glut of inventory in Calgary hides the fact that sales in 2007 are within a hair of what we saw in 2006 (a record year). Therefore, I expect the Calgary market to tighten up quite a bit in 2008, and that we’ll see prices increase in Calgary an average of 11-12%. U.S. Real Estate Market To Feel More Pain Contrary to many people who believe the worst is over, I believe the U.S. real estate market is going to see sustained weakness and a further reduction in overall prices. While some “experts” foolishly are calling for a bottom of the U.S. market as early as March 2008, I believe we’ll see further fall out in the credit markets, and it will be 2009 before you see the numbers showing a clear sign that the market is starting to recover. However, this also means there will be tremendous buying opportunities in 2008, depending on which market you’re focusing on. Remember that you can’t fall off the floor, so if you’re able to buy really well in most areas, you’ll still be able to make money in 2008. The buying opportunities will be limitless, and if you do it properly, 2008 may be the only year you need to buy in order to set yourself up for many, many prosperous years to come. Cooper Will Tip The Scales At 8 pounds, 8 Ounces Much to the chagrin of my wife Raylene who has to actually deliver him in March, I expect that our first baby, Cooper, who is due March 30 will come in at an impressive 8 pounds, 8 ounces, and look more like his daddy than his mommy. And finally .. the Flames will take the Stanley Cup in 6. Regardless of how 2008 turns out, I sincerely wish you all the best, and a very prosperous 2008! You have the ability to make 2008 you best year ever with so many incredible opportunities occurring in so many markets, and I challenge you to do so!]]>