| 'Tis the
time of the year when everyone and his
brother tries to predict what will happen
in the year to come. So in that spirit, I
offer the following five optimistic
predictions for 2006: (1) Internet
traffic and e-commerce worldwide will
continue to grow. Fueled by a combination
of new internet users and dial-up users
switching to broadband (and therefore
making heavier use of the internet), this
one seems almost inevitable.
(2) Consumer Robotics will experience
good growth. Clever toys like the new Furby
and more utilitartian products from IRobot
will do well. Sony, Honda, and other
companies will expand the capabilities of
their higher end robots, and companies
most of us have never heard of will bring
out interesting products by the end of
the year.
(3) Inflation will be contained and
very possibly lower than in it was in
2005. Globalization and past Federal
Reserve rate hikes should exert a
moderating effect on price pressures, and
it seems unlikely that energy prices will
be as much of a negative factor as in the
past year.
(4) The economy in general will do
reasonably well -The previously passed
tax cuts should continue to exert a
favorable influence on investment and
productivity, especially if congress can
muster the will to make them permanent.
Contained inflationary expectations will
likely cause the Federal Reserve to ease
up on interest rate hikes at some point
in the year. With many of the most of the
major market indices near or below where
they were 5 years ago, we may see a nice
upward movement in the stocks.
(5) There will be some surprises
(aren't there always?), but they won't
all be bad news. Sure, we could get hit
by exceptionally severe weather, energy
supply disruptions, bird flu, or
terrorist activity, but there's also the
potential for unexpected positive
developments. We could see mild weather
for a change, unforeseen declines in
energy prices, new breakthroughs in
medicine or space exploration. Major
terrorist figures could be captured or
killed. Some obscure entrepreneur could
create a totally new industry. A lot
could go right.
Well, those are my predictions - no
guarantees. We'll know what really
happened around this time next year.
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