Here too, most investors will fail to appreciate the cruel nature of large declines and advances expressed in percentage terms - this will leave Chinese stocks 55 percent below where they began 2008 (i.e., before last year's 65 percent decline).

Gold and silver mining stocks will outperform all other equities in 2009 (this process is already well underway) and many retail investors will add gold stocks to their portfolio for the first time only to sell in a panic during the first correction.Predicting that stocks would rise this year was met with a few cat calls six months ago but equity markets are generally up at mid-year with emerging markets leading the rest of the world.

Gold and silver mining stocks are up about 15 to 20 percent so far this year, trailing the BRIC stocks (Brazil, Russia, India, and China) by a wide margin, but ahead of most other sectors.

4. Short-Term Interest Rates Will Stay at Zero

Short-term interest rates in the U.S. will end the year where they began - at zero.

Instead of the Fed funds rate, the new metric that will be used to gauge what the Federal Reserve is doing will be the Fed's balance sheet. Now at $2.2 trillion, this will grow to over $4 trillion by year-end, by which time the weekly H.4.1 report will become a major news event.

Ben Bernanke aged five years over the last twelve months - over the next twelve months he will only age two years.

Short-term interest rates were (and continues to be) quite an easy call. The fun will begin next year when there are real prospects for higher lending rates to combat rising inflation, an economy that is probably still weak, and an election cycle about to swing into high gear.

The Fed's balance sheet has become more important than interest rates, but the $4 trillion target now looks a bit difficult to reach based on the current trajectory. Of course, that could change quickly over the summer if credit markets have a relapse.

5. Energy Prices Will Rebound

After dipping below $30 a barrel in the spring, the price of crude oil will rise to $100 by the time Hurricane season is over (hey, there's no election in '09) and end the year at $85.

Just when people were getting used to $1.50 gasoline, taking advantage of dealer incentives to buy Suburbans and Escalades again, the price at the pump will be back up over $3 and they won't be happy about it.

This too was something of a bold call as oil was trading below $40 a barrel for a good portion of December, jumping inexplicably from $37 to $44 a barrel on December 31st. Crude oil went below $34 in February, largely due to a wicked contango, and then almost doubled from there.

Gasoline prices have risen substantially, now at $2.93 a gallon on the West Coast with a national average of $2.70. Prices at the pump of around $3 a gallon don't hurt nearly as much as $4 gas did a year ago but, of course, millions more Americans don't have to drive to work anymore.

6. Gold and Silver Will Soar

The price of silver will double before ending the year at around $20 an ounce and gold will again surpass the $1,000 mark, finishing the year at $1,150. Inventory at the SPDR Gold Shares ETF will increase to over 1,000 tonnes and there will be 10,000 tonnes of silver in the iShares Silver Trust ETF. We still won't be sure whether the ETFs really have the metal, but no one will care.

An increasing number of retail investors will buy gold and silver for the first time and they'll sell in a panic during the first correction they encounter. They'll look back and think, "Precious metals are no more volatile than that S&P500 Index fund I sold last year. Why did I sell in a panic again? Maybe I should just invest in Hummels."

People will start talking about junior mining stocks at cocktail parties - just like internet stocks in 1997. (As noted the last couple years, I'm going to keep saying this until it's true).

The idea of a tousand tonnes in the GLD ETF was kind of a big deal back at the beginning of the year since it only had 780 tonnes at the time. It's now down slightly from its all-time high at 1125 tonnes and the silver ETF, at 8,730 tonnes, still has a ways to go reach 10,000.

Prices for gold and silver have been less impressive than the inventory levels, but the metals have finished up odd-numbered years very strongly in this decade, so $1,150 and $20 are do-able.