Our predictions for 2009 turned out to be pretty accurate.

Of course, most of them were fairly obvious – especially in retrospect – but supposedly informed commentators were saying otherwise at the time.

Anyway, encouraged by our previous success, here are a few more statements of the obvious – or, at least, of what we consider obvious. Some of our leaders seem unaware of them.

1   The bond markets are going to flex their muscles. There is already a big difference between some trading prices and official credit ratings. The markets will force governments to confront their debt problems, which means... 

2   Spending cuts and tax rises – probably both – will exceed expectations in most high-spending economies. Expect a particularly savage Budget immediately after the British General Election – irrespective of who wins.

3   Inflation will return. This in turn will lead to higher interest rates – although inflation may actually be encouraged by governments with high levels of public borrowing seeing it as a “cheap” way out of their debts.

4   Be ready for mini-scares. There are many “known unknowns” that could still trigger a panic – Dubai, Congressional interference with the US Federal Reserve, populist attacks on banking, etc. The relatively calm response, so far, to the bad news from Dubai may show a new maturity in the markets – but they remain jittery, because there is a lot about which they should be jittery.

5   For all that, the dominant global trend will be slow recovery. Emphasis on both the “slow” and the “recovery”. Anyone expecting a return to boom times will be disappointed, but it is worth noting that the world as a whole is now once again getting slightly richer every day. 

6   Business migration is ongoing. Business will return but not in the places it did. Unless the USA, the UK, and Western Europe abandon the lethal combination of high government borrowing and hostility to bankers, they will drive the service sector – the most profitable part of the modern economy and the most mobile – into Asia. The centre of gravity in the world economy is already shifting to the East.