The Parallax Brief noticed that certain contributors to the UK political blogosphere have written self congratulatory posts about the predictions they made for 2009 back in the closing days of 2008. Never one to miss out on an opportunity to smugly boast about his soothsaying ability, the Parallax Brief has decided to present his own 2010 predictions.

1. The Conservative Party will win the general election with a majority of at least 80. Despite what the Labour optimists, and some recent opinion polls, say, the Parallax Brief believes it is unimaginable that a government embroiled in a bloody meatgrinder of a counter-insurgency war, with a leader as unpopular as Gordon Brown, in an economy as bad as ours, and with unemployment likely to be near its high watermark come election time, will not be voted out emphatically by an electorate which has had a Labour government for over a decade and has the expenses scandal fresh in its mind.

2. The Liberal Democrats will lose seats at this election. Not many; they’ll end up on somewhere close to their current number of seats, but this is the kind of election where the public is desperate enough for change to vote tactically to get rid of a Labour incumbent, and as the third party in more seats than they’re the second, it may be the year they lose out — especially as they still seem to be struggling a touch at this late stage to find an image and headline policy to differentiate them from the other two parties.

3. There will be a referendum on Scottish Independence in 2010, and the SNP will lose. When the Conservative Party win the election, they will likely have no representation North of the border, increasing pressure on parties in Holyrood to pass a referendum bill of some kind. But the SNP will be beaten at the ballot box and the Union will be maintained.

4. Esther Rantzen will become MP for Luton South. It is notoriously difficult for independents to win seats in modern day elections. However, with the sleaze of expenses fresh in the memory, Ms. Rantzen may just have a chance. Her centrist, “floating voter” political views mean that she will not be relying on picking off voters from just one party, and her wholly unsullied, impossible-to-dislike public image give her, in the Parallax Brief’s view, an outside chance.

5. Gold will not pass USD1,350, and inflation in the UK and US will not pass 3.5% and 3% respectively. Libertarian and right wing economic pundits have for some time been calling the end of the dollar and pound (and any currency issued by a central bank engaged in quantitative easing). “Hyperinflation is on the way,” they say. “Buy gold”. It won’t happen: gold will not smash through all time highs, and inflation will not spiral out of control.

6. At least five of the G7’s main stock indexes will close 2010 below their December 31st 2009 levels; oil will not pass USD100. The Parallax Brief believes that a good part of the reason inflation will not rise too high is that Britain, the US and most other developed, western countries will experience turgid, painfully slow recoveries (although the US is likely to see higher growth than the UK this year). The debt burdened G7 will struggle in the next year, and given that the 2009 stock market recoveries were often liquidity driven — that is, driven by low interest rates and QE which will likely come to an end at around the same time fiscal stimulus programs run out –the Parallax Brief sees a tough year for equity investors in the developed world. These factors will also hold oil around USD70 or 80 per barrel (For Brent and WTI blends).

7. Bellweather South East Asian ex-Japan equity markets will finish up on the year. If 2009 was finally the year when it became clear that the pendulum of economic power had swung decisively toward Asia, 2010 will see this action manifest. Korea, Singapore, India, China, Indonesia, and Taiwan will all see much faster growth than the G7 (although all may be outshone by Brazil), and terrific capital inflows over the next year. Their markets will reap the rewards of this growth by December 2010.

8. China will revalue its currency by at least 15% against the dollar. However, this economic swing toward the East will make China’s current dollar peg untenable. Usually, when a country earns more than it consumes, its currency increases in value, reducing the competitiveness of its manufactured goods on the international market, and brining into balance its current account. China, however, runs a mercantilist policy through which it keeps its currency artificially low, effectively stealing jobs from the rest of the world. Pressure from the US to increase the value of its currency has been steadily ratcheting up, and now its seems the EU is becoming more vocal, too. China may bristle at such suggestions; however, with the US likely to be running a super-loose monetary policy until at least the second half of this year, China will effectively be importing inflation if it doesn’t do something soon. It simply can’t sterilize all those dollars out of its system. The Parallax Brief is betting that internal and external pressure will force it to do so, perhaps even brining its monthly bilateral current account with the US into deficit during some parts of the year.

9. The main financial scare of the year will come from Greece. Greece is likely to come — at the very least — nailbitingly close to defaulting on its sovereign debt this year. It’s budget deficit is currently huge, piling ever more debt onto a national pile which is way, way beyond EU limits and already tottering on the brink of collapse. Worse, it looks increasingly as if the socialist government simply doesn’t have the political capital to muscle through the savage cuts needed: there have been riots on the streets of Athens and terrorist attacks against even the minor cuts and pay freezes proposed. The Parallax Brief believes that while Ireland, Spain, Britain and Italy will ultimately emerge from the crisis relatively unscathed, Greece, and perhaps Portugal, will put the EU in a position of either going against pre-decided policy and undertaking at least one massive sovereign bail out (and in doing so putting in place the foundations of an EU debt union), or letting them go to the wall, and risk seeing contagion and panic spread. The Parallax Brief believes the former, but Greece could well be 2010’s Lehman Brothers.

10. Mahmoud Ahmadinejad will not be president of Iran at the end of 2010. The Parallax Brief believes that the good will out and that the heroes of the Green Revolution will be successful in removing this baleful, indecorous little man this year.