-Dugald Malcolm

Montreal, Canada.

The future for markets in 2010 and beyond does not look promising, at least according to several well respected investors and fund managers.

Jim Rogers, the commodity guru, has a bleak view of the economic road ahead. He sees no signs of recovery and, in fact, believes the problems are getting worse. Attributing the majority of America's economic woes to the government's reckless spending and money printing, Rogers, in an interview with Yahoo.com, says "The idea that you can solve a problem of too much debt and too much consumption with more consumption and more debt... I mean it defies belief!"

Although buying the US dollar as a short-term contrarian bet, Rogers sees its long term prospects as particularly negative. He asserts that we are long overdue for a currency crisis and advises that investors should own hard assets, including gold, to protect themselves. Rogers goes so far as to say that the Federal Reserve, an entity much in need of a thorough audit, could very well disappear in the next few years because of the mistakes made by the likes of Greenspan and Bernanke

Eric Sprott, head of Sprott Asset Management here in Canada, also shares in the pessimistic future outlook. Sprott was one of the very few who predicted the current market mess earning close to 500% returns for his hedge fund compared to the S&P 500 Index's 32% loss over the same nine year period. He's also been bullish on gold since 2000.

In a year-end interview with Bloomberg, Mr. Sprott warned that the market will most likely see new lows far below those made on March 9th. He sees the current rally as a perpetuation of what he calls a U.S. debt "Ponzi scheme."

"We're in a bear market that will last 15 or 20 years," says Sprott, "and we've had nine of them."

Someone else who also successfully predicted the recent economic crisis was Dr. John Hussman, President of Hussman Investment Trust and manager of the Hussman Funds. In a recent commentary to his investors, Hussman blames "Wall Street's tendency toward reckless myopia" as being a significant cause of a reoccurrence of problems in 2010. Hussman writes:

In my estimation, there is still close to an 80% probability (Bayes' Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we've observed in the equity market, labour market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle. Meanwhile, valuations are clearly unfavourable here, and even under the typical post-war recovery scenario, we are observing an increasing number of internal divergences and non-confirmations in market action.

Finally, no examination of bear commentary would be complete without turning to the opinions of Marc Faber, editor and publisher of The Gloom, Boom & Doom Report. In an interview with MSNBC, Faber predicts that the market will not witness a repeat of last year's tremendous performance. He sees 2010 as a "year where capital preservation will be most important." He sees a very good chance of at least a 10% market correction from the markets' currently overbought levels.

Despite seeing a rebound in treasuries in the short-term, Faber is also bearish for their long-term outlook. He sees the eventual onset of inflation as being a contributing reason for this. He suggests that gold will be the ultimate insurance policy in the coming year.