It's time for ICBW's annual predictions post...First, a review of last year's predictions:

The US economy will continue to recover in 2011, and unemployment will drop, although not sharply. Inflation will remain tame, and short-term interest rates will therefore be kept very low, although long-term interest rates will rise substantially. Real estate will decline slightly again. The dollar will strengthen, oil and other commodity prices will be stable, and gold will drop.

Not a great prediction--in a nutshell, I expected a stronger recovery in the US economy, the absence of which weakened the US dollar, causing oil, gold and commodities to remain strong.

At least one US state or large municipality, and at least one European country, will experience a Greek/Irish-style debt crisis, which it will manage to muddle through, Greek/Irish-style, with a combination of austerity measures and external bailout funds.

Birmingham AL and Harrisburg PA both declared bankruptcy this year, and numerous states and municipalities have experienced major budget crunches. Several European countries (Italy, Portugal and Spain) joined Ireland and Greece to form the notorious "PIIGS" group.

The Afghan "surge" campaign will show signs of progress, but strong domestic opposition to it in the US will force an overall de-escalation of operations and/or a shortened time limit on deployment. The gradual American withdrawal from Iraq will continue, and internal instability there will again increase, although only modestly.

Pretty much on-target, although the American withdrawal from Iraq became markedly less gradual at the end of the year, and some say the resultant increase in instability has become correspondingly less modest.

Middle East peace negotiations will remain frozen. The Palestinian Authority will enact some kind of official declaration of independence or sovereignty, which will be nominally recognized by a bunch of countries around the world, but otherwise change nothing. Similarly, the UN tribunal will indict some Hezbollah officials for the murder of former prime minister Rafiq Hariri. The move will be ignored in Lebanon, where Hezbollah's iron grip will continue unaffected. Both Hamas and Hezbollah will exercise relative restraint towards Israel, however, due to strengthened Israeli deterrence and Iranian government's preoccupation with consolidating its hold on power and shoring up its imploding internal economy.

Pretty much dead-on.

The Obama administration and Congressional Republicans will alternate between conciliation and confrontation over the year, co-operating on certain popular measures--possibly including deficit reduction and tax reform--while feuding bitterly over partisan ones, such as health care and the environment. GOP-run House hearings and proposed (but doomed) legislation will compete with symbolic executive and regulatory actions for partisan advantage through theatrics. Obama's approval ratings will improve to the low-50-percent range. On the Republican side, the 2012 presidential nomination race will by the end of the year produce neither a clear frontrunner nor a credible threat to Obama's re-election.

Perhaps they should have taken my advice--a year of continuous confrontation and hostility has badly tarnished the approval ratings of both the Republican Congress and the Obama administration. As a result, Mitt Romney is looking more and more like both a clear frontrunner and a credible threat to Obama's re-election.

Phenomena such as the Voca People and Mike Thompkins will lead a surge of popular interest in a cappella music.

Well, maybe next year...

And now for this year's fearless (or fear-mongering, or fearfully misguided, or merely frightful) predictions...

The Euro's never-ending soap opera will badly constrain European growth, and developing-world growth will also slow. As a result the US economy, though stronger than elsewhere, will grow only modestly in 2012. The stock market will decline as profits get squeezed, and interest rates and inflation will remain low. Real Estate will bottom out but remain flat, and oil prices will (finally!) drop modestly, as new supplies start to come online. The US dollar will continue the recovery it began in mid-2011, as other economies continue to show greater weakness.

At least one European country will begin concrete initial moves towards exiting the EMU (AKA the Euro). Rather than causing the predicted crisis, this move will eventually come to be recognized as the only realistic solution to Europe's financial crisis, and the question of which countries will require a bailout or default will shift to that of which countries will require a Euro exit.

The "Arab spring" turmoil in the Middle East will turn out to be more of a large-scale collapse than an awakening. Following the departure of American troops, Iraq will dissolve into the civil-war-like conditions of 2006, with the Iranian-backed Shi'ite government battling Saudi-supported Sunni rebels, and the Kurds increasingly clamoring for independence. Syria's Bashar Assad will remain in power, but will be forced into a protracted low-level conflict with a Turkish-supported insurgency, as Western sanctions bring the country's economy to its knees. Egypt will face food riots as its economy also collapses and foreign aid fails to prop up the government's finances enough to keep up the necessary rate of subsidized food imports. The new Islamist governments of Libya and Tunisia will attempt to impose strict Shari'a laws, but will find themselves unable even to maintain basic order in the face of domestic political infighting, corruption and tribalism. The PA will find itself under increasing pressure from a resurgent Hamas, and the two will spend most of the year alternating between making nice and fighting bitterly. Iran's nuclear program and apparatus of internal repression will continue to operate unimpeded--new sanctions will be imposed, which will be about as effective as the ones against Saddam Hussein were--but it will be too preoccupied with propping up its proxies in Syria and Iraq to cause much trouble elsewhere.

Amidst all this chaos, Israel will be a haven of stability, with ample time and resources to devote to its endless internal political squabbles.

At least one of the following autocrats will fall from power this year, due to death or ill health: Hugo Chavez, Ali Khamenei, King Abdullah of Saudi Arabia, Robert Mugabe, Raul Castro.

Mitt Romney will very narrowly defeat Barack Obama in the 2012 presidential election. The Republicans will also win the Senate--but just barely. They will maintain control of the House of Representatives, but with a net loss of seats. Turnout will be low compared to recent presidential elections.

The issue of concussions will become the NFL's equivalent of MLB's steroid scandal.

There they are--read 'em and weep (or laugh derisively)...