What does the ghost of Christmas Future have to show us? What grave? What empty chair? What jokers at the funeral?

The end of the year approacheth. What do we know? What have we learned? Where have we come to?

Come hither specter… Come, tell us your secrets. Take us by the hand… Show us tomorrow.

And then… What ho! A shimmering light…our candle blew out by a sudden gust of wind that seemed to come from nowhere. And then, a voice…disembodied, ghastly…

“Heh, heh…want to see the future, eh? Go to Prichard…”

What?

With those cryptic words, the shade vanished.

Christians go to bed tonight with visions of flat screens and eternity dancing in their heads. In the hush of the Christmas Eve, they hear everlasting life breathing softly in their ears. For this night recalls the Holy Night in which Christ was born.

If you believe the story, the savior freed Christians from the grip of death. Yes, their bodies might decay. But their souls would be immortal.

We only mention it because we read in the news that Christmas has become a secular holiday. Few people remember the religious significance of it. And many don’t care, even if it is recalled to them.

Not that we care what people think. But we are defenders of lost causes, underdogs, and diehards. Since Christian traditions seem to be in danger; we will rally to their standard.

What has this got to do with money? Probably nothing. But it’s Christmas Eve, for ch**** sakes. Besides, does everything we write have to be about money, money, money? Well, does it, dear reader?

It does?

Oh…

Well, in that case, let’s just imagine that these Christians are right. Let’s imagine that death has been conquered. Sin has been beaten. Eternity is ours!

If this were so, then the Ghost of Christmas Future might actually exist, no? If you can have everlasting life, you must have more than just the here and now. You must have the past and the future available to you. Infinity in both directions, right?

So, why couldn’t the shade take a peak at tomorrow? And why couldn’t he give us a hint of what is in store?

Come back, oh spook. Tell us more of your secrets. Prichard? What do you mean?

We look around. We wait. But we see nothing. No spook. Not even a shadow. Nothing.

Listen. We don’t hear anything either.

Hummmph.

Well, we’re on our own. We have to make our own guesses about what tomorrow looks like.

Now, the mistake most people make most of the time is in thinking that tomorrow will be like today. It if is bright and sunny, they imagine it will be bright and sunny tomorrow. If it has been bright and sunny for a long time, they imagine it will be bright and sunny forever.

Got a leak in your roof? Betcha you will think of repairing it AFTER a rainstorm, not before one. After a long dry spell you forget that it can rain at all. Why bother to fix the roof?

Now that that is established, we wish to take issue with it. Because, guess what? They’re usually right. Tomorrow usually is like today. And if we were in a guessing mood, we’d guess that 2011 would be a lot like 2010. But with some major differences.

The trouble with betting that tomorrow will be like today is that you can’t make any money – or even protect your money – that way. Nothing changes? No pain. No gain. No problem.

It’s the unexpected changes that hurt.

That’s why buying stocks here is likely to be so costly. One poll says investors are 58% bullish. Another says 71%. Both say bullishness is at extraordinary levels.

“When everyone is thinking the same thing, no one is thinking.” That’s what the old timers say. When everyone expects stocks to rise, the smart money bets that they will go down. Because the buyers have already bid them up. The money is to be made on the other side – betting that they will go down.

So, the shrewd investor should be out of stocks – even if he thinks stocks are more likely to go up than down. The odds favor the seller, not the buyer.

The shrewd investor should be out of bonds too. Again, this is not because he has the Ghost of Christmas Future whispering in his ear. It’s only because he can do the math.

Lend money to the government for 10 years and you will earn a yield of 3.34%. This is at a time when the Fed – custodian of the world’s dollar supply – has increased the core monetary assets of the banking system by $1.4 trillion…and fully intends to raise the inflation rate. The foundation of the system is the Fed’s own assets. It pays for those assets with money it creates out of thin air. Ben Bernanke is creating three times as much money as all the other Fed chiefs put together.

What does 3.34% say about this? It says investors have lost their minds. Maybe they think the Great Correction will keep inflation rates down for the next 10 years. Even so, the risk is far too great. Something will almost surely go wrong. The dollar will collapse. Or the bond market. Or both.

Shrewd investors don’t know what is coming. But with this kind of crackpot monetary policy, they know they have to protect themselves. They know the odds favor betting against US Treasuries.

What else?

A shrewd investor should be invested in gold. Not that there is any guarantee that gold won’t go down with everything else. Christmas Future is going to be a rough time. China could blow up. Commodities should get hit hard. World trade could sink. Emerging markets could backslide. Housing could take another major dip.

Europe could see more debt crises. None of the fixes so far have fixed anything. The debt is still there. It grows larger each year.

Sooner or later, at least one European economy is bound to go broke…possibly the euro and the European Union too.

The Europeans are trying to solve the problem of too much debt by borrowing more money. And they’re not alone. The Americans are doing the same thing. Even if the national government doesn’t go broke in 2011, there are bound to be some state and local governments that get into deep doo-doo.

What’s this?

The New York Times reports – from Prichard, Alabama!

This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

The situation in Prichard is extremely unusual – the city has sought bankruptcy protection twice – but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.

“PRICHARD IS THE FUTURE,” [emphasis added] said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. “We’re all on the same conveyor belt. Prichard is just a little further down the road.”

Oh…you sly wisps of smoke… You clever shivers… You shimmering puffs of air…

Thanks.

And Merry Christmas.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.