Being that it’s Martin Luther King Day, the markets are closed in the United States. They are open in Asia and Europe, though, and what a day it is! World stock markets are down sharply, in some cases as much as 8 percent in a day! This leads me to ponder what will happen in the United States at tomorrow’s opening bell.

For that matter, it leads me to ponder what the next three to five years holds in store. I’ve read a lot of top 10 predictions for the coming year lately. So, I thought I’d offer my own top 10 list of probable economic developments for the coming three years. Here goes:

1) Buy gold. It’s going higher. How high? I don’t know, but things have always seemed to go a lot higher than people thought they would. Whether it was the NASDAQ, housing prices or Beanie Babies, once the public gets onto an idea, watch out. Gold is about $880 an ounce today. My guess is we’ll see about $1,200 an ounce in 2008, and then it will go well over $2,000 an ounce within the next three to five years. I say “well over” because I think we’re going to be shocked at just how high it does go.

2) Buy a piece of real estate. I know you’re thinking, “Pulleezzze,” but seriously, think about it. Currently real inflation, not the bogus government numbers but the real cost of living, is going up around 8 percent a year. Current mortgage rates are about 5.25 percent. This is about 3 percent less than the inflation rate. It’s literally free money. Now, I know that prices may go a little lower over the next year or so, but with rates this low you simply cannot lose over the longer term.

3) Inflation is on its way. For you folks under 30, you don’t know what that is. Trust me, it’s nasty. You’re already seeing it in higher gas prices. Brace yourself, it’s about to strike everywhere, and I do mean everywhere. Food, clothes, computers, airline tickets, automobiles, movie ticket prices, PG&E bills and everything else you need or want. Within three years a box of breakfast cereal will be $4 to $5.

4) Government programs. Lots of them. During the 1930s the federal government was credited with spurring economic growth through all manner of programs. Free market economists of the Austrian School have argued for years with Keynesian economists about whether these actually did any good, but the fact remains that during an economic downturn people will look to the government to solve things. They’ll try using all kinds of new programs and initiatives. Some will help. Some won’t. Both sides of the economic debate will claim victory.

5) A new energy regime. This will be part of the government programs mentioned above, but will be so big and so sweeping that it will take a center stage. With oil prices rising and the economy stalling, the government will launch a massive energy act that will encourage solar, wind power, fuel efficient appliances and automobiles that will go beyond anything we’ve seen so far. It will fund research and development for alternative energy sources and give generous incentives to homeowners and business to “go green.” It will both reduce the country’s energy dependence and spur jobs. This will happen because it makes sense and is necessary. As Winston Churchill once said, “America invariably does the right thing after having exhausted every other alternative.”

6) Conspicuous consumption is out. Versace bags and Rolex watches will quietly disappear. With people struggling to pay higher prices for life’s basic necessities, the days of flaunting wealth are over. A backlash will occur against any flashy celebrity sporting a convertible Mercedes and gold teeth.

7) Frugal will be in. Programs on how to budget and save money will be all the rage. People will trade cost-cutting ideas like they used to share stock tips. Bestsellers will be written on “How to eat in America for less than $100 a day,” or “How I saved $100 a day and retired early,” etc. (Remember, inflation’s coming: $100 a day won’t be much money.) Folks will literally start to mull around coffee shops talking about how hard the times are and will be looking for work. Second jobs will become more common.

8 ) Security is going to become even more of an issue. Whether that is protection against identity theft or petty theft, we’ll be more conscience of being and staying safe. Neighborhoods will begin to re-form watch programs. You’ll end up locking your credit report and you’ll probably buy a shredder.

9) The federal deficit is going to go completely out of control because of the government programs I mentioned earlier coupled with lower tax revenues from the slowing economy. The deficit numbers are going to be mind-numbing. Counting in billions is going to be “so ’90s.” Increasingly, expect to hear numbers from the government to be expressed in trillions.

10) No recession. Huh? Considering the previous nine dire warnings, how is that possible? I’ll answer that in a few days. Check back.