Great history books reveal as much about the time in which they’re written as they do the time they’re written about. This is part of what makes reading history so much fun. A book published about the Great Depression today will naturally reflect the times we’re living in as much as it does the 1930s. Lords of Finance: 1929, The Great Depression, and the Bankers Who Broke the World by Liaquat Ahamed – due next month – will likely be a fine example of this.

New year predictions are very much the same. The tentative calls offered up by crystal ball gazers a year ago reflected the atmosphere of Q4 2008 more than they did 2009. This year’s guesses (well-informed and otherwise) should be taken in a similar light. I’ve assembled answers to 10 key questions from a variety of experts.

1. Will the Canadian economy grow in 2010? There is a consensus here, and the answer is yes. Expect about 2.5% growth by year-end says the Bank of Montreal. Royal Bank of Canada predicts 2.6%.
2. Will Canadian unemployment decline in 2010? Again, there is a general tone of optimism about the outlook for Canada. A survey sponsored by CareerBuilder.ca and conducted by Harris Interactive found that 29% of Canadian employers plan to boost their number of permanent full-time positions. TD Bank predicts that 280,000 new jobs will be created in 2010.
3. Will we see a rise in Canadian interest rates? This may be the safest bet of all. Most experts think the Bank of Canada will hold good on its promise to maintain the overnight rate at 0.25% until June. Michael Gregory, senior economist at BMO Capital Markets says we could see as many as four increases of 0.25% each by year-end.
4. Are Canadians confident? They are, according to a new Royal Bank survey. The RBC Canadian Consumer Outlook Index rose eight percentage points in December. Sixty per cent of Canadians expect the economy to improve this year.
5. What about real estate? Commercial real estate does not have the potential to do harm here in the way it might south of the border. On the residential side, worries about a real estate bubble have subsided for the most part. But that’s not to say that some Canadians won’t buy too much house while interest rates (and therefore carrying costs) are at historic lows. This one is a firm maybe.
6. How high will the Canadian dollar go? Our dollar ended 2009 at just over 95 cents U.S., a 16% rise for the year. Experts are predicting parity or near-parity with the U.S. dollar this year. A recent Scotia Capital report predicted that our dollar will be worth $1.03 U.S. at the end of 2010 and $1.05 at the end of 2011.
7. Will the U.S. economy grow in 2010? There is a wider range of opinion on the U.S. economy. Bloomberg has Harvard University economics professor Martin Feldstein saying it’s not clear what happens when Washington’s stimulus spending dries up. This places “a serious cloud over the near-term economic outlook,” he says. “It will be difficult to have a robust recovery as long as the residential and commercial real-estate markets are depressed and local banks around the country restrict their lending.”
8. Will the global economy grow in 2010? More than likely. Reuters Canada has this quote from Andrew Milligan, head of global strategy at Standard Life Investment: “We are looking forward generally to a year of positive growth in most countries and good profits growth for most companies.”
9. How expensive will oil get? Economic growth will push prices higher as the year progresses. This piece, posted on Reuters India by D. H. Pai Panandiker of RPG Foundation predicts a range of $80 to $85 a barrel in the second half of 2010.
10. Should we find ourselves sleeping too restfully, what big ugly risks might we obsess about? Bank of America Corp.’s chief global equity strategist sites an asset bubble in China, a U.S. dollar crisis and triple-digit oil prices. Perhaps we can add terrorism, the aforementioned commercial real estate and one or more sovereign debt defaults to the list. Happy new year folks.