I want you to know about a book I just finished. The name of the book is “The Demographic Cliff. . .How to Survive and Prosper During the Great Deflation Ahead.”
Harry Dent, the author, says these are some of the things we can expect in the coming months:
. Unemployment to increase because the work pool continues to shrink. Companies will lean more towards employing people with experience.
. Housing prices may fall again by as much as 40% over the next several years as mortgage rates are likely to rise.
. High private debt, an estimated $140,000 for every one in the U.S., falling incomes and no equity left in their homes, expect more personal bankruptcies and property foreclosures Federal deficit ballooning high as $1.5 to @2 trillion..
. Continued demographic decline. State and municipal governments forced into default, Detroit only the first.
. Crisis in Europe worse. Britain and Greece. Spanish real estate bubble bursting again as more and more European Union member countries slip over the demographic cliff, especially Germany.
The book delves into how our economy peaks every 40 years on generational cycles, almost like clockwork. His research suggests what is about to happen in the markets and forward is practically preordained.
Baby Boomers, the biggest generational tsunami, descended on the workforce between l957 and l978, setting in motion a series of economic events like massive inflation. They’ve had known spending cycles impacting everything from music to potato chips to cars and homes. And, then, now they’re slowing down selling and downsizing. Their massive spending cycles peak at age 46 on the average after their purchase of homes took place between their ages of 27 to 41 and their spending on cars peaks at age 53. Now they are retiring, perhaps traveling or buying an RV.
The Baby Boomers are starting fewer business and paying far less taxes. In short, according to Dent, they stop spending on things that drive economic growth: housing, cars, furniture and boats.
Combine this demographic-economic reality with everything else happening – the debt levels, currency volatility, shifting economic and political power bases, and the fact that we’re on the tail end of one of the greatest technological eras since the industrial revolution – it paints a troubling picture until about 2022.
Every 500 years a ‘mega’ innovation like the printing press or the computer forever changes the way we live and leads to decades and centuries of prosperity.
If you want to borrow my book, let me know.