Content Synopsis: Harry Dent has been confounding the “experts” for twenty years by predicting economic and financial trends and markets based primarily on demographics and business cycles.
This is his fifth book in a series that has predicted economic trends. If Harry Dent is right once again, everyone should read this book! Dent’s thesis is quite simple: he argues that demographic trends drive business cycles that have been predictable for several centuries, and that these cycles drive the economy regardless of much else going on.
This fifth book traces that giant “baby boom” generation: 92 million people in the US born between 1946 and 1964 who have had the greatest impact on our economy and society in the last half century. It explains how these great demographic changes demand goods and services as they go through different phases, from the school building explosion in the 1960s to educate them to the strong economy of the 1990s and early 2000s, when they were at the peak of their consumption. period.
The Great Crash Ahead now predicts an economic depression of 2008-2018 or longer due to the aging of this demographic and its reduced demand for goods and services. Combined with misguided government and financial policies, this cycle built a giant “bubble” for real estate and credit during the first decade of the 21st century. This period from 2001 to 2007 was seen as a good time with easy credit and easy access to home ownership.
All bubbles in the economy correct themselves. Dent describes how the correction of this credit and housing bubble combined with the continued reduction of spending by the largest group of Americans is creating the worst financial depression since the 1930s. He weaves through this the excessive extension of credit to both the government like the private sector and how it can’t be fixed quickly. This inevitably leads to financial market failures and significant price deflation over the next decade. Dent is not limited to the United States. He explains how bubbles and similar demographic trends pushed the Japanese economy into depression over the last 20 years and will lead to similar problems in Europe and China.
Dent bases much of this on an 80-year cycle of boom and bust that his research shows has repeated itself many times over the last few hundred years. Now, 80 years after the great depression, we are again in the “winter” of this cycle that will last ten to fifteen years before a new spring leads to a slow recovery in the 2020s.
It’s hard to ignore Dent’s theory. In the late 1980s, he predicted the demise of the Japanese economy when most economists and pundits were optimistic about Japan. Similarly, in the 1990s, when many were predicting tough times for the American economy, Dent was predicting the boom of the 1990s and early 2000s. The book traces the government’s failure to correct this cycle because it simply didn’t can do it. It examines the huge public and private debt that must be paid off or written off to restore the economy. His macro predictions have been spot on so far, so it’s foolish to ignore what he says now. If he is wrong, it will be the first time in his three decades of predictions, and if he is right, we are in for a tough time.
At the end of the book, Dent provides advice on how we can use this information to protect assets and invest wisely in this “new” world. She teaches how to forget the way of doing things that we learned during the last half century and learn to adapt to a new economy.
Sure Dent has his critics. A quick Google of his name and books turns up a number of highly critical articles arguing that Dent assumes too much, that his analysis, while technically impressive, overlooks other factors that will influence the economy beyond his demographic predictions and some that offer complex Elliott wave analyzes suggesting that Tooth has it bad.
At the same time, he has some impressive followings. David Bach, John Thomas, Kim and Charles Githler, and a long list of others endorse his book. I can’t say for sure if Dent is right or the critics, but if he is right, he deserves consideration. Again, while some of the details of his predictions may not always have turned out perfectly, the overall accuracy of his predictions to date cannot be overlooked or discounted.
Utility: It should be noted that any prediction of future economic trends and behavior is inherently fraught with risk. However, if Dent’s predictions in this book are as accurate as his earlier analysis, it will prove very useful to anyone saving for retirement, investing, running a business, or choosing a career.
Legibility/Writing Quality: Dent writes well and clearly. The book is full of fairly complex economic and demographic analyses. It is not an easy book to read but it is worth the effort to understand it.
Notes on the author: Harry Dent is an author and director of the HS Dent Financial Advisor Network. He regularly publishes a financial newsletter. He is the author of The Great Boom Ahead, The Roaring 2000s Investor, The Next Great Bubble Boom, and The Great Depression Ahead.
Three great ideas you can use:
1. The economy is primarily driven by demographic trends which, in turn, drive business cycles. External activities, including wars, natural disasters, and government actions, have little effect on these trends. Understanding these cycles and trends is critical to planning for the future and protecting investments.
2. In the latter part of the first decade of this century we have entered a winter phase of a great 80-year demographic and economic cycle. Nothing the government does will change this. This winter cycle will lead to major debt restructuring, market corrections, and deflation. The period between 2008 and 2018 will look a lot like 1930-1940.
3. Understanding this megatrend and its inevitable consequences is essential to investing wisely over the next decade to protect current assets and exploit the winter economy.
Publication Information: The Great Crash Ahead by Harry S. Dent, Jr. with Rodney Johnson Copyright 2011 by HS Dent Publishing Published by Free Press, a division of Simon and Schuster