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Copyright 2016 by Harry S. Dent, Jr.
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First published by Delray Publishing, 2016.
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To my recently deceased mother, Betty F. Dent (19322015).
And to my 310,000 Economy & Markets subscribers... who have the courage to listen to a realistic view when it is more critical than ever.
To Teresa van den Barselaar: For an outstanding job of organizing, crystallizing, and editing the material for this book in such a short time! My readers should thank her as well, as Im sure you will instantly notice the difference between this book and my past ones.
To David Okenquist for relentless efforts to dig for the best and most accurate research. His charts alone are more than worth the price of this book.
Incredible Insight... and a Rebellious View
It is with great pleasure that I endorse world renowned economist and researcher Harry S. Dent, Jr.
From the moment I picked up Harry at Sydney airport for his first tour to Australia with Secure the Future in 2011, the media was in a frenzy. His incredible insight (and often rebellious views) on the future of the world economy is intoxicating.
Harry Dent showed me that he is a straight shooterhe will not accept any incentive to change his view. His only interest is to tell the truth, based on his in-depth economic and demographic research.
I have found Harry to be correct so often, which is why we continue to have large numbers of people turn up to hear him speak every time he comes to Australia. The man is a riveting speaker, who people can sit and listen to for hours and hours. Nobody leaves the room when this man commands the floor.
In 2015, we ran a webinar to launch the forthcoming Secure the Future event, and a staggering 4,000 people tuned in. There were so many people that the webinar system had a meltdown and people complained afterwards that they couldnt tune in. I made the mistake of asking people to email any questionswe ended up running out of time for Harry to answer them all! This is so telling. It proves that Harry is striking a nerve.
What I am also impressed by with Harry is that some people come to hear him because they think he is totally wrong! They buy a ticket and so often end up staying right to the finish. Maybe Harry and Muhammad Ali had something in common! People came from everywhere to see Muhammad Ali fight because he was so outspoken and there was never an empty seat in the house when he was boxing!
The reality is... Harry S. Dent, Jr. is not your typical economist.
I have built a great friendship with Harry; I find the man the real deal.
Greg Owen
CEO of GOKO Management
Sydney, Australia
Founder and Promoter of Secure the Future
CONTENTS
CHAPTER 1
CHAPTER 2
CHAPTER 3
CHAPTER 4
CHAPTER 5
CHAPTER 6
CHAPTER 7
CHAPTER 8
CHAPTER 9
CHAPTER 10
CHAPTER 11
CHAPTER 12
CHAPTER 13
CHAPTER 14
CHAPTER 15
CHAPTER 16
CHAPTER 17
CHAPTER 18
CHAPTER 19
CHAPTER 20
CHAPTER 21
CHAPTER 22
CHAPTER 23
CHAPTER 24
INTRODUCTION
Bubbles: Why We Never See Them
SOME CALL ME the Demographics Guy. Others call me that crazy guy. But at the heart of it, Im a cycles guy and were in a time of extreme cycles. Its the times that are crazy, not me!
Ive lived and breathed cycles for as long as I can remember. When I first visited the Louvre in Paris in 1976, I walked through the whole thing in a day. Most people would note the differences in artists and painting styles over thousands of years (the art is presented in historical sequence). I saw something totally different: the cycles of dark and light, human indulgence and repentance, boom and bust through these paintings.
When I look back, thats when I realized I was a cycles guy. For me, the most thrilling, enriching, and productive days of my life are those spent elbow deep in cycles analysis.
After more in-depth research into cycles in the 1980s, including intense research into the emerging baby boom generation, I stumbled upon the greatest cycle in modern history: the Generational Spending Wave. Thats what landed me with the Demographics Guy label.
New generations enter the workforce and earn and spend more until their kids leave the nest, creating predictable long-term booms and busts in our economy. That means we can predict economic cycles almost 50 years in advance!
As it turned out, it was the best leading indicator for market and economic movement until 2009, when the Federal Reserve and central banks across the globe began their desperateyet ultimately futileefforts to manipulate their way out of this very cycle. It turned down in 2008, as I predicted it would all the way back in the late 1980s.
In so doing, they goosed the markets along, but have done nothing to change the demographic impact on the economy. There is a huge demographic headwind that will only get much stronger in the years ahead. Now weve reached a point where the stock market no longer has any logical connection to reality, making it an extremely dangerous beast (which Ill talk about in the pages of this book).