The Great Depression Ahead How to Prosper in the Crash Following the Greatest Boom in History
The first and last economic depression that you will experience in your lifetime is just ahead. The year 2009 will be the beginning of the next long-term winter season and the initial end of prosperity in almost every market, ushering in a downturn like most of us have not experienced before. Are you aware that we have seen long-term peaks in our stock market and economy very close to every 40 years due to generational spending trends: as in 1929, 1968, and next around 2009? Are you aware that oil and commodity prices have peaked nearly every 30 years, as in 1920, 1951, 1980 — and next likely around late 2009 to mid-2010? The three massive bubbles that have been booming for the last few decades — stocks, real estate, and commodities — have all reached their peak and are deflating simultaneously.
Bestselling author and renowned economic forecaster Harry S. Dent, Jr., has observed these trends for decades. As he first demonstrated in his bestselling The Great Boom Ahead, he has developed analytical techniques that allow him to predict the impact they will have. The Great Depression Ahead explains “The Perfect Storm” as peak oil prices collide with peaking generational spending trends by 2010, leading to a more severe downtrend for the global economy and individual investors alike.
He predicts the following:
• The economy appears to recover from the subprime crisis and minor recession by mid-2009 — “the calm before the real storm.”
• Stock prices start to crash again between mid- and late 2009 into late 2010, and likely finally bottom around mid-2012 — between Dow 3,800 and 7,200.
• The economy enters a deeper depression between mid-2010 and early 2011, likely extending off and on into late 2012 or mid-2013.
• Asian markets may bottom by late 2010, along with health care, and be the first great buy opportunities in stocks.
• Gold and precious metals will appear to be a hedge at first, but will ultimately collapse as well after mid- to late 2010.
• A first major stock rally, likely between mid-2012 and mid-2017, will be followed by a final setdback around late 2019/early 2020.
• The next broad-based global bull market will be from 2020-2023 into 2035-2036.
Conventional investment wisdom will no longer apply, and investors on every level — from billion-dollar firms to the individual trader — must drastically reevaluate their policies in order to survive. But despite the dire news and dark predictions, there are real opportunities to come from the greatest fire sale on financial assets since the early 1930s. Dent outlines the critical issues that will face our government and other major institutions, offering long- and short-term tactics for weathering the storm. He offers recommendations that will allow families, businesses, investors, and individuals to manage their assets correctly and come out on top. With the right knowledge and preparation, you can take advantage of new wealth opportunities rather than get caught in a downward spiral. Your life is about to change for reasons outside of your control. You can’t change the direction of the winds, but you can reset your sails!
User Ratings and Reviews
4 Stars Using History of Economic Cycles and World Wide Demographics, Dent Forecasts A Long Down Cycle
The books reads somewhat like a good news, bad news joke in the sense that Dent explains that economic cycles are predictable and the bad news is that our current economic situation will take years for recovery. Dent goes in detail explaining historic cycles of economic highs and lows and based on these patterns that economic depressions are predictable. In addition, Dent explains economic gains and declines based on demographics, population based on age and buying power and innovations. Dent goes into sometimes-minute detail to explain the predictability of an individuals peak buying power and the effect the aging boomers have on the economy as they head in mass to retirement without the financial slack picked up by the too distant echo boomers. Dent provides numerous charts, sometimes endless, demonstrating the same consequences for many countries such as China. Along with the charts are detailed descriptions that are virtual quick reads, since once you pick up the patterns of descriptions, you can look at the charts and pick it up pretty quick. Dent’s news is not good for the short term but he offers investment advice over a projected period, his initial news is not good for investing in the stock market. Dent’s book is very interesting but with an over 10 year tough economic projection, I just hope he is wrong in regards to the long run.
3 Stars Editing D+; Charts B; Ideas A-
D+: This is the most poorly edited book I’ve read in years. Dent jumps from one topic to another sentence by sentence, making for paragraphs that don’t flow, pages that are rife with staccato information, and, thereby, making it unpleasant to read and synthesize his ideas.
B: It seemed he was jumbling many themes together, and as a high school math teacher, I could tell that many charts were fine, but some of them didn’t always line up with what he said. I am also all too aware that statistics are easy to manipulate, and I wonder if he is crunching numbers to favor his ideas.
A-: What I liked were the ideas of demographics and other influences on our world’s economy. Right or wrong, I don’t know, however this was very interesting to me and I will look into this more by researching what some other Amazon reviewers suggested:
1. Paulos’ “A Mathematician Plays the Stock Market” (overview of behavioral psychology).
2. Dreman’s “Contrarian Investment Strategies: the Next Generation” (extensive discussion of pattern-seeking.
3. Gerald Celente of the Trends Research Institute.
4. Dan Arnold’s The Great Bust Ahead
5 Stars Opportunistic investment guide
This book is a bold attempt to predict not only the next several decades, but also the next several centuries – at one point, author Harry S. Dent prognosticates about the year 2400. As he mentions, however, he did predict Japan’s 1990s economic slump and the U.S. boom that began in 1998. If you are a believer, take cover, because now Dent’s predictions are not so rosy. He foresees a major depression followed by a long period of slow growth. He is singing with the great chorus of economic pundits and prophets, the preponderance of whom seem to be chanting a dirge. However, Dent predicts several encouraging points of light in the very long tunnel ahead, and a great new boom starting about 2020-2023. His methodology is distinctive, though not unique. He anchors his analysis in demographic and technology cycles. Readers might or might not share his faith in the existence and predictability of these cycles, keeping in mind that good advice in the past is not an accurate predictor of the future. However, getAbstract notes that even readers who scoff at the notion that one can predict developments over a centuries-long scale might find the author’s methodology useful and his investment recommendations worth considering.
3 Stars A Dark Vision Through a Cracked Crystal Ball
During the beginning of the current financial meltdown, a large bank in Charlotte cancelled a planned base jump off of their skyscraper headquarters. The image of people jumping off a bank building, they decided, was inappropriate for the current economic climate. Reading this book might make you feel like trying it out anyway, maybe without a ‘chute.
To distill Mr. Dent’s basic theorem down to its most fundamental, he proposes that the global economy, and hence the valuation of the stock market, is driven by US consumer spending. Since the “Baby Boom” generation has passed its spending peak, which according to Mr. Dent is roughly 40 to 55 years of age, the US and the world as a whole is condemned to an inevitable economic downturn that will last roughly 20 years. In support of his theory, Mr. Dent has provided a raft of charts and graphs, some of which look quite impressive, but don’t really provide enough information to be truly useful. Another problem with Mr. Dent’s demographic models is that they fail to take technological advances into account. He essentially says that technology doesn’t matter, that while technology has improved in the past, it has had minimal impact on the overall economic growth, when viewed in comparison with demographics. There are many who would take issue with this contention, and Mr. Dent doesn’t spend a great deal of time investigating and/or refuting contrary theories.
Mr. Dent further says that our traditional investment strategies are all flawed, and that if we follow them, we will wind up losing. He says that his strategies, on the other hand, will allow us to beat the trend and preserve our personal wealth. Mr. Dent is clearly trying to position himself as a contrarian investor. Immediate term, he says, play it safe, then gradually move back into higher growth areas as things shake out. This of course, is not really contrarian at all.
Also Mr. Dent’s claims to have been the most accurate economic predictor seem at best to be “cherry picked” data. If Mr. Dent really can see the future, why is he not outperforming Warren Buffet?
In the end, the picture is too grand, the small details too nuanced and the predictions too equivocal for this to be of much value, I think. When I read the book, I was reminded of my college economics professor, a Nobel-prize nominee, telling us of how he got his start in economics. He said that immediately after World War 2, he predicted a recession as wartime spending ended, and at first there was none. So he quietly predicted a recession again, and again, there was none. This continued for several cycles until finally there was a recession which was very short, as the US cranked up spending again for the Korean War. But it didn’t matter, he said, that the recession he had predicted only lasted for about year. What was important was that he had predicted it! And he told anyone who would stand still long enough that he was a great economist, because he had predicted a recession. I think Mr. Dent is a similar economic forecaster. He even hedges in his book, and tells everyone to subscribe to his newsletter for regular updates in his predictions. This is not intended to be an indictment of Mr. Dent. He is likely just as accurate a predictor of the economy as any other economist or researcher. The economy is a chaotic system, and what we should realize is that no one can predict the future of such a system. In the end, no matter how educated the guess is, it’s still just a guess.
2 Stars Maybe relevant but boring
This book is overly detailed, repetitive and just boring. Harry Dent at least 20 times in the book tries to sell his newsletter. He also get very political in places throughout the book, especially in the last chapter. At times I felt I was reading a book on global warming not a book on the economy. I was very disappointed in this effort.
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