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The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History (Hardcover)


Review
"While being one of the most bullish and accurate forecasters for 20 years, Dent has always been warning that this great boom would end around 2008-2009. He now sees a bigger crash ahead and a deflationary environment that could ravage your portfolio. His warnings and predictions are well worth reading and taking seriously." -- David Bach, #1 New York Times bestselling author of Start Late, Finish Rich and The Automatic Millionaire

"While many talk of change these days, the real question lies in assessing in what direction things will change. Harry Dent does a masterful job using demographics and other key cycles to lay out where and when changes will come that will have sweeping ramifications for our pocketbooks, our way of life, and our nation. I cannot more highly recommend this book." -- Mark Sanford, governor of South Carolina

"Economists cannot forecast the economy very well, and most would admit it if their jobs didn't depend on the fiction that they can. So most economists become closet extrapolators, with some minor tweaking for visible pending developments and policy changes. Even I can see to the next corner pretty well, but I can't see around the corner.There is one exception, however. Demographics! Demography, as they say, is destiny. The reason is that you can see the future based on the facts of the present and demonstrated behavior. You can see the pig, or the pigs, going through the python.Harry Dent is the reigning expert in applying sophisticated demographic analysis to economic forecasting. His past record of getting it right speaks for itself. I hope he's wrong this time. I hope we don't have a great depression by 2010. But given his track record, I won't be betting against him." -- Robert D. McTeer, Distinguished Fellow, National Center for Policy Analysis, and former president of the Federal Reserve Bank of Dallas

Product Description
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!

Cycles on Top of Cycles on Top of Cycles . . . That Appear to Be Heading DOWN, January 8, 2009
By Donald Mitchell "a Practical Optimist" (Boston)


The main reason to read The Great Depression Ahead is to see the most persuasive case that can be made for an extended economic decline in the United States and other developed countries. After understanding that case, you'll be in a better position to make decisions that will leave you better off regardless if the economy recovers quickly or keeps sliding down for several years (as it did in the early 1930s). Mr. Dent is better than most forecasters for this purpose because he provides lots of documentation for why he develops the scenario forecasts that he does.

What's the essence of the case he's making?

1. Developed countries are facing many years when there will be declining numbers of people in their peak spending years.

2. A multi-decade commodity price cycle is about to peak to be followed by lower prices.

3. The burst bubble in real estate will be with us for some time, and prices will fall further and longer than most people expect.

4. There are no new innovations waiting in the wings to drive economic growth forward.

He takes that scenario and develops investing, business, and personal financial planning solutions over the next century.

The essence of the advice is to play it safe for now by being in short-term Treasuries and to later switch into Treasury bonds after interest rates rise a lot (expecting that the bond prices will soar as the yields once again fall to near zero). If you can sell your house now, sell it and rent. If you can sell your business now, do it. Otherwise, play it safe, hunker down, and wait for competitors to disappear.

Economic forecasts are notoriously wrong. In fact, some forecasters "predict" the opposite of the consensus. Financial forecasts are even worse.

Mr. Dent is famous for vastly overestimating how much the stock market would climb in the 2000s period. In this book he explains what he missed (commodity and real estate inflation coupled with unsettled world conditions due to terrorism and the U.S. trying to stamp out terrorism is unlikely places like Iraq).

He repeats and updates all the graphs you saw in earlier books and adds some new ones. He has so many cycles that I wasn't quite sure how he puts them all together. He offers free updates on this book's forecasts via an address on his Web site.

I'm pretty pessimistic about the economy and the financial markets over the next 18 months, but I can see that Mr. Dent is much more pessimistic than I am. He wrote this book before the U.S. and other governments began spending over $10 trillion to prop up the economy. As we saw in the second quarter of 2008, the government can spend enough to prop up the economy for a few months. There seems to be a will by government leaders to spend another $10-20 trillion in this cause. Since you and I will pay the bill, I can see why they are enthusiastic. Otherwise, everyone will want to kick them out of office as the economy sags and stays down.

Don't take the book seriously. Learn from the assumptions, keep your eyes open, retain lots of cash in safe places, and look for terrific bargains.

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