World economy headed for another crash, says US guru

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Sly21C

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MELBOURNE - The world economy will face a crisis in the next two years even bigger than the downturn currently buffeting the global financial system, a respected US forecaster warned today.

Author Harry S. Dent, who predicted Japan's slide into recession in the 1990s and the present slump, dismissed claims the worst was over for the world economy and that "green shoots" were emerging from the fiscal firestorm.

Dent said the baby-boomer generation was set to cut back on spending, sending the share and property markets into downward spirals that would dwarf the recent recovery.

"We're in the middle of a bear market rally," Dent told the Australian Broadcasting Corporation.

He said share markets were likely to continue to gain in the next few months but would fall again towards the end of the year as the global banking system suffered another meltdown, bottoming out in 2011.

Dent said post-war baby boomers in the Western world were spending less as they aged, in a long-term demographic shift similar to that seen by Japan in the 1990s.

"Peak spending is age 46, so we've been saying for decades, we're going to have this great, great boom and then around the end of this decade baby boomers are going to peak in spending, prepare for retirement," he said.

"(Their) kids are going to leave the nest and the economy's going to slow just like Japan did in the 1990s.

"Japan has already gone through a housing bubble and a peak in generation spending ... their stock market declined for years, housing declined 60%, and all the government stimulus could not put Humpty Dumpty together again, that's what we're looking at."

Dent said Australia's proximity to Asia, the world economy's growth hotspot, meant it was likely to experience a less severe downturn than other Western nations.

"If I had to sit out the depression in one place in the Western world, it would be Australia," he said.

"Your demographic slide is less, your immigration's been stronger and you're on the edge of China and India, they're not turning down due to baby boomer demographics, they've got much growth ahead."
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Business Day

Now I am really scared. Company shares on the JSE's top 40 index have risen far to fast as far as I am concerned during the past 4 months or so, the price of Brent Crude is about $70 now even though the world is still in recession. I'm just worried that the recent rally on the JSE is not sustainable and will crash. Maybe keeping my spare cash in a savings account would be best, instead of exposing it on equity markets, don't you think?
 
Buy property. It's a great buyers' market at the moment and it's better than having your money in the bank.
 
Buy property?.. when the "guru" is saying that property will go down even further?

Doesn't sound like the best advice really
 
ToxicBunny said:
Buy property?.. when the "guru" is saying that property will go down even further?

Doesn't sound like the best advice really
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The gurus also said that it will never go down :D

I'd rather have my money in a house at the moment than in an investment account where the interest is less than inflation.

You can get some real good specials on houses at the moment.
 
davemc said:
These "gurus" have absolutely no idea what they're on about.

Baby boomer generation?
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Damn you're ignorant..

In the 1940's, there was a baby boom. People were having kids left, right and centre! Thats the baby boomer generation.
Those people basically in their huge numbers, spent and spent, economies were in boom, growth was high etc.

These guys are now retiring, spending much less, saving, which in turn means less money for companies selling products, meaning less revenue, meaning workers are entrenched, more unemplyment, so even less spending and the cycle is started again.
Workforce is reduced, government spending on medical care of elderly increases, meaning governments have less money to spend on other thing. more recessions, even depressions. Also, government spending means a larger money supply = inflation. And theres a WHOLE lot more involved..

And you sit here infront of your computer, and you think you know what you are talking about, smarter than the "gurus" all the way up there..
 
The demographics alone mean a slowdown.
But the coming crash is mainly because governments are creating money out of thin air like there's no tomorrow. They're right - tomorrow has been cancelled, but it's fiat money that's causing it. Thing won't come right until the current lunacy comes to an end and the bubble deflates. Real Pain Lies Ahead. Buy gold. Not gold shares or other paper. Real, tangible gold.
 
<Claps hands loudly>

Well done gurus. Dispense totally useless information that serves only to create self fulfilling prophecies that end up plunging the economy into the exact pit you are "predicting". How irresponsible. The entire shares industry is based largely on perception and speculation. The hopes that a Fortune 100 bank won't fold tomorrow determines much of its share price. And here you go shouting that the world is heading for a fall, destroying any perception of value in shares and thus worsening the spiralling effect.

House prices are picking up and what do you do? Tell everyone that everyone won't be spending on houses and thus leading everyone to believe that no one will buy houses and, essentially causing everyone to not buy houses and thus causing property market to take another kidney punch. The average person defines what they do by what "gurus" like these idiots say. If these gurus say the world is going to crash then they set in motion a wave of people holding on to their cash and then creating a disaster that should never have occurred.

Well done.
 
This disaster was going to occur sooner or later, it was a matter of time.
You don't borrow that much credit and expect everything is going to be hunky-dory.

Its a fact that older people spend less. And its a fact that we are getting older, and therefore?
This crash IS going to happen, probably in 5 years time. It IS going to be bad, but, as economies all over go, we WILL recover. We just won't be growing as fast as we used to, ever.

Japan is actually the most perfect example.
 
Aeron said:
<Claps hands loudly>

Well done gurus. Dispense totally useless information that serves only to create self fulfilling prophecies that end up plunging the economy into the exact pit you are "predicting". How irresponsible. The entire shares industry is based largely on perception and speculation. The hopes that a Fortune 100 bank won't fold tomorrow determines much of its share price. And here you go shouting that the world is heading for a fall, destroying any perception of value in shares and thus worsening the spiralling effect.

House prices are picking up and what do you do? Tell everyone that everyone won't be spending on houses and thus leading everyone to believe that no one will buy houses and, essentially causing everyone to not buy houses and thus causing property market to take another kidney punch. The average person defines what they do by what "gurus" like these idiots say. If these gurus say the world is going to crash then they set in motion a wave of people holding on to their cash and then creating a disaster that should never have occurred.

Well done.
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People won't buy houses because of "gurus", sorry to say this but you are not making any sense, anyway, no one believed Nouriel Roubini when he told economics of the upcoming financial crisis, they didn't listen to him, and for you to say that he (and people like him) is partly responsible for this recession we are in is preposterous.
 
One day you'll understand to which extent average people are influenced by the media. As an example, swine flu has killed 140 people in three months, worldwide. Now there are literally millions of people topping up on their vaccinations and hoarding hospitals because they are afraid they might die of swine flu. On the other hand, thousands and thousands of people die DAILY from normal flu, worldwide. But do you see hospitals overflowing from people who think they're going to die because of flu? No.

If Oprah says sit, people sit. If Oprah says stand, people stand. If Oprah says vote Obama, people vote Obama. If economist "gurus" say don't buy houses because no one will buy them. Guess what? Then no one will buy them.

You are strangely naive. In boom years, just like when someone is in a "winning streak", people tend to listen to no one, believe the fun will go on forever, there can't be a fall, etc etc. They're overly confident with their 10 years of salary debt and big houses and nice cars. But when they're being relieved of those cars, those houses and yet not of their debt, like right now, people tend to listen and listen too much. If you can't understand that, don't bother to reply to it.
 
boramk said:
Damn you're ignorant..

In the 1940's, there was a baby boom. People were having kids left, right and centre! Thats the baby boomer generation.
Those people basically in their huge numbers, spent and spent, economies were in boom, growth was high etc.

These guys are now retiring, spending much less, saving, which in turn means less money for companies selling products, meaning less revenue, meaning workers are entrenched, more unemplyment, so even less spending and the cycle is started again.
Workforce is reduced, government spending on medical care of elderly increases, meaning governments have less money to spend on other thing. more recessions, even depressions. Also, government spending means a larger money supply = inflation. And theres a WHOLE lot more involved..

And you sit here infront of your computer, and you think you know what you are talking about, smarter than the "gurus" all the way up there..
Click to expand...

:confused:
Not sure if I'm reading correctly here.
The 1940's were about 70 years ago, and the people who had kids then are retiring now?.

I thought the baby boomers was in the 80's, think Diane Keaton was in a movie called Baby boom or something like that.
 
Yes, they are baby boomers (1940), and they are reaching retirement age (65+)
 
Just another good reason to move to Aus.....
 
I wonder, how can one go about buying physical gold? Not through shares or anything like that, but physical gold, and maybe have that gold kept somewhere.
 
Yeah, they're about the best you can do in this country..

I seem to remember something about it being illegal to own things like gold bars in this country....
 
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