Most Helpful Customer Reviews
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11 of 11 people found the following review helpful:
3.0 out of 5 stars
Cycles on Top of Cycles on Top of Cycles . . . That Appear to Be Heading DOWN, 8 Jan 2009
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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3 of 3 people found the following review helpful:
5.0 out of 5 stars
Opportunistic investment guide, 23 Mar 2009
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.
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by Harry S Dent
by Fred Harrison
