Economist John Adams and I discuss our conversations with Author Harry Dent during his recent Australian tour.
Specifically, we pose the question, will the central banks simply try to print their way out of a crisis as they did a decade ago, and what are the potential consequences?
Caveat Emptor! Note: this is NOT financial or property advice!!
See my recent conversation with Harry on Central Banks.
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Agree, scenario is the way to present, NOT forecast.
They will print print print print print, buy more ink, print print print…
They are going to reset and the dollar will die (globally at least)
Much smoke is already being seen around the world, where there is smoke there is….
What happens on the Peripheries will eventually reach the core…central banks, one by one!
– Yes, the central banks will (literally) print LOTS of money. But it won’t prevent the economy from “deflating”. Once governments have become extremely desperate then and only then governments will resort to (literally) printing LOTS of money/banknotes. That’s the point where an economy will enter Hyper-Inflation.
– I read 2 books written by Harry Dent.
– Harry Dent’s work provides an excellent thesis on why there was/is a housing bubble 1) in Japan in the late 1980s, 2) Spain, the US in the 2000s, 3) Australia New Zealand after 2008 4) South Korea right now. The thesis is based on very predictable spending patterns from individuals during their lifecycle.
– But when it comes to predictions on the economy then I am “less impressed” by his work. Dent doesn’t understand why inflation was high in the 1970s and why that inflation collapsed in the early 1980s.
– Dent theory only works prefectly when circumstances remain perfect. A civil war (like in the former Yugoslavia) can/will “disrupt” those circumstances. Or an early financial “downturn” like in Japan in the early 1990s. Dent predicted that the japanese economy would peak i/around 1994/1995/1996.
– Australia has very favourable demographic fundamentals but it will (like Japan) be overwhelmed by the growing/upcoming “financial problems” in that same Australia.
– And adverse economic developments also have a demographic impact on a country. A good example is the US. The US was already before 2008 ageing but after 2008 the birth rate has declined even more (by some 20% (??)).
– Demographic developments a “Social Science” ?? No. Demographics are also like physics. Very predictable but it’s inifinitely more complicated.