We also had better than anticipated figures, mostly or wholly due to consumer spending. Given the amount of personal debt we are currently carrying, surely this can't be a good thing. It says people have confidence in the economy, but the spending, mostly on new cars and tv's would predominantly be on credit.

I would have thought that a higher personal debt than we have would be the last thing we need. Maybe it would have been a better idea to pay back some of the money if we were feeling so confident.

It's the same as when the govt. throw out a whole lot of money to stimulate the economy, the figures improve, but the money is borrowed, so it cancels itself out in the end.

Harry Dent’s Outlook on Demographics, Debt, and Deflation

How Demographics Drive Spending Trends (and Hence Stock Prices)
Dent’s research shows that human spending habits follow very predictable patterns throughout the human lifecycle.  Individuals typically hit their peak spending between the ages of 46 to 50, as depicted in the graph here:



These spending waves drive the economy, as well as stock prices.  In the US, as you can see, there’s been a very tight correlation between family spending, and stock prices:



Peak spending rolled over for the first time in 2007 – and the stock market rolled with it.  If the economy continues to follow the spending wave, we’re in for another lean 12 years, as the next peak spending pickup is not scheduled until 2022!

Why Government Stimulus Spending Isn’t Working This Time
For the first time in American history, government stimulus is falling flat on its face.  It’s starting to become apparent that the record stimulus being thrown at our economy is not going to pull us out of this recession/depression.  Why?

Because according to Dent’s research, for the first time ever, we don’t have favorable demographic winds at our back.  During previous recessions, the government could float easy money out into the economy, and eager consumers would grab it and spend it – because they were in the upswings in their spending patterns.  But this time, Bernanke & Co are merely pushing on a proverbial string.  The Fed can extend credit – but they can’t force the consumer to take it!

They can’t get the baby boomers to take on more debt because of where they are in the spending cycle.  It’s a time to save, not spend, in their lives.  Want a mortgage at record low rates?  No thanks – we’re already choking on debt!  And we hope to retire someday.

Hence, the Keynsian solution that “worked” (quotes for you Austrian econ fans) so well during the 20th century is shooting blanks here in our 2008-2010 and counting Depression.  Hmmmm, this is starting to sounds like another advanced economy that’s been stuck in the mud for a couple of decades now…

Japan’s Spending Wave Peaked in Tandem With Its Bubble
Dent’s team accurately forecasted the current soft depression in Japan in the late 1980s, at a time when the world was wildly bullish on Japan’s future.  The secret was, again, the spending wave – Japan’s baby boom reached peak spending in 1990, at it’s been downhill ever since for Japanese stocks and real estate.



Since 1990, the Japanese economy has been fueled by government stimulus, and only government stimulus.  Like a drug addict, as soon as the high of government spending wears off, the economy again slumps into recession.  The same appears to be happening here in the US, as our initial stimulus begins to wear off, and we don’t have much to show for it – except for a lot more sovereign debt, of course.

So Will It Be Inflation or Deflation?
Dent cites the massive amount of private debt (estimated to be $50-100 trillion or higher) as a large pool of credit that is going to have a significant chunk written down (his debt deflation scenario is similar to Robert Prechter’s in this regard, though less extreme).

As this massive amount of bad debt floats away to “money heaven”, the forces of deflation will overwhelm any amount of potential government stimulus, Dent believes.  Also, with the US citizenry already quite pissed that the last stimulus didn’t do much of anything, the Federal government’s hands may be increasingly tied by voters calling for austerity measures (or at least, more responsible government spending).

Deflation Investing Strategies
“Cash is king” is Dent’s mantra today

Making Sense of Today’s Schizophrenic Markets

hile Dent’s demographic forecasting models have been extremely accurate in forecasting long term economic trends, he readily admits that the immediate short term is often much more difficult to predict.  This economic and investing environment is truly a once-in-a-lifetime event.

Countries With the Most Favorable Demographics
Out of the world’s major countries, Dent likes India’s demographics the best.  China does not compare as favorably – due to their baby nightmare “one child per family” policy.  He thinks China will get old before it gets rich, and that per capita, their wealth will never reach that of the current US.

Summing It Up – Big Picture Forecast
Dent expects a major bottom in the stock market sometime around 2012.  He thinks that the previous lows will likely be taken out, with the market falling significantly once again (DOW anywhere from 3800-6440).  If that happens, you obviously don’t want to be in stocks.
Link -
http://www.themarketfinancial.com/harry-dent%E2%80%99s-outlook-on-demographics-d...
=========
As with any perspective, there are some areas where I would agree & some not!

However, the Demographic basics are on the correct track!

Hi Perceptions,

I would had thought that Baby Boomers were checking out and so would be placed under (3)Declining Global Population!

Peak oil? SAME THING WAS SAID IN THE 70'S.WE HALFWAY THROUGH THE KNOWN OIL SUPPLIES,we would have ran out by now...LOL
Its a con,its used to jack up prices,and bleed the life blood out of the Economy!
Prices dictated by 11men on what the world can pay,called OPEC. Its a money spinner for all concerned the higher the price,(OH its rare we are running low theme) the more taxes made for Govt and more profit for the rockafella!
In the 70's Middle east est were made on the known oil reserves at the time,40yrs later they still have slightly more than what they claimed then!
Since Russia is now number 1 exporter,and the Middle East is still oozing out the same volume of the stuff too!
Plus liquid gas and coals,Canadian tar sands plenty still..when we do run out some 100 plus years we might be mining on MARS!
................................................................................
..................
Interest Rates already at or near Zero, in many major Economies.
and if
The Federal Reserve  monetize the federal government deficit?

................................................................................
..................
Debt & Deficits already thru the roof, in many major economies.

As for deflation, no risk there either. The huge deficits prevent deflation,in USA case "Fiscal  consolidation"
................................................................................
...................

Climate Change looking to curtail the Usual Economic expansion.

YEAH YEAH leading to globe taxation.Carbon trading...and futures,YEAH YEAH. U can start to throw in NWO and WORLD BANK,from here.

The last shambles Copenhagen remember the planet's heating up because oil etc and hence peak oils but then  suddenly the Entire planet dropped a few degrees..man made did U say?..look to the sun as your heat source..EH!

Btw Air pollution should be address through,especially in China or you have further world declining population.    

Cheers   

lerche007 wrote on Sep 6^th, 2010 at 4:22am:



A matter of timing! Global Boomer Aging is now, in fact realy started about 10 years ago, but will continue to around 2030.

Whereas, Global Population Decline won't actually start until around 2030-2040 and it will then continue thru until the end of the century.





Since when did the entire planet drop a couple degrees?

I have previously recommended against an ETS, but I believe set reduction targets, with a carrot & stick tax approach should be brought in.

However, the over-arching problem is "self-interest". The up & coming nations, such as China & India, want we (USA, Europe, OZ & some others) already have and the likes of China (in particular) will not simply roll over & do what they are told and to be honest, you can't blame them.

The result is that China are steaming ahead with new Coal fired power stations like there is no  tomorrow and that may well be the case.

There will be Global Population reduction, but it may be too little & too late???

And, in any event, that Population reduction is part of the Economic Decline / Climate saviour conundrum.


Btw, as you can already tell, you can post much larger amounts of info and use many different add-ons to emphasise your issues, I trust you will enjoy!

Hi Perceptions,

'Since when did the entire planet drop a couple degrees?'


Well the point is it did drop,perceptions which means its not man made,as man's contribution to the issue have remained constant.
Assuming all things equal the another scenario's of Cow's excrement of ton's and ton's of methane gases eg,assuming same cows still existed the temperate should had raised,there would be no other way.

BTW the threat of Humans burning more fossil fuels etc is a false flag
How can U make it worst if U only have half of those resources left?
U would be lucky to keep the temperate up if U had too.

Cheers.

Sorry. I was trying to get the link to work. Now you'll have to do it the loooong way.

Things are getting more and more grim over there, with another 54,000 jobs lost last month. At least fixing up the railroads etc. are real jobs. It would have been good for our stimulus money to go on creating real jobs to fix up our ailing transport network.

Funny how Wall Street are still carrying on just like they did before the first recession. The look on their faces when the crash came was priceless, it could be worth a repeat soon.

http://www.smh.com.au/world/obama-unveils-55b-jobs-plan-20100907-14y8g.html

lerche007 wrote on Sep 8^th, 2010 at 3:40am:




Humans are not the only influence on Climate Change, there are also more natural events such as El Nino's & La Nina's, major volcanic eruptions & Ocean conveyor belt systems, which influence Global temperatures.

As can be seen from the above chart, the Global temperatures do not move in a smooth pattern, they go up & down and have done so for a long time, but the overall effect is that the planet is warming, which should be shown again when the 2010 figures come out, as this has been another hot year on the old planet Earth!

How could we make it worse?
Well, we will see about that?