The world, including the United States, Canada, and Australia, is set to face a major economic depression that could even supercede the Great Depression of the late 1920’s, according to Harry Dent of Trends Forecasting, and he blames 2 main factors to support his theory.
The first is demographics. Simply put, in most major developed countries around the world, aging people aren’t having as many children as they used to and people in their 50s, 60s, and 70s don’t make as much money and they don’t spend as much either. On top of this, they are now all starting to draw on the entitlement and social security benefits of their governments.
The second is the massive amount of debt. Government debt, consumer debt, and corporate debt are now reaching their highest combined levels in history, encouraged by the fiscal stimulus central banks in developed nations poured into the economies after the height of the financial crisis of 2007 – 2008.
How the Debt Bubble Has Fed the Everything Bubble Destined to Crash the Economy Once Again
All the zero interest rates lending has done is pump printed money into the prices of various assets- housing, stocks, farmland, and even exotic pieces of art. But with the eventual lack of buyers able to afford these pricy items coupled with the deleveraging of all these markets due to rises in interest rates and natural corrective forces in the market, the day of reckoning soon approaches where there will inevitably be more sellers than buyers, as we are seeing in the housing market, and prices will go back to fair value- like it or not.
Dent says that central banks the world over have increased their balance sheets by 16 Trillion USD dollars and bought up their own bonds and securities and dropped interest rates to zero, which will bring in a massive deflationary spiral.
A More Accurate View of the Stock Market and the Real Economy
Starbucks is seeking to close an additional 150 stores in the coming year. Sears is officially dead. Facebook stock has taken a dive, because their income is derived from selling advertisements, and advertisers stop buying ads when the demand for sales drops on the consumer end.
General Motors has also made plans to lay off 11,000 workers and discontinue several lines of cars. About the only companies doing well in this economy have been Dollar Stores, which should be a telling indicator for anyone who realizes that no economy can grow based on what people buy at an establishment on par with a thrift store.
What You Can Do Right Now To Protect Your Money, Savings, and Retirement
If you are still in the market or have a stock-heavy traditional IRA, 401K or Roth IRA, look into getting a Tax-Friendly, Recession-Proof Gold IRA Rollover to put away a significant portion of your money into a hard asset that on a timeline big enough, has never lost and will never lose its value because it is not able to be printed, unlike paper, QE, stimulus, and all other kinds of clever financial manipulation used by the government and central bankers of the world.
Remember, precious metals tend to go up when everything else drops in price. This is why if you would have bought gold immediately around the Dot Com bust in the early 2000’s, you would have seen amazing gains up until 2013 where the price has remained relatively flat for the last 5 years, but will not for much longer considering the economic realities that will be addressed whether people, the media, or the government like it or not.
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