The Great Depression Ahead

The Great Depression Ahead: Why We are only in the Calm before the Real Storm

By Dominique Grubisa

I hate naysayers and I hate even more the fact that I’ve become one, but I just can’t help but feel that the political spin doctors are using smoke and mirrors to lull us all into a sense of false security:

“We have dodged the recession bullet, fasten your seatbelts the economy is starting to boom and interest rates are set to rise because inflation is coming back”

What if this is just the calm before the real storm? There is simply no basis to put a bandaid over the economy and say things are better than ever, when the overwhelming body of evidence suggests otherwise.

We have a demographic upheaval as the largest generation in modern times begins to retire. It is a proven fact that we spend the most when we are in our mid forties to early fifties – that’s our peak earning time and the time when our children cost us the most; we upgrade to bigger and better houses, spend more on ourselves and our family and generally invest and spend the fruits of our hard work in our 20’s and 30’s. After this our children leave home, we downsize and then we contract and save for our retirement. We then become pensioners and the next generation pay for us! It happens every 40 odd years as one generation passes the baton to the next – the 1930’s, the 1970’s and now!

That may be fine but what about other cycles – like cycles of innovation which comes around every 80 years? This century has brought huge innovative change which has improved the way we live and in economic terms, has caused huge booms.

The cycle goes something like this:

An invention comes along which revolutionises productivity;

At first it is expensive and only available to about one per cent of the population;

Within about 10 years though production becomes fine tuned and economies of scale mean that the price makes the technology accessible to all;

Over the next 10 years or so, the invention becomes common place as everyone ‘buys in’ or takes it up;

Ultimately there is no-one to sell to as 90% of the population have the product;

There is a shakedown and only the ‘fittest’ companies survive.

It happened in 1900 when Henry Ford produced the first motor car. By 1910 he had perfected the production line and the T model Ford which meant that everyone could afford a car. We then had the roaring 1920’s where a huge boom arose around the technology, however by 1929 cars were common place in most households and the ‘shakedown’ began where the automobile industry imploded and only the strongest companies survived – this caused widespread unemployment and The Great Depression ensued.

Unfortunately we’re there again – the 80 year technology cycle has coincided with the demographic generational cycle. The world of computers which brought us mobile phones, the internet and associated technology has allowed us to enjoy a huge boom for the past 30 odd years but now the technology has been taken up globally and we have reached the shakedown phase which will lead to unemployment. Couple this with the baby boomers retiring en masse and not only stopping their spending spree which has driven the economy for the last 30 years but actually becoming dependant on us to support them in their twilight years and that makes for one BIG bang.

I may be wrong, I hope I am - we should expect the best but we must prepare for the worst.

Change is not a bad thing – especially when you see it coming. There are ways to profit and prosper in the crash which follows the greatest boom in history. Our lives are about to change for reasons outside of our control. We can’t change the direction of the winds but we can get ready and adjust our sails.

What can you do?

Come to our free seminar and we’ll walk you step by step through your rescue plan to not just survive but thrive not in spite of, but because of the strong headwinds coming up: