I have been doing alot of reading lately, and i have just recently finished a book called the great crash ahead by harry s dent. Now this guy has some fairly controversial and extreme views and outlooks for the world economy, but his views also make quite alot of sense.
I'm only young and very in-experienced in the sharemarket, but for those of you that still have hope in trading long on the sharemarket i ask, when is it going to get better?! Everyday i watch business channels(not hoping to get anything from them other than some news updates) and i see economist after economist getting up and saying " the market is definitely oversold, and we see some real bargains coming through now" and have been saying this since the asx was at 4900?
Governments have now had 4 years to repair broken and debt plagued economies and have all but completely failed. In this book the main force behind the research is demographics. It looks at peak spending patterns of generations, and guess what, the baby boomers are at the end of theirs. Hasn't anyone wondered why the hell after the amercian fed has pumped TRILLIONS of dollars into the economy that the US growth has simply stagnated if not dropped marginally?
Why you ask? Because the fed is working against a force beyond their control, and one that no one has ever experienced! Deflation. Can anyone tell me what would have happened if the fed had of printed 3 trillion dollars in 2005 when the dow was sky rocketing, and pumped it into the economy? inflation would sky rocket?! but it hasn't has it.
It's only a matter of time before governments run out of cards to play, and the world has to face the music. Baby boomers have inflated prices to unsustainable levels for gen y'ers like myself, and something has to give. If your a baby boomer just ask yourself where your at in your life. Are you in the market to be buying a new 7 piece lounge set and a new tv, spending 400$ a week on groceries to feed growing teenagers,and then maybe upgrading your home in 6 months? OR are you thinking, the kids have left home, i need to downsize, and oh sh#$ my supers taken a big hit, and i better start saving for my retirement!
Its this worldwide shift in spending habits that caused japan to crash(which 20 years later they still havent bounced back from) and that i personally believe will cause the next crash that is knocking on our door. Europe has an ageing population, and have been sitting on the edge of financial meltdown for months. America has an unrealised debt in excess of 60 trillion, yes thats right 60 trillion in private, finance, and government sector debt. It will surely all have to come to a head will it not?
Anyway sorry for all the doom and gloom but my main reason for posting is to see what other people thought about the above opinions, and would appreciate other users views and arguments.