Harry S. Dent Jr.'s Blog, page 138
September 3, 2015
It’s 2008 All Over Again: This Federal Agency Doesn’t Get It
September 2, 2015
4 Charts Show Why This Rally Will Become a Rout!
There’s a reason why I warn you to get out of a bubble a little early rather than a little late. It’s because the first wave down tends to happen in a matter of a few weeks or months, sometimes days. It’s fast and furious.
I know this because I’ve studied every major bubble in modern history – all the way back to the infamous
The Blame Game: Is China Responsible, or the Fed?
China has been in the headlines and is widely seen as the culprit for the global financial turmoil. China disagrees. In fact, an official from the People’s Bank of China has blamed the Fed for the mess, given its plans to hike rates this year. The country has joined the IMF in urging the Fed to delay its pending rate hike – or call it off altogether.
The dollar is already stronger given expectations of a rate hike. It we get one, the dollar will be stronger still! That could devastate emerging markets like China that rely on capital inflows, or that are trying to pay off U.S.-dollar denominated debt.
Whether China or the Fed is to blame for this market volatility, one thing’s certain – the Red Dragon dominates commodity consumption. So when China stops buying, commodity demand dries up and prices fall. That means that as China slows, as it is now, economies that depend on commodity exports will suffer.
September 1, 2015
This Almost Sounds Like the Start of a Bad Joke…
With two kids in college and one about to finish high school, I’m no longer required to spend countless hours at a sports field or in a gym watching others compete. This gives me more time to pursue my interests, so I’m considering new hobbies. I like the idea of music, but I’ve been told my natural abilities are lacking. Maybe I could jump on our demographic bandwagon and buy a motorcycle, adding a bit of excitement to the next phase of my life.
There are lots of possibilities, and I’ll consider many different things. But there’s at least one area that holds no interest for me: potted plants.
While I appreciate greenery in a plastic bucket as an accent in a room, I don’t think of establishing and caring for potted plants as much of a hobby. That’s not to say it isn’t work. I get that growing vibrant, diminutive trees and flowers is difficult. I’ve killed more than my share of indoor vegetation. But it doesn’t really strike me as, well, active.
Maybe I’m too American. Even as adults, we tend toward hobbies that scream we’re still vibrant, still in the prime of life. It could be that we still have that Wild West attitude about us, even though the West was tamed over a century ago. Or it could be that, collectively, we’re still young.
The situation in Japan is very different.
The demographics of the Land of the Rising (or is it setting?) Sun are well known.
One in four people are over the age of 65. They have more household pets than children under the age of 15. More adult diapers are sold in Japan than baby ones.
We can now add another qualification to the group, and this one sounds like the start of a joke. The people of Japan are so old, they think of potted plants as a hobby!
Once every five years, the bureaucrats behind the Statistics Bureau of Japan (SBJ) scrutinize the 585 items they track as a reflection of daily life. These items make up the country’s inflation measurement.
They remove things that are no longer common, and add things that have grown in popularity. The 30-odd items to be struck, as well as those now making the list, give us a sense of just how old the country has become.
Gone from the measure of inflation is the cost of a kid’s lunch, as well as that of a pen case and thermometer. The trappings of daily life with children are fading from society.
Also on the cut list is the cost of renting a tennis court, which means that the aging population is either shifting its activities to other sports, or simply fading from sports altogether.
The answer to that question can be found on the list of added items. Under the “Recreation” heading, the only entry is the aforementioned “Potted Plants.”
What makes this even more confusing is that one of the items to be removed is “Plant Pots.” So aging Japanese are spending recreational money on potted plants, but not the pots to put them in? Strange indeed.
The shake-up of the inflation list provides other insight as well. Gone are coffee cups and saucers, glass cups and wine glasses. It’s not that people are drinking less, it’s that they’re not spending as much on the cups and stemware.
Along with the rising popularity of pets and plants, Yen100 shops are also booming. These stores sell all items for under 100 yen, which is roughly $0.81. Penny-pinching Japanese pensioners flock to such markets, buying tableware and much of everything else they need. But you don’t see this in the inflation list, because when a glass costs 100 yen, it’s too small of a purchase in the typical 300,000 yen ($2,419) monthly budget to be included in the inflation calculation.
Among the other telling items being added are home security systems, knee supports, hygiene masks, and hearing-aid devices.
If there was ever any doubt that the Japanese society was slowly aging out of existence, the changing measure of inflation should put that to rest.
As their population ages, we can expect their spending to slow even more, with deflation as the constant threat to their economy. Without a significant rise in births or a flood of immigration, the trend won’t change.
While the situation is sobering, there was a little happy news tucked into the statistics.
The Japanese are spending less on scales and more on fried chicken. If they’re going to spend their days frequenting budget stores and staring at potted plants, at least they intend to eat well and quit worrying about their weight.
Rodney
Follow me on Twitter @RJHSDent
August 31, 2015
August 29, 2015
Medical Breakthrough: Targeting The Growth of Cancer Cells
If you’ve ever known someone with cancer, you know the terrible side effects of the disease… mutated cells replicating throughout the body, slowly taking over vital organs, until they stop functioning.
Traditional medicine techniques for fighting cancer usually include cutting out the mutated cancer cells, or attempting to kill them off through highly toxic chemotherapy or radiotherapy.
Some advanced-stage cancer patients even make the choice to just forego the misery of treatment, attempting to maintain a little quality of life before succumbing to the disease.
Scientists at the Mayo Clinic in Florida hope to change that by exploring treatment options that focus on the molecular DNA level. Already, they’ve
August 28, 2015
Is This The End For The U.S. Dollar?
China, the biggest foreign creditor of the United States, owns a truckload of our government bonds. Over the past several weeks, it’s been selling some of those bonds to prop up their currency, the yuan. This is supposed to signal the end of the dollar. As the Chinese put our bonds out for the bid, interest rates are going to shoot higher, driving down the value of the greenback and making imports unaffordable. At least, that’s what dollar haters have expected for years.
There’s only one problem. It’s not happening. And in our view,
Stocks Are Likely in for Another 6 Months of Volatility!
What a week it’s been!
Since last Thursday when the selling began, volatility – as measured by the CBOE Volatility Index (aka the “VIX”) – has rocketed higher, and doesn’t look to calm down anytime soon.
