Harry S. Dent Jr.'s Blog, page 26

Australia: Real Estate Cons, Demographic Pros

Man! They’ll need to take me off the plane in a stretcher when I eventually reach San Juan later this weekend. My wife too. She broke her wrist while Down Under with me. This trip to Australia – my favorite country in the world – has been exhilarating and exhausting… and jet lag’s a bitch (even worse heading east).

I used to visit once a year, helping attendees of the road show understand the incredible demographic profile they have – the best in the developed world – and warning of the inflating real estate bubble. People would swarm me during breaks, telling me how they loved my demographic and cycles work, but that they didn’t believe their property market was in any danger.

Limited land. Strong immigration. It’s easy to understand why Australians weren’t worried about any bubble. But I kept warning, and now the bubble’s bursting.

Since prices began dropping, my annual trips to Australia have turned into bi-annual trips. Finally, they’re starting to listen. And they don’t like my message.

I share it with you in today’s video, so listen now.

Despite my negative outlook on Australian real estate, as you’ll hear in the video, I have several bullish forecasts for the country as well. They have the strongest Millennial generation of any developed country and they’re perfectly positioned on the rim of the next boom zone.

Before signing off for the weekend, one last, but important, thing: A big thank you to all my Australian readers and listeners. Your hospitality is a breath of fresh air. I’ll be back in November. 

WATCH THE VIDEO ON FACEBOOK>>

Harry

Interest Rates: Why the Fed is Cowering

The Fed left interest rates unchanged, again. I’m not surprised… But many pundits are wondering if this is Powell kowtowing to The Donald…

I can see why they might think that…

Do you remember the Alien movie franchise with Sigourney Weaver? Remember how the baby aliens rips through its host’s stomach as it’s born? And how an adult alien impregnates its victims by attaching itself to their face?

That’s what The Donald reminds me of when I think about his eruption into the Presidency… and his harassment of the Fed and its Chair Jerome Powell.

He disguises his messages (er… instructions?) to the central bank as “pro-business…” but what he’s really saying is: “Don’t let this big, fat, ugly bubble pop on my watch.”

Before his election, he was full of bluster and criticism about the Obama “bubble.” Since the Fed began raising rates to slowly deflate the bubble (a joke because no bubble deflates slowly), he’s been the greatest opponent to higher interest rates.

Powell held his ground for a while… standing firm on the Fed’s decision to raise rates and draw down the balance sheet.

Then out of the blue, he changed course, announcing more modest changes, and only if necessary. Again, yesterday, rates remained unchanged.

Is he succumbing to The Donald alien attached to his face, like those pundits think?

I don’t think so.

Rather, I think Powell was, and still is, reacting to the data, which has not looked good in recent months and quarters.

Yes, GDP came in at 3.2% for the first quarter – close to the range Trump has promised for the last three years – but don’t be fooled. As Rodney explained yesterday, that number stands on very weak foundations. Besides, there is simply NO way that we could achieve and sustain that level of growth. Not with the demographic cliff Boomers are walking toward and falling over in increasing numbers (but that’s a topic for another email).

The Fed isn’t blind to those “weak foundations,” in the U.S. AND around the globe. It even cited “mute inflation” as a reason for holding steady on rates yesterday.

Look at this chart of industrial production in key countries around the world…

The two leading exporters, China and Germany, both peaked dramatically and started to fall the most sharply in 2018. The euro area, the U.K., and Japan also followed down. The U.S. is again the only bright sign thanks to Trump’s tax cuts, but even we started faltering in late 2018.

I’ve warned all along that even the tax cut stimulus would be a short-lived shot in the arm against ever-increasing downward fundamental trends into 2022-23. Growth rates are already slowing.

The trade war is a major factor here, and it’s hurting the global economy, not just us and China.

Frankly, Powell was simply doing the smart thing in light of the evidence at hand. Trump, however, is doing everything in his power to pump up the bubble. In short, the Fed’s neither cowardly or Trump-whipped. For once, they’re doing the right thing.

Can Trump keep this bubble going until mid- to late-2020 so he can have a good shot at getting re-elected?

Most I talk to think so.

I don’t.

Not because I doubt his resolve and intentions… but because this bubble is getting so exponential in stocks that I don’t see any way it doesn’t blow within the next year. Even in my Dark Window scenario, where I project the Nasdaq will reach 10,000 and the Dow 33,000 by early 2020, the Great Crash is likely to happen BEFORE the election.

Make sure you’re taking advantage of this Dark Window while it lasts. And read the latest issue of Boom & Bust for the 11 sectors warming their boosters as Baby Boomers begin their flood into them.

Harry

Uncovering the Real 2019 GDP Picture

Botox seems weird to me.

People pay to be injected with tiny amounts of a virus so as to deaden nerves for a prolonged period of time.

I understand the goal… to change the way they look (in most cases).

But eventually the effects wear off and they have to do it again. It’s an expensive, losing battle, but it’s their money, and not my concern.

And yet, neighborhoods and newspapers gossip about who is having what work done to improve their appearance. That seems like a lot of effort.

If it’s that important to society to know, then maybe we need personal scorecards, perhaps in the form of temporary tattoos on the backs of people’s hands, noting with different symbols what’s been done, like a “B” for Botox or an “F” for filler.

That way, as with a great new haircut or hair color, we could immediately compliment the person… or simply talk about them later. But at least we’d have good information…

I thought about Botox last week when I saw the GDP numbers…

At 3.2% growth in the first quarter, the economy looks fabulous.

But just like Botoxers who look younger than they are, there’s more to the story than the headlines.

Our economy isn’t on the verge of recession… but we’re not shooting to the moon, either.

Upon closer inspection, the results weren’t as spectacular as they first appeared, they just looked that way because of some temporary issues.

Imports and Widgets

During the first quarter, we imported much less stuff than usual, most likely because of the trade wars. Speaking of our trade tiff with China, we still have an ongoing spat with Canada too.

The tariffs we slapped onto goods from these two countries altered buying behavior as expected, shifting demand to domestic suppliers.

That sounds good, but it costs companies more since domestic supplies tend to be more expensive, and it only lasts as long as the trade wars. When we come to new arrangements with our trading partners, the tariffs will fade away and imports will shoot higher, dampening GDP.

We also built a lot more widgets last quarter. American businesses built so many units that they stuffed supply chains with inventory.

This adds to production for the quarter, but it means that at some point in the future those same businesses will need to work off the excess supply, thereby reducing production.

If you don’t consider imports and exports, inventory changes, or government spending, we’re left with final private sales, which measures how much end users spent.

The naked number…

That stripped-down number came in at a much more modest 1.3% last quarter, down from 2.6% in the fourth quarter, the weakest reading since 2013.

But don’t make the mistake of dismissing strong growth numbers just because some of the details aren’t quite as pretty as they seem on the surface.

What if the trade wars stick around for a while? I didn’t expect them to last this long, so what’s another three or six months?

And don’t forget the other side of imports… exports. Companies are building more than 1,200 miles of pipeline across Texas to move oil and gas to the Gulf Coast where it will be available for export. Rising energy exports contribute to GDP.

All of these positive surprises add up, and they give us another chance to earn profits as Harry’s Dark Window forecast unfolds. I might not have expected the strong GDP showing, but I’m not upset that I’m making money on the rising markets as they react to the news.

Eventually though…

Eventually, GDP will roll over… we’ll walk into the teeth of the next recession… and the markets will fail…

But not today. The Botox on the economy is working…

It looks pretty good, just don’t get too close.

Rodney

Who’s protecting your Social Security and Medicaid?

My wife and I drove to San Antonio last weekend so she could attend a bridal shower. Not part of the festivities, I took the opportunity to hit an outdoor pub and catch up on some reading and people watching.

The disconnect between the two hit me like a ton of bricks.

The town is bursting with young energy. You can feel it as you walk through the outdoor shopping areas and make your way through restaurants. There’s a hunger in San Antonio that makes you want to run the economic race a little faster, work a little harder.

Yet in my hands was news about the latest drum beating up in Washington…

The House of Representatives will continue pounding on the Mueller Report even though the Senate won’t take up impeachment efforts. “Uncle Joe” Biden finally entered the race. And, oh yeah, Social Security will go broke in 2035, a year later than previously thought.

Do the young dynamos of San Antonio know that their elected officials are squandering their financial future, fiddling while Rome burns?

Medicare spends every dollar of tax money it receives, plus all the interest it earns on its trust fund, and also some of the principal of the fund. The program will be broke in seven years.

Social Security spends all the tax it receives, plus almost all of the interest it earns on its trust fund. By next year, Social Security will spend all the interest and start spending down the fund. It will be broke before the babies born today start working and paying into the system.

These two programs consume trillions of dollars and are the backbone of our old-age entitlement system. They are wildly popular, and yet our elected representatives refuse to put them on sustainable paths.

We deserve better, but we keep sending people to Washington who spend their time on almost anything but moving the country forward.

From 2011 through 2014, the House of Representatives voted 54 times to repeal the Affordable Care Act when the House leadership knew the measures would go nowhere in the Senate. Today, House leaders are spending their days poring over Mueller’s investigation even though any move toward impeachment would die in the Senate.

And yet…

Medicare and Social Security march toward a funding cliff.

When the bill comes due for decades of inaction, it will be very expensive, and the politicians won’t pay. Remember, their pensions aren’t part of Social Security.

We will pay. It will be the thousands of young people I saw in San Antonio who are suddenly asked to give up more of their paychecks.

It will be the current teens and tweens, not yet working, who will step into a job and have less to show for it on pay day than their parents because our representatives didn’t do their jobs.

So, before we send the next class of well-paid, pension-guaranteed politicians across the Potomac, each one should be required to provide a specific, detailed answer to a very easy question:

What is your proposal to make Social Security sustainable?

Social security has two components: taxes and benefits. Given the parameters, a 10-year-old could figure out how to fix it.

Raise taxes, lower benefits, or develop a combination of the two. That doesn’t mean the other 534 Congressmen would vote for any one proposal, but we should get, we deserve to get, concrete answers to concrete problems.

We can ask the same question of presidential hopefuls.

With the Democratic field now at 20, we’ll get plenty of slogans and platitudes over the next year-and-a-half. Along with all the fluffy language about change, values, morals, and the ever-present cry of “most important election in the history of the universe,” we should demand a concrete answer to the entitlement funding question from every contender.

And Trump doesn’t get a pass. Where is his piece of legislation to solve the riddle?

I want answers now so that I don’t have to pay more later. Part of my retirement, and part of my investments, depend on it. So far, my representative hasn’t answered the question. My vote for him is in serious jeopardy.

As for the best way to fix Social Security, you can work on the answer yourself. The Center for a Responsible Federal Budget maintains a website that allows you to change the parameters of taxes and benefits and see how they will affect the program.

A note of warning: none of the answers make you feel good, which is why our politicians refuse to take up the issue. If they address Social Security, they might not get re-elected, which appears to be their only goal.

Rodney

The States Gaining & Losing People is a Warning for Real Estate

Let’s pick up where we left of in our real estate conversation from last week. It’s on everyone’s minds. It’s all over the media. Everyone knows housing prices are over inflated. In places like San Francisco, they’re outrageous. Increasingly, the data shows trouble brewing.

The bottom line is, the property market must reset. People can’t afford to own homes in some of the major cities… and it’s not like they are earning poorly. They’re averaging close to $100,000 a year, yet they can’t buy a house. Increasingly, it seems like you have to be a millionaire just to own a trailer-sized house in places like Manhattan and Vancouver.

I came across this interesting infographic the other day. It maps the salary needed to buy a home in 50 U.S. metro areas.

The American Dream is Becoming too Expensive

In places like Nashville or Tampa, Charlotte or Baltimore, you need to earn less than $60K a year. In San Diego and San Francisco, you need more than $199K. In San Jose, you need to earn a salary of $254.8K to buy a house. The median home price there is $1,25,000. There’s no way. Seriously, who has that kind of money?

There are many ticking time bombs that could level this real estate bubble. One is the underwater mortgage problem I told you about last week. Another is the sheer size of this bubble. It’s going to end up crushing itself and all who are in the way when it collapses. A third – perhaps most dangerous – is the dyers-versus-buyers phenomenon that will arise as Baby Boomers continue on the path to the grave.

Where’s Everyone Going?

Of course, indicative of this growing problem is the migration of people across the continental U.S. According to the latest stats out of United Van Lines, domestic migration continues to shift towards better climates and affordability in select western and southeastern states.

The states in the Northeast and Midwest are losing people rapidly. In part, that’s thanks to the loss of manufacturing jobs in the rust belt. In part, that’s thanks to expensive real estate in places like New Jersey, Connecticut, and Chicago.

Domestic migration looks like this currently…

Vermont is the #1 destination for migrants because it’s small, charming, and attracts aging hippies and liberals, like Ben & Jerry and Bernie Sanders. But the big winners tend to be in the more affordable and growing states in the west: Oregon, Idaho, Nevada, Arizona, and Washington state.

The Losers…

The losers are all in the Northeast and Midwest, except Montana where the weather is twice as cold and snowy as neighboring Idaho and the cattle to people ratio may even be higher than in Wyoming. New Jersey and Illinois are the worst as they are more industrial, blue-collar areas near more expensive metro areas.

In a major downturn, as I forecast ahead, even domestic migration rates are likely to slow. But the states that continue to attract, especially due to lower costs and retirement prospects should hold up the best – and be the best buy opportunities after the crash.

Harry

The Best Way to Make Gains on Your House

My house is in a bit of disarray. We’re spring cleaning, but it’s more than that. We’ve decided to move, so going through clutter takes on new meaning.

We don’t need to move, but as I wrote a few weeks ago, we’re looking to the future and trying to determine how best to position ourselves. Two hundred feet from open water in one of the more expensive homes in the neighborhood looks less attractive when I consider rising taxes and higher flood insurance. As many of you commented, it might be time.

But now I’m a bit anxious. Other high-end homes in my neighborhood aren’t moving. After making a tentative decision to sell, I have that nagging worry that I won’t be able to get the price I want.

The National Association of Realtors recently reported that existing home sales dropped 4.9% in March, following an 11% gain in February. Combining the two gives a monthly average gain of about 3%, but that’s misleading. Over the past year, existing home sales are down 5.4%.

New home sales are moving the opposite direction, up 4.5% in March to a 16-month high, and up 3% over March of last year. Still, the details give a more precise picture of what’s going on. The median new home sales price fell 9.7%. It’s possible that home builders were discounting their inventory to get it out the door, but it’s more likely that they’re building what’s selling, which are moderately-priced homes.

In March, The Wall Street Journal ran a big story on the problem homeowners are having as they try to sell McMansions. Boomers built them in the early 2000s, and now they can’t find buyers as they try to downsize. Or at least, they can’t find someone willing to pay their price. It’s not a new story. The Chicago Tribune ran a similar article in 2016, and Harry has been talking about this issue for years.

The situation will get worse before it gets better…

And it’s all about demographics.

There aren’t enough Gen-X’ers like me to replace the buying power of the Boomers, so in some areas we have to skip a generation, going straight to the Millennials. This creates a disconnect when it comes to large assets like homes.

Boomers are starting to unload their trade-up homes, the big houses they bought in their 40s both to show that they had “arrived” and to get their teenage kids farther away from them within the house. But without enough rising Gen-X’ers, those born from 1964 to 1980, to buy them, they’re stuck trying to push the big houses on Millennials. That’s a tough sell, because the younger generation is trying to buy its first home. Most first-time home buyers don’t jump into the game with a 5,000-square foot, $900,000 mini-resort.

But as the saying goes, all real estate is local. In San Francisco, the median home sells for more than $1 million. Of course, their teachers and city workers must commute two hours because they can’t afford to live in town.

This leads to a bifurcated real estate market, where the high-priced stratum moves at a snail’s pace because of a lack of potential buyers, while the modest end of the market turns over rapidly.

The question is, where are you on the spectrum?

Is your home at the high end and likely to take a while to move, or do you live in a home that will attract Millennials looking to buy their first home? Knowing where you stand can help you determine your options down the road.

Our home has unique features like water views, so we should be able to squeeze out some gains, but I’m sure every homeowner thinks that. We’re Americans, after all. Everyone is special and all of our children are above average. But the test will be when we put the home on the market. At that point, what we think won’t matter.

As for the next home, I’m thinking golf course… and a bit lower-priced. I want to make sure my home will stand out the next time I choose to sell, but I also want it to be as attractive as possible to the next wave of buyers. If I’m selling to Millennials wanting to trade up in 10 years, I should be able to attract buyers who like Tiger Woods. Here’s hoping he continues his winning ways.

Rodney

San Francisco Real Estate is the Least of Our Worries

There’s been a lot in the news lately about a slowing U.S. property market, with San Francisco a particular worry. According to Reuters, home sales fell more than expected last month. The National Association of Realtors said that existing home sales dropped 4.9%.

I’m, in fact, in Australia for the next two weeks – my third visit in 14 months – because real estate prices are cratering. Everyone seems shocked. I’ve been warning of this for a long time now.

While scanning headlines at 2 a.m. local time (4 p.m. Eastern – jet lag’s a bitch), I saw several articles about trouble brewing in the San Francisco real estate market. Again, not surprised.

One piece in particular caught my eye: “San Francisco at ‘boiling point’ over tech, houses, homeless.”

What lights me up like a firework show on Independence Day is that this is news to anyone. Since 2014, I’ve warned that San Francisco is a ticking time bomb. Several times this year alone I’ve pointed out how San Francisco starter home prices are utterly unaffordable.

Dumb rich people…

And it’s not just windy city that has this problem. Dozens of cities across the country have nose-bleed real estate prices that only the wealthy can afford. The rest of us suckers are left out in the cold. And up and coming Millennials? They can just forget owning a home in some of those areas.

San Francisco and Manhattan… Vancouver… Sydney… Singapore… Shanghai… They’re all poster cities for how rich people can also be dumb people, blinding throwing millions into real estate in the mistaken notion that property prices always go up.

Ha!

Little do they realize that the bubbles they’re inflating will burst from their own extremes… and that’s where we are today. You practically have to be a millionaire to afford a trailer in San Fran and parts of Palm Beach and other areas.

Bursting the Housing Bubble

But, as over inflated as real estate prices are in places like San Francisco and Manhattan, as ready to burst as they are, they may not be the trigger for the pain that awaits property owners and investors ahead…

The subprime lending crisis in the U.S. burst the last U.S. real estate bubble. People who had no business financing McMansions started to default on their mortgages.

But these weren’t rich people living in LaLa land. No. The people losing their homes (and families) were those who lived in areas that weren’t benefiting from the bubble boom in investments and new technologies. Living largely in the Midwest and inland Southeast, they weren’t in the bubbliest areas. They were ordinary, hard working Americans who had their asses handed to them when the subprime house of cards collapsed.

We’re seeing a similar trend this time around…

While this current bubble has concentrated even more in the most urban and hi-tech cities like San Francisco and Manhattan, LA, Seattle, Boston, Washington D.C., Vancouver, Toronto, Sydney, Melbourne, Singapore, and Shanghai… and while we’re already seeing slowing or price declines on the high-end in those cities… there is a bigger problem brewing in middle class cities.

Mortgage Stress Prevalent

We are witnessing growing signs of “mortgage stress,” as Martin North calls it.

Just look at those numbers.

Detroit continues to lead the mortgage stressed pack with 34.4% of its mortgages underwater. That after a 10-year-plus recovery? In what was once King City, leading the auto and mass manufacturing revolution in the 1900s? That level of financial distress speaks volumes about the Economic Winter Season we’ve unknowingly endured since 2008.

Notice how all the other mortgage-stressed cities are in the Midwest, Northeast, and Southeast. All solid, blue-collar cities.

Even the national average is still 8.4% underwater mortgages, for crying out aloud. Clearly much of the country didn’t recover from the Great Recession of 2008 to 2009.

Just imagine how they’ll fare in the next Great Depression ahead?

Still, while Average Joe will be brought to his knees as the latest real estate bubble bursts, the people who stand to lose the most are those dumb millionaires throwing good money after bad on overpriced property in places like San Francisco.

There’s truth to the saying, “the bigger they are, the harder they fall.”

Don’t pin your financial hopes and dreams to real estate. The foundations are crumbling. Rather, grab the Dark Window opportunities available right now. And prepare for the Sale of a Lifetime after the Great Crash of 2020.

Harry

#IPOs In Peak Digital Advertising

Digital advertising is supposed to be the fuel of the future, funding new companies (#IPOs) that provide us with services we never knew we wanted – Facebook, Pinterest, Twitter, etc. – while tearing away at our privacy.

But there’s a problem.

Digital advertising is annoying users, and starting to creep us out.

I don’t want to see ads for lightweight jackets for the next three months just because I searched for one last November.

And by the way, isn’t that a bit backward? If I already bought the jacket, why is it still being marketed to me?

But advertisers aren’t deterred! In fact, they’re rather emboldened, spurred on by the fact that everyone from Facebook to PayPal will share the most intimate details of their users’ data, allowing companies to tailor their message and target their ads in ways that were unthinkable just a decade ago.

Investors get in on the act by extrapolating the digital advertising revenue of behemoths like Google and Facebook to other companies, then estimating that newcomers like Pinterest and Snap could be worth untold billions.

But what if that doesn’t happen?

Win for Losing

What if digital advertising has already reached its plateau because consumers can only see so much social media in one day, which means ads are competing for limited viewing time, and consumers are becoming not just immune but hostile to much of the messaging?

Think about this: Do you watch the ads at the beginning of YouTube videos? Or do you click to another window and do something else for the 15 seconds?

The answers to those questions could lead people to either make or lose fortunes.

Twitter should be sending President Trump flowers for the way the Tweeter-in-Chief revived the struggling company’s presence before he entered into office. Now Twitter has staunched its loss of users and posted a $250 million profit last quarter.

That’s good money, but does it make the company worth its current market cap of $26 billion? Remember, the company has lost users. Can Twitter really drum up enough digital advertising to justify a 26 price-to-earnings ratio?

Seeking Profit

At least Twitter has a profit. Snap, which owns Snapchat, the mobile app famous for delivering pics that disappear in a few seconds, watched its shares soar recently when the company reported a 43% jump in revenue, which cut its losses.

During the conference call, CEO Evan Spiegal said:

“This limited our Q4 losses to just 13 percent of our revenue, compared to just one year ago when our Q4 losses totaled more than 50 percent of revenue.”

This company carries a market cap of $15 billion.

And then there’s the latest darling, Pinterest. The newly public firm priced its shares at $19, and they shot to $24 when they opened for trading, valuing the firm at roughly $12.5 billion.

Pinterest earns almost all of its revenue from advertising and managed to lose about $50 million on $755 million in revenue in 2018. The numbers have been improving, and Pinterest might earn a full-year profit in 2019.

Or it might not…

Privacy Preferences

At the same time that these firms are banking on higher advertising revenue, consumers around the globe are getting concerned over their lack of privacy.

There’s no question that the privacy genie isn’t going back in the bottle, but we’d like to see companies share less of our data with marketing groups, or else find a way to pay us for our data.

And that’s the rub. We’ve exchanged our personal details for access to seemingly free platforms like Pinterest and Snapchat, which then monetized the information by selling it to advertisers.

As many people have said: If something appears to be free, then you’re the product.

What happens when regulators demand better safeguards on private data as well as prominent disclosures of what information companies are sharing with others? At the same time that social media platforms are competing for our time, they’ll be restricted in the ways they can make money off of our demographic information and search history.

The result will be less fuel for the presumed profit machines, which should drive down their share prices. Investors who hold such names could take huge hits to their portfolios even as they regain a tiny bit of privacy.

I’m not wishing for anyone to lose money, but I wouldn’t be upset to see some of these companies go down in flames as online advertising takes a hit. If you own stock in Snap, Pinterest, Twitter, or something like it, keep a watch for new privacy regulations, and stay updated on quarterly earnings. If you see warning signs, get out early.

You might leave some gains on the table, but you might also avoid ugly losses.

If that happens, you can tweet about it.

Rodney

The Link Between the New Zealand and Sri Lanka Tragedies

Last Wednesday, I wrote to you about the 70-year Globe Buster – the second iteration of the 35-year Geopolitical Cycle that brings with it chaos and global agony during its negative turn.

And man! This cycle has truly been brutal. 9/11. Civil wars. The Arab Spring. Mass shootings. White supremacist terror attacks. In fact, more terror attacks than any of us care to think about… the latest being the terror attack in Sri Lanka on Easter Sunday. At least 290 killed… on a holy day meant for rest and worship…

My deepest condolences to the families of all those lost at the whim of gutless brutes.

I am relieved that this cycle turns back up in a few years. But that brings into play the larger 250-year Political Revolution Cycle that is mushrooming.

The last time a confluence of revolution cycles came together like this was during the emergence of the American Revolution between 1765 and 1783. The simultaneous advent of democracy, free-market capitalism, and the Industrial Revolution was, in retrospect, the most important event of modern history.

Do you realize in the crescendo year of 1776 that we saw the Declaration of Independence signed, the perfection and patenting of the steam engine, and the publishing of Adam Smith’s infamous book on capitalism, The Wealth of Nations?

The last 250-year cycle was preceded by the massive Protestant Reformation of the early 1500s, which still shapes Europe and Christian religions around the world today. But that revolution was joined by an 84-year Populist Revolution Cycle and a 28-Year Financial Crisis Cycle.

No wonder that created such a massive impact.

And it’s happening again today…

Hitler and Trump

The last Populist Cycle saw Hitler become Chancellor of Germany in January 1933, exactly 84 years before Trump became President in January 2017… these may be different populist backlashes, but populist revolutions they clearly are.

The last financial crisis was in the late 1980s/early 1990s with the S&L crisis and recession.

So that’s the big insight here…

The adverse Geopolitical Cycle that started with radical Muslim attacks on the U.S. on 9/11, followed by more in Europe, civil wars across the Middle East, and mass shootings in America is now reaching its bottom around late 2019/early 2020 as forecast.

The rise of white supremacist terrorist acts against Muslims, immigrants, and foreign workers… the yawning income inequality across the face of America and Europe… all set the stage for the election of Trump, Brexit, and a larger political revolution that is still playing out. We’ll see the biggest impacts and reforms ahead, between 2020 and 2023-plus.

There will be great changes ahead and very likely democratic administrations for many years to come to bring in reforms like those of the Great Depression. But these will be greater than even those concocted during the 1930s and 1940s due to this larger, more painful cycle.

All of this brings with it opportunity. There’s no gain without pain, as I explain in my April edition of The Leading Edge. And after the pain of these cycles, the sale of a lifetime will follow in due course.

Harry

Look East for the Next Great Opportunity

I’m travelling to Australia on Sunday for my third six-city tour in 14 months. I’ve been looking at the countries near them that they export to… and it just keeps reminding me that the biggest opportunity that will come out of the big crash ahead – when the Dark Window slams shut – is going to be China versus India.

China, since the mid-80’s has been the up and coming country, has been adding 1.1% urbanization every year. That’s more than 3% faster than India’s rate. Their GDP per capita is $18,369 when you adjust for the lower cost of living. India’s GDP per capital in only $7,432.

But I see the tables shifting as we move through the crisis ahead. I share the details with you in today’s video.

Watch now.

Watch on Facebook >>

Harry