2021 Economic Forecasting with Harry S. Dent Jr.-Part 1

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This week,  renowned Economic Forecaster Harry S. Dent, Jr. joins Bruce Norris and talked about Harry’s prediction of the biggest financial asset bubble.

Harry S. Dent Jr. studied economics in college in the 1970s, receiving his MBA from Harvard Business School where he was a Baker Scholar and was elected to the Century Club for leadership excellence. After Harvard he became a management consultant, helping businesses understand where they were, what obstacles they faced, and how to succeed.  He did this by weaving together research on people, technology, and markets.

Since then, he’s spoken to executives, financial advisors, and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC, and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics, and Omni.

Harry has written numerous books over the years. In his book The Great Boom Ahead, published in 1992, he stood virtually alone in accurately forecasting the unanticipated boom of the U.S. economy in the 1990s, as well as the multi-decade decline of the Japanese economy.  In 2016, Harry published, The Sale of a Lifetime,  where he reveals the secret behind many of the largest (and fastest!) fortunes in history out of great crashes that can create a profit windfall that will last you generations.

 

 

Episode Notes:

 

Narrator  This is The Norris Group’s real estate investor radio show, the award-winning show dedicated to thought leaders shaping the real estate industry and local experts revealing their insider tips to succeed in an ever-changing real estate market hosted by author, investor and hard money lender, Bruce Norris.

Bruce Norris  Thanks for joining us. My name is Bruce Norris and today we really have a very special guest, Harry S. Dent Jr. It might be easier to describe what Harry is not. He’s not a classic economist, blindly following the Phillips Curve or assuming that people make rational economic choices. Harry is more of a renaissance man and entrepreneur, voraciously reading about history and current trends to develop his views of what comes next. When Harry studied economics in college in the 70s, he found it vague and inconclusive. He chose the bedrock of accounting instead, because the numbers don’t lie, rely on black and white data, he could quickly determine a company’s health and chart a course for success. His undergraduate studies led him to Harvard Business School where he was a Baker Scholar and was elected to the Century Club for leadership excellence. After Harvard he became a management consultant helping businesses understand where they were, what obstacles they faced, and how to succeed. He did this by weaving together research on people, technology, and markets. Since then, he’s spoken to executives, financial advisors, and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC, CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, US News and World Report, Business Week, The Wall Street Journal, American Demographics, and Omni. Harry he has written numerous books over the years in his book, The Great Boom Ahead, published in 1992. He stood virtually alone in accurately forecasting the unanticipated boom of the US economy in the 90s, as well as the multi-decade decline of the Japanese economy. In 2016, Harry published The Sale of a Lifetime, where he reveals the secret behind many of the largest and fastest fortunes in history out of the great crashes that can create a profit windfall that will last you generations. Today, he uses these tools he developed for, from decades of research and hands-on business experience to offer readers a positive, easy-to-understand view of the economic future. So, Harry, we welcome you to our podcast.

Harry S. Dent Jr.  Yeah, nice to be here, Bruce.

Bruce Norris  I’m going to tell the audience what I respect about you. First of all, you predict in both directions, which I don’t think is normal, which means that you are looking at evidence not you have a bias that you have to land on, that’s important. That you put it in writing and once you do that, you put yourself in harm’s way. Because you’re going to be wrong. I just saw, you know, we write reports every two years about what’s going to happen in real estate. And once you put it in writing, you’re going to be wrong, it’s going to be early, late, or sometimes it actually is going to be wrong, but, but you, you take the right, the risk of putting it in writing and I respect that. In 2008 or nine, you know, I do public speaking. And somebody come up to me and say, ‘Yeah, we knew that was going to happen.’ And I ask him, ‘Okay, can I see your document?’

Harry S. Dent Jr.  Yeah.

Bruce Norris  Yeah, because that’s, uh, you know, I wrote a 400-page document called the crash, I just want to see your document. Because when you’re making that statement that’s so easy to make, you know. Your titles leave no doubt is where you stand, which I respect. There’s no wiggle room, you’re, you’re definitely headed in one direction and can stand behind it. And I like that I feel like you have a sound basis. To start with the subject of demographics. So, and that was the first time I ever heard anybody use that, so. That’s what I, that’s what I like about what you do. What led you to do research on how the economy could be predicted in the first place?

Harry S. Dent Jr.  Well, you know, I had the intuition when I was in college, that I can see these cycles, clear cycles, I’m like, well, if things go up and down, and people invest the most, and buy the most houses and do all this stuff, the top and then they’ll see the bottom coming. well, come on, if there’s a cycle, there’s a reason for it. And only after I stopped consulting to Fortune 100 companies if any company and took that state- same strategic consulting into new ventures. In the early 80s, the new ventures were appealing to the young baby boomers, the giant generation and nobody saw coming early stage and so I had to start looking into demographics by default. Now, one thing to look at demographics another thing in the same time frame 1981 when the US government started year-by-year publishing their first demographic surveys of when people spend money, by income and age, I mean down to 600 categories, potato chips, for crying out loud. So, I quickly determined from that, oh my god. Back then the peak in spending in the US, in most developed countries was 46, maybe 47. And, and now it’s a little higher, but, but I… So, shortly after that I developed, I was consulting these new ventures. But I already been interested in economics, but I quit my economics major after two courses, because it was a waste of time, all theory and all blah, blah, blah. And, you know, you know, what turned me off, Bruce, most economists said, ‘Well, nobody can predict the future.’ And I’m like, ‘What?’. If you can’t predict the future to some degree and the thing, if there’s not some predictability with all these plans whirling around us and all these things happening, then, what do you mean? Why are you even in economics? So, I quit economics. I studied everything else in business, but I didn’t really learn about demographics and another important concept, the S curve, how new radical innovation start on a small scale with a few crazy people like Steve Jobs, you know, and then move into niche markets and then explode at a predictable time at 10% penetration into the mainstream and go to 90% fast. So, demographics and the S curve were the two things that allowed me seeing it in business, who then started to project it, Oh! with the whole economy does the same thing. And that’s when I got like, I mean, when I first put a 46 year lag on the birth index in the United States, and saw that it was almost a perfect mirror of the stock market, almost 50 years in advance? … in my chair, I’m like, ‘Oh, my God, I got to break through here.’

Bruce Norris  Well, you know what…

Harry S. Dent Jr.  ….could break through it turns by accident, but I was looking for it. And I was looking in the right places, you don’t look at the old companies for the future. You look at the new emerging companies, you don’t look at the old generation, you look at the new generation, I ended up looking at both at the right time.

Bruce Norris  My question, next question was going to be what was your AHA moment? And you just told me those are fun for a researcher when you look at something and go, ‘Holy cow. No one’s ever seen this.’ That is so fun.

Harry S. Dent Jr.  Yeah. And one year later, I got, I got a 20-year lag on, in, on, on workforce growth for inflation, same thing, demographics. Who would think ‘people’. Of course, you ought to ask why would nobody think it’s not people? Why would, think why would people think government policies and a little more Republican or a little more Democratic or whatever free market are not which are having effect are more important than what people do predictably, say, I just asked you right out the gate, would you rather hire a 17-year-old or a 48-year-old, okay? End of story, who’s gonna be more productive and smarter and wiser, now, there’s exceptions to that. But that’s, that’s how simple the economy is.

Bruce Norris  What, what lead me down the road to try to figure out stuff was personal bad experience. So, as a real estate investor that did everything right. But you couldn’t do much wrong in the 70s.

Harry S. Dent Jr.  Yeah.

Bruce Norris  In 89, and 90, I built, I built seven custom homes, and couldn’t get rid of them. And, and then I had in 1995, my son, Aaron graduates from high school, and I buy him a Honda Civic for 1506, and buy a three-bedroom house in my hometown for 1303, and it, it just dawned on me, I said, ‘What the heck happened to real estate?’ And what I did is I looked in the library for, for articles written about real estate timing, from 1970 on I read every news article, every, every magazine article, and no one predicted anything in the future. And so, that’s how I got interested in it saying same kind of way. I wonder if it, if it can be figured out. And so that was…

Harry S. Dent Jr.  …if something that big happens, a real estate boom and bust, come on. You told me it happened by accident? By a lightning strike? Of course, there’s a reason behind it. And, and people always think, ‘Oh, it’s because the government had good policy or interest rates were lower or higher’. And that matters, too. But interest rates are totally determined by demographics as well. Older people mean lower interest rates, and young people unproductive, and expensive mean higher interest rates. Young people mean inflation. Old, middle-aged people means a boom, and older people mean deflation like we’re happening now. No matter how much money they print, guess what? We don’t get inflation. Not a surprise to me.

Bruce Norris  That’s interesting. Ah, yeah, I just, I love charts. A lot of people in real estate very high up people that are in, you know, in charge of other people’s or swaying other people’s opinion, a very, very common comment. As course when interest rates go up, prices go down. And you know, you only need two charts to go and make that, see if that’s true. You need to chart for the 70s an interest rate, interest rates doubled. And prices…

Harry S. Dent Jr.  …highest in history in real estate boom.

Bruce Norris  Yep.

Harry S. Dent Jr.  Exactly, Bruce.

Bruce Norris  Yeah.

Harry S. Dent Jr.  That was one of the wake-up calls for me. It means you have to dig deeper.

Bruce Norris  Yeah.

Harry S. Dent Jr.  Okay.

Bruce Norris  That’s right.

Harry S. Dent Jr.  Interest rates were up because of the unpro, productivity of the declining generation, and the new young generation, but the new young generation was starting a rising demand for real estate at the same time. So, two different things, you had real estate going up and I also realized stocks don’t like inflation, bonds don’t like inflation, real estate is one of the best- real estate and gold are two the best correlators with inflation, if inflation goes up, the price of your house goes up, because it would cost more to build a replacement.

Bruce Norris  See what you just said. Again, in studying this, I was able to get access. And I mean, literally, I’m the only human being other than the inventor of this report that has access to the vault, where they have one report a quarter for some of the years in the 50s, 60s, and 70s. And so, because I did the research he respected that I got in the vault. And what they did, which was incredible in the 70s, they actually took per year, the same house, and they charted the breakdown of the cost to build it for, for a decade. And I realized, holy cow, when I own a house, I own a basket of commodities. And then there’s a, there’s a correlation between new home and existing home. And only four times in history, have they crossed over, where existing homes are more expensive than new. And it’s because demand, and that we just had that in December of 2020… time.

Harry S. Dent Jr.  Low inventory and high demand of homes, and in fact, is more low inventory than high demand from my view, so…yeah.

Bruce Norris  It’s, it’s, well, we’ll get to, we’re going to get to the asset classes. You know, I’m just ,we’ll get to what you think is going to occur because we have people that are listening that have assets and a lot of these classes predominantly in real estate, one of the things that happens to demographics, so you and I maybe you’re about same age, I’m 68. And so…

Harry S. Dent Jr.  I’m turning 68 a week from now.

Bruce Norris  Okay, so..

Harry S. Dent Jr.  We’re same age.

Bruce Norris  So, there’s some stuff that’s happened. When you look at demographics, there’s things that have changed that we have a longer lifespan. So, how has that changed some of the outcomes?

Harry S. Dent Jr.  Well, that’s a really excellent question, Bruce, because the standard of living of the everyday person in the United States, in developed world has gone up eight times in the last century.

Bruce Norris  Wow.

Harry S. Dent Jr.  But the average life expectancy has gone up from 50 something to almost 80.

Bruce Norris  Yeah.

Harry S. Dent Jr.  People live longer. They they spend more, they earn more, they contribute more, it, you know, it’s like anything, you start a new business, it’s an investment, it costs money, do they pay off or not? Well, if you have babies, and they live to 80, or 100, instead of 40, or 50, or 60, of course it’s better for the economy. And of course, these demographic trends I’m talking about, demographic trends are really about the workforce. How many young people enter at age 20, on average, and how many old people exit at age 63, 64 on average, and that’s going up over time. So, if people live longer and work longer and exit later, and if there’s younger people born more, which is not happening now…

Bruce Norris  Right.

Harry S. Dent Jr.  Then that, that increase it and this stuff, Bruce is predictable. I mean, the rate of people die and the young people being born, it’s one of the most predictable things on earth. And economists don’t look at it.

Bruce Norris  What about the, the change in the household structure where you have a lot of now single, single mom or single adult households, and less kids? How does that impact? What what you…

Harry S. Dent Jr.  Well, you know, actually, in a way, if you have more households per family size, it just means you need a little more real estate. Okay? I mean, you need a certain amount of space, but but a single mom with two kids versus a married couple with three kids. Okay, you’re talking three versus five, but, but the house is not going to be as much larger on average. So, I’d say you know, the, the fact that we have a more households and fewer a lot smaller families with the same population are growing slowly, is actually a slight, not a big but a slight benefit for real estate, but it also tells you, you need smaller houses instead of larger and more apartments, then you know, mcmansions that’s…

Bruce Norris  Okay. When you have predictions as anybody that does predictions do not happen on a timely basis. What is your process to reevaluate. Why?

Harry S. Dent Jr.  Well, you know, I’ve gotten Bruce every major Innovation. I just started out with the simple spending way 46 year, you know, lag on birth index, which, which first I had to adjust for immigration, I realized, wait a minute, some countries that doesn’t matter but in the US, the immigrations, a big deal. And so I had I actually my forecast for underperforming what would happen when I was so bullish in the late 80s, early 90s, people thought I was a madman. I realized, ‘Oh, immigration is augmenting.’ So, you have to adjust for those sorts of things. And I found that ‘Oh, there’s there’s other indicators’, geopolitical, I mean, you know, there were 20 years we’ve had difficult middies crises and terrorism and all this stuff. This is not an accident. This happens for about 17 to 18 years, every 35 years. And now we’re actually looking at everything geopolitically. I our Qaeda is declining. Our worst terrorism is, is people at home, you know, getting pissed off because they’re falling behind the success of others. So, it’s so so that, but most important boots, I found a technology, science and technology. So, people going from unproductivity teenagers into the workforce into peak spending and  productivity in their mid to late 40s. That’s huge. What’s bigger is new technologies like like, okay, like the personal computers that then got linked on the internet. And now blockchain which pulls all financial assets and things of value onto the internet. Oh, my God. I mean, this is huge. I just was doing an interview earlier this morning. I said, you know, is 10 years ago, my research took three full time research assistants, you know, it takes now? I split one with my partner.

Bruce Norris  Wow.

Harry S. Dent Jr.  Three to a half because the internet allows me to go quickly and identify things I want to go to. And then I put so I don’t tell some poor person. ‘Oh, I need to find this find it’. No, I find where it is, and then direct it to them and they jump on it. And they do all the hard work on the charts and fleshing it out. That tripled, quadrupled my productivity. So, the internet scraped Blockchain? All, financial assets, everything’s going to be on Blockchain. Now Blockchain set us infancy, you know what happened the Dot-com stocks bubbled up in ’99, 2000 and crash. You know, much they crash? 94%. That’s going to happen with Blockchain here, I think and that, and the Bitcoin and stuff, but then they’re going to boom for the next 10, 15 years, like the internet stocks, like Dot-com did. So, innovation, new things, the best thing… Well, more people is always good. But the best thing is that new technologies that take what we do now and make it 10 times more productive, like the assembly line, I tell you, there’s one important person before modern day time, Henry Ford, the assembly line was the most important innovation of the early 1900s. Everything went to the assembly line after he proved it with car. And that may, and that’s what created we didn’t have a middle class before that we did not have a middle class, there were rich people, a few merchants and then a bunch of poor people. That was like before the assembly line made every day people productive and smarter. And now computers, and the internet and Oh my god, I mean, I’ve been working from my home since 1989. How much money I save on real estate and office costs and dressing up every day and blah, blah, blah, blah. I mean, I’m telling you, and I don’t mean not to, you know, I don’t have to brush my teeth some days, you know, I mean, massive, I probably save two hours a day, from working from my home, not to count the real estate costs of paying for a freaking office that I didn’t have to come into, so…

Bruce Norris  What you’re talking about is…

Harry S. Dent Jr.  …making us more productive.

Bruce Norris  As far as original research that I did. Yeah, I, first of all, I didn’t. This was 90.. 18 let’s say 95, but I, I just went to libraries. I studied data, I had to handwrite, all this stuff, every category, all that stuff I did took me a year and a half to get all the data together to where I could actually draw or write or first report. So, I get it.

Harry S. Dent Jr.  Well now you can get, that but I did the same thing, Bruce. Literally, to early-stage my research I was running companies part-time on the side and in trouble, turnaround manager and sitting at home reading through 10,000 pages of the history of Western civilization and charting out things over time… which we don’t have to do that today.

Bruce Norris  You know what though? I tell you what, I bet you’re glad you did it because I am too.

Harry S. Dent Jr.  I am because by doing it physically it implants in your brain. Be proud, I learned. You’re right. I learned a lot about that. But if I still had to do every chart like that, today, I’d be wasting a lot of time for my newsletter subscribers.

Bruce Norris  You know, I don’t have a formal education. So, I have a high school diploma. And I’ve been, I’ve been honored to debate, many PhDs in economics. And the reason I can do that with confidence as I went to the library and hand did it all, so I know, I know why I’m saying what I’m saying.

Harry S. Dent Jr.  Yeah.

Bruce Norris  I was gonna make make this statement, because this is, this is true in my life. It’s true. And anybody that predicts, the enemy of accurate predictions is intervention, and systemic events. And so, I’m going to go back to the, to the around 1980 and Paul Volcker. That was when they raised interest rates a lot. And he was front of Congress and the builders were there. And they basically said that you’re destroying our business. And his comment was, ‘Well, right now I have bigger fish to fry’. And that was, that was interesting. Well, since then, it seems like we’re headed in a different direction. So, the Fed has a number of tools, lowering interest rates, buying assets, giving out money. And there was a quote, I just looked it up this morning, Jerome Powell said that this was about 25th, November 2018. He was happy with the quantitative tightening and that it would continue. And by December 16, the stock market had dropped by 3000 points, then that was the end of that.

Harry S. Dent Jr.  Yeah.

Bruce Norris  And so, why the change in policy now really directed toward helping asset prices, instead of whatever the bigger picture is, why is that the concentration?

Harry S. Dent Jr.  Very simple answer, Bruce, the baby boom keep and spendings. I predicted 25 years in advance, it would in late 2007. And the economy slowed down and everything they did at birth to try to get nobody needed to spend more, nobody needed to borrow more, people borrow the most, you know, in their 40s spend the most just after that. And what they did was by accident in the 2008 downturn, when it got so bad and look like the next great depression, which is what I was predicting. That’d be like, 1930. It looked like 1930. And they said, holy cow, and Ben Bernanke, back then it studied the Great Depression, studied it never done it, never been there, like most academics and economists. And he said, ‘Oh, my God, we can’t have this. It’d be the highest unemployment…’ So, they just started printing money. Now, they thought when they lowered interest rates, and printed money made more available to the banks first bailout, the banks, but but to give them more liquidity, oh, people would start borrowing yet. No! they didn’t need to borrow. So, they finally realized, oh, wait a minute, though. And when we did print all this money, stocks went up and real estate went up, ‘Oh! well, that at least makes the top 10 to 20% that owns most of that feel richer and spend a little more money.’ So, they ended up stumbling into this quantitative easing, they thought they were supposed to just do it to get over the 2008-09 crash for a year, then they realized the economy was so weak, they had to keep doing it more and more. And now, Bruce, in the last year and a half, if I combine monetary stimulus, and the new fiscal stimulus programs, and I haven’t even counted the 4 trillion versus 2 trillion infrastructure plan out but 55% of GDP, 55% of GDP to stimulate a dead economy hoping it will grow another 2% again, like it has, a one and a half. This is insanity. This is gonna, these central bankers don’t know they’re, you know what, from a hole in the wall, they do not. They’re academics. And politicians never want a down economy when they’re in. So, everybody’s into this, ‘Well, if we just have to keep printing money to keep this going, that’s what we’ll do.’ And they even get Warren Buffett to sign off on this. I’m sorry, Warren Buffett, shut up manage money. You’re a hero with that, shut up. He doesn’t know anything about economics. Shut up, because people trust him. And he’s saying, Oh, this printing money out of thin air as if you could create prosperity out of that is a good thing. They’re just helping the economy. No, Warren, it’s not a good thing. They are setting up the biggest fall and crash in history. That’s all they’re doing.

Bruce Norris  When the Fed balance sheet went up from about 4 trillion to almost 8 trillion now, what is it that they, what is it they bought and why did they do what they did?

Harry S. Dent Jr.  Okay. People say they’re just what they do. They’re not, it’s not like Fiscal stimulus of reason which is actually a better way to go if you have to stimulate because they’re actually giving money to consumers or businesses… …they’re just buying bonds, high quality Treasury and agency bonds. So, they’ll think, well, they just buying bonds? No, no, they are injecting more money, trillions of dollars into a fixed financial system of bonds, real estate and assets and those money and it starts in bonds, where do they go? They buy those bonds. And those people reinvest in higher yield bonds, or higher yield real estate, or higher yield stuff. And so, what they’re doing by doing that is pumping up financial assets. There again, they’re not giving it to businesses, or consumers, which also to me is bad because it causes people to overspend, over expand, over borrow, which you also pay for later. In this case, all they’ve done is created the greatest financial asset bubble in history. And Bruce let me put a number on that, that you will not hear from anybody else. Okay. It took me a while to get to this. Because it’s not, nobody polishes it and he got to pay 525 trillion. 525 trillion globally against 80 trillion of GDP, six and a half times our GDP, we now have financial assets of stocks, bonds and real estate. And you say, well, whoo, is that bad? Yeah, normally, that’d be two times GDP and at worst three. So, we have the greatest financial asset bubble in history, we first had a debt bubble, start to fail from overborrowing, over stimulus after the baby boom turned down. Well, when they, when the when stimulus couldn’t stop that they realize, Oh, well, let’s pump up financial assets, because that’ll quite least make people feel temporarily more rich, only the rich by the way, not the average person. And now they got the biggest financial asset bubble, so guess I, here’s my endgame here. 525 trillion, is cut in 40, to 50% down to reality, maybe more. $250 million, globally, disappears forever, or for a long time. That’s why we go down. That’s the Great Depression I had. And it’s not going to last that long, because we’ve already been struggling for years and years, we just have to flush the excess debt and financial assets out of the system. I think that’ll happen the next two to three years, but it’s going to be, it’s going to be painful, they put this off. Instead, I tell Bruce also. And we’ll just let the 2008-09 recession go on another year, year and a half like 30 to 32. And flush out the bad companies and the bad debt, which we didn’t do. We’d be over this, we might be struggling to come out until the millennials come along, which is not till 2023-24. But we wouldn’t be at the precipice of an even bigger downturn than we’ve seen since 1930-32. So, I think this won’t be as bad as 3032, because governments will keep supporting a bit, this is going to be worse than 2008-09 guaranteed. And it’s not going to be over for stocks until at least late 2022, early 2023. The economy’s not gonna really come out of this until about 2024. So, hunker down.

Bruce Norris  Right. You gave an asset value, what’s the debt attached to that? I’m just curious.

Harry S. Dent Jr.  The debts about half that, the debts about 252 so on, or 60. That is record levels, that is higher than ever compare, again, you have to compare everything to GDP.

Bruce Norris  Is that… is that ratio two to one normal debt to asset?

Harry S. Dent Jr.  Uh, no, no, the financial assets usually would not be that much higher. So, so again, the debt was already stretched compared to anything in history. And then when they found out that stimulating the economy didn’t help spending or borrowing because people didn’t need to, they ended up doing it just to pump up financial assets. So, it’s the financial assets back in 2007, that crash was both things. The baby boom slowing down, which triggered a debt bubble I’ve been, I was not just warning about the baby boom, peaking in 2007. I was warned about the greatest debt bubble in history. Well, the financial asset bubble was created to offset the debt bubble. And now, I tell people forgive the debt bubble. The biggest threat to the economy is the financial asset bubble, if 525 trillion.

Bruce Norris  So, what’s interesting, we interviewed an economist that we’ve interviewed quite a bit, and I have a lot of respect for him. And they do, a you know, they do an annual report. And then the beginning of 2020, they do a three-year projection. And they had 2021. This is January of 2020, saying the 2021 GDP growth would be 2.0. So, this year, they have the report for 2021 at 6.5. So, I went, okay…

Harry S. Dent Jr.  That’s after a downturn. That’s not realistic.

Bruce Norris  Yeah. What’s interesting about that GDP growth. I went backward, you know, because I like charts and go, ‘Okay, well Where were we last at six and a half percent?’ That was 1983. And then I looked at the fed fund rate, it was 10. Not a quarter. And you just go Wow, that is, that’s an amazing… You just realize if you have 6.5% GDP growth, it’s on the backs of nonsense.

Harry S. Dent Jr.  Yeah, it’s entirely fiscal and monetary stimulation. It’s not real spending. How many times have people refinance their house or trade it up to a better house and gotten their kids in a better school? I mean, there’s a limit where you can’t do this anymore. And the problem is not that the economy will fail as much as financial assets will finally fail. There’s a point where anybody to trade stocks, which I’ve done for a lot of years, the Smart Money drives the market when the Smart Money decides this thing’s just too crazy and over and they start shorting it, it’s over. I’m telling it, it’s the, it’s the 525 trillion of financial assets, starting to come down to reality. This is going to tank this economy because demographics are already near their low point in our cycle. And government stimulus is offsetting that it’s the financial asset bubble that these stupid douchebag economists created. To solve this problem that’s going to kill them. They created a financial asset bubble that’s bigger than their dumb asses, and that’s what’s going to kill this thing. You wait for stocks to go down, I can see 40 to 50% in the next two to six months. That’s what’s going to start a big problem.

Joey Romero  That’s gonna do it for part one of our interview with economist Harry Dent. Please join us next week for part two, as we lead into Bruce’s second-quarter report on Saturday, May 15, Titled: The Impact of the next nine months.

Narrator  For more information on hard money, loans, and upcoming events with The Norris Group, check out thenorrisgroup.com. For information on passive investing with trust deeds, visit tngtrustdeeds.com.

Aaron Norris  The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.

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