Some of you may have been alive during the Great Depression or possibly heard stories about the era and people’s daily struggle to make a living from parents or grandparents who lived through that period. You may have also heard of the phrase ‘Roaring Twenties,’ which refers to the time leading up to the Depression, when everyone was making money on the Stock Market, the economy was growing rapidly, the automobile was entrenched and allowed cities expand. and new industries to be created. The rapidly becoming industrial superpower, the US has often had the decade described as the era of “bathroom gin (alcohol was banned in the US during the 1920s), the Model T, the $5 business day, the first transatlantic flight, and the movie.”
Why am I mentioning all this? Well, according to one of the world’s best known and most successful economists, we are going through a similar period right now. According to him, it will very likely eclipse the Roaring Twenties in terms of prosperity, but it will also precede a time that could eclipse the Depression years in terms of daily struggle.
I now know that we are bombarded with pundits in all forms of media predicting that interest rates will do this, property prices will do that, etc. You are rightly skeptical as the information is too vague or obvious to be of any real or low use and lo and behold, the same person shows up a couple of weeks later and says the exact opposite of his previous advice. The question to ask yourself if these people are so experts in their fields, why are they still working for a living?
The person I refer to as the predictor of all these events is Harry S Dent Jr., a Harvard graduate and also a well-known author, whose latest book “The Next Great Bubble Boom” documents his view of what will happen next. in the next two years. decades and beyond. Now, if you want credentials, this man predicted the boom and then the bust and slump of the Japanese stock market and economy in the 1980s. Also in 1992, while much of the world was still in recession, he published a book that he describes the boom of the 90s and also the bust (which he calls for a correction) in the early 2000s and then a relatively quick recovery leading up to the period. we are now. Of course everyone has the critics of him, but this guy has made some bold specific predictions, so it would be very hard to say he meant anything else or to take them back if they didn’t come to pass.
How does this relate to the 1920s? Well, according to Dent and many others, we experience major technological advances roughly every 80 years, or every 2nd generation. Now, typically, there is a 20 to 30 year gap between mass market acceptance of the technology. For example, the modern automobile and its related components were invented and available in the 1890s and 1900s, but it was only in the 1920s that it became a “everyone’s item.” Similarly, the microchip was invented in the 1970s, but only in the 1990s and now that computers, the Internet, mobile/wireless technologies are taking over everywhere. Companies like Ford, Standard Oil, and GE rose to prominence in the 1920s and today are Microsoft, Google, and Nokia. However, Dent argues, due to the nature of human behavior, demographics, and the revolutionary nature of this change, there will be an inevitable and, in this case, a sustained collapse and period of depression. History seems to be repeating itself as humans have short memories and for the past few generations this same pattern seems to have occurred. Around the period Dent argues that the first big crash will occur in 2010, also coinciding with the year that the first of the Baby Boomers reached 65 and began to retire, thus taking large amounts of money from the world’s financial markets.
Now all of this may sound scary to you, but at the beginning of this column I mentioned you or you probably know someone who lived through the last Great Depression and has obviously survived. Pay attention and they will give you valuable insight into what society is like in desperate times and pay attention to experts who are practicing what they preach and not just hedging their bets.