Decade of Depression or Resurgence - 2011 to 2020

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Decade of Depression or Resurgence - 2011 to 2020

Since the subprime crisis began to unravel in August 2008, a whole host of doomsayers have come crawling out of the woodwork.  Some are perennial economic “quacks.”  Others are academics who have happened to get the short-term facts right for once.  By and large, those same prophets predicted “Armageddon” in the wake of every financial crisis since their careers began.  So, like a stopped clock, they finally got it right. 

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Consider New York University economist Nouriel Roubini.1  “Dr. Doom” became a household name for forecasting the Great Recession.  But,

  • in 2008, he predicted a major hedge fund meltdown that never materialized.
  • in 2009, he called for oil prices to stay below $40 a barrel just before they spiked to $80 at the end of that year.
  • in March 2009 Roubini called for the S&P 500 to fall below 600, just as it began its 23.5% one-year surge to close at 1,115.

Or look at Gluskin Scheff’s chief economist Dave Rosenberg.2  He was also early to sound the alarm on the 2008 financial panic.  But since then, his forecasts have all been far too bearish and he continues to forecast gloom.

Another so-called prophet is Peter Schiff of Europacific.  Schiff gained fame after predicting the crisis.  Unfortunately, he has been anything but prescient about the recovery.  Today, he insists that the economy is in worse shape than it was 2008 and he is now expecting another “depression.”

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However, Harry S. Dent, Jr. is not a member of this “panic du jour crowd.”  At the end of the 1991-to-1992 recession, he was one of the few who accurately forecast the tech boom that ended in 2000.  Subsequently, he correctly predicted the rise and bursting of the housing and commodities bubbles. 

Like the Trends editors, the H.S. Dent Foundation focuses on long-term forecasts driven by an ongoing analysis of demography and technology.  Its short-term forecasts are based on the interplay of short-term technical indicators with these long-term trends and cycles.

As a forecaster, Dent’s expertise lies in his understanding of how long-term cycles tend to shape the economy across decades and even centuries.  Therefore, this particular discussion doesn’t focus on the next 12-to-18 months — which the Trends editors will examine later in this special issue — but on the next 10 to 15 years...

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