Friday, September 8, 2017
Book Review: 'The Great Crash Ahead' by Harry S. Dent, Jr.
"For the price of wisdom is above rubies." -- Job 28:18 (NKJV)
Harry S. Dent, Jr. and Rodney Johnson combine analyses of demography, prices, debt levels, deleveraging, asset bubbles, and government policies to present a strong argument in favor of major continuing deflation combined with economic weakness and higher unemployment beginning in the next three years and hanging around for some time. While governments are trying to engineer inflation without much success, it's a sobering thesis . . . and well worth studying as a way to be sure that your personal plans and financial practices will allow you to prosper should this well-documented scenario play out.
Naturally, no one can really forecast what's going to happen with prices, economic growth, and unsustainable levels of debt at a given point of time. There are just too many moving parts and too many things that can happen to intervene (such as the sovereign debt and banking solvency crisis in Europe).
Understanding risk is an essential element of gaining financial rewards. The authors provide solid, well-documented arguments for their conclusions that are well worth your time and attention.
If the book has a weakness, it's in perhaps being a little too convinced in the one scenario. If you are looking for financial advice, you may be disappointed that more attention is placed on the scenario than on identifying how specific advice might work out if the authors are wrong in any of their conclusions.
If you have been reading Mr. Dent's books, you'll probably only find the updates on debt and government policies to be relatively new.
That said; it's good to see an update of Mr. Dent's way of thinking. I enjoyed the book.
If this scenario does play out, spend more time thinking about how to go short than this book explicitly discusses. It could be one of the great short selling opportunity periods of all time.
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