To really understand what’s going on with the American economy, don’t look at the headlines. Don’t look at the unemployment rate or the trade balance or the deficit. Don’t even look at what’s happening today at all: Look at what happened 46 years ago.
And what happened then? Fewer Americas were being born, points out Harry S. Dent Jr. in “The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014-2019” (Portfolio).
Following the Baby Boom, which peaked in 1961, came the Baby Bust, a long slow decline in the birthrate. Those babies grew up and began spending in accordance with highly predictable patterns.
People tend, for instance, to buy houses at about the same age – age 31 or so. Around age 53 is when people tend to buy their luxury cars – after the kids have finished college, before old age sets in. Demographics can even tell us when your household spending on potato chips is likely to peak – when the head of it is about 42.
Ultimately the size of the US economy is simply the total of what we’re all spending. Overall household spending hits a high when we’re about 46. So the peak of the Baby Boom (1961) plus 46 suggests that a high point in the US economy should be about 2007, with a long, slow decline to follow for years to come.
Anyone find that convincing?
Read more at NEW YORK POST.