In this compelling episode, renowned economist Harry Dent shares his unconventional journey and insights into the world of economics, challenging traditional theories with his practical approach.

Having honed his analytical skills at Harvard Business School, Dent shifted his focus from the corporate sphere to aiding small businesses and individual investors.

His groundbreaking research on generational spending cycles reveals a clear, predictable pattern in economic booms and busts, influenced by human behavior and life stages.

This episode is more than just an economic discussion; it's a deep dive into the mind of a maverick economist who brings clarity to the complex world of finance.

Loral's Takeaways:

• Economics, Business, And Personal Experience (01:19)
• Economic Trends And Predictability (03:25)
• Economic Cycles And Generational Spending Patterns (08:59)
• Demographic And Economic Trends In China And India (14:46)
• Economic Bubbles And Inflation (25:59)
• Financial Asset Bubble And Its Potential Impact On Investors (31:01)
• Economic Bubbles And Their Impact On The Market (36:13)

Meet Harry Dent:

Harry S. Dent, Jr. is a best-selling author and one of the most outspoken financial editors in America.  Using proprietary research, Harry developed a unique method for studying economies around the world, and uses his analysis to provide insights on what to expect in the future.

Instead of focusing on endless graphs that assume people behave rationally, Harry instead looks at real people, making real economic decisions for themselves and their families.  He combines demographics with actual spending to inform his research.

Harry received his MBA from Harvard Business School, where he was a Baker Scholar and was elected to the Century Club for leadership excellence. He then joined Bain & Company as a Fortune 100 business consultant and now heads the independent research firm HS Dent Publishing.

Since then, he’s spoken to executives, financial advisors and investors around the world about demographics and the power of identifying different trends. Harry has appeared on “Good Morning America,” PBS, CNBC and CNN, Fox News and is a regular guest on Fox Business. He has also been featured in Barron’s, Investor’s Business Daily, Fortune, U.S. News and World Report, Business Week, The Wall Street Journal, and many other publications.

Harry has written numerous bestselling books over the last few decades, from The Great Boom Ahead in 1992 to Zero Hour in 2017. In 2019, Harry published his latest book Spending Waves, where he shares decades of extensive research covering over 200 businesses across 14 different industries to give readers insight into business and investing trends for the years ahead.

Connect with Harry:

https://harrydent.com/

Meet Loral Langemeier:

Loral Langemeier is a money expert, sought-after speaker, entrepreneurial thought leader, and best-selling author of five books.

Her goal: to change the conversations people have about money worldwide and empower people to become millionaires.

The CEO and Founder of Live Out Loud, Inc. – a multinational organization — Loral relentlessly and candidly shares her best advice without hesitation or apology. What sets her apart from other wealth experts is her innate ability to recognize and acknowledge the skills & talents of people, inspiring them to generate wealth.

She has created, nurtured, and perfected a 3-5 year strategy to make millions for the “Average Jill and Joe.” To date, she and her team have served thousands of individuals worldwide and created hundreds of millionaires through wealth-building education keynotes, workshops, products, events, programs, and coaching services.

Loral is truly dedicated to helping men and women, from all walks of life, to become millionaires AND be able to enjoy time with their families.

She is living proof that anyone can have the life of their dreams through hard work, persistence, and getting things done in the face of opposition. As a single mother of two children, she is redefining the possibility for women to have it all and raise their children in an entrepreneurial and financially literate environment.

Links and Resources:

Ask Loral App: https://apple.co/3eIgGcX

Loral on Facebook: https://www.facebook.com/askloral/

Loral on YouTube: https://www.youtube.com/user/lorallive/videos

Loral on LinkedIn: https://www.linkedin.com/in/lorallangemeier/

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Real Money Talks Podcast: https://integratedwealthsystems.com/podcast/

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Welcome to Real Money Talks, real strategies from the money makers and the world changers that you can use to make millions. Keep those millions. Multiply your wealth and build your team. Here's your host, author of five New York Times best sellers, money expert on Dr. Phil, CNN, CNBC, the street TV, Fox News, and the view Loral Langemeier. I'm gonna I'm still gonna call him a dear friend. It's been a long time since here and I've talked the pandemic hit. You know, it's a lot of lot of the experts and I'd say, mentors, friends jayvees affiliates that I've done business with prior to the pandemic, reaching back out and bringing the ball back to the forefront, Harry Dent and I traveled all over Australia together. We've done a lot of tours together. The man is extraordinary, in my opinion, is one of the world's leading economists. And he's his predictions are usually right. He's wrote a an amazing amount of New York time best selling books, the roaring 2000s and just goes on and on. So Mr. Harry Dent welcome. Hi, Laurel. Hey, it's so good to see you. I miss you and all our little plane rides around Australia. That has

been a while yeah, it's getting older I guess. I just

little Logan, remember a little Logan it ran around like Mike Tyson stages he is now 20 465 was 290 played for Georgia Southern now he dropped about 275 He just got engaged lives in Nashville, Tennessee with a beautiful Southern belle. Love her. So give them a little backdrop before you jump into your presentation. And I'm just gonna let you run because I know you have a lot to say. People information. Yeah,

hi, everybody. I am supposed to be an economist. I'm not actually an economist, thank God, I did a major in a cot and economics when I started in my major in college, but after the third course I say this is a waste of time. You know, it's big. It's it's conceptual, theoretical, nobody can understand it. Economists can't predict anything anyway. And I wanted to be in the prediction business. So So I took everything else I took my father's but he but he was in politics, big time. And all of his big donors said no, no, haven't taken accounting and finance. We wish we got that. But I took it marketing management, everything but economics after that. And what I did was when when I did, I went to Harvard Business School, which I had to go out and work for a couple years even to get in there. It's very hard. The hard part is not the school it's getting in and the hard part. So I had to work for two years, get some really big, you know, reviews from from the people I worked with. And then that was the best thing I ever did. Because they had this case method, and wasn't like learning road stuff. They just threw a case at you. And 80 people in his section all think they're smarter than hell argue over this chase. I mean, it's just I've never had more fun. I never realized what I was really good at, until I did that got thrown in that that kind of circus. And, and went from there. And and of course, I thought, well, I'm supposed to be a corporate business consultant, I tried working for corporations before that, to get my business experience for Business School. And that didn't work out. Well. I tried working at Bain and Company, fortune 100 Consulting comm a great company, and they've been massively successful. But I couldn't even consult to these, I hate to say at large dinosaur companies, I call him so. So I ended up breaking off. Somebody wanted me to run turn around a publishing company, which I did. And then from there, I just kept turning around small businesses in California. And that's where I learned everything, you know, because because we know the people there, there's people who improve things. And there's people who really create something new, I call it radical versus incremental innovation. And so I realized I wasn't supposed to be in corporate America, and my best clients would be small business entrepreneurs and and individual investors, not corporate, not large corporations and institutional investment firms and that sort of stuff. So So I've just been doing that ever since. And it also in running these I turned around six companies in the 1980s, I was just consulting but small businesses are almost always in trouble. They don't they can't get help sophisticated help. So I turned around other companies did that and then but I was doing research all along. And I was learning with all of these all the important point all of these small entrepreneur companies were in the new economy that was emerging back then in the 80s. And not in the old economy that I was you know, working with at Bain and Company so so so that's that's what got me oriented towards business entrepreneurs. But the big thing is I had time to do the research I wanted to do that I didn't get did economics courses didn't get me And what the secret is, it's all about people, people drive our economy. And individuals are can be seen as crazy and be short or tall and all types of stuff. But they're incredibly predictable in large groups. So in fact, I got this, I was doing some research for one company, I was thinking Firestone tires, about when people drive the most, and when they buy tires, and automobiles and stuff, and then I ran across this survey, they said, Oh, the average person spends the most money, not only on automobiles, but in total at age 46. And I said, we'll Damn, that ought to be important for economics, if we know when all these people entering the workforce are going to grow up and spend the most money and we know it down to a number like 46. So that's when I did my real cert research. And my first breakthrough indicator off showed his head, a full a simple 46 year lag on the birth index. I later had adjusted for immigrants, which is a little more complicated, but I know I know, the ages they come in. And and I had the best leading indicator in history when the economy had boom and bust and I in the late 80s, when people thought the US was done in Japan, and East Asia, we're going to have us for lunch said no, we're going to dominate the next boom, because we have this gigantic baby boom generation. So let's jump in.

Here. I have one question before, I'm just gonna let you go. And those of you if they have questions, I'm gonna have him put him in the chat. And then towards the end, we'll just go back through and just answer and summarize a bunch of the questions that work. Yeah.

Okay, perfect. Ready, go.

Okay, that's the problem. Everybody says nobody economist. And that's what I learned in the first book, nobody can really predict the future could pass the next election because it's too complicated. And it's all baloney. But truth is long term trends and ask any climate scientists or any scientists by that way, long term trends are a lot easier. And the reason is, long term trends are driven by simple fundamental things, not zillion every day, the market can go up and down for all types of reasons. But if the economy is growing longer term and growing in a certain direction in certain industries, there's a reason for it. And those reasons are simple. And the greatest genius back of his time was Leonardo da Vinci, he was everything at once again, go to all the things he did. His key quote was some Simplicity is the ultimate sophistication. Note, the word sophistication, people think simplicity is simple and not sophisticated. It's hard to look at a complex thing and dig through and find out what is that underlying trend. And that's what we're going to look at today, the economy is a lot simpler than most people have been told. And it's a lot more predictable than you've been told. So my promise to you, you can see the key economic trends that will impact your life, your business, your investments, and your family over the rest of your lifetime. And your kids and their lifetimes. Now that any economist would say that is trading here. Nobody can do that. No, that's much easier to predicting what the economy's going to do in the next year, depending on what the stupid ass Fed does. And whether they raise or lower interest rates. They're just put here, you know, they, they're just putting speed into the economy or slowing it down. Okay. But this is this is especially important, all of what I learned from doing long term research, all trends are exponential, there is no linear or straight lines. And but that just means now we're making so much more progress has been more progress made in the last 120 years since the late 1800s, and electricity and all that sort of stuff, then all of human history for 300,000 years. That's how long we've been around for the monkeys. Okay, so so so this is important, things are changing faster, only gonna change faster. But we can see trends coming with a couple of simple tools. Now, real quickly, and I'm not going to go over all this today in this short period of time. But what I put together is a series of simple cycles. I started in the middle here, that blue line going up and down in the middle. Okay, that is generational spending cycles, okay, we know exactly when people spend they're born in generations that thing and that's another cycle. And so we can predict when there's going to be longer term booms and busts like 1983 to 2007. And if you think well, the boom didn't end in 2007 will ask me how much money they printed. I'll tell you that later. We've been printing money nonstop ever since because the baby boom generation stops spending. There is the top line of fortune. This is the most important long term trend, innovation technologies, different ways of working. The assembly line was the biggest damn single thing that happened in history. Henry Ford shouldn't have been famous for the automobile. It was the assembly line that made everyday uneducated people can X workers 10 times more productive on that assembly line and a spread to everything ever since technologies have a 45 year clock. It took me a while to get that On the generational cycle that I got right on, right on early on. And then finally I realized there's just times where things are better politically and in the world. And so I came up and found a 35 year about 17 to 18 years positive and 17 to 18 years where things are just negative. That is not a cycle that affects the growth per se, but effects things like the stock market, when things feel and look good valuations are higher on stocks, and they do better beyond their growth. And when things look questionable, you know, geopolitically stuff, then those valuations are lower. And then on the bottom here, there's a nice little sample, this is a another pack of cycles. By the way, cycles usually come in three, I learned this from the greatest climate site, cyclist in history, molten Milankovitch, he has 100,000, year 41,020 2000 climate cycles, that guy nailed this way before I did on something way bigger, which just proves the point doesn't matter if it's more short term, medium term, what I'm dealing with are very long term like he's dealing with, there's always cycles, you know what, he got it down to three cycles. So So most dynamics have one dominant cycle, and two other important cycles. And that's when I knew I had a more complete set. And that took me years after I got my generational cycle. But here's this real quick, my first breakthrough in 1988, after about six years of intense research, which I did half time, while I was running in consulting to small companies, okay, this is the Dow Jones and the stock market, the red line adjusted for inflation, so it's real, and we're not gonna deal with that here. And the rest of it just a immigration adjusted birth index for the US lag Ford 46 years where the peak and spinning and that is exactly when the average person peeks and spending. It's not 45, not 47, it is actually 47. Now for the millennials, and it may be 48, for the next generation, or whatever. And it was 44 for the generation before. But this is what makes it predictable. You don't have to understand individuals, averages were really good in this sort of thing. So that blue background goes up and down. That's your predictable generational spinning cycles. And then the stock market gyrates much more the red line around it, especially we just for inflation. So it told me back when I had this in the early in the mid 80s, that this was not just going to be a boom of the Babel is going to be the greatest boom in history. I also predicted 2008, it would stay that we would be down and we'd be down and you can see for many, many years, and then the millennial generation would follow. And I was always warning people, everybody says the millennial Gen, there's more people it's better as a wave. And as comparison to the generation before it, it only brings us back to where the Baby Boom, baby bust drop, it is not a bigger generation from a cycle point of view and taken us to new heights, it only takes us back. And you see the boom to follow doesn't last as long actually into 2037. So this boom did in 2007. They've been printing money ever since and massively after COVID. And that created inflation and now they're having to tighten and I'm saying Watch out folks, because everybody thinks the economy is strong. It's only strong because it 27 sirillium dollars 1.4 times our total GDP ever since the 2008. downturn. That's how much money they printed that just keep us growing modestly. And everybody thinks, oh, the economy's Okay, well, you take that 27 trillion, and we would have been in the 1930s. Okay, we would have had a Great Depression, and it would have lasted a long time. So they've been covering this over. And unless there's a new thing, and God has changed his mind about this, I still say you don't get something for nothing. So you can't just print money and create a boom, which they did. So that means we're gonna have to watch out is access and all this sort of stuff. Now, Europe peaks like us similar between 2010 and 20. And then declined look at these things. This is the whole developer declines for ever. Okay, this is not just a generational peak. This is an urbanisation peak, and on a fluence peak, and one of the things people don't understand, and why we always have cycles, no matter what a boom cycle makes people richer. The problem is when people get richer, they have fewer kids, they want to have fewer kids and get them all in Harvard and Stanford, okay. And the Asians are more this way than the Americans and Europeans. And so this creates a natural thing that even when there's a boom, we start having less kids. And that means slower growth in the future and less kids to drive the next boom, here's China. Now China is an emerging country, and that's different. I'm not going to go on that today. They mostly grow by urbanization in China since 1980s, gone from 10% to 65%, and massive but still most countries go to at least 80 Before that slows down, and these people make three times, folks. That's why and a third world emerging world, urbanization is more important than these demographic and generational booms, because these people make three times just getting in a specialized, much more ample job market with higher wages and higher opportunities. Okay, China is the first and this is important, and nobody gets this even in anywhere. China is going to be the first emerging country. So there's a billion developed country people, and about 7 billion in total, so another 6 billion emerging and all the future growth is emerging. China is the first emerging country to peak in their demographics and then spending and start to go down Japan was the first developed country to peak in 1989, ahead of the United States and America, and then everybody's following. So all these emerging countries to do this, but China's already going to show that even emerging countries get a fluent enough to have peak births and fewer kids and to start to slow down the road. So cute. So what is China piece here and then never grows all the way to 2100? If you're alive in 21, or congratulation, I'm going to be lucky to make it 20 more years. Okay, so So this to me is forever. And even for younger people declining from 2010 to 2100, for 90 years, might as well be forever. Now, what's the what's the flip side of this India, the other very large country with the same approximate one for 1.4 billion population, the difference with India's they're going to keep growing to 1.7. Before they peak, we can project this today pretty well. And China's going to drop the 780 million. Now think about this, a country that gets to 1.4 billion, and in the next 15 years drops to 780 million loses 40% of their population. This has never happened before, folks, okay, and nobody would even suspect it. And we know that developed countries are slowly slowing like Japan, and eventually United States and also Europe, for sure. But nobody would even think that China could drop that much. And every event, even India will peak in 2050 55, in about 10 or 15 years after that there'll be peak urban about 80%. I'm not going to get into that today. And then eventually even mighty India, but India is going to be the single most important growth country for the rest of anybody's lifetime in this room. Okay. And China was the most important growth country since the early 80s. And the United States was the most important one from that since World War Two, okay, so not only know any country is going to do the spinning waves and urbanize. And when they're going to do it, and how fast all this stuff, we also know we also can focus on the countries that are most important. Now, my next breakthrough and research a few years later, after I got this spinning way, this 46 year lag again, you don't get a simpler indicator than that. Okay? I found that okay, that's the blue line here again, on this chart, boom, bust, the last generation I call it the Bob Hope generation, then their bust, and then the baby boom, that big boom, and then the Generation X that baby bust behind that. That's the blue line we already talked about. But something else happened. inflation rises out of the last winter season. That's that's what a depression really is. In economics, you get a spring boom with low rising inflation. Then when the next generation, which is bigger enters the workforce, it costs money to raise kids, it costs money to build offices for them expand infrastructures, and all this sort of stuff. Okay? Everybody, government, everybody has to pay to get this and the parents that talked about them, because to raise these kids, okay. So that's when you get a new generation just entering the workforce, that's when inflation peaks, and then when they get in the workforce and start to learn and become productive people and all this sort of stuff that brings inflation down while you have the even bigger boom, so you have a spring boom, a summer in place so so think of inflation like temperature, a hot summer so summer may be fun, but it's hot and it's not as good as spring to most people. Then you go into fall falling prices on and that's really good for business and stuff and all that sort of stuff. And an even bigger boom, that's the fall boom and falls another very pleasant balance time a year before you go into and everybody much agrees of this except for polar bears and stuff and skiers. Winter comes in. So the biggest generation bust and that brings at that point deflation in prices as well. When you're seeing deflation and we've seen it recently a little bit. We saw it in spades. The 30 deflation means you're in winter deflation means you're in deep shit. Now I don't say see it that way. I love winter I because I love innovation and the worst economy get what's happened, who are the ones that innovate when things get bad people like us entrepreneurs, that's when they have the advantage. When things keep growing in one direction, the bigger bigger companies have economies of scale and all this stuff and big marketing budgets, and they have the advantage. Entrepreneurs flourish. Yeah.

Could I see a question? On the blue line for the generational spending boom, and stocks and economy from 2010? To 2020? Can you explain that a little more to me, Harry, the decrease of that. So is that a generational group of people, for example, the baby boomers, no on that on the slide we were looking at?

Yeah, so you go to that site I started with that is that spending way more and more, and all it is, it's a 40 today. And for the baby boom, it was simply a 46 year lag on the birth index. And I did adjust for immigrants. And that's a little more complicated, but it's also straightforward.

So for example, in this chart here, what I'm looking at is the blue area, which is essentially just a line, we're seeing immigration justed births. In other words, we're gonna have a contraction of a relative contraction of the people that could buy things and consume

this chart with the blue, I guess, rise there in the middle was the baby boom generation, the number of 46 year olds, which are your peak spenders on average, okay. So that's, that's a sign of peak spinning, everybody's moving towards that 46 year old peaking spending before they go down again. Okay, so that's just a 46 year lag showing when that baby boom generation collectively was going to spend more and more money from 83 to 1961, then they would peak and then they would be replaced by smaller numbers of echo boomers, or Generation X, whatever you want to call them. That would be spinning similarly, but in smaller numbers, and therefore the economy would actually slow down. And people say, let's say again, like I said, well, the economy didn't slow down from 2008 to 2023. is supposed to oh, wait, did they just printed money to make up for it? They just sent money. Their

money follows. That that's that's hard follows. In this chart, though. It doesn't look like you appeared to adjust the Dow all the way through current the Dow just because

that's what we'll get to that. Okay, cool. There's a good reason for that, because it goes apeshit out of after that. Okay. stimulus. I mean, it was like shooting heroin. I mean, they do act normal when you shoot heroin or crack or whatever, you know, I've never done those things, of course, but you know, people aren't normal. So that's why we stopped it there. This correlation was one of the that was my breakthrough gives us the audience and stockbrokers. They go like, you can predict booms and bust over the rest of their lifetime. Well, after this, it's a different story. Okay, so So but that's a 14. Now, that's another principle I found investing, okay. People are predictable. You can project particularly by their age, and higher income people actually peak later and peak much higher, obviously, but you can project sectors of the economy, because everything pick up potato chips peak at 42. Okay, just just an example. This consumer expenses survey where I get this spending data has 600 categories down to dinky things like potato chips, and you know why it's 42. Nobody would ever guessed this, I'm the only person on earth that knows this is because that average kid was born to that parent when they were 28. And their calorie cycle is predictably the highest at age 14, even challenge even calorie doctors can predict things like that, that people choose will have the highest calorie intake around 14. Okay, so I don't want to go into you know, because there's a lot here and I'm trying to get an important point. Another important cycle, which I was aware of early on, but I took me longer to figure out all throughout history, and especially modern history, since stocks were invented in the late 17th. And we didn't have stocks before then, by the way, okay, to raise money for companies. Every 90 years, we had these great resets, as these arrows show 90 year cycle. And what I later figured out, that's what led me to the technology that is 245 year technology cycles. And then the people like Strauss and how they came up with a book generations, and we're looking they saw how generations had four different personalities, and I'm in in two groups. And that was that 40 times to that, and that happened over 80 years. So So again, people and in this and then also in this case, we're talking about technology progress that drives these 90 year cycle. Now inflation is another thing that is predictable. Nope. And nobody would ever no economist would Ever connect this. And I connected it because I had so many damn charts, I saw this red Red Line Chart and Blue Line Chart on my desk at the same time. So what the hell is going on and it looked like the same chart, and it was labor force growth and inflation. And then I kept thinking thinking, Oh, young people are expensive to raise. Young people are expensive to train when you first hire him. And this this chart on a two and a half year lag says the correlation between labor force and inflation comes in on a two and a half year lag, which is how long it takes to train a brand new worker before they really click in and start become a productivity machine. And when they do, inflation comes down. So young people raising them is the biggest driver inflation and their productivity as workers into their peak in their 40s is the biggest driver of disinflation, and not one economist on Earth, if I hadn't been the cuckoo guy that stumbled on this, nobody would have stumbled on this for another 200 years, okay. But it works incredibly well. And I was saying all the way back in the early 80s, not only we're gonna have the greatest boom in history, inflation is gonna go down to near zero at the top of this boom. And that's exactly what it did. Now, here's what happened, though, when we got into trouble in 2008. We did have a big down year in 2008, the great boom did in and the stock market crash was big enough. And the unemployment was big enough that economists that Oh, my God, we can't handle this. In fact, Ben Bernanke was the head of the Federal Reserve, and his thesis and his PhD was on the Great Depression. So when he saw 2008, you know what he saw? 1930. I wish he hadn't. But he was smart enough to see that because he was right, we would have been beginning a Great Depression. So they printed a bumper on what do you do just rent money to cover over $3.6 trillion. This was back in a $16 trillion economy, that's us 25% of the economy. And all we need the economy to grow is 234 percent a year to be happy. So we should have been growing a lot faster than that. But it was remember it was in a downtrend. So that's how we they got the economy growing again. So they did that. And they leveled off for a while after 2014. And then it started to slowly get COVID hit, and then everybody got scared. And then they real then they went apeshit this and this is where they blew it, okay? They were keeping this thing going. But they panicked and printed $5.1 trillion in two years. Because COVID Scared him so bad, I would have thought the opposite. COVID is a temporary virus, it's gonna go away on its own, they had influenza, the same thing in the beginning of the roaring 20s, you know, and it came for two years and went on its own just like that, too. But instead, they printed more than ever. And that's what got them the inflation, and now they've had to tighten. Okay, so but you see cumulatively over since 2008, the Federal Reserve has printed $8.7 trillion thrown into the economy. And that's why we finally got inflation in a time when my inflation indicator said it would have still been closer to zero and it will be in the future as well. And that's what got him in trouble. And that and that's why we they all of a sudden they had to tighten it. So again, go ahead

is and that last chart, Harry was that blue area of the Fed balance sheet.

Exactly. That's exactly what it is. Yeah, it's a shitload of amount of bonds they buy, they buy their own bonds, okay, so they're issuing record debt and how do you keep that cheap for the government you buy your own points of interest right? So this is not a not only cheating on economies cheating for the government, they're running up more debt than ever doing all this crazy stuff, but they're pushing interest rates down by cheating and keeping the interest rates costs so so it's this is basically a Ponzi scheme. Okay, when it comes down to it so again, that's why I bring it this chart and update it later. Is it somebody noticed before this, this is what had this is how far after that to that when they started printing money, the economy in the stock market has gotten divorced from the natural proven cycles, okay? And if I'd have had better data on births and stuff I could have gone back farther and I can do it in general I'm telling you this cycle correlates way back but but we could do it in detail here. Okay, so So what does this tell me we have the mother of all bubbles. And bubbles only do one thing in history and and in the last 10 years since all this stuff happened, I am no longer just a cycle and demographic expert I am an expert on frickin bubbles damage. Okay, I've studied everything ever printed on bubbles. Because we're in the greatest, most global and pervasive bubble in all history. I can't even compare this to the roaring 20s which is the last bubble and that also makes the point bubbles are not normal. They only come about once every 90 years on that cycle. I show you early earlier okay, but now we have massive bubbles and these bubbles are going to burst As in when bubbles burst, they burst fast. And once they get enough momentum, not a damn thing you can do. So the central bankers went from over stimulating, but because they overreacted to COVID. Now they've had to over tighten, they've raised interest rates with a 5.25%. They call it 525 basis points. Okay. That's the most they've done since 1981, when they were fighting the highest inflation and the recession from that and all that. And everybody's saying, Oh, well, the economy can take it. I don't think so it's going to take a year to find out because all these things hit on a year, year and a half lag. So 2024 is going to tell whether the economy's gonna take it, and I'm telling you what my bets are, it ain't gonna take it well at all, because they've already pushed his economy way past its limit for 15 years by printing money and pushing interest rates so low that everybody has been buying more and more houses, whether they need them not or buying a bigger one, whether they need them or not. And that's not a good thing. Long term, either.

Question, Harry, I'm so sorry. I'm just trying to keep pace with your information on the previous slide. And the previous slide, it's a bubble. And I see it too. And by the way, I agree with

it. That's not a bubble. I don't know what the hell and look at the bubble is basically saying that the bubble too,

I understand. So what I basically am saying so that everybody can maybe help follow your information a little easier, that the Dow Jones, the price of it is so far away from the blue area. Now the blue areas, essentially representing the amount of people let me make sure I'm clear the amount of people that are able to consume to sustain the price of the current stock market. It's a simple

estimate of the cumulative trends of a whole generation growing up and having more and more people move into the predictable peak is spending at 46, which raises the whole cumulative spending until 2007. And then reduces it until 2023. That but it's a bubble because it's measuring a big important trend, and very accurately, by the way, but

it's a bubble because but there's disparity aside is because the price shouldn't be able to keep up with what the people available to consume. are able to

me has been stimulated the point that people are buying way more and spending more and getting way bigger house and all this sort of stuff. And their stocks are going up giving them profits they don't deserve like normal investors. They just been so overstimulated that we are like, like we were in the greatest boom in history at the very time from 2008 to 23, when natural trends would have said, Oh no, we're gonna have a slowdown and spinning from the baby bust until the millennials come along in 2024 to 37 and create the next boom, in the next moment is small, it just says we're overstimulated. And that means to just get back to normal, we'd have to crash 70 80% is what it basically means.

Thank you. Thank you.

Now, this is the net result, and this is what I've created. Okay. 509 Actually, this number would probably be about 600 trillion now. So let's call a $600 trillion in global financial assets. Okay? When I say financial asset, that's everything. It's all real real estate, personal business and investment. Okay. It's all stocks, it's all bonds, corporate government bright, you know, all this sort of stuff, all debt. Okay. So in in why this is important. This I call the biggest number in the world financially or economically, because global GDP is now just over 100. While this number is now just getting over 600 trillion. So there's what I'm saying there's six times the financial assets, as there is the total annual GDP in the global economy, why financial assets or are factoring in what things are worth in the future as well, stocks are not just the earnings a day is 10 years projected out discounted back into a risk free rate of return. So so this is an important number. And and I'll tell you why it's important when I go back and look at what normal financial assets to GDP ratios of B, it's normally two to three, so three would be on the overvalued side, two would be normal and safe. Okay, so there's six times what does that tell me? What do we have to see here? A giant financial asset bubble burst, that gets us down? So just just to go back down towards normal 250. That's what this chart is saying that arrow going down from 573 to 320 3.7 says it would take about $250 trillion that is two and a half times total global GDP just to give you some birth back that disappear, just to get us back where that spinning wave said kind of back to normal, which means investors lose a lot of money. And you know what it really means. In the Great Depression. Yeah, rich people lost money because they own mostly stocks. But real estate wasn't the big bubble back then. And rich people own a lot more real estate now that the rich people, the higher income people, people in this room are going to lose the most money because 80% of people I mean, 20% of people own 80% 86% of the financial assets and 1% own 40 Okay, so this is this is unique normally, okay, rich people can wait this stuff out. But But this has been particularly a financial asset bubble more like the roaring 20s in financial assets are gonna go down the most and take a long time, they're gonna be very slow to come back at first. Now, another this is an here's my, under the ground indicators, secret indicators I get from people like Lacey hunt, one of the few economists I listened to, because economists have no connection to people in business. I always say economists have never had sex and never run a business. And that may be a slight over exaggeration, but it's not a big one. Okay, if you've known me, okay, so so this is this is really, we've been the debt we've been borrowing increasingly with all these lower interest rates and stimulus has just been getting less and less returns from those debts and investment. That's a bad trend, folks. And here's the second and this is the my ultimate secret indicator called the velocity of money. Again, I've had Lacey hunt, speak at every one of my conferences for the last 20 years since he spoke at mine, and explained this chart, because I've seen other economists put it up and they don't know what it means. Velocity of Money, when it's going up means then this is everybody, governments, consumers and businesses, the money we're investing in everything from housing, or capital investment, or plant and equipment, all this sort of stuff, okay? Or government building buildings and roads, all of this money, if it if money, velocity is the truth. And again, if it's going up all this happening, it means the money's being invested productively, they're getting returns enough to pay back the capital with profits, and then reinvest more. Now when it's going down like it was, if you see the leftist chart from 1918 to 32, and 46. In the World War Two, it means the opposite. Yeah, yeah, we keep investing more and but we're not getting those returns. And that is what happens when you have bubbles bubbles are a sign that money velocity is falling, or vice versa, following millennial Millennial Money. Velocity is a sign. We're not making good investments, we're over investing, not getting the returns, and it's not going to end well. So this money velocity falling always ends in one thing, it's called a depression. And back then it was the Great Depression, followed by World War Two. That was the worst time in entire US history. And now we got this thing falling into now and it says watch out for the next several years, I mean, almost guarantee. China emerging country and the largest second largest the same thing. Here's their velocity money been dropping like a rock and talk about Miss investing money. anybody in this room know how many homes are empty? How many homes have been built and have been sitting empty for years in China? 22% is probably even higher than that now. Okay. That is a bad investment. I don't know. So their money velocities dropped relatively even more than ours. And then people say to me, Well, Harry, this isn't a bubble because then here's a chart. Okay? Look, every one of these is a bubble. By the way. We're in a bubble era, like the early 1900s. But look at this last one from 2009 to 2021. Is it that is it a bubble and what the hell is he both are dumber than shit, they got black rimmed glasses over. This is how delusional people can get and they have all these books in history that match the delusions of mass crowds are whatever, that sort of stuff. Because then when everybody else believes that people believe it, so people aren't really that stupid. It's the crowd thing. This is a bubble and bubbles burst and this bubble goes back down to normal levels. My estimate just from this chart would be 85%. Okay, your stock broker tells you rightfully so 90% of time sit through most corrections because most people don't how to time it and you'll just miss the next boom, right? I love stock brokerage to that they're good. Not now, don't listen to your stock broker now or any financial advisor because they'll tell you to sit through this you'll be down 85% And you will be dead before you catch up if you ever do and nobody ever will because they will sell somewhere down there. And then they'll wait a long time to get back in when it's fine. So this is a bubble make no mistake about out. Here's another great thing, logarithmic chart, which already reflects long term exponential growth. Okay, we got this trend of the last major bubble in 29. And the biggest crash in history over the left and the 30 to 89% in stocks. Okay, well, look, now we're back up in 2000, the first tech bubble and now in 2021, the second one at the top of this chart, and to get back down and just test the bottom and we're not going to stay there forever, but it's a long way down. Same number I put over minus 86%. Do you want to sit through stocks minus 86%? And do you think if stocks go down that much the economy's gonna be okay? So people who are working have to fear losing their jobs, I typically got a job kiss your boss's ass right now. I don't care if you hate them. Okay? And but for entrepreneurs get ready, because when things fall apart, things open up. Older businesses are having to exit things that are unprofitable and layoff workers. So you can hire anybody you want. markets open up. This is what works the best for small companies if you're agile, but most important if you see a company. Now the global real estate thing, I'm not gonna spend more time on that there's a whole topic. This is not equal. Okay? Asia, China, Hong Kong, East Asia has had the biggest bubble in Japan had the first giant real estate bubble and the first giant crash they were ahead of us, okay. And then it's I speak a lot in sodas Laurel is Australia. These guys have better way better Demis because of Asian immigrants, and I mean high quality immigrants, high income, high quality, higher quality and the population on average, but they have a one of the greatest real estate bubbles in Australia is gonna get their ass kicked by the real estate bubble, not so much by the demographics, because they're still going to be selling to Asia for many, many decades. Even when their economy their people do age. So you see Sydney and Melbourne Yeah, then El Nino, the highest LA and San Francisco, California, the most Overbeck Honolulu. So the value is there but everything normal down and aren't many cities, you can see major cities around the world. And if they they're anywhere near normal valuating. So real estate, the difference between this and the last downturn in 2008, stocks went down 57% real estate went down 34. But this time real estate is going to go down at least 50%. And that's what's going to hit people the worst. So again, if you look at bubbles, this is the Shanghai Composite. Their stock might you know, that is one of the biggest bubbles I'm I'm sorry, this is Shanghai real estate. And remember, stocks crash a lot more than real estate, okay, and people in buy real estate on leverage. That's what makes it more dangerous to leverage. Real estate is almost never going to crash my stock. But here I've got a forecast of 78% crash in everyday real estate in places like Shanghai and China. Now, the Chinese have 75% of their net worth on average. In real estate, we have 38% the United States. So this real estate bubble is going to crucify these poor Chinese people who have incomes more like 12,000 compared to our 60 to 70,000 lower income people and by the way, a lot of Chinese everyday people have a second and sometimes a third home sitting empty because there's no rental market there because everybody buys you know, and it's so cheap and all that sort of stuff to buy in the path. And so when this crashes everyday people are going to lose that said most of that 75% network. That's gonna be the biggest real estate crash in the world.

Thanks for listening to The Real Money Talks podcast. Your host has been Loral Langemeier, author of five New York Times best sellers and money expert on Dr. Phil, CNN, CNBC, the street TV, Fox News and the view. Want to learn more about off Wall Street investing tax strategies and multimillion dollar business strategies. Visit live out loud.com/podcast for past episodes, show notes and resources for some special wealth building gifts only for laurels podcast listeners, visit live out loud.com/podcast gifts. Do you have a burning question for Laurel? Visit ask laurel.com to submit your question and it may just be covered on a podcast episode. So stay tuned and be sure to subscribe to get new episodes every week.