Another Reason to Ignore Government Statistics

Harry S. Dent | Monday, September 16, 2013 >>

I have been warning for decades that during the economic Winter Season, which started in 2008 and will last until around 2023, immigration will fall like a rock and births will decline substantially.

This means that the population estimates the U.S. Census Bureau and international agencies like the United Nations (UN) recently released are far too optimistic.

The government projects our population will swell to 420 million by 2060.

I don’t see that happening. In fact, I forecast the U.S. population will only reach about 360 million by then. That’s a 60 million difference, which is pretty significant if you ask me.

See for yourself…

See larger image

My calculations anticipate that we’ll add only 44 million people to our country in the next 47 years. That’s 936,000 new people a year, on average, or 0.27% growth.

Put another way, that’s only 20 million households by 2060, or 425,000 new households per year.

That means the government and businesses are building infrastructures to accommodate 575,000 households and 1.28 million people that probably won’t even exist. What a waste.

But why should you care? After all, that’s some 47 years away.

Quite simply you should care because experts are using those incorrect estimates to forecast an increasing need for housing and infrastructure in the decades ahead. And if you invest in those areas in the hopes of capturing double or triple-digit gains on the back of that growth, you’ll be sorely disappointed.

I hear the argument all the time that we are going to need more housing, office space, and infrastructure in the decades ahead.

But that’s just not true.

The number of people dying in the years ahead will start to rival the number of younger people entering the workforce, especially when you factor in the growing anti-immigration sentiment in the U.S. This will result in depressed – if not outright declining – real estate prices and sorely lacking demand for new homes.

Immigration dropped to near zero in the early 1930s and didn’t come back very fast during the economic Spring boom that followed. And since 2008, immigration trends have begun to reverse, with more illegal immigrants heading back to Mexico and fewer coming here. That’s because the U.S. economy is not as strong and the “civic” generations, like the Bob Hopers and now the Echo Boomers, don’t tend to be as open to immigrants as their parents were.

And births will decline in the years ahead, too. In fact, the decline already started back in 2008 as we forecast decades ago it would. The simple fact of the matter is that people have fewer children during recessions and depressions, as witnessed during the 1970s and 1930s. Also, people are having fewer children today because it is so expensive to raise and educate them.

Do yourself a favor and remember that economists, and especially the government, are almost always merely extrapolators. They just project trends in the same direction and at the same growth rate. They don’t account for the major cycles and downturns in the economy that come every 40 years from the generation cycles.

Twenty years ago I forecast that this economic Winter Season – set to unfold from 2008 into 2023 – would see falling births and immigration rates, just like what happened in the 1930s.

So far, my forecast is spot on.

And if I’m right about a depression ahead, and an on-and-off again weak economy over the coming decade, there is no question that births will continue to fall substantially, as will immigration. History backs me on this one.

The bottom line is this: Don’t bank on the government’s population forecasts. Instead, use our research and the investments we recommend in Boom & Bust to build your investment portfolio and income streams in the lean years ahead.

Harry

 

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Categories: Life Cycle

About Author

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.