Between now and 2019, our economy and markets will face the perfect storm.
At the same time, the next technology revolution is brewing, so we can expect to see booming results from 2023 to 2036. (Not as great a boom as we’ve seen from 1983 to 2007, but still worth watching for).
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I know all of this thanks to the cycles I’ve identified over the years. (There are three crucial principles for our economy and markets that I learned early on in my forecasting career). I use these cycles (and principles) to forecast booms and busts years — even decades — ahead.
At present, these cycles are clearly pointing to the next great crash… but right behind that is the next concerted boom.
Now, I’m willing to bet money that you’ve been taught to believe that forecasting long-term is near impossible. Well, I’m here to tell you…
Predicting longer term trends is a piece of cake!
It’s the short-term that’s more difficult, especially when governments try to keep the economy and markets alive with endless stimulus and manipulation.
What makes long-term forecasting so easy is my three key “Macro Cycles.” When they are all negative together, as they are now, you can expect things to be rough. But when they’re all positive together, you have a near-guaranteed boom.
Learning the Cycles of Our Economy and Markets is Key
The last time the three longer-term cycles were full-out bullish was between 1988 and 2000. A fourth denial boom/bust cycle was bullish from 1996 into 2000 when we had the great tech bubble, and is now bearish from mid-2014 into early 2020. The next larger bullish cycle is between 2020 and 2036.
So what are these three macro cycles? They are… —
1. The Spending Wave
2. The Geopolitical Cycle, and
3. Innovation Cycles.
Let’s look at Innovation Cycles first…
The last mainstream technology revolution converged around the Internet as it accelerated from 10% to 90% of households in the U.S. between 1993/1994 and 2008/2010.
The chart below shows how major technology S-Curves overlap with the Internet revolution now maturing AND the nanotechnology revolution emerging (which includes biotech, robotics and alternative energy). You’ll see that they’re set to surge between around 2022/2023 and 2036/2037.
The simple logic here is that the last revolution matures after 90% penetration, while the next one is emerging into niche markets, from 0.1% to 10%. Then that next revolution accelerates mainstream. This occurs about every 45 years. Steamships peaked around 1875, then railroads around 1920, then autos around 1965 and now the Internet and wireless communications around 2010.
And each major S-Curve acceleration from 10% to 90% lasts 14 to 15 years… then the overlap period follows for another 14 to 15 years.
So expect to see this begin to take place in the early 2020s or so, before swinging into full gear and roaring to the moon again. But the next major peak in innovation will have its greatest impact into around 2055.
As far as my most critical economic cycle — the Spending Wave — is concerned, wherein new generations enter the workforce in increasing numbers and earn and spend more money until their kids leave the nest:
Today people reach their peak spending point around age 46. When we lag the U.S. birth index by 46 years, it’s possible to see when spending will increase and when it will taper off.
That’s how we predicted a boom from 1983 through 2007.
That’s how we forecast the downturn from 2008 into 2020/2022.
And that’s how we know when the next boom will take place. You see, this cycle turns up again from 2023 into 2036 as the echo boomer generation moves through its first predictable spending wave. Then there will be a second phase of that generation’s boom from around 2044/2045 into 2055 — right in line with the next longer term innovation cycle.
Then there’s my third macro cycle: The Geopolitical Cycle that shifts from positive to negative every 17 to 18 years.
1983 to 2000 was the last positive cycle. That turned negative in 2001 and we’re witnessing the effects all around us, starting with 9/11, with civil war threatening in the Middle East, and passenger plains being shot out of the sky in Ukraine.
Unfortunately, this negative side of the cycle should last into around late 2019 or early 2020, at which point it will flip to the positive again until about 2036 or 2037. When it does, I hope you’re ready for the next concerted global boom.
In short, all three macro cycles will switch into boom mode at the same time between 2023 and 2036! All three point down together from late 2007 into late 2019 or early 2020.
The perfect storm turns back into sunny skies again.
So on those days when it feels like the end of America has come, remember that, in fact, the opposite is true. We’ve got some great years ahead of us, once we’ve moved through this economic winter season.
Start preparing now for the next wealth-building boom. But first prepare for the worst economic season of your lifetime from late 2014 into early 2020.
P.S. I’m not the only one who relies heavily on cycles to better understand the economy and markets and — most importantly — to take advantage of what’s happening. Adam, our chief investment strategist is the same. That’s how he’s been able to show his Cycle 9 Alert subscribers how to make $22,760 in just 27 days. More than that, he’s shown them how to repeat such winnings over and over again.
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