For this book review I’ve chosen something slightly different from the usual direct response marketing books. It’s the latest from Harry Dent…
The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014-2019
The subtitle “How to survive and prosper during the great deflation of 2014-2019” pretty much sums up the contents.
If you’re not familiar with Harry Dent he is a well-known economic forecaster and consultant who has written a series of books starting with “Our Power To Predict” back in 1989. If you’re wondering why you should pay any attention to him, put simply he has been broadly right in his predictions. In “The Great Boom Ahead” in 1993 he predicted a long period of economic expansion and general prosperity up until around 2010 with recession and more difficult times to follow for at least the next decade.
More specifically, Dent bases his forecasts on a clear model so you can easily follow his methodology and decide for yourself if it makes sense. From the new book…
“Throughout his long career as an economic forecaster, Harry Dent has relied on a not-so-secret weapon: demographics. Studying the predictable things people do as they age is the ultimate tool for understanding trends. For instance, Dent can tell a client exactly when people will spend the most on potato chips. And he can explain why our economy has risen and fallen with the peak spending of generations, and why we now face a growing demographic cliff with the accelerating retirement of the Baby Boomers around the world.”
People like Dan Kennedy regard Dent highly, even if they don’t always agree with his forecasts.
The current book is an update on his long term forecasting model. It starts out with…
…a pretty short review of his methodology based on demographics and population numbers. For a more detailed treatment you’ll need to consult earlier books. He then looks at the population statistics for the major countries around the world and points out the broad picture of declining numbers and falling economic activity.
Of course, individual countries have their own characteristics. But one country where demographic decline is already a reality is Japan. Dent devotes a chapter to Japan and its experience over the last 20 years as a guide of what’s likely to happen in western countries as population trends follow what’s already happened there.
Other chapters consider the impact of falling populations on real estate and the public finances as well as general economic conditions. Dent also suggestions for the appropriate business and personal finance strategies in this tougher environment.
Dent diverges from his core model a little in the final chapter “A Major Revolution Brews Every 250 Years”. This sort of long term cycle analysis is a lot more speculative of course, but the points Dent makes are interesting and thought provoking.
Overall a worthwhile book that discusses in simple terms how changing demographics are shaping our world and the likely impacts in the coming years. Even if you don’t agree with Dent’s conclusions and policy ideas, you’ll be much better equipped to understand the changes the world is going through.
