Harry S. Dent | Friday, May 17, 2013 >>
I experience contractions – yes! like a woman giving birth – when I hear so-called experts talk about demographics on TV. It is THAT painful.
They just take those pieces of the research and statistics that support or prove their political or economic position and ignore everything else.
If nothing else, this is what sets us apart from most other experts. I’ve studied demographic trends and numbers from cradle to grave for 30 years now. And then we use that information to make good investment, business and financial decisions… whether the information that research garners is positive or negative.
A good example of the expert’s misuse of demographic details is the way they’ve positioned the size of the Echo Boomer generation…
They claim it is larger than the Baby Boom generation so it will take us to new heights in our economy and housing and everything else.
The chart below shows the truth…
This chart shows immigration-adjusted births in the U.S. First, you’ll notice that the Echo Boom generation is bigger than the Baby Boom generation. There are 29.9 million more of the former.
So is it me who’s full of B.S.?
Ha. My wife might sometimes think so… but in the matter of demographics, no!
Just like Rodney and Adam have mentioned several times over the past week, statistics can be very misleading when you only look at one number.
Yes, there are more Echo Boomers, but – and that’s a very big “but” – they are spread out over a much longer period.
It took just 28 years for the Baby Boomers to flood the pool. It took the Echo Boomers four years longer. Those four years make the crucial difference between a pig in a python and cat in a python (for example)… or the difference between a 300lb gorilla and a oversized monkey.
For our demographic projections – for everything from innovation when people are young, to spending as people mature, to investing when they are older – it is the size and magnitude of the wave that matters.
If you have ever been a surfer or a boogie-board rider, you know the difference between a five-foot wave that could hurt you if you’re really stupid and unlucky… and a 10-foot wave that could kill you or give you the thrill of your life.
For some perspective, the Bob Hope Generation that drove our economy from 1942 to 1968 was more like a three-foot wave.
That is the difference between the Baby Boom and the Echo Boom that follows it. That’s the reason the latter will never be the same driving force of growth as its parents were. That’s why we won’t see a repeat of the extreme highs we enjoyed in every sector of our lives during the 80s, 90s and 2000s.
And we called it!
Back in the 1980s already, we said we’d see “the greatest boom in history” between 1989 and 2007.
The truth is, the Echo Boom is larger than the Baby Boom, but not in a way that will make any impact. It’s tallness of the latter generation that matters more for economic trends and waves of growth.
There simply will not be as many Echo Boomers in the U.S. (and most developed countries) to spend more, borrow more, buy more houses and invest more in a concentrated-enough period of time.
In fact, for real estate, after 2013 there will be more people dying than buying homes… something we already see happening in Japan. And we’re starting to see it in places like Germany, where they’ve started to tear down residential and commercial developments to turn them into parks. They simply don’t need all that infrastructure.
My point is that demographics are destiny. To harness that power, you need to know the numbers.
ALL of the numbers… and how they relate.
That’s what we’re here for.
Ahead of the Curve with Adam O’Dell
With global demographics pointing down, there’s one investment that will almost surely tank. That’s copper.