This transcript is automatically generated
But the housing market still struggling hasn't gotten any better everybody's hoping but the big question is -- Yet another crash of the -- -- market on the horizon.
-- some day soon.
I don't know when but we know a guy that does no baby boomers all over the country will be ready to downsize.
-- start selling their homes but the following population is much smaller so will there be anybody out -- to -- their homes.
Joining me now the author of the great crash ahead strategies for a world turned upside down Harry Dent area I'd I always love your demographics work.
To such an expert on it and that we were talking among ourselves -- -- about the fact that there's so many of applause boomers.
Then -- that gap in the population the exporters whatever you wanna -- the next group who's gonna buy all over stuff.
Ball courts and then they won't in Japan's already proven this Japan how to out housing bubble and stock bubble peak in 1989 and ninety.
And housing fell for many years and it is still drifting down because for every young new echo boomer in Japan and they have less than we do by the way but.
For every new young family wants to buy a house.
There's an older family moving into a nursing home or dying so.
There is no net new demand for housing so it's not as bad in the United States but we're gonna see this trend housing has -- for a long time.
So has our economy the Fed is fighting.
92 million baby boomers they're gonna spend less save more in the coming decade until there's enough echo boomers to drive are coming back up against.
We get downturns like this every forty year for generations -- the differences.
Like you said the baby boom generation is much larger than any generation we've seen for 250 years.
So the boom was greater and now the boss will be greater we are gonna see a crash and housing again.
We're gonna see a crash and stocks again.
I think it's probably gonna be more next year because we just -- economy flooded.
Would money from Europe and a big QE2 -- over a trillion and and I think the Fed on hold the dual QE3.
Later this year when we slowed our -- Yeah in fact this week -- -- more rumbling about exactly of exactly that -- so you've got this group and into the stock market point that you made.
Everybody you have to be a stock market which is to know that if there's a whole bunch of sellers one day on the stock market and not a lot of buyers the market goes down.
So isn't that what we're talking about is that there are going to be missed it.
Less wealth or is it gonna be less -- because some day when I die my money's gonna go to my kids aren't they gonna have the money to keep all this propped up.
-- what happened it's really earnings to drive the stock market people think that is saving you -- out some minor factor you -- earnings and and when a generation peaks and spending and stop spinning the earnings go down and then stocks go down even more because they go from high valuations.
To lower valuations there that the most important thing to get about the markets right now on the should be more obvious and if we're in another bubble.
We had a bubble -- -- late 99 early 2000 crash bubble in the 2000 more emerging markets and real estate.
Crash now we've got another bubble being fed solely.
By the Federal Reserve in the government stimulus.
In this bubbles going up stocks are going up very rapidly and so was gold and silver.
In in energy and commodities and foreign stocks and everything we're gonna see another bubble crash so people got to get prepare but as we're in a bubble economy.
Generated by massive stimulus this is not good policy in history is not gonna look while on this.
So if there's so this -- this bubble that were in how long is it going to last because.
If I'm on the leading edge and there's a lot of leading edge boomers that are just now starting to retire but that first group to comes through it's -- -- -- -- that twenty years or so of oh -- is large population is it -- -- be twenty years.
Of having to go through this period where the government's gonna have to provide a lot of services a lot of the retirees are not going to be paying as much and in taxes.
And what we've got -- a team like a crunch going for maybe 20/20 530 years you're the expert you what's -- -- timeframe.
Yeah it's not quite that long are.
Our Democrat we we've moved -- the birth index 46 years simplest indicator ever invented for when people spend the most money.
It says the boom from 83 to 2007 the what happens and then a slowdown -- -- 2123.
Before the act go boom generation.
The Generation Y.
are the -- -- like column.
Have enough force enough people -- economy to drive back up -- buying and spending enough to offset the -- -- Baby boomers are going to be retiring in in increasing numbers until 2000 when he for so.
But but -- is this the two generation -- The next decade is gonna continue to be slow.
But then again the next generation may not want that big expensive home that somebody that that the peak of their.
Bernice period -- sixty years old and there in the got a you know expensive home that's.
Some thirty year old guy is not going to be able to -- afford that.
Yeah that's true they've they've they've seen a more difficult time when they're growing up the baby boomers have always been spoiled never seen a bad economy.
And they borrowed more than any generation history this next generation is gonna be a bit more conservative.
-- how much they spend and borrow they're gonna save more they're gonna be more like the Bob Hope generation.
Then the baby below a little bit next boom.
Next -- will not be as strong.
Due to that but even more so this generation is not as large is not as larger wave of people so we've seen the greatest moment in history.
In the United States from 1983 to 2000 -- I'm sure you experience -- do when I was in the investment business and -- a young guy and I have a lot of older clients that were.
Maybe teenagers during the Great Depression or they were Froogle they watched every penny they -- ever forgot never forgot the Great Depression but.
Leaving the politics out of it how does the immigration issue -- -- as you've got births.
And then you've got immigration legal and illegal how does that play into this.
Yes Tom we factor into our birth index we actually factor in past and future forecast immigration so we are counting immigrants have to change we made in 1996.
And -- the immigration waves already happened we predicted a long time ago that we see this slowdown births would slowdown was they've been slowing since 2007.
Immigration would slow down when the economy weakens immigrants are not as attractive and the people here start saying gosh we were wary of too much immigration in the boom.
But when you're losing jobs like we are.
Immigration gets cut -- -- immigration unfortunately is gonna slow in the next several years and that's gonna hurt our longer term prospects.
-- test -- -- you're always a fascinating guy good to see it Harry -- thank you so.