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-- -- -- while that jobs numbers of course came out this morning -- better than forecasted signaling to some more stable and sustainable economic growth in the US but.
Could this actually mean trouble I had for the US economy is the Fed begins to taper it's stimulus program.
That is what Harry Dent -- research founder says Andy joins us right now.
I'm here is -- what your reaction was to market reaction.
Today was volatile as low volume third lowest volume day frankly -- the third highest low Monday.
For the year but it was a volatile day what is that telling you.
-- I mean people are confused here and and I think we're getting into a place where.
Good news -- it's too good it's not good news anymore -- is where I say the Fed gets -- made -- we've been warning I agree with David Stockman the work.
We're gonna see higher rates we predicted that earlier this year too and at some point not quite yet.
It's gonna weigh on the markets may do we have to hit 3% in the ten year treasury before stock starts and cool this is bad for our valuations and it's particularly bad for the housing recovery and that is the strength tonight and or they -- -- Our economy housing -- them super low mortgage rates and and an automobile -- the last things to peak in the demographic cycle for the baby boomers.
And then so they have about another year and then they Taylor -- so it is time goes on here demographic trends which we've already -- reached the peak.
In the UF -- them they're just going to get worse and governments are gonna have to stimulate harder in the markets at some point gonna record -- this just isn't -- but there's an.
End game today areas you know very well -- -- in Milton Friedman talked -- by the time we all know what the end game as an end game is usually hyperinflation and try to stimulate too much.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Deflation coming how can interest rates continue to rise without -- rising in in inflation.
What they only rise long enough to trigger a crisis like they did in early thirties.
And they will -- because what you have again demographics are slowing.
Slowing an aging demographics are deflationary in the himself well ultimately -- -- went out during the big jet that simply what you're saying is as the boomers retire.
They're not going to be buying as much better retirees save more than -- -- right.
And that particularly they pay down debt they don't invest in the future they're not -- -- bigger home they're downsizing to a smaller home young people.
-- -- the workforce to great expense and then borrow and spend money so so there the opposite but but the bigger factor.
Every great debt bubble in history when it finally burst has seen deflation there are no exceptions to this so the end game is deflation.
Like we saw in late 2008 but only when the financial system starts melting down.
And of course the central banks are trying to prevent that might worry is not so much -- tapering.
Causing a crisis here my worry is that something goes wrong in Southern Europe -- technical happened the next six to twelve months and China's got the biggest.
Unbelievable bubble in the world I can't believe more people don't see this over building everything.
Debt has escalated unbelievably in the private sector there since the crisis started China's gonna blow at some point and the -- cannot keep this economy.
You're going -- erupting that we have seated we haven't talked about it -- mean empty city is -- -- is that there are talking about but that's been reported on for years.
And yet we're still making bets on China and any drop a concern about the Chinese economy drops US markets here so it seems that we are reacting.
To China -- what do you think that we're missing here.
What -- it.
If not you're right if not so much that we're missing something -- things do fine until the bubble burst every -- I mean how did that US economy look in 1929 or 1972.
Before major bubbles burst.
So it as long as everything's okay people say well maybe they'll work out maybe -- and keep this under control I'm saying there is no way in hell.
Governments can keep this under control the -- trends are too large in the demographic trends continue to get worse.
Big Japan dropped off the cliff demographically and early ninety's -- -- 2008 Europe doesn't do it until the next year or two and then they drop off a steep -- you can't keep fighting this sort of -- with fake money.
By the way at at the risk of blowing smoke I'm -- -- smoke in your direction but it this guy Harry -- He's not just a nay -- folks back in 1992 he wrote a book called the great boom ahead.
Which forecasts that huge rise in the stock -- so when we see things going right he says it too he's not just -- told perpetual mesa air.
Don't you see any -- hairy and in demographic trends that give you hope I'm I'm thinking for example of the influx of of immigrants I know a lot of people out there don't want to but it's coming.
We're gonna see more -- and very often that that leads to -- new surge in buying.
Well we predicted a long time ago that when we saw this downturn and demographics after 2007 approximately.
Immigration would start to drop in birth start to drop -- economy gets challenging people don't have as many kids so.
Immigration is falling and in Mexico is many people are going back to Mexico as coming in from -- we have zero immigration now from Mexico -- -- source -- Immigration and fortunately it's gonna continue to work against us but again the biggest problem.
Its debt ratios four to 500%.
Not counting entitlements.
In major country -- and the US to England -- Japan and now China is getting way out there and that's emerging country which shouldn't have even half the depth we have.
Fasten your seatbelts -- Deb thanks very much thank you.
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