By Kimberly Clark on Jan 16, 2020 8:00:00 AM
What are the top 5 drivers to the coming Great Depression?
- Health Care Costs
- US National Debt
Have there been any developments that would change the timing of our 2030 outlook since we published Prosperity in the Age of Decline?
Is the US economy growth rate getting slower and slower over time?
No, not in modern times.
- US GDP Growth Adjusted for Inflation: Average per Annum %
- 3-yr 3%
- 5-yr 5%
- 10-yr 9%
- 20-yr 2%
- 50-yr 8%
Will the Great Depression of the 2030s have a lower trough than the Great Recession of 2008?
Will the US economy exhibit linear growth in the 2020s before the depression hits?
No. Both the overall economy and your business will still contend with business cycles and move through various phases of non-linear growth. But it is important to note that we expect US GDP to have ascending troughs and peaks leading up to 2030.
Is it true that what we earn today (income) is less than what we earned in the past?
No. When you look at deflated US Median Weekly Earnings since 1979, the answer is a clear no.
Is the consumer carrying too much debt?
No. The consumer is always carrying more debt per capita – it’s more about how we are managing that debt. Track Consumer Delinquency Rates (over 90 days) against the 10-year average to see how the consumer is managing auto debt, student loan debt, and mortgage debt.
How do I maximize the 2020s to prepare for the 2030 depression?
Be careful. Invest in more inflation-hedged items. Stay involved in the equities market but exit before the onset of the depression. Live below your means. Pay down your debt. Save 10% of your after-tax income (can be saved into your 401k or IRA). Mortgage rates are going to rise over the next 10 years; buy real estate now rather than in the late 2020s.
Which type of real estate will best hold its value during the 2030s?
The lesson from the Great Recession of 2008 is that while single-family homes are not immune to the effects of the depression, they will fare better than condos.
How long do you anticipate the Great Depression will last come 2030?
Theory indicates that the low point of the depression will occur around 2036. Recovery will ensue off the low point. If you measure the length of the depression from peak to trough, that is your answer. If you measure it from one peak to the next (which some people prefer), it will likely encompass a 10-year period.
How can people in their fifties, sixties, and seventies best prepare for this financially, keeping in mind all aspects of their lives: health, finances, housing?
The single best answer: be debt free and cash rich by the time we transition from the rise of the 2020s to the depression of the 2030s. Be sure to switch out of equities in time, which is one of the primary reasons we are developing the ITR Equity Optimizer Model™. Investing the cash into certain government bonds will provide protection and a solid return on the investment.
Will there be a foreign language that will be valuable to learn and why?
French. It is the common language of Africa, and Africa's potential is immense.
What opportunities can we prepare for?
The following opportunities are both investable and intended as career guidelines for younger people coming of age in the 2030s: security, defense industry, food, health care, engineering, pets, forms of entertainment, distressed finance counseling, bankruptcy law, civil law. Furthermore, entire new industries developed from technologies still in the laboratory could make their way to the marketplace with the clearing of the old capital infrastructure.
Will all countries participate in the Great Depression?
The US recognizes 195 countries. Due to their variety and the fact that "all" rarely exists in economics, we don’t think we can say all of them will participate. Most countries will participate, but to varying degrees and in various ways. Taking such factors into consideration led to our recommending Canada, Australia, and Switzerland as investment destinations by the late 2020s.
Do you believe we can get the debt spending under control if we find the political will, or is this coming depression just a cycle that cannot be averted?
We do not believe that the political will necessary to avert the 2030 cycle will be found. There is nothing in the history of the US and nothing in the current political discussion to convince us of anything more than the remote possibility of finding it. It does not rise to the level of probability.