During podcast episode number 75 on Jason Hartman’s (that's me!) Creating Wealth Show, Harry Dent, explains the ‘Dent Method,’ a long-term economic forecasting tool based on demographics. Dent has made predictions based on this method, most of which have come true. The ‘Dent Method’ takes indicators most economists never even look at because most economists are only focused on the short term trends, which are very difficult to predict. “Long term trends are easy to see,” says Dent, “the baby boom was driving all of the new trends; this created a whole new way to analyze the cycles.”
When asked about demographic tendencies, Dent said, “Peak earning years are at age 46, and peak spending years are between 46 and 50.” He explains that, because their kids tend to leave the “nest” at that point, their spending goes dramatically down and they begin to save what they have left for retirement.
During podcast 75, Dent speaks on inflation and the role the younger generation plays in causing it to exist. “Young people cost everything and produce almost nothing; and high productivity actually reduces inflation,” states Dent. Contrary to this statement, Dent also explains that as the workforce contracts, it is deflationary, and will result in the overall fall in prices.
Dent even addresses the current housing collapse at the end of the interview. He believes the housing, when adjusted for inflation, has actually been very flat; but during the bubble, housing appreciation doubled. Dent states that he understood the nature of this housing bubble and predicted it would eventually pop. “Where was your house priced in year 2000? Dent asks the audience, “that is where housing prices will most likely fall to during the correction.”
Harry Dent, expert economist and author, has published many books on this subject, most recent The Great Depression Ahead.
My Creating Wealth Show has featured many recognizable names in recent years including Michael Gerber, David Allen, Michael Munger, Addison Wiggin, Robert Kiyosaki and many others. The Creating Wealth Show is available for free on www.JasonHartman.com/radioshows or the iTunes store, and offers investment strategy advice to those who wish to be financially independent through income property investing. To speak with an experienced investment counselor, you can call 714-820-4200 or visit www.JasonHartman.com for more details.
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