Need a reference source: Imminent Financial Collapse? Move money to?

[Dennis Leahy]

Posted by alamojo (here)

Posted by Dennis Leahy (here)
Gotta say, I am very, very leery of advice from any of the "mainstream" guys, and prefer true independents. I wish I knew for sure who was paying each financial adviser's paycheck (and bonuses, and under-the-table money...) I'm sure some of the mainstream guys have a very good concept of what is really going on, but if they are professionally compromised, will they tell us the truth or what their benefactor wants them to say?

I'm also leery of anyone - right now, with the world financial climate the way it is - offering advice that sounds like solid financial advice - if only it was 1957.

Dennis

Dennis, I guess this is in response to my comments? Early Warning Report is certainly not mainstream, it's pretty "out there".

Sample newsletter: http://www.chaostan.com/sampleewr2011.html

This seems to be a rather bizarre comment: I'm also leery of anyone - right now, with the world financial climate the way it is - offering advice that sounds like solid financial advice - if only it was 1957.

What ARE you looking for??

Investing is gambling, trying to predict the future. If you're looking for a sure thing, it does not exist. We will all lose money in the next few years; some will lose a lot. I suggest you look for safety (ie. capital preservation), which was the point of my post.

alamojo,

No disrespect intended. I'm not an investor (decades ago I sold the tiny bit of stocks that were given to me), and wasn't looking for investment advice for myself. Quite frankly, I guess I'm surprised that anyone is looking to invest rather than protect their assets right now. I was trying to say that the old, standard, tried-and-tested-true advice just seems very risky right now. The advice I remember hearing many years ago was, "diversify, but retain stocks. They will always come up again."

Will they? (rhetorical) I guess I figure that logically, based on what happened in 2008 ("housing bubble" burst) which was supposed to have been engineered/caused by derivatives followed by bailouts, and there is now an unprecedented $700 trillion to as high as $1.6 quadrillion dollars (depending on quoted source) of derivative debt now, are we not on the brink of major financial collapse?

What is a major financial crash? If folks like Gerald Celente are right, all paper will crash: stocks, bonds, and the dollar. Simultaneously. There are other non-mainstream people advising to buy certain stocks right now. They can't both be right.

I suppose what I'm looking for is someone non-mainstream, that I believe. Then, I can offer that to my family members that have started asking questions. "Hey, go check out ___________."

It seems like the investor newsletters are continuing to look for standard stock investments that can "weather the storm", and they don't seem to give any indication that "the storm" may be three simultaneous F5 tornadoes, not just "a storm." This could mean that there is no major storm coming (or not a fast-moving storm), or it could mean the investor newsletters are written by people that cannot comprehend storms so devastating that the stock market could fully crash, that bonds could fully crash, or that the US dollar could crash - much less simultaneously. Will these guys that write investor newsletters ever say, "sell all stocks and bonds, now. Spend all your dollars on real, tangible goods and on fully paid-for real estate, now." ?

I don't know. That's why I'm asking questions. I suspect that some financial advisers that have a superb track record are going to get caught with their pants down, if a precipitous crash takes place in one or more markets/asset classes.

My personal baggage/prejudices:
I admit that it is also true that I have no desire at all to be the messenger that alerts family and friends to invest in the hideous monsters that are the scourge of the Earth. Hey, maybe Walmart will do great in a partial crash - people will want more cheap crap, right? Maybe this is the perfect storm for botanical biotech companies like Monsanto, and this is the beginning of their complete takeover of the world's food supply with GMOs. I suppose if someone invests heavily in defense contractor stocks, they have a better chance of making profits (or not losing), compared to other stocks, because it doesn't appear that anyone or anything is preparing to unseat the blood-thirsty, war-mongering psychopaths that rule the world. If this is the truth, and even if I had 'insider' trading info that confirmed it, I would not pass that on to friends and family. Anyone who wants to profit from death and destruction is sick and twisted, in my book. In the sample Easrly Warning Report, a headline asks, "The war is spreading. Are defense stocks and overlooked value?" Maybe there are some wise investments, looking only at a calculator, spread sheet, and bank account, but the wisdom is shallow, hollow, even sickening to me. So I carry baggage which I believe is compassion and a big picture overview of Earth and humanity always worth more than profits.

I apologize in advance if I react unfavorably to anyone's advice. I suppose I could be a better poker player, simply thank everyone and not comment, but maybe what I wrote above will give a better idea of where I'm coming from.

Dennis

[crested-duck]

Check this out Dennis, and everyone:
The Economic System Special: Two Weeks to Save the Nation

July 24th 2012 • 10:27AM


In this extremely important discussion with the LaRouche National Slate, Lyndon LaRouche stresses that we are in a two week countdown in which absolutely nothing short of the integrated three-tiered approach of Glass-Steagall, National Banking and NAWAPA XXI, as an inseparable whole, will save the nation. So we simply must do it! http://larouchepac.com/node/23441

[Lost Soul]

Since Gerald Celente was mentioned, he talks about the 3 G's. Gold, guns and a getaway plan. He also buys silver too.

[Mulder]

Posted by Lost Soul (here)
Since Gerald Celente was mentioned, he talks about the 3 G's. Gold, guns and a getaway plan. He also buys silver too.

Gerald doesn't buy silver - he say's it's a "wild-card." Gerald says he buys gold to protect his money from inflation, etc. Gerald isn't saying gold is going up to some high price like $10,000/oz.

[alamojo]

Dennis, I am curious if you took a look at that sample newsletter I linked to? I think if you take a few minutes it will be clear that Richard Maybury is far from mainstream.

[Dennis Leahy]

Posted by alamojo (here)
Dennis, I am curious if you took a look at that sample newsletter I linked to? I think if you take a few minutes it will be clear that Richard Maybury is far from mainstream.

Hi alamojo.

Yes, I did take a look. I agree that the word "mainstream" is not an accurate descriptor of the guy's site, but don't know how to characterize it. Please remember that any comments I make do not reflect on you - just my honest and straightforward take on the material. I note both your signature line "Before you speak, ask yourself, is it kind, is it necessary, is it true, does it improve on the silence?" and the fact that it appears I already hurt your feelings once, and so, if I was smart, I'd say, "It doesn't improve on the silence." But I'm not smart. I am honest. Thus this big disclaimer that my comments are not aimed at you personally, so please don't take them personally. I don't want to hurt your feelings but find that I am not in agreement with (at least some) info on that site.

The guy is a bit off-beat, not mainstream, maybe even a likable fellow. As I sort of said before, if the best advice I could give friends and family is to buy stocks in corporations that I find to be "the bad guys" (banksters, GMO biotech, war-for-profit, for-profit prisons, Big Energy, Big Ag, etc.), then I will not offer any advice at all. I would personally be embarrassed to give someone advice to invest in oil or gas, for example. The second example below I find (now don't get mad at me) utterly repulsive and in collusion with the worst sociopaths on the planet.

Here's a pair of quotes from that page (hopefully enough in-context not to skew the gist):

The specific types of investments likely to do well under QE3 or a rise in velocity are gold, silver, platinum, oil, natural gas, real estate, art, antiques, copper, other natural resources, and stocks of firms that own a lot of land, machinery and other items of substance. These are what I call non-dollar assets.

One of the few reliable flows has long been the MIC (military industrial complex). In my opinion, a portfolio that isn't partly in the MIC is far more risky than it needs to be.

To me, MIC stocks are looking attractive again, and I'm presently researching a specific group that ties into last month's article about mercenaries. It looks very promising, and I'm sure you want to hear about it.

Forgive me if I missed the joke by running away repulsed at that moment. I could not bear to read more. Maybe it was pure sarcasm and satire, but I think he was serious. I would ask, beg, my family members to divest from the MIC, to wash the blood off their hands and to forgive themselves for their past greed-based ambivalence.

So. again, I'll try to refine the question to be that

I have family members that have worked, nose to the grindstone for decades, have sequestered themselves in their jobs, believe mainscream media nearly 100%, believe the war on terror is real, believe that banks needed to be bailed-out, etc. These are good people at heart that have been lied to and led astray in their thinking about who the bad guys are in this world. They would name alQaeda, not the CIA. They would name Palestine, not Israel. They are oblivious to the harm to our bodies, soil organisms, and food/seed gene pool that the pesticide and herbicide producers and genetic manipulators of seeds have caused. Etc., etc.

They have been frugal and have saved some money (probably in mutual funds - whatever their employer is tied in with) - I don't really know.

Now, they started asking some questions, prompted somewhat by me saying that it appears, with the giant $700 Trillion or more debt bubble, that there has got to be a precipitous (fast drop, steep drop) or outright total economic collapse. The 'old' advice if you think stocks are going to go down, buy bonds (or vice versa), but what advice can you offer if bonds are supposedly just as likely to take the same freefall - and is the US dollar going to implode at the same time.

I actually don't want to give anyone any financial advice. I'm not qualified. I'd like to have one solid, coherent source that I could say, "Check out ________." (but I don't want to do that if the advice is to buy stock in Monsanto, Lockheed Martin, and a few shares of the prison industrial complex.)

I think (I feel) that there has been some very good advice offered in this thread. If someone has a lot of money, buying a small organic farm sounds like a really smart "investment"/purchase to me. If someone has a little, then fill the pantry with organic dried and canned food, buy some silver coins, get a wood stove and a few cords of wood, buy organic seeds, buy tools, buy organic fertilizer, and know exactly where you're going to grow a big garden next year. But again, I want them to read it on some website where they are more likely to believe it (remember, these are folks that believe the news, so they probably need to see something convincing, not just my words.)

Hope that makes sense and did not step on any toes.

Dennis

[GoodeTXSG]

This is all starting to leak out to the main stream media... finally. We just need to KEEP THE HEAT on them. We will soon be posting new petition and email campaign info as well as protest ideas. We just need more people following this group and we can use resources from the Tea Party, Occupy and other groups. THEY win as long as they can keep us arguing with each other.
WE need to come together with people we wouldn't normally work with to bring these criminals DOWN! Spread the word, others have carried the load of exposing this activity. Now we the people NEED to come out and make it a major issue in the news and in this political cycle.
http://www.facebook.com/BankAndPolit...cialCorruption

[trenairio]

Libor Criminal Probe In U.K. Starts As U.S. Readies Indictments

http://www.bloomberg.com/news/2012-0...dictments.html

I believe the LIBOR bust is very very important.

[Dennis Leahy]

Some of the financial newsletters feel just like this to me.

Dennis

[rmauersr]

My top two choices for economic news are Jim Sinclair (sometimes too technical) and Gerald Celente (never pulls any punches). On Gerald's website click "Media Blog". Both have an excellent track record.



There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.
– Ludwig von Mises

[Spartacus]

This interview published in the Gold Report resonates with me strongly. I think it's an excellent analysis of current demographics and economics.


THERE IS a perfect storm ahead warns Harry Dent, author of The Great Crash Ahead. In this interview with The Gold Report, Dent explains how central bank stimulus programs are fighting a futile battle because a huge army of aging baby boomers has reached the stage in their economic lifecycles when they curb spending.

The Gold Report: Your considerable research over many years indicates that the size and age of its citizens drive a country's economic growth or decline. Because people have predictable consumption patterns throughout life, you can predict well in advance national economic growth or decline. How does that work?

Harry Dent: We've identified a peak spending wave indicator that correlates strongly with the stock market and the economy. It doesn't apply so much to emerging countries, where we look at urbanization rates, which greatly affect incomes, and workforce growth because emerging nations don't have a middle-class curve where typical consumers earn $60,000 a year at the peak of their careers.

In developed countries, though—countries with higher-tech infrastructures and a solid middle class—this spending wave indicator peaks at around age 46. People slow in spending way ahead of retirement, from 46 on. That is basically when the average person's kids are leaving the nest. In fact, the greatest slowing comes from age 50 on. That's the correlation, that people earn and spend more money dramatically as they approach midlife. On average, they enter the workforce at about age 20, marry at 26, have their first child when they're 28, and hit 46–50 when that child gets out of school. Then their spending drops like a rock. Part of that is because they're saving for retirement but, more importantly, they don't need bigger houses and don't drive their cars nearly as much. It's just a natural life cycle in developed countries. It's the ultimate leading indicator.

We saw the spending slowdown we're experiencing now coming 20-some years ago, when we came up with this tool. We said baby boomers' spending would peak around 2007 and slow down from 2020–2023.

TGR: Is the pattern the same across the globe, or do slowdown years differ from country to country?

Harry Dent: There's some degree of variation, but the post-World War II baby boom pretty much happened around the world. Birth rates in most developed countries peaked in the late 1950s to early 1960s, so the whole developed world is pretty much synched on this baby boom, all peaking together. Japan is the one exception, where births peaked twice, once in 1942 and again in 1949.

TGR: So you've gone back through history and now can predict that every 40 years or so a country's economy slows as waves of babies come through. Is the age-related consumption pattern the only demographic you use to evaluate what influences economies?

Harry Dent: Another cycle comes into play as well. It's an 80-year economic cycle consisting of two generational booms and busts, like the Bob Hope generation that drove the US economy up from 1942–1968 and then down from 1969–1982, and then the baby boomers who drove it up again from 1983–2007 after that 46-year lag, and now down again from 2008–2023. Additionally, these boom-and-bust pairs go through a pattern we relate to the four seasons.

If you think of the consumer price index (CPI) in temperature terms, a high CPI is hot, or inflationary, and a low CPI is cold, or deflationary. A deflationary period or depression, as we're going into now, is the winter season. A spring boom follows, with a new generational spending pattern and the modest inflation that comes with it.

In the summer, with that generation entering the workforce, inflation continues to rise. We do a lot of research to demonstrate that young people are inflationary. They have more to do with inflation than any other factor, and nobody has a clue of this in economics. The last summer in the US occurred when the baby boomers entered the workforce in large numbers, basically from the late 1960s through the early 1980s.

The fall boom brings bubbles and the resulting expansion of debt. Stocks, real estate and so on bubble up and when that boom ends, those bubbles burst. Winter sets in again, with restructuring and deleveraging of debt, which create deflation.

The 1970s was a difficult recession time, but it was inflationary, not deflationary, and not similar to the downturn that the Federal Reserve is trying to prevent now. The Fed is actively and constantly inflating the economy to prevent deflation to avoid a replay of the Great Depression. But it won't be able to hold it off indefinitely.

TGR: Let's talk a bit about the debt issue.

Harry Dent: In the US, most people focus on government debt. Under George Bush, the national debt grew from $5 trillion (T) to $10T in 2000–2008. At the same time, the banking system, financial systems and shadow banking—in the private sector—created $22T in debt. That was the greatest debt bubble in history, and it occurred in developed countries all around the world. So we have this global debt crisis and this debt has to deleverage. Everybody is in too much debt—financial institutions, consumers, businesses and governments, with central banks propping them up and bailing them out. Obviously, this can't go on forever.

If the demographics weren't working against the Fed and the other central banks, it might be different. But they're fighting a battle they can't win because the baby boomers are working against them. How do you stimulate an economy when the largest part of its workforce, the aging baby boomers, wants to save and not spend, to pay down debt?

That's the problem. The money the Fed creates gooses up the markets, but doesn't do much for the economy, and banks aren't lending. It's crystal clear in history. Every time you see a big debt bubble in a fall boom—as in the 1860s and 1870s—a depression follows. We saw this from 1873–1877 and into the early 1880s. We saw the next big bubble into the roaring 1920s, followed by the Great Depression and debt deleveraging after that. In short, debt bubbles ultimately burst and then deleverage. Deleveraging debt destroys money, so there's less money in the system and it means deflation in prices.

That's very important for investors to understand. In a deflationary crisis—whether in the 1930s or what started in 2008—everything goes down: commodities, stocks, real estate, even gold and silver in many cases. In deleveraging an asset bubble, all assets go down and there's nowhere to hide. Investors have to be in the US Dollar and very safe bonds and cash and wait for the crash, and then buy at the bottom. That's the trick. Cash is king—cash and cash flow.

In contrast, in an inflationary crisis such as the one we had in the 1970s, commodities, gold and silver were booming. Japan was in a positive demographic cycle. Emerging countries benefited. Real estate loves inflation. In that environment, a lot of things go up, but stocks and bonds go down. In this environment, though, there's nowhere to hide.

So people just have to get out of the way. Even with all the stimulus, the Fed has no way to restore normalcy with this debt level and this demographic downturn. The stimulus has merely created bubbles in stocks and commodities, and commodities are already going down pretty fast. We think stocks are next, so we expect another stock crash within the next few years. And the next crash will be worse than in 2008–2009 because the Fed has pumped everything up and stretched the system to the max.

This is what happens in the winter season. It's a survival-of-the-fittest struggle for businesses to see who will dominate their industries for decades to come. So it's a huge payoff for the companies that simply survive and it deleverages the whole debt and asset cycle and brings things back to affordability. So it's a difficult season, but it's necessary and actually good in the long term. Lower prices in general will increase the standard of living.

The government is trying to skip winter. It keeps heating things up, pouring the money into the economy so the banks don't deleverage debt and the banking system doesn't collapse as it did in the 1930s. The truth is, it's only keeping us in high debt and maintaining a bubble that's not sustainable. Sooner or later, this stimulus will result in a crash that takes down the economy.

The top 10% of consumers are the only ones still spending. We know from demographics that wealthier people marry and have kids a little later. Their kids go to school a little longer, so their spending peaks four to five years after the average person's. After these folks' spending peaks, which will be by the end of this year, we'll have a second demographic drag on the economy.

TGR: So we're basically just getting into this 2008–2023 winter depression. How deep will the trough go? Will it bottom at the midway point? What should consumers expect over the next 20 years?

Harry Dent: A winter season lasts from 13 to 15 years or so. The worst collapses in stock prices and real estate hit when the banking system deleverages. In the 1930s, that happened early on. In this case, the government took a lesson from the 1930s and decided to keep pouring money into the banking system to prevent its meltdown. But it can't be done. There's a limit to how much you can stimulate. It's like a drug. It takes more and more of the drug and it has less and less effect until it has almost no effect, and then the drug itself kills you.

We're seeing that in Europe already. The last round of stimulus there was massive and came well after QE2 in the US, but Europe's already back in trouble again and is having to implement all sorts of emergency procedures. There's no bailing out Spain. It has one of the biggest real estate bubbles in the world and a rapidly aging population. The Spanish people won't be buying housing for decades.

TGR: What do you see in terms of stocks?

Harry Dent: The worst is likely to hit in the next two years. It's a matter of when the stimulus stops working or when governments throw in the towel. At some point, for example, German citizens may just say they won't bail out another country. They've been doing it to protect exports and avoid defaults on all of the money they've loaned out already, but considering the demographics, it's a losing game.

We've studied all of the major debt bubbles and depressions in history, and this one is different because Keynesian economics, which came out of the Great Depression, wasn't adopted as economic policy until the 1970s recessions. So now, for the first time in history, central banks around the world—the European Central Bank (ECB), the US Federal Reserve, the Bank of China and the Bank of Japan—are actively fighting deflation. When banks start to deleverage or when deflation starts to step in, they just push money into the system. The question is: Do they lose control?

Japan has been through all of this before, but when it came into its crisis in the 1990s, it had budget and trade surpluses. The rest of the world was experiencing the greatest boom in history, which we'd predicted. There was mild inflationary pressure and everybody thought Japan was about to take over the world when it was actually about to collapse. We were among the few who predicted that ahead of time in the late 1980s.

Japan continued to push money into the system and never let private debt deleverage at all in either consumer or financial sectors. Japan is still carrying very high private debt, and its government debt has risen from 60% of gross domestic product (GDP) to 230% and still climbing. So Japan didn't really go through a depression. It was more an on-and-off mild deflationary recession because the stimulus eased the pain. But now Japan's debt is much larger than before the crisis and deleveraging still looms ahead. Japan has been a lost economy for 22 years now. Real estate is down 60% and stocks are still down nearly 80%, 22 years later.

Demographics say the Japanese economy will weaken even further after 2020. The interest on its debt will go up in a spring boom with rising inflation worldwide, and it will be bankrupt immediately because its debt is so high. It's only because it's borrowing at 1% or less that it can handle its deficits now. Sooner or later, this game has to end.

TGR: So Japan's QE has raised government debt to more than 200% of GDP but only managed to postpone a depression?

Harry Dent: Yes, it kicked the can a couple of decades down the road. It's like trying to resuscitate a patient with a defibrillator. You keep hitting the chest, clear, boom. At some point, the patient dies.

If the bond markets allow the US to keep putting in money like Japan, we'd end up with a balance sheet on the Fed at $5–6T and up with QE of $4–5T before this is over. We've only gone about $2T so far. The Fed stimulus pushes money into the banking system, but the banks don't lend it to fuel economic growth. They cover their losses and reserves, and then turn around and reinvest the rest in government bonds and stocks. They're speculating. The money ends up in the stock markets. It's like crack in the markets, and the markets just want more crack. But the markets can't continue to go up when demographic trends are pointing down.

TGR: Your earlier mention of losing control brings to mind the people of Greece out in the streets rioting because demands for further sacrifices and more fiscal austerity have become unbearable.

Harry Dent: It is true. One of our financial advisers who was there recently reported every third store is closed or boarded up. Greece is in a depression and Spain's headed there. The ECB has already pumped $270 billion into Spain and Greece just to cover its bank runs, which may happen faster than the governments can fend them off. In the US, the vulnerability is much more in real estate, as in Spain. We have a backlog of close to 4 million foreclosures already in the system. At some point, the banks will realize that home prices are not coming back. That they haven't come back in Japan after 21 years gives us a hint. But if the banks start dumping these millions of foreclosures that aren't on the market, it would kill the housing market and trigger a bank crisis that the Fed couldn't stop with stimulus.

China also is vulnerable. Exports, which drive most of its economy, are declining rapidly while government spending on vacant buildings and empty cities has created a real estate bubble. If that bubble begins to seriously break down, Chinese consumers with disposable income, the top 10% of the population, own the real estate that will lose its value.

TGR: A while ago, you said businesses that manage to survive the winter would dominate their industries for decades to follow. What advice do you have for those running companies to help them come out the other side of a depression?

Harry Dent: First, those who are running a company and thinking about retirement within five years should sell their companies and retire now. Those who want to keep their companies and hand them down to the next generation or continue to grow them should hunker down, cut costs, cut overhead and put off capital expenditures. Rent your building; don't own it. Sell real estate. Sell marginal product lines. In fact, sell everything you don't need. Do everything to raise cash because, as I said before, cash and cash flow are king. Be lean and mean. Office space, real estate, factories, warehouses, anything you want to invest in your company will be a lot cheaper after deleveraging. Even if your business weakens, if your competitors weaken more rapidly, you're winning. At some point, a lot of your competition, just like a lot of banks, will fail.

We saw this phenomenon after the Great Depression. There was a big payoff for the companies that survived; they dominated their industries for decades to come. Everybody thinks the market leaders were born in the technology revolution in automobiles and electricity in the early 1900s and into the roaring '20s. Certainly, the race was on then, but the shakeout of the Great Depression decided who was left standing. General Motors survived and absolutely dominated the automobile industry from the 1930s through the 1970s. In electronics, it was General Electric.

TGR: What about gold?

Harry Dent: I think gold has another run in it. It's trending down right now, but I'd expect gold to benefit from the early stage of this crisis. If we have one more big QE coming in the US and Europe—especially in Europe—gold is likely to rally. We told people to sell silver when it hit $50/ounce (oz) in April of last year. Now we're suggesting selling gold if we see a good rally, say, $2,000/oz or higher.

Ultimately, there's a natural instinct to expect gold to go up in a crisis, but if you look at 2008, gold and silver went up in anticipation of a financial crisis. But when the crisis actually hit and debt started deleveraging and money supply started contracting, which happened in the second half of 2008 and early 2009, gold went down I think 32% and silver went down 50%.

TGR: Everything went down.

Harry Dent: Exactly. That's the point. The only thing that went up was the US Dollar Index and Treasury bonds. This time, I think Treasury bonds may turn around. People act as if German, US bonds and United Kingdom bonds are risk free. They are not. These US and UK governments are in terrible debt, and Germany is holding the bag for Europe. People are throwing money at negative yields just because they don't know where else to go. A better bet might be to go long the Dollar or, even better, short the Euro. That would be a good hedge.

TGR: What's the best investing advice you ever received, Harry?

Harry Dent: Basically, I think you have to think contrarian, because it's just human nature for people to pile into something, especially in these bubbles we've seen. They pile into tech stocks or real estate, thinking they can't go down, and then the bubbles burst. I learned early on to think contrary to the crowd, something like Joseph Kennedy. Right now, most investors think these markets can't go down because the Fed won't allow them to. They call it "the Bernanke Put." Well, if everybody's thinking that, I don't think that.

TGR: Whom do you view as the best investors?

Harry Dent: The classic ones are Benjamin Graham back in the good old days and Warren Buffett these days, although I think Buffett's off base now that he's become a cheerleader for the US government.

TGR: You're speaking at the MoneyShow in San Francisco in late August. What major themes will you cover?

Harry Dent: Basically three things: debt, demographics and deflation. People who argue that hyperinflation is ahead are dead wrong. Japan had zero inflation for the last decade despite massively more QE than we've done relative to its economy. It would have been a deflation if it hadn't stimulated so much and the world hadn't been in an inflationary mode. Debt deleveraging leads to deflation, and aging societies are deflationary.

Old people are deflationary, young people are inflationary. The inflation of the 1970s had nothing to do with monetary policy. It was the baby-boom generation partying in college, spending their parents' money. It's expensive to raise kids, who don't contribute economically until they get into the productivity curve in the workforce. At that point, productivity drives down inflation.

TGR: Do you expect the US to fare better than Europe over the next two decades because of the echo boom, as the millennial generation gets into a serious spending cycle?

Harry Dent: Yes. The echo boom kicks in from about 2023 forward in the US and in a lot of countries. It's nowhere near the size of the baby boom generation, but enough to create growth again. But there's no echo boom in Southern Europe or in China, where the workforce will start shrinking like Japan's after 2015. Japan's little echo boom runs out by 2020, and because Japan never deleveraged its economy, it's not even benefiting much from it.

But, yes, there should be a worldwide boom with the stronger developed countries—Northern Europe, North America and Australia—doing fairly well, though as I say, not as strong as the boom we saw in the 1980s, 1990s and early 2000s. Excluding the developed countries of East Asia—Japan, Korea, China—the emerging world will really dominate in terms of demographics and workforce growth.

[Lost Soul]

JP Morgan recently moved 9 million ounces of silver from the vault at Brinks out of country to Scotia. So did HSBC and a couple of other banks. My interpretation is that when they can't deliver on their short sales of paper silver, they want their physical out of reach of the US courts. It sucks to have to pay back money one steals. Thieves hate to have their booty/loot taken.