A visiting American has come with a story that’s bad for job creation and wage rises and we all better hope this guy remains wrong. You see, he has made big correct calls and got a reputation but he’s also made bad ones. Even so, he still has books that people buy, which encourage others to show up to his seminars. And they pay money to be scared about the future!
I’m not wild about Harry
Harry Dent is the man telling us that economic and stock market Armageddon is around the corner. Dent is visiting from the US with his new book, ominously called Zero Hour. Now I’m not wild about Harry’s predictions but this is what the book’s blurb says: “Will you be prepared to take advantage when the revolution comes or will you go down with the rest?
“Revolutions are cyclical. They run on a very specific timetable. You could be so much happier, healthier, and wealthier if you grasped the powerful cycles that influence everything from currency valuations to election returns,” Harry says.
Has Harry dented my optimism?
Yep, you guessed it, this isn’t a read for the forever optimist. Even though I sometimes get called such positive names, the reality is I know bull markets don’t go on forever. While I’m enjoying this bull market that started in March 2009, that’s been more enjoyable for US investors, with their stock market in record territory, I’m always on the lookout for indicators that tell me it’s time to go negative.
That’s why I talk to someone like Harry, who has made a lot of money out of being negative on bull markets in the past.
Nervous Nellies who’ve lost money
You see, there are negative nervous Nellies out there who’ve been worried about this bull market since 2011, when credit rating agencies actually took away the US Government’s triple-A status as a borrower.
And when the US economy’s response was so bad that official interest rates went to virtually zero, Armageddon spotters came out of the woodwork.
Then in 2015, when we all got used to a new political term “Grexit”, again the financial world held its breath for a Greek debt crisis that could ruin even German banks!
When Harry met Switzer
Around that time, Harry was here and I interviewed him then. He was then warning that Australia would be economically drowned by a China-created tsunami that would wipe us out. In case you missed it — he got that one wrong.
C’mon, he was anti property in 2015!
Prior to that, in 2015, he was targetting our property market. He was headlining the Secure Your Future conferences in Sydney and Melbourne and his message wasn’t good for property lovers. News.com.au captured his argument then to potential panic merchants. “Bubbles ultimately peak when the people buying can’t afford to buy it,” Mr Dent said.
“Melbourne has been, actually, the biggest bubble in recent years and I would expect the biggest burst there. In Australia, obviously the bigger bubbles are in Sydney, Melbourne, Brisbane and Perth because they had the greatest growth and the greatest limitations in supply – but not quite as much in Adelaide and other cities.”
Did property experts agree with Harry?
When I mentioned that I was interviewing Harry for my radio program on the Talking Lifestyle station to Charles Tarbey, founder and chairman of real estate group Century 21, he couldn’t resist having a shot at him. “If someone took his advice in 2014 and sold their property or refused to buy a property because of his warnings, they have lost a lot of money,” Charles said.
He got Perth right, but…
Of course, he was right for Perth but everyone knows that this property market rises and falls on mining booms and busts, so that wasn’t a difficult call to make.
What does Harry predict now?
His current warnings are that the stock market, the property market and the crypto-currency market are all going to crash and burn. He didn’t say exactly when (because he doesn’t know) but given the title of his book, Zero Hour, it’s safe to say that on Harry’s clock, you should start worrying now!
Harry isn’t an economist. He is a demographer and over his long history of scaring the pants off investors and even normal people, who like their life with a job and a nice home, some of his calls have been on the money.
A broken clock’s right twice a day
One day he (and other bears) will get their stock market crash and the economic challenges that will bankrupt businesses, kill jobs and take away wage rises, which, to date, have been pretty poor in Australia.
Here’s a more optimistic player
During the week I interviewed Charlie Aitken of Aitken Investment Management, who largely invests overseas but lately has started seeing our banks as a potential buy because their share prices have reacted to all the bank bashing out there with a Royal Commission, the bank levy, etc.
But it’s not just their prices. He thinks the Oz economy is on the improve and expects this will bring higher wages in 2018 and 2019. This will mean more spending, economic activity and that’s when banks will benefit — customers with more money to spend and more income to power borrowing would be a plus for our bottoms lines, as well as the banks’ bottom lines!
Say a little prayer…
If you like wage rises and lots of job opportunities, then say a prayer that Harry and his fellow doomsday merchants, who want to kill off the bull market with their bearish calls, are wrong, at least for a few more years.
One day market crashes and economic slumps will come but I don’t think they’re just around the corner.