Buck: Welcome back to the show, everyone, today. My guest on Wealth from your podcast Is Harry Dead? Harry’s been on before. He’s a bestselling author and one of the most outspoken financial editors in America. And he is famous for having developed a unique method for studying economics around the world and uses his analysis to provide insights on what to expect in the future. Instead of focusing on endless graphs that assume people behave rationally, Harry looks at real people making real economic decisions for themselves and their family. He also combines demographics, which is a big difference between him and a lot of others, I think with actual spending to inform his research. So here he is, the author of What to Do When the Bubble Pops: Personal and Business Strategies For The Coming Economic Winter, Zero Hour and Be Your Own boss. Harry, welcome back to the program.
Harry: Yeah, nice to be back.
Buck: But so yeah, it’s funny that we we actually I think the last time we talked was in in the middle of COVID when we had these huge, you know, huge government handouts and helicopter money and all that. Why don’t you give sort of your perspective on what’s happened since then and you know, obviously now we’re in the middle of some who knows what right at this moment. But why don’t you give us a little bit of a catch up in terms of your thinking? Okay. I mean, first of all, the first thing to get the greatest boom in history, which I alone call back in the 1980s, the baby boom generation moving into their peak spending at age 46, 1983 to 2007. Everybody thought the US has been Asia was going to take us over and we had the greatest boom in history.
Now the problem is that ended in late 2007, exactly when my 46 year lag for big spending on the Baby Boom birth and act peak. And we’ve gone into a slow down ever since that slowdown actually in demographics spending potential. The most important thing in the economy among a few others really is bottoming around this year, 2023. Okay, So what happened? For the first time in history, we had a very sharp downturn. The deepest recession since 1980, 82. In 2009, just as my model would have predicted the end of the baby boom. But then the Fed and government said, Well, we can’t have this, especially with all the debt and all the leverage that they had incurred. And so they’ve just been printing money ever since.
So from early 2009 on, we’ve been in the printing money economy to try to compensate for a natural slowdown in spending, which will then naturally come back up next year from around late 2024. And in 2037, when the millennials have their spending boom. So so that’s my basic premise. Demographic cycles every 40 years, typically boom when a new generation is spending and then slow down. But governments have been fighting this for 13, 14 years. And what they did by printing all this money back is only one way. Can go. They buy financial assets. They send us checks in the mail. You know, in Homer Simpson especially, it would have been more of a consumer inflation thing and a boom. And everyday people know the rich get richer.
Just continued the money went into financial assets. Yeah. So it drives up bonds. It drives up stocks in particular real estate across the board, particularly high in real estate and, you know, trade up homes and that sort of thing, and office buildings. And now that’s where we see things crack.
So you have this model that obviously, you know, it has been fairly accurate in terms of predicting things based on demographics. But obviously, how do you adjust for a lot of these major, you know, currencies like you can’t hardly predict COVID in and all of these kinds of things that kind of come in the middle of this? I mean, does that rock you off course at all?
You can’t predict you can’t predict COVID. But this is where I think the central banks and particularly the Fed made a huge mistake. You know, COVID was a virus. This happens that happened in 1918 to 20. You know, last a year or two, people get sick, they get to spend less, less money. You don’t need to have massive stimulus because there’s nothing wrong with economy.
People just got to get over the virus. But since the Fed and central banks have been stimulating so hard since we really did go into a deep slowdown from 2008 nine forward, they panicked and they just blew the lid off. They did. The Fed printed 5 trillion more than they had printed in 30 years before. In two years. And on top of that, the government added about 5 trillion commitments to fiscal spending. So now we’ve had this skyrocketing short term little bubble. Yeah, that is not going to last because since they loose, you know, since they loosened so much there, they have been forced to tighten because inflation suddenly went from one to 2% to 9%. And I’ve got the best inflation indicator in a well world.
It’s workforce growth. Same thing, demographics. And it says inflation should be 1 to 2% for as far as the eye can see. We’re never going to see high inflation again. This 9.1% was 100% is over. Printing and overstay modulus. And now we’re in this time where oh well, now the Fed’s tightening and people think, well, but the economy is strong, you can handle it. No, the economy’s been weak since 2009. Why? They’ve been printing money for 40 years. Yeah. Yeah. Why would any why would central banks have to print unprecedented amounts of money in greater and greater amounts, especially in COVID, unless the economy was weak and it is weak and it’s about to turn strong a year from now. So my view but it is very simple.
We need to clear out the garbage, the bad debts, the zombie companies, which are all at record levels beyond anything compared to 1929 or 1968 or any other major boom. That is, we need to clear out this stuff so the millennials can have their boom. Yeah, And without all this debt overhang and stuff and all this stuff. But but nobody wants to do that because of course, that would, without question, cause a recession.
And in fact, we should have been in more like a depression off and on from 28 to 23, just like 1932, 42 back two generations. And back, you know, tech cycles, everything I study. So that’s where we’re at. We we need to let the economy deleverage for a year or two so we can have the next boom. The truth is, they’re not going to.
Buck: Yeah, they’re not going to do anything.
Harry: Right now, the markets are where both the markets are going down just on this little tightening. And now the Fed’s got this thing. Well, do we suddenly turn around and loosen, which would look really stupid after they tighten, after all this loosening? I think they’re I think the Fed made a mistake here. If they’d accept more modest stimulus, they might have gotten away with this a little longer by overdoing it. They’ve had to tighten. They’re going to have to at least go a little more tightening, you know, and and I think that’s enough that the economy’s weakness will show later this year. And I think we’re going to see stocks go a lot lower. And this will be good stocks to go back to normal. Home prices are the most affordable by far in all of history, roaring Twenties didn’t see a great housing boom because credit wasn’t so easy back then.
You had a five year mortgage and 50% down, you know, speculation back then and housing like today. So this real estate bubble globally is the biggest sign of how big and global this bubble is. The stock bubble we’re having the second tech driven stock bubble 2000 now 2021. We need this bubble to deleverage bad debts and stuff, and then we can have the next boom. If not, we’re going to be in murky waters. And I think it’s going to happen despite the government here, because they did finally have to tighten from their own miscalculation. I do think they could get this going another year or two if they had overreacted to October and nobody would have blame them for a slowdown over Coke.
Buck: Yeah, I think the thing that I think is interesting to look at right now in lieu of the fact that the rates were moved up so quickly and, you know, it’s seems like the the Fed’s mantra in general has been in these situations you move up until something breaks. But something broke. Right. And move in the sense that we’ve got these regional banks moving out a couple of bank failures and that kind of thing.
But inflation numbers come out today and I think it’s still 6%. So now they’re kind of, in my view, in a little bit of a pickle. Right. Like the optics of of raising interest rates in the middle of, you know, what looks like a very unstable economy, doesn’t seem like it doesn’t seem like necessarily the best idea. However, I haven’t seen them back up on this. And the major banks mostly are predicting that they’re going to go ahead with the 25 at least 25 basis points of increase, except for Goldman Sachs. Who doesn’t think they’re going to do it? What’s your take? What’s your take on on, you know, where we are right now and what the Fed may or may not do next?
Harry: Well, you know, it is between zero and 25 based on what the 50 basis points was on the table before this happened. And now it’s not okay. But the point to me is what people don’t understand and any addiction expert wouldn’t understand is any addiction takes more and more of the artificial stimulus to keep it going. And if you don’t, you go into detox and you detox, which is very difficult. So all of this stimulus, it’s always taken more and more. And now just just for them to not keep stimulating the economy, to start detoxing and death start bailing again. Here you see this bank. There’s three banks now under question. Now, there will be many, many more. There are many companies overleveraged because debt has been so easy and interest rates have been at least 2 to 300 basis points lower than they should have been when.
So when money is easy to get and low in interest, people will speculate more and ramp up more debt. And then when things slow down, all that debt and all those bad debts and zombie companies come flushing out. And that’s already happening very quickly here. So this is really a duel between the central banks and the real economy.
I have studied the real economy most of my adult life. And I’ll tell you what the real economy wants. The economy likes the boom and expand all types of new innovations and new generation. And then it likes to sit back, it likes to go to sleep and reset things and wash out bad debts and stuff. Recessions are just is necessary. The long term growth is booms. And the fact that economists don’t get that mean they don’t understand the economy. No surprise you ever get economy. Looks like they’ve never had such a run of business. No, nobody has. That’s the problem. Okay. Yeah, I come out of the business world. Okay. I came out of Harvard Business School, went straight into consulting the Fortune 100, turning around these companies who had done well in the fifties and sixties, seventies.
And we’re starting to feel foreign competition. And they were like laggards. And then I said, Well, this is too boring. And I started consulting two new ventures, the new baby boom oriented new ventures dealing with this new generation. And that’s when I accidentally discovered, Oh my God, the baby boom generation is the biggest thing that’s ever hit the United States in the developed world. And we’re going have the greatest boom in history when everybody thinks Asia and Japan is going to take over. And they will eventually. But it hasn’t been the case. U.S. and Europe have had a great boom. U.S. especially, and now we’re peaking and our millennial generation will will at least keep us afloat longer than Europe. But the demographics say we need to slow down.
And the worst thing you can do is keep carrying bad debts in the future. That’s why recessions are necessary. And look, it’s like sleeping and awakening how much we wake 16 seven now it’s 60 to 70 now. How much do we sleep? 6 to 8. Okay. It’s the same with booms, 25, 26 years, and then 12 to 14 years. Slow down like 68, 82 and 29 to 42. That’s the natural cycle of the economy. And then short term, three, four, five year booms in 1 to 2 year, two recessions. We need this. And an economist think they’re smarter than God, okay? They think they’re smarter than free markets. After we, the Western world, had proven the power of free markets since the late 1700s, especially the marriage of democracy and free market capitalism.
Now, what are we doing? We second guessing free markets. Yeah, I hope the Fed fails here so badly. Nobody ever listens to them when let them run the economy. Their job is not to run the economy and keep it booming as if they would know how to do that anyway. And they don’t. They’re the ones going to create this bigger crash here when all of this extra debt that we added since 2008 nine has built even higher and we have to wash out even more. So I think we’re going to see stocks go down 70 to 90% before this is over in the late mid to late 2024. And when I see that, I’m going to be the most bullish guy on earth like I was in the eighties again, but not until then.
Buck: So the you know, the demographic way of looking at the economy that you’re describing, I think you call it the spending wave theory. Is it right?
Harry: Yeah, extremely simple. Yeah.
Buck: You they explain explain that a little bit. A little bit. Again, I know you’ve sort of talked about it a little bit, but just so listeners kind of have a a sense of the, you know, the way you approach it.
Harry: Yeah. One of the good things about the US is the Bureau of Labor has conduct surveys of consumer every year, depth 600 categories down to hot dogs and potato chips, you know, and housings and starter homes and trade up homes and nursing, you know I mean everything. Yeah. So what I found real quickly when I started studying this data for my new venture clients in the early eighties, Oh my God, this, this is the golden grail here, okay?
Because what it show me is the average person and averages are everything. When you’re looking at the macro picture. And as the workforce 20 earns and spends more dramatically as they’re raising their kids until they get them through school, through high school to college at 46 on average, and then they spend less the rest of their life and they invest more and then they retire and they die. So spending less is deflationary, and dying is the ultimate deflationary act where things disappear. So so demographics, our destiny. And for the first time, I just happen to be looking at demographics for my own client. When the Bureau of Labor started doing these annual. Yeah, believable data dumps the survey out of the household again down here, when the potato chips beat 42, you know why average kid born at 28 to their parents has the highest calorie intake and junk foods at 1428 for 1442.
So if the economy is that predictable down to potato chips of course is predictable at the market level even more. That’s what I discovered in my own business research. And then that’s when I became an economist. By the way, I did not get a Ph.D. in economics, thank God. But this year I started I started with a major in economics. By the third quarter, I said, I’m learning a lot in my management, marketing and accounting courses. I’m not learning crap in my economics taught you dissolve theoretical. And so so I became an economist when I discovered this relationship. Oh, it’s people. The average person, especially in developed country, are incredibly predictable.
Buck: Yeah. So you would, you would assert that spending wave theory regardless of the short term, you know, changes in whatever panacea that the that the Fed provides that spending wave theory ultimately prevails in the long term. Is that fair?
Harry: Yeah. And real quick now, I’ll show you what it would have looked like over the last century. Okay. So so the boom in in 1929, into the crash, into 42, 32 more, but didn’t turn around till 42. So that was a long term boom and a bust on the Henry Ford generation 42 to 68 spending wave of the Bob Hope generation, the World War two, Generation Apollo. They peaked in 68 ever after that. Basically recession, recession, recession, 68 to 82 down. So 26 years up 14 years down a generational cycle. So the baby boom cycle largest in history was late 82 to late 2007. And did the economy peak right on late 2007? Because I was telling people what happened in the early to mid eighties, knowing nothing about anything in politics in the future.
Just because all these baby boomers would predict can be spent. Yes. What change is when they caused the greatest downturn since the 1930s in central banks Panic decide, Oh, we don’t trust free market capitalism more. We just got to print money and get this thing going. Stupid is single thing ever to happen in history and I hope I live long enough to point that damn finger. This is stupid to think you can run an economy on endless money printing and to think that the economy doesn’t need a recession. We’ve had a recession every decade since I’ve been born. Yeah, they are necessary, as I said earlier, just as necessary as the booms. They just should last shorter, which they do.
Buck: Let’s talk a little bit about what you think specifically of various assets. You’ve been you know, you’ve been on the deflation. You know, you’ve been sending out the warnings about deflation for some time. So are you in still in that in that mindset? And if you look at, say, gold real estate, you know, the markets, obviously in the short term, it looks like you’ve already said that the real estate markets would be in trouble or I’m sorry, the equity markets would be in trouble. But can you give us some sense of where you think based on the what’s going on and you’re spending way theory, what happens next?
Harry: Okay. First of all, I’ll make a quick comment. Who I want to favor the young people here are the old people like me. They’re going to die in the next 1020 years. What do young people want, Lower inflation or lower house prices? All this real estate boom and bubble has just benefited aging baby boomers beyond what they deserve.
Harry: And all this stock bubble, they’re the ones that have old investments. Young people are spenders and borrowers. They’re not investors until their fifties on okay, so this is also a war between the baby boom, aging baby boom and the rising millennials around the world and the gen everybody past then. Okay, so there the been efficient real estate has to come down the average house people don’t really just 20 years ago and inflation has been low since then this 100 grand now it’s 400,000 somewhere. Yeah, that’s the same stupid old house in Ohio. Okay, this doesn’t make sense. How are young people supposed to prosper when they finally get a job and get out of college with all that debt? If they went to college, how are they supposed to prosper when they have to spend that much money just to get their first house? Not a dried up home? That the 800,000 that first home now for 2000. And yeah, maybe their incomes are 60 when their parents used to be 40. But at the minute this is an imbalance. Okay. This is all been because of money printing in this bubble and extending this bubble and nobody wanting a bubble to burst. And of course they shouldn’t because bubbles always burst violently and twice as fast as they built.
Typical bubble builds in five years and burst in two and wipes out all those bubble gates. So that’s where we’re at. We had the first bubble in 2000. We had a mini bubble in 2007, and now they’ve created a totally artificial the first totally artificial bubble in all of history except for the Mississippi Sea bubble way back. Okay. Because they just pumped up one big company. Okay. But that that’s what that’s what’s wrong here. Governments took over and said we don’t like free markets anymore because after this great boom in history, we’re going to have to have a big slowdown and a nobody wants to slow down. Well, I’m sorry you don’t get the booms without the bust.
So that’s my pet peeve. I think economists don’t understand anything important about the economy. Nothing fundamental because I’m the one that studies people and I didn’t do this. I did this by accident for my home business customers studying their new baby boom customer. That’s how I got onto this. Accidental economists. I call myself didn’t plan to be an economist because, I mean, how many economists can even get a girlfriend? But it wasn’t my goal to be an economist. Yeah, but, but when you see it, it is simple and it’s the average numbers enter the workforce. 20 inflation occurs until you enter the workforce because you cost the economy and don’t contribute 20 to 46. You contribute the most in your lifetime and then you slow down and then you invest the most at an exact number, 63.
So our workforce 20 spend the most, 46 now going on 47 and and invest the most money, have the biggest investment before you retire at 63. And people don’t retire an average of 65 by the way. But it’s 63 if you do the research. Yeah. So that’s all I do. Look at people. People are predictable in math, not individually. And people drive our economy and now governments are trying to play Monday night quarterback and screwing it all up. We could have been had a deeper recession. It would have lasted from 2008 through 2000 mid 2010, like 1929, 30. We get a flush most this debt out zombie companies and we could be ready to boom again with these millennials.
And the truth is we’re not going to be able to boom unless we let the economy do what it needs to do. Get rid of record levels of bad debts. Zombie zombie companies are record levels, debts at all levels. Government and consumer are at record levels and ratios. You have to flush this out. In history, we’ve always done it and that’s how the next boom happens. Better. Jim Demographic trends. After they slow and you flush out the inefficiencies and become efficient again, both those things have to happen to have a healthy boom again and now all we’re going to have is the Millennials ready to spend a year from now for the next 13, 14 years, much shorter generation trend in the US, by the way, not so much in Asia and all but and and we’re going to be hampered by oh well we weren’t willing to get rid of all this debt and bad companies. So we’re dragging these things behind us a big weight on the economy.
Buck: So when you when you look at the sort of as a forecast and if you were advising a client or something like that, you would have mentioned now a couple of times that maybe towards the end of 2024, you’d have this period of millennial spending for 13, 14 years. So is do you believe, despite any sort of despite what the Fed’s doing, what it despite, you know, economic the forces that are intervening in these types of natural history of the economy, do you anticipate that this will be another boom then even despite all the artificial debt leverage, all those things that you’re talking about, Or do you think it’ll be hampered and unable to actually, you know, come to fruition as predicted?
Harry: It’ll be both. There’s no good this millennial generation will be enough of a force like the baby boom. Was it just not as long and not as strong. But it is still. We have the best millennial generation in the developed world. That’s the US. Europe doesn’t have this. Okay. Yeah. Japan peaked before us and doesn’t have it. Korea doesn’t have a China. Actually, their demographics are peaking right now and fall for as long as the eye can see. Okay, So so we will this this force will be a positive for the economy regardless. It won’t be nearly as positive if these millennials and they already hate the baby boomers to this. We already took all their jobs. We already did all this stuff.
We created all this debt, We created all these bubbles. They know that, okay, we were the dominant generation and we got our way, you know, and we changed a lot of things for the good, but we brought we were the only generations that brought central banks that just say, well, the best way to grow is just print money. Stupidest idea in history. But that came with baby boomers. Okay, I hate to say it, a baby boom. Federal Reserve Chairman, I. They got it. So. So you’ll have it anyway. But it will be compromised, no question about it. And I’ll tell you another thing. Even if we clear out this stuff in the next few years, what I think is going to happen anyway, okay, I think the economy is going to win here because it’s bigger.
This boom, the baby boom did happen. I have a 90 year cycle, a super bubble cycle, I call it. It’s two technology cycles. And the technology cycles are 45 years. I’m telling like a clock on this one versus the generation at 39 to 40. Okay, So we’re in a super bubble cycle that peaked around 20 1920. Now we’ve extended all this stuff. So it’s not totally unnatural that we have this bubble here and then extends past the demographic cycles because the demographic cycle may be the most important, but it’s not the only major cycle. But if we don’t clear this stuff out, we’re taking bad debts. That’s why the economy that did that, George Childers, my favorite economist, and I’ve spoken with him a lot in recent years on the same stated this thing he says the secret to capitalism is failure.
Yeah we allow failure. Central governments and and bureaucratic governments around the world. They try to manage their economies and don’t allow billion. That’s what our government they’re not allowing failure. You have to let a thousand lights bloom and then you have to weed out the failures. There’s always going to be failures when there’s growth and new technologies and new generations and growth, there’s going to be failures. The secret of capitalism is we flush it out as we’re going. It’s not kept enforced by a top down government. It’s a bottoms up, dynamic system. That was the genius of democracy means free market capitalism. Okay. And we’re in we’re doing everything against that. We we don’t understand why we’ve gotten so affluent in the last 120 years with those two those two factors.
And now we’re doing everything to fight that just to stave off a short term damn downturn. Get over it. Take your licks and let’s move on. If we don’t, it will be gone. But yes, we will have more positive fundamental trends. Even with all this debt, we’ll just have to drag it on our backs and it’ll slow us down like we’re walking uphill with £100 on our back.
Buck: You know, when you speak about the demographics and how that’s driving driving the economy, I guess the other question for for you is that you know, obviously you have a big millennial generation about to spend, but the additional force there that maybe we haven’t seen quite as much of is that you’ve got a lot of baby boomers that are aging. And so by the 2013, I mean, you’re going to have a significant burden, whether you know, through Medicare and also, yeah, it’s affecting the equity market. So so again, it’s it’s hard to imagine the economy really flourishing.
Harry: Well, I’ll give you a number on that one, too, because I actually did the calculations on that burden. 2029 okay. That’s just several years. And now will be the time when that baby boomer retirement entitlements burden is at its peak compared to the millennials growth curve and all that stuff. So so that’s I mean so yes, that is already a headwind.
So in addition to that natural headwind, we’ve never had a smaller generation to follow a larger one. So that is that is an important headwind. But on top of that, we say, well, we’re not going to clear out our debts from the baby boomer generation, this greatest boom in history, and we carry that weight with us, then, yes, we could we could have the most disappointing, muted generational boom. In fact, we will have the most muted boom in history. And even with clearing out everything, if they do everything I wish to happen in the next few years and we clear out all this debt and stuff, even with that, their boom will not happen in this bubble 90 year cycle. And so the stocks in real estate, I don’t think either them in the US will see the peaks we’ve seen recently for the rest of our lifetimes and most of the millennials.
Not so now we can still have a huge boom if we went down to 3 to 5000, you know, I on, on, on, on the Nasdaq and it went up, you know, oh, you know, even back to the levels, the peaks we had so we can still have a great boom. But but this boom on no level, even in its natural forces, nothing will match what we saw from 1983 to 2007 when the greatest demographic force and it was globally in the developed countries, but it was dominated by the US, we will not see a boom like this again.
Buck: So if you’re so, you know, certainly not asking you for investment advice or anything like that, but curious what your take is on, you know, the performance of assets where people should look at potentially to deploy capital over the next year or two. You know, I know for some time you’re fairly down on gold and, you know, real estate and that kind of thing. But certainly where we are, there’s a lot of real estate investors here and probably curious on your take on real estate in particular.
Harry: Okay. Yeah, perfect question to sum up here. I mean, okay. So so stocks definitely go down and of course, the more leverage the Nasdaq will go down more in the S&P and the Russell then more than the S&P that S&P is becoming per say. But they’re all going to go down. I mean, 80% are more and more okay if this thing really fleshes out real estate.
Second real estate bubble looks exactly like the first one. Started it higher levels and went to higher level real estate. This time to go back down to fair value as we go down 50% instead of 34% last time. That’s going to be the biggest hit most people get. So what do you and stocks go down 70 to 90% like in the early thirties, not normal, 40 to 50%. Major shakeout. So the key is there is nowhere to hide here. Investors have to get out of the way. If you have a main home and you’re going to stay in it and you have a vacation home, sell the vacation home, or it’s a vacation home where you’re looking at retiring, sell the main home now and then move and go ahead and retire in that vacation, but minimize your real estate exposure.
And people ask me, Oh, Harry, I got this, this, this one, one house with a high debt and the other one with equity. I should sell the one with high debt. No, sell the one with the equity. Get all your money out. The one with the high debt may end up having the bank take a lot of that. Hit it because the banks are going to have to restructure debt at some point and they’re the ones that went too much money. So so you have to think about it. So get lean and real estate, I mean, as soon as you can, because real estate tournament, you just have to be out of stocks. There is no. Oh defensive sectors might go down 50% that 80 I don’t care.
I don’t want to be there. Where do you be? And this is what’s proven, not gold. Gold did the same thing. It’s do it this time. It edged up in the early stages of the last recession than the early 2008 and then crashed 45 50% right into the bottom of that gold went down the and gold was not the worst place to be did well early on goals done and here I expect gold to go to a thousand give or take for it’s over and then it’ll be a great long term investment because the future is Asia and Asians particularly Indians. The biggest Asian factor going forward, not China. Then they love gold. Okay, so gold is going to be 3 to $5 in one day, but not because of a crash thing. It is not the safe haven wasn’t in 2008. So stocks down, gold down, real estate down. Multifamily is the most stable real estate. Okay. Where do people go when they can’t afford to buy or when the banks climb up?
But then they have to rent and then. And then there’s people winning anyway. So. So is multifamily. If I have to own real estate, I want I want to own multifamily. I’d rather be out of everything if I could. Okay. So but multifamily will hold up the best and people more people will be driven to them out of despair. Okay, so you’re like you’re like the Treasury bond. You’re like the safe haven in real estate, right? Okay So. So and and the ultimate, though, and this is proven, I have to argue with people like Peter Schiff all the time, and it should not be an argument. 2008 Gold crashed in the end and the Treasury bonds went straight up in reverse.
And when the things got, there were some mid to late 2008. Towards that bottom, the Treasury bonds were the safe haven. The longer the better. 30 year went up 60%, ten year went up 34 40%. I’m projecting some of these Treasury bonds and ETFs like 000 TLT can go up 40, 50, 60, 70% in this crisis. And here’s the bad part There’s no diversification in the downturn. All financial assets bubbled up with easy money. In all these policies, they will all go down. The only safe haven are the triple-A corporates, and even more so. And I don’t even want to bother with the triple-A corporate, the 30 year Treasuries. The best single thing you can buy, or again, 00z is a 25 year average between ten and 30 TLT is 20 year average.
You know, the zeros will go up 50% faster than TLT in a crisis already proven in recent time. So I’m telling people, hey, you could be in cash if you really can do the best thing, be in the safest bonds in the world, longest term U.S. treasuries just for the crash. People say, well, here you look well, what about down the road? I’m not seeing much. The next boom, you need to be back in stocks and you need to lean back towards tech in the U.S. and in Southeast Asia and India, where the growth is going to be not not even China so much. So that’s the future. But now there’s only one thing to do. The preserve your money and the only way to grow it safely in a crisis is these long term Treasury bonds.
They are the safe haven. If you don’t believe it, look at what they did in 2008. Only thing they go up when even gold went down and gold was the second best because at least it held up after the way through like it is now. I’m expecting gold to go down.
Buck: Yeah. Harry, it’s been great talking with you. Connecting. And I definitely would love to get you back on as we continue this odyssey of the weird economy that worries.
Over the real play bug. I mean look for more information Yeah Harry Dent dot com. Yeah very simple. We have a free newsletter. I and my partner write a weekly article so keep up with just what we’re thinking and then we have a paid newsletter. Once people get the best. I’m telling people not only better job for sure, but at least get on a free newsletter. HarryDent.com All you do is put in your name and your email and you’re on our free newsletter. At least you can hear. I mean, because I’ve already had to change my tell me this stimulus thing is so back and forth. This is I think stocks are going a lot lower and sooner than later and real estate on a lag. But how it happens is going to continue to be a bit of a puzzle depending on how these central banks react. And now I think they are in trouble because they finally overdid it and now they’re forced to tighten or at least be neutral and tightening or neutral. If you get tightening or neutral, we’re going to see this downturn again.
Buck: This is HarryDent.com make sure you sign up for that newsletter. And Harry, it is great to talk to you and we’ll be in touch I’m sure in the in the coming years and. Hopefully you’re wrong. People should hope that I’m right are long term particularly young people in our long term health of our economy. We need this. I’m not a doomsday or I’ve been bullish 90% of my career. In fact, I got most criticized in the eighties for being too bullish, especially on America, so that I am not Barrett. But there is a time to be bearish.
Harry: And this is yeah, if you can find it, anybody can find bigger or more bubbles than this. Any time in history come to me and I’ll hire.
Buck: Yeah. Fantastic. Thanks again, Harry. We’ll be right back.