DebtCrisisCD_workbook7[1]

© Copyright 2010, HS Dent Publishing

The Debt Crisis of

2011-2012: How You Can

Prepare and Prosper

Audio CD Workbook

HS Dent Publishing

Harry S. Dent, Jr. is recognized as one of the most reliable economic and

business trend forecasters of our time. He has been profiled and quoted

in Fortune, Business Week, The Wall Street Journal, Investors Business

Daily, and Entrepreneur, and regularly appears on CNN, Fox and CNBC.

He is a Fortune 100 consultant, small business manager, new venture

investor and noted speaker as well as having a Harvard MBA. Mr. Dent

stood virtually alone in forecasting the unanticipated boom of the 1990s

in his book, The Great Boom Ahead written in 1992. Mr. Dent also

explained in his book his prediction for a downturn in the US that would

start around 2008. In 1989, when Japan looked invincible, he forecast

that the Land of the Rising Sun was on the verge of a 12 - 14-year

downturn, which followed in short order. He offers a refreshingly

understandable view of how the economy works, and suggests practical

applications at all levels, and uniquely uses the science of demographics

to identify changing trends and opportunities ahead. Dent has proven

that by using his approach to understanding the economy you can see the

key economic trends that will impact your life, your business and your

investments over the rest of your lifetime and years before they occur!

Now Mr. Dent has put together this CD Set, The Debt Crisis of 2011-

2012: How You Can Prepare and Prosper

You will learn how massive debt levels, slowing demographic trends in

spending, and deflation in prices (not inflation) will create a crisis much

like the early 1930s. Dent calls these the three D's: DEBT,

DEMOGRAPHICS and DEFLATION. To survive and prosper in these

increasingly volatile times you must understand how the three D's will

impact you, your family and your business. The massive stimulus

program of the U.S. government and worldwide will fail and create a

banking crisis greater than the one we saw in late 2008. Individuals and

businesses that can see this coming can prepare and prosper as we will

see the greatest sale on financial assets since the early 1930s. This crisis

which will create unprecedented opportunities "out of the ashes" will

paradoxically be very good for our economic health and will reduce our

debt levels and cost of living. This will generate another mass prosperity

boom like the one following the Great Depression from the 1940s through

the 1960s. Harry Dent gives you short and long term strategies for preparing and prospering in the crisis just

ahead and for the longer winter season lasting into 2020 to 2023. Cash, cash flow and credit will be king for

investors, as well as betting against stocks and real estate. Many businesses will evaporate and fail. Those that

cost cut and focus on their strongest products and services will survive and become dominant in their market for

decades to come.

This CD set includes:

CD 1: Why a Deeper Crisis Is Unavoidable: The Truth About Our DEBT

CD 2: Why the Boom Turns to Bust: How DEMOGRAPHICS Drive Our Economy

CD 3: The Four Seasons of Our Economy: Winter, Slowing and DEFLATION Ahead

CD 4: How to Prepare and Prosper: Short and Long Term Predictions

And a bonus CDROM which includes a downloadable workbook with charts so you can follow along with the first

4 discs.

Begin Learning How You Can Prepare and Prosper, NOW!

Harry S. Dent, Jr.

Author of:

The Great Depression Ahead

The Next Great Bubble Boom

The Roaring 2000s

The Great Boom Ahead

CD 1: Why a DeeperCrisis Is Unavoidable: The

Truth About Our DEBT

CD 2: Why the BoomTurns to Bust: How

DEMOGRAPHICS Drive OurEconomy

CD 3: The Four Seasonsof Our Economy: Winter,

Slowing and DEFLATIONAhead

CD 4: How to Prepareand Prosper: Short and

Long Term Predictions

1-1

2-1

3-1

4-1

l Debt as a % of GDP was approaching 200% of GDP in1929 prior to the Great Depressionl In 2008 such debt was approaching 400%l We have just seen the greatest credit bubble inmodern history

CD 1: Why a Deeper Crisis Is Unavoidable - The Truth About Our DEBT

The Debt Crisis of 2011-2012: How You Can Prepare and Prosper 1-1

l Forget the $13 trillion in Federal Debt -- total privateand government debt was $56 trillion in 2008l $14 trillion in total government, $17 trillion infinancial institutions, $11 trillion in corporate and $14trillion in consumerl The financial sector and consumer sector are themost extreme and where the crisis has concentrated


Note Your Insights & Actions Here :

U.S. Debt Since 1929as a percentage of GDP by category

Chart 1.1Source: SG Global Strategy, Bloomberg, US Federal Reserve

Government$14Trn

Financial$17Trn

Corporate$11Trn

Consumer$14Trn0

10,000,000,000,000

20,000,000,000,000

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40,000,000,000,000

50,000,000,000,000

60,000,000,000,000

1977 1982 1987 1992 1997 2002 2007

Federal Govt Trust FundsFederal GovtState and Local GovtFinancial SectorForeignCorporateHousehold OtherConsumer CreditHome Mortgage

Total:$56 Trn !

Total U.S. Debt, 2008

Chart 1.2Source: Federal Reserve Flow of Funds Report

l In addition, the government declares that it wouldtake $46 trillion today to fund the benefits it haspromised for health care and social securityl 80% of that $46 trillion in unfunded liabilities comesfrom Medicare/Medicaid which increased dramaticallyin 2003 with expanded drug benefitsl In 2009 we expanded health care again when weclearly can't even afford what we already have



l Our total debt when $46 trillion in unfunded liabilitiesis added to $56 trillion in debt = $102 trillion!l That is 700% of GDP as opposed to 200% in 1929l Our debt crisis is far greater than anyone is tellingyou, meaning a crisis is inevitable and the governmentcan't just stimulate their way out of this mess!



Total US Debt

Total Debt Obligations

7 x GDP !!!

$56 trn

+

Unfunded Federal Liabilities $46 trn

=

$102 trn

Total US Debt Obligations

Chart 1.4Source: HS Dent

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Addition of Medicare Part D

Includes Social Security and Medicare

$46 trillion

Unfunded EntitlementObligations In $Trillions

Chart 1.3Source: The White House, US Treasury




l The $17 trillion in financial institution debt isunprecedented, banks used to lend against d e p o s i t s ,now they sell their loans to investors through debtsecuritiesl $8 trillion in debt was raised by government sponsoredagencies like Fannie Mae to buy loans from banks andallow them to lend morel $4 trillion was borrowed by Wall Street through "toxic"mortgage securities

The Debt Crisis of 2011-2012: How You Can Prepare and Prosper

l We said from the beginning that the governmentstimulus plan would faill The best economic leading indicator is pointingtowards recession again by January of 2011 if not soonerl The stock crash we have been forecasting for thesummer of 2010 will cause this indicator to turn downmuch steeper ahead



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Financial Sector Debt Outstanding$Millions, Seasonally Adjusted Annual Rates

Chart 1.5Source: Federal Reserve Flow of Funds Report

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The WLI forecasts economic growth approximately 7 months into the future.

Weekly Leading Index

Chart 1.6Source: ECRI

l Innovative new real-time measures of consumerspending are forecasting a consumer slowdown evenearlierl 2nd quarter GDP will be very disappointing whenreleased on 7/30/2010 and 3rd quarter could benegativel An accelerating stock crash from July onward willcause consumer confidence and spending to plungefurther



l Mortgage delinquencies continue to rise sharplydespite the economic recoveryl Foreclosures follow on a 1 - 1.5-year lag and thatdepresses home prices furtherl As the economic recovery fails further delinquencieswill only rise faster in late 2010 and 2011



Daily Growth Index

Chart 1.7Source: Consumerindexes.com

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Total Delinquency % (excluding Foreclosures) All Product Types

Mortgage Delinquencies

Chart 1.8Source: LPS Applied Analytics

l The real "ticking time bomb" is rising homes"underwater," meaning the home is worth less than themortgagel Even in a good economy 48% of mortgages areestimated to have negative equity by early 2011 with60% of those severely negativel The worst loans are option-ARMs with no principleand no interest for the first 5 years and they will be 89%underwater



l The "trigger" for the ticking time bomb is predictablerises in mortgage resets to higher, longer term ratesl The next surge occurs into October of 2010 and thenhigher into September of 2011l Subprime mortgages dominated the surges into 2008,this time it will be option-ARM loans - and they are themost likely to default



Q1 2009 Q1 2011 Projected

Total mortgage market 26% 48%

Option ARM 77% 89%

Subprime 50% 69%

Alt-A 49% 66%

Prime jumbo 29% 46%

Conforming 16% 41%

The Ticking Time BombNegative Equity by Mortgage Sector

Chart 1.9Source: Deutsche Bank August 5, 2009 Report

We are here

Mortgage ResetsTrigger for the Next Financial Meltdown

Chart 1.10Source: Loan Performance, Amherst Securities

l Housing prices do not go up with the economy asstocks dol They correlate with inflation when adjusted for sizeand quality of featuresl An unprecedented housing bubble occurred from2000 - 2005 with prices more than doubling - that wassimply not sustainable



l A similar housing bubble occurred in Japan from 1986- 1991 with a 2.6 times increasel Bubbles always go back to at least where they startedas occurred in Japan with a 63% decline back to a bitlower than 1986 levelsl Japanese prices have not risen substantially even 18years after their peak in 1991 due to a much smallergeneration to follow as buyers



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Home Prices

Long Term House Prices vs. Inflation

Chart 1.11Source: Robert J. Shiller, Irrational Exuberance, 2nd Edition, PrincetonUniversity Press, 2005.

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Japan Residential Land Price National Index

Chart 1.12Source: Japan Statistics Bureau

Home PricesAdjusted forInflation

l The unprecedented housing bubble was fueled byextremely easy credit and low interest rates l In 2000 the average household could borrow 3.3 timestheir incomel By 2006 that expanded to 9.2 times, or nearly triple- that is nuts!



l The U.S. housing bubble is likely to go back to whereit started or a bit lowerl The bubble started in 2000 and that would imply atleast a 55% decline vs. the 34% thus farl Look at your real estate and ask: what was it worthbetween 1996 and 2000? That is where it is likely to fall



Pre-Tax IncomeBorrowing Power

2.8 times

Borrowing Power of a Typical Home Purchaser

Chart 1.13Source: Amherst Securities

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Average US Home Prices1994-2010

Chart 1.14Source: Case-Shiller US 10-City Index

l The great benefit to this debt crisis will be theelimination of $ trillions in private debtl We estimate that such write-offs could end up beingnear $20 trillion!l The ultimate "stimulus program" would be for thegovernment to support the banks in writing down debtwhich saves massive costs for households andbusinesses





$19.0 – 24.0 TRNTOTAL WRITE OFFS

$0.5 - $1.0 TrnState and Local Govt. Bonds

$5.0 - $6.5 Trn$11 Trn Corporate and Comm. RE

$2.0 - $2.5 Trn$5 Trn Other Financial Sector

$6.0 - $7.0 Trn$14 Trn Consumer Mortgages/Credit

$2.5 - $3.0 Trn$4 Trn Wall Street Toxic Securities

$3.0 - $4.0 Trn $8 Trn FMae/FMac Bonds

Estimated Debt Write-Offs in the Private Sector


l The key driver of our economy is the predictablefamily spending cycle with agel Spending rises into a peak at age 46, plateaus into age50 and then declinesl Spending typically peaks as the kids graduate andleave the nest

CD 2: Why the Boom Turns to Bust - How DEMOGRAPHICS Drive Our Economy


l We do predictable things from cradle to grave whichmakes many things predictable about our economyl Hence, the birth index adjusted for immigration is thekey leading indicatorl We can predict inflation, spending, borrowing, homebuying and savings decades in advance



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Immigration Adjusted Birth Index


l Most important, we can predict the broader economyon a 46-year lag to the birth indexl Stocks follow the economy and correlate well longterm when adjusted for inflationl You can see the booms and busts in our economy 46years in advance and we warned of a downturn around2008 twenty years ago!



l We predicted a 12 - 14-year downturn in Japan back in1988 - 1989l Consumer spending followed a predictable demographicdecline and stocks followed downward in line with thatl Japanese stocks declined 80% and are still down 75%in the summer of 2010, 20 years later



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Dow Adjusted for Inflation

The Spending WaveBirths Lagged for Peak in Family Spending


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Change in Consumer Spending

Japanese Stocks vs. Consumer Spending 1987 – 2007

Chart 2.4Source: Japanese Family Income and Expenditure Survey

l Demographic trends are pervasive - down to the mostmicro levelsl Potato chips peak at age 42 as calorie intake peaks at14 and the average kid is born at 28 to the parentl Such product trends can be predicted into local areaswith different age distributions



l You wouldn't have to be a psychologist to know whenthe average male has a mid-life crisisl Motorcycles spending peaks between age 45 and 49which means a bust aheadl It is aging professionals that dominate motorcyclespending, not younger people



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l Most areas of spending peak between age 42 and 54 -from housing to furnishings to cars to travell The one large area that will continue to grow withBaby Boomers will be health carel For example, prescription drugs grow until theaverage woman dies at age 81



l Real estate is not one industry, but a series oflifestyle purchases as we agel Apartments peak at 26 as we get married, then starterhomes at age 29-33 and trade-up homes at age 37 - 42l There are two surges of second homes, the first intoage 46 - 50, and the second into 63 - 65



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Real Estate Spending Cycle


l We can use demographic trends to predict globally aswelll Developed countries generally follow the sameSpending Wave as in the U.S.l Europe's Spending Wave points down from 2010 fordecades to follow, as does Russia and East Europe



l In emerging countries, urbanization is the mostcritical trend for raising incomes and productivityl Brazil and Latin America are already 80% urbanizedwith slower potential aheadl Brazil only has $5,800 GDP per capita in 2000compared to near $30,000 in the U.S. at similarurbanization rates - they will not become as rich



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Europe Spending Wave vs. Workforce Growth

Chart 2.9Source: United Nations

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Chart 2.10Source: United Nations, Maddison, Agnus

l Workforce growth is the better measure ofdemographic growth as emerging countries don't havethe highly leveraged Spending Wave into age 46l Brazil will continue to grow from workforce trendsinto around 2030l Most of Latin America will see workforce growth moreinto around 2040



l China will be the surprise of this century as itsdemographic growth plateaus from 2015 to 2025 andthen declines more strongly from 2035 forwardl This results from the "one-child policy" back to theearly 1970sl China will see continued growth from urbanizationahead, but at much slower rates due to demographics



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l India will be the large country that has both highdemographic and urbanization potentiall India's workforce growth points up sharply until atleast 2055 and likely longerl Southeast Asia grows into around 2040 and Pakistaninto the Middle East into 2065 or later



l Demographics also drive inflation rates as youngpeople are expensive and unproductivel Workforce growth on a 2.5-year lag correlates closelywith short term inflation ratesl This shorter term Inflation Indicator points towardsdeflation by early 2011



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LABOR FORCE

GROWTH

2.5-YR LAG

Inflation Indicator

Chart 2.14Source: BEA and Bureau Labor Statistics

INFLATION (CPI)

LABOR FORCEGROWTH 2.5-YR

LAG

l We can extend inflation forecasts out two decades byprojecting when 20-year-olds will enter on average andwhen 63-year olds will retirel This longer term Inflation Forecast projects deflationin prices into around 2023, not inflationl Everything points towards deflation, includingmassive debt deleveraging and falling Baby Boomspending





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Inflation Forecast

Chart 2.15Source: U.S. Census Bureau and U.S. Bureau of Labor and Statistics

Inflation

20 Year-Oldson a 3-Year Lag

Minus 63 Year-Olds

l Our most important cycle is an approximate 80-yearFour Season Cyclel Two generation boom and bust cycles creates fourseasons: spring, summer, fall and winterl But technology innovation creates price cycles liketemperatures with high inflation in summer, deflationin winter ahead and more balanced prices in spring andfall

CD 3: The Four Seasons of Our Economy - Winter, Slowing and DEFLATION Ahead


l Remember that private debt is $42 trillion vs.government at $14 trillion - it is the 800-pound gorilla!l Private debt grew faster in the boom and now isdeclining faster in the bustl Greater private deleveraging vs. government debtincreases means deflation wins, not inflation



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Simple Four Season Economic CycleEighty Years in Modern Times


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Change in US Debt

Chart 3.2Source: Steve Keen’s Debtwatch July 2009

l Household net worth fell $18 trillion in the firstrecession and stock crashl We project it will end up falling at least $26 trillion inthe deeper depression ahead, and likely morel This fall in assets greatly outweighs $ trillions ingovernment stimulus and private debt will ultimatelyhave to fall in line



l Many forecasters focus on rising money supply fromthe unprecedented government stimulus plan as leadingto inflationl But they don't notice that "money velocity" isdropping like a rock!l If increases in the money supply are not spent or lent,then they do not lead to inflation



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Household Net Worth

Chart 3.3Source: Federal Reserve

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The Velocity of MoneyGDP to Adjusted Monetary Base

Chart 3.4Source: St. Louis Fed, US BEA

l The broadest measure of the money supply is calledM3l M3 has been falling sharply despite the un-precedented stimulus plan and has already turneddeflationary in 2010l The negative growth trends in M3 strongly suggest abanking and deflationary crisis just ahead



l The last winter season from 1929 - 1942 saw adeclining and very volatile stock marketl The asset allocation plans you hear about simply won'twork when everything is falling - stocks, real estate andcommodities -- international and domesticl Long term bonds do best in the winter season, but youhave to wait until they first spike in yields forrepayment or default risks



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Money Supply Measures - M3 Annual Money Supply Growth

Chart 3.5Source: Shadow Stats, St. Louis Fed, SGS

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Dow Adjusted for Inflation1929 - 1942

Chart 3.6Source: Yahoo Finance, Bureau of Labor Statistics

l The last time demographic trends declined was 1969- 1982 in the summer seasonl Stocks were trending down and were very volatileagain, but not as bad as in the winter seasonl Inflation in summer favors real estate, commoditiesand emerging countries, but not bonds - the winterseason will be very different



l Home prices lagged stocks and bottomed in 1933 atthe worst of the Great Depressionl Home prices rebounded after the bottom andeventually strongly - that will not be the case this timewith a smaller generation followingl Real estate needs to be bought and managed for cashflow, not appreciation as much



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Dow Adjusted for Inflation1968 - 1982

Chart 3.7Source: Yahoo Finance, Bureau of Labor Statistics

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Median Asking Prices for Existing Houses (Washington D.C.)

Chart 3.8Source: Historical Statistics for the U.S. Colonial Times to1970

l The worst of most depressions comes in the first 3 -5 years when the banking system is deleveragingl Unemployment rates peaked at 25% in 1933 and thenhit 18% in the second recession in the late 1930sl This time we are likely to see 15% plusunemployment rates between 2011 and 2012, withunderemployment as high as 25%



l Business failures also were much higher in the firstcrash from 1930 to 1932l A shake-out in businesses actually started back in1920 - 1922, much like the dot-com bust 80 years laterfrom 2000 - 2002l The businesses that survive the coming shake-out into2012 will see their competitors fail and gain massivemarket share



0%

5%

10%

15%

20%

25%

30%

1929 1931 1933 1935 1937 1939 1941

Unemployment Rate1929-1942


0

5000

10000

15000

20000

25000

30000

35000

1921 1924 1927 1930 1933 1936 1939 1942 1945

Business Failures1921-1945


l The Consumer Price Index also saw its worst deflationinto 1933 in the first crashl The second stock crash and downturn only saw veryminor deflation in pricesl The next spring inflation cycle started from 1942forward as will occur from 2020/2023 forward



l Interest rates or yields on long term governmentbonds fell generally from 1929 through 1941l But there was a spike in yields in late 1931 as theworst of the crisis started to set inl While most investments fell, there was a great bondbull market from late 1931 through 1941 -- and likelyfrom late 2010/mid-2011 into 2020-2022



12

13

14

15

16

17

18

1929

1930

1931

1932

1933

1934

1935

1936

1937

1938

1939

1940

1941

1942

Consumer Price Index1929 - 1942

Chart 3.11Source: Bureau of Labor Statistics

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

1929 1931 1933 1935 1937 1939 1941

Long Term Treasury Yields1929-1942


l In March of 2010 we outlined a "minefield of tickingtime bombs" to go off over 2010l We saw European default threats coming back in Apriland May and mildly disappointing 1st quarter GDPl From late July on we see very disappointing 2ndquarter GDP, geopolitical crises, accelerating mortgagedefaults and China's bubble bursting

CD 4: How to Prepare and Prosper - Short and Long Term Predictions


l We outline two scenarios for stocks in the decadeahead and the broader winter seasonl The next stock crash is likely to occur steeply into late2010 and see the Dow as low as 3,400-3,800l After another bounce into 2011, the last wave downshould occur into mid-2012 or so with lows around3,300



October

September

August

June

April

March

February

January

May

July

Accelerating Mortgage Defaults

Very Disappointing 2nd Qtr GDP

China / India Tighten

China Bubble Bursts

Iran Tensions,

Terrorist Strikes,

Oil Spikes

Mildly Disappointing

1st Qtr GDP

Further Default Threats in Europe

Austerity Programs

Greece Default Threat

2010

Minefield of “Ticking Time Bombs”


0

3,000

6,000

9,000

12,000

15,000

Oct-02 Oct-07 Oct-12 Oct-17 Oct-22

3,400-3,800

3,200-3,300

Dow Forecast Scenario 12010-2023

Chart 4.2Source: Yahoo Finance

l The second scenario would see a more steady declineinto mid-2012 with a bottom likely between 3,200 and3,800l There would similarly be a mid-term rally mostlybetween late 2014 and mid-2017 followed by a moreminor crash into 2020/2022l In this scenario investors should wait to buy stockslong term until around mid-2012 and mid-2022



l 10-Year Treasury bond yields have been declining in achannel since 1989l We could see even lower lows in yields at more like1.5% by early 2013 or so, after a spike to around 4.5%firstl Bond yields should generally decline from early 2011or so into 2020 or so creating a good environment forowning bonds long term



0

3,000

6,000

9,000

12,000

15,000

Oct-02 Oct-07 Oct-12 Oct-17 Oct-22

3.200 – 3,800

Dow Forecast Scenario 22010-2023


10 Year Treasury Bond Yield1989-2023


l Tax rates rose in the last winter season from 25%marginal rates to 94% in World War IIl That will happen again, likely to a somewhat lesserdegree from 2011 into 2020 or so l Talk to your financial advisor about how to reduceexposure to rising tax rates now before the rules change



l Apartments are the best sector in the currentdownturn although there will be losses fromdepreciation of pricesl Apartments will benefit from rising rental demandfrom Echo Boomers into 2017l They will also benefit from households that can't orwon't buy a starter home in this environment



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1913192319331943195319631973198319932003

Perc

entag

e

Top Federal Individual Income Tax Rates1913 - 2008

Chart 4.5Source: IRS

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

1959 1969 1979 1989 1999 2009 2019 2029

Imm

igrat

ion-A

djus

ted B

irth

The Apartment/Shopping Center Wave26-Year Lag

Chart 4.6Source: BLS and HS Dent

l Starter homes will see the greatest demographicpressures once home prices likely bottom around early2013l Demographic trends favor starter homes into 2021and then again from 2028 into 2038l This is the first and best broad sector for buying fromearly 2013 forward - have your kids wait to buy



l Trade-up homes will fare the worst in this downturnand for years to comel The next rise in demand comes from 2018 into 2032l This is the last sector to buy into unless there areincredible bargains



2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

1960 1970 1980 1990 2000 2010 2020 2030

Imm

igra

tion-

Adju

sted

Birt

h

The Starter Home WaveBirths on a 31-Year Lag


2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

1970 1980 1990 2000 2010 2020 2030 2040

Imm

igra

tion-

Adju

sted

Birt

h

The Trade Up Home WaveBirths on a 42-Year Lag


l Vacation/retirement homes and areas will likely seethe most appreciation after crashing the most fromextreme speculationl The final demographic cycle points up from 2013 into2024l Early 2013 to early 2015 is likely the best period tobuy second homes again



l Commercial real estate peaks the latest with the broadeconomy and then falls the hardestl Demographic trends here don't really pick up until2023l There will be select buying opportunities from early2013 or early 2015 for the mid-term boom into 2017



2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

1987 1997 2007 2017 2027 2037 2047

Imm

igra

tion-

Adju

sted

Birt

hs

The Vacation/Retirement Home Wave Births on a 63-Year Lag


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1950 1960 1970 1980 1990 2000 2010 2020 2030

Ann

ual L

abor

For

ce G

row

th

20-year olds minus

63-year olds

The Commercial Real Estate WaveWorkforce Growth Projections

Chart 4.10Source: U.S. Census Bureau and U.S. Bureau of Labor and Statistics

l Global spending in general is flat into 2023 and thenup into 2035 before flattening againl The next concerted global boom will be shorter thanthe last one from 1983 - 2007l India should lead along with Southeast Asia and theMiddle East, with Europe lagging the most andChina/East Asia somewhat



l Commodities boom on a different clock thandemographic cycles - every 29 - 30-yearsl Commodities are important for exports to mostemerging countriesl Latin America, the Middle East and Africa will get anextra boost out of a booming commodity cycle againfrom 2023 - 2038/2039



0

200,000

400,000

600,000

800,000

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

2055

2060

2065

2070

2075

2080

2085

2090

2095

Japan 1

Russia 1

US 1 Europe

Japan 2 S. Korea

China 2 Russia 2

US 2 Indonesia

Brazil

Mid East Saudi Arabia

India Pakistan N. Africa

Sub-Saharan Africa

Mexico SE Asia

China 1

Global Spending Wave


Jan-

13

Jan-

23

Jan-

33

Jan-

43

Jan-

53

Jan-

63

Jan-

73

Jan-

83

Jan-

93

Jan-

03

Jan-

13

Jan-

23

Jan-

33

0

50

100

150

200

250

300

350

400

450

500

1949-1951

1920

1980

2009-10 2039-40

29-30 Year Commodity Price CycleCRB Index (PPI before 1947) 1913-2040

Chart 4.12Source: Bloomberg

l You can use our cycles to plan for your kids'education and career strategiesl The economy will be unattractive for jobs betweenlate 2010 and early 2013, and again from late 2017 into2020/2023l College enrollments will be declining demographicallybetween 2009 and 2015 making it easier for your kidsto get into a good college





3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

4,700,000

4,900,000

1980 1990 2000 2010 2020

Imm

igra

tion-

Adju

sted

Birt

hs

The College Admissions WaveImmigration-Adjusted Births Lagged 18 Years


Summary Action Points for Businesses:


Sell Your Business in Late 2010 if You Want to Retire/Exit

Cut Back Major Capital Expenditures Until Early 2013

Focus on Short Term Marketing Expenditures to Increase Sales

Cut Short-Term Costs to the Bone to Increase Cash Flow

Focus on Cutting Overheads that Don't Contribute to Cash Flow

Focus on Products/Markets You Can Dominate and Survive In

Look to Where Demographic Trends will Favor Your Business

Look for New Opportunities from Larger Businesses Refocusing

Look to Buy Assets on Sale in Bankruptcy from 2012 Forward

Survive and Watch Your Competitors Fall = Greater Market Share

The Debt Crisis of 2011-2012: How You Can Prepare and Prosper Summary


Thank you for listening to The Debt Crisis of 2011-2012: How You Can

Prepare and Prosper.

You have just heard one of the most influential forecasters of our time explain not only how

our economy works, but also how to prosper and thrive in the volatile times that lie ahead!

You may have already seen some of this volatility by the time you listen to this CD series.

This is only the beginning. Now you must map out your own strategy for protecting your

business, your investments, and your family and position yourself to prosper from the

unprecedented opportunities that will come from the predictable trends in debt,

demographics, and deflation. This will require you to not only consider your position in the

current economic environment, but also to stay informed as the economic landscape is

always changing.

Because you have used this audio CD set to learn more about Harry Dent's research and

how it can help prepare you for the times to come, Mr. Dent would like to offer you:

l a FREE copy of a recent edition of his newsletter, the HS Dent Forecast

l and a FREE copy of his timely special report, the "Debt Crisis of Late 2010 - Late 2012"

You also have Mr. Dent's permission to share this report with your friends and relatives to

warn them about what is to come. This offer is only good for a limited time, so please visit

the website that we have set up for you at http://www.hsdent.com/debtcrisis-lp. You

can also call us toll free at 888-307-3368. Thanks for listening!

HS Dent Publishing, LLC

15310 Amberly Drive, Suite 390, Tampa, FL 33647

888-307-3368

www.hsdent.com

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