Prosperity in The Age of Decline: How to Lead Your Business and Preserve Wealth Through the Coming Business Cycles

Chapter 13How to Spot the Top (Before the Great Depression)

Throughout most of this book, we have referred to the 2030–2040 Great Depression. Our unique business cycle theories indicate that this is the time frame we should have in mind. But economics is not an exact science; it could come a little sooner or conceivably a little later. We're more apt to believe “sooner” is more probable given when the entitlement program funding in the United States will become critical. Of course, there's always a chance that some exciting new technology or radical change in thinking at the governmental level will occur to forestall and perhaps even mitigate the downturn we envision. Although we might hope for such an occurrence, we cannot ignore reality.

Therefore, this chapter introduces eight road signs to depression that will apply whether the downturn starts in 2027 or 2033. It pays to remember that the sort of cycle we have discussed requires a confluence of events and trends. Avoid yelling that the end is near if any singular road sign appears. The U.S. and global economy are resilient enough that the downturn will truly require a combination of factors.

Dating from mid-2014, it is likely that we will experience three or four normal business cycles before the Great Depression occurs. At least two of these cycles will involve recession, and one or two could be soft landings—that is, what occurs when the economy slows down but doesn't break down. During a recession, the economy actively ...