Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression, Expanded and Updated Edition

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Summary: Think Demographics
Review: When I read this book I was completely convinced. I've been out of the market since, much to my chagrin. Despite high debt levels, high asset valuations, etc., things have moved along quite nicely. The 9-11 terror attack, stock scandals, two wars, and the bursting of the internet/tech/telecom bubbles were simply blips, a minor recession within a bull market. Now we are back on track, with job gains and productivity growth. Why? I'd say it's demographics. As the author of The Great Bust Ahead points out, the big-spending 45-54 old demographic will continue to expand until about 2010-2012. Until these folks retire, they will make make lots of money and they will spend it. Then comes the reckoning. When they retire, if they don't transfer a large portion of their wealth to their children, demand will collapse and a depression will likely occur. Prechter will take credit for predicting it, but it will be caused by the most fundamental reason. Elliot Wave analysis offers analysis without much causation. Demographics is a far more common sense reason for ups and downs in the economy. So what to do? Well, I'm getting back into the market, until about 2010, then I'll start shorting it. The debt bomb will explode. The housing bubble will burst. The overvaluation of assets will be corrected. The debasement of the dollar cannot continue indefinitely. But I don't think a depression can occur until the big-spending baby boomers are out of the picture. Then all hell may break loose. And even then, I think the debt problem will cause the Fed to inflate in order to pay off debt and pay Social Security beneficiaries with devalued dollars. There is no political will to cut benefits, so we have to pay entitlements will a devalued currency. Thus, inflation, not deflation. Whatever.