The Coming U.S. Economic Collapse Will Trigger a Revolution
By: Harry Dent
MarketOracleUK
Aug 19, 2014
When the next economic collapse comes, and it’s inevitable, the revolution against the upper class will kick into higher gear!
Let me explain using my long-term economic cycle — the new 80-year, four season, Generation Wave — and an important 250-year cycle
Just like the weather, the economy shifts through four seasons as generations pass through it: spring, summer, fall and winter. There are dynamic fluctuations that favor innovation… then efficiency… then inflation… then deflation… all through different booms and busts.
A boom in the fall follows the summer inflationary season. During this fall boom, new technologies move into the mainstream and entrepreneurs and financiers gain the most (as we have witnessed since the late 1970s).
That, in turn, creates a longer-term trend…
That is, everyday people gain as well, thanks to higher wages and increased productivity.
These trends occurred frequently from 1933 to 1972. Everyday people adopted the technologies that enabled a rise in productivity, and so enjoyed an increase in their wages, bringing lower-cost products and a better standard of living.
In fact, we saw the last broad, middle-class boom during the spring season of the economic revolution from 1942 to 1968. During that time, overall income of the average household grew faster than the income of the top 1% and top 10%!
In 1929, the top 1% held 50% of the wealth, but they lost their grip on it. By 1976, they only held 24% of the wealth. Then they regained some of that lost wealth, holding 50% again by 2007.
During normal cycles, 2007 would have been the peak of such income inequality. But not this time…
Since 2000, the middle class in developed countries like America and Europe has seen their wages stagnate as emerging countries like China take over the manufacturing and office tasks at lower prices. We call it “The Great Asian Deflation.”
And the cost of education has inflated so fast that it’s increasingly out of reach of the average person (but that’s a whole other topic for a future article).
However, entrepreneurs have done well, as they create long-term gains for the economy and everyday people through their innovations, new industries and business models.
And financial engineering on Wall Street has accelerated (unfortunately), creating greater speculation and leverage in the economy and generating greater profits for those invested (along with the potential for bubbles to burst like in the 1930s).
The Federal Reserve and central banks around the world have also done some engineering of their own, artificially maintaining stock and debt bubbles. They’ve poured free money into the economy, benefiting the banks, financial institutions and the top 1%.
But here’s the rub.
All of this “engineering” has altered the natural cycle. Instead of peaking in 2007, as it should have, the rich have continued to prosper while everyday people have stagnated or declined.
The thing is, when you fight against nature, you eventually lose. And I believe that all the manipulations and engineering that has distorted the natural cycle will eventually be the Western world’s undoing.
The Rest…HERE
