China Crashes, Australia in Depression!!

I recently attended a seminar where celebrity economic futurist, Harry S Dent, was speaking live via video link from Florida in the US. Harry was confidently predicting the second phase of the GFC, which he said would be worse than phase one.

We’ve all heard about the tragedy which is Greece, where no one pays any tax and they all retire at age 50 and wonder why their economy is a basket case.

Mr Dent thinks that whilst Greece is bad enough, it will be Spain, a much larger economy, which will be the straw that breaks the camel’s back. Unemployment in Spain is currently at 20% and if they default on their debt, then Europe will be in very, very serious trouble.

Okay, so what?

Europe is China’s biggest export market and if that market crashes it will create a major slowdown in a Chinese economy which is already slowing. There has been a massive building boom in China over the past decade to the point where there are whole cities with no one living in them.

Property prices in China are grossly over valued and according to Harry Dent, its property crash is just around the corner. Harry also believes Australia’s house prices are amongst the most expensive in the world and that if GFC Mark 2 happens over the next couple of years, there is the potential for our property prices to fall by 50%.

Well, he probably has a point about our property prices being over valued compared to the rest of the world and also in relation to wages.

But a 50% decline? Sounds a bit rich, doesn’t it.

So, according to Harry, what’s the good news???

Well, the good news, according to Harry, is that once we’ve been through the impending recession, Australia will be at the forefront of the next economic boom, later in the decade and beyond.

Harry’s advice, sell your shares, sell any investment property and reduce debt.

By the way, one of the major factors determining economics over the next decade is the imminent retirement of the baby boomer generation and all that it implies… but that is another story.

I would be really interested in your thoughts or queries. Please feel free to comment here.

Also feel free to check out our Facebook Page.

Find us on Google+