You should know, as you begin reading this, that I am an optimist at heart. Problems phase me for only a moment. I look for (and usually find) opportunity in every situation. And I believe that good things will happen to people and companies that make decisions that reflect the best interests of the people, industries and communities they serve. Those general philosophies on life and business make it difficult for me to believe the many catastrophic economic predictions that author Harry S. Dent, Jr. suggests lie in our immediate future.
In Dent's book, "The Great Depression Ahead," Dent forecasts that this current recession represents merely the early years of a downward spiral that will send us into the first depression since the 1930s and 40s.
Now, to be sure, I would never have read this book had it not been recommended to me by John Spader. In fact, had he not followed up the recommendation by sending me the book, I probably would have passed on the thought of reading it altogether. But he sent it, and I felt obligated, and as it turns out, I feel rewarded by understanding Mr. Dent's well-thought-out perspectives.
I love to read, and more, I love to learn. And despite the fact that a book with such a title - not to mention an incredibly ominous outlook - doesn't jibe with my rose-colored outlook on life, I closed up the book feeling as though I had learned much.
In fact, it was the last two chapters that most fully delivered on the book's subtitle: "How to prosper in the crash following the greatest boom in history." For the most part, the book offered a sensationalist's view of what lies ahead, something Dent and his prior books have been criticized for. Those last two chapters, however, provided a return on an otherwise mentally agonizing investment.
That investment walks you through a series of cycles that Dent suggests are inherent in our economy. He's convincing, too, as he demonstrates that our economy follows an 80-year new economy cycle that ends in a depression (we're in year 80, by the way); a real estate cycle ("we have just witnessed the greatest housing bubble... possibly ever..."); a geopolitical cycle, a commodity cycle, a decennial cycle, and a presidential cycle, not to mention a 500-year mega innovation cycle and a 250-year revolutionary cycle. And as you can imagine, based on the title of the book, Dent suggests that we're on the downhill slide, if not at the end of our rope, on most, if not all of these cycles.
He walks you through with great evidence how the baby boomers, the largest generation in history, are on the downhill slope of their spending years. And he points to trends and facts that make you truly believe him when he suggests that we'll see a moderate uptick in the economy in mid to late 2009, and the crash will begin between then and late 2010.
As a business owner or manager, you really should read this book. Forget about the sensationalism. Much of the book is filled with strong lessons in economics - both from a global perspective and a localized, within-your-own-house viewpoint. And whether or not you believe his predictions, they provide a great framework for understanding the advice he offers in the final two chapters.
"This is the Darwinian process of free markets," Dent writes in the chapter titled Strategies for the Great Winter. "These markets foster innovation and the expansion of many new companies through bubbles and then shake them down to the very fittest during crashes and depressions that follow such bubbles."
What you learn in this book may just help you ensure your company remains one of the "very fittest."