Harry S. Dent Jr., bestselling author of The Demographic Cliff and The Sale of a Lifetime, predicted the populist wave that has driven the Brexit vote, the election of Donald Trump, and other recent shocks around the world. Now he returns with the definitive guide to protect your investments and prosper in the age of the anti-globalist backlash.
The turn of the 2020s will mark an extremely rare convergence of low points for multiple political, economic, and demographic cycles. The result will be a major financial crash and global upheaval that will dwarf the Great Recession of the 2000s—and maybe even the Great Depression of the 1930s. We’re facing the onset of what Dent calls “Economic Winter.”
In Zero Hour, he and Andrew Pancholi (author of The Market Timing Report newsletter) explain all of these cycles, which influence everything from currency valuations to election returns, from economic growth rates in Asia to birthrates in Europe. You’ll learn, for instance:
• Why the most-hyped technologies of recent years (self-driving cars, artificial intelligence, virtual reality, blockchain) won’t pay off until the 2030s.
• Why China may be the biggest bubble in the global economy (and you’d be a fool to invest there).
• Why you should invest in the healthcare and pharmaceutical industries, and pull out of real estate and automotive.
• Why putting your faith in gold is a bad idea.
Fortunately, Zero Hour includes a range of practical strategies to help you turn the upheaval ahead to your advantage, so your family can be prepared and protected.
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Harry S. Dent, Jr. is the bestselling author of The Demographic Cliff, The Sale of a Lifetime, The Great Depression Ahead, and many other books. He is the founder of Dent Research, which publishes the newsletters Economy & Markets, Boom & Bust, and The Leading Edge, among many others. He has an MBA from Harvard, consulted for Fortune 100 companies while at Bain & Company, and lectures widely.
Andrew Pancholi is the director and chief strategist of Cycles Analysis and author of the acclaimed newsletter The Market Timing Report.
Chapter 1
The Three Harbingers of Revolution
Cycles are the dark matter of our world. We can't see them, but they affect everything we do.
Harry Dent
Neil deGrasse Tyson talks about how dark matter makes up 85 percent of the universe. We can't see it. We don't know what it is. We just know that our equations for explaining the universe don't work without including it. But it does have gravity, which is why we can detect it and measure its impact.
It's the same way with life, except that our "dark matter" is cycles. We can't see them, we can't touch them, and there are too many to fathom, but every single one affects us to some degree at multiple points in our lives.
They're the invisible, underlying currents that drive us.
As this decade rolls by us, we're caught up in an armada of economic, political, financial, social, and geopolitical cycles that are changing the face of our world.
We're about to move much deeper into the most intense phase of the Economic Winter Season in my 80-year Economic Cycle (more on this later). With it comes a once-in-a-lifetime great reset of debt and financial-asset bubbles and the emergence of a whole new economy, as occurred in the 1930s. Think of the advantages if you could have seen that great reset coming-the sale of a lifetime in financial assets back then!
We're also entrenched in the converging downside of the Four Fundamentals-four key cycles that are critical to the performance of stock markets, the survival of economies, and the safety of citizens all across the globe (and I'll talk more about this later as well).
All four have been on a negative trajectory together since early 2014.
This convergence happens infrequently. The most comparable to this one occurred from late 1929 into 1934, giving us the worst years of the Great Depression. The only other such event in the last century resulted in the massive inflation of the 1970s. This cycle will continue to deepen through early 2020, with aftershocks into at least 2022.
But what really sets this century apart is the addition of the Three Harbingers of Revolution!
We last saw the most turbulent of these three cycles-the 250-year Revolution Cycle-during the American and Industrial revolutions of the late 1700s.
The 84-year Populist Movement Cycle is back. The last time this cycle rolled through, we had to endure the horrors of Hitler and Mussolini.
And there's the 28-year Financial Crisis Cycle, hanging over our heads like the sword of Damocles.
(Andy brought the 84- and 28-year cycles to my attention. I've been using the 250-year cycle for decades. I also have an 80-year cycle that is very close to his 84-year cycle.)
This is going to be fun! Let's look at each of these harbingers to better appreciate how they're going to revolutionize our world.
Harbinger #1: The 250-Year Revolution Cycle
The current revolution started in mid- and late 2016, with Brexit and then Trump, and it could last a decade or two, to as late as 2033.
The last one started in the 1760s, with the thirteen colonies' rebellion against the Sugar Act of 1764 and the Stamp Act of 1765. It culminated in the Boston Tea Party, in 1773. The First Continental Congress was formed in 1775, followed by the Declaration of Independence, in 1776. The Revolutionary War lasted from 1775 to 1783.
That period, from 1765 to 1783, was the birth of democracy. That was a very big deal, and it's still spreading through the emerging world.
From 1776 through 1789 Adam Smith published five editions of his breakthrough book The Wealth of Nations. He's considered the founder of classical economics and the first to express the dynamics of free-market capitalism-what he famously called "the invisible hand." Sounds like dark matter, doesn't it?
This era also marked the practical beginning of the Industrial Revolution around the emerging breakthrough innovation of the steam engine.
I call this "When Harry Met Sally."
Two opposite principles converged to create the greatest advance in standard of living in perhaps all of modern history.
Capitalism rewards individual contribution and risk-taking. Democracy is inclusive, giving everyone a say via the right to vote. This aligns the troops with the generals.
The 250-year Revolution Cycle before "Harry met Sally" saw the Protestant Reformation, starting with Martin Luther's 95 Theses, posted in 1517. This created a split in the Catholic Church and played into the power of the printing press, invented in 1455.
This period also saw the emergence of one of the greatest inventors in history, Leonardo da Vinci. There was a clear intellectual revolution in this late stage of the Renaissance, from roughly 1517 to 1532.
Here's what this cycle looks like:
The present 250-year Revolution Cycle corresponds with the Economic Winter Season of my 80/84-year Four Season Economic Cycle and Andy's 84-year Populist Movement Cycle. I increasingly think that these two cycles are one and the same and that the 84-year time frame is the more accurate.
Andy is a close friend and possibly the only other person in existence to be able to outcycle me at times.
We had a shootout at my Irrational Economic Summit, in Palm Beach in 2016, with many similar cycles, like 10-year, 30-year, 45-year, 60-year, 80/84-year, and 500-year. But Andy was pulling out 100-year, 144-year, and 180-year cycles that converge in this period.
He basically outgunned me on some of these longer-term cycles, and that's not easy to do.
That was when I decided we had to combine our cycle expertise, and this book was born.
Over the years, I've also increasingly turned to him for help fine-tuning my forecasts, because he excels at the shorter-term stuff. He has mastered the art of cycles analysis by developing signals that show him potential turning points and an array of other invaluable information.
Harbinger #2: The 84-Year Populist Movement Cycle
This particular cycle is easier to see in the world today, because we're witness to the countless protests and riots almost daily.
It started with the deep dissatisfaction of the everyday worker and middle-class citizens when the U.S. economy fell apart in 2008. They'd already endured falling wages since 2000, so they were ripe for revolt.
These people have been devastated by one bubble and burst after the next, all while they've watched the wealthiest 1 percent run off with 50 percent of the money. It happened the same way in the 1929 long-term stock peak and the Economic Fall Bubble Boom Season-yes, about 84 years ago.
Worse, in the United States, they've been further affected by the "Asian deflation" in middle-class wages, thanks to competition from legal and illegal immigrants coming largely from Mexico and Latin America.
In Europe, that wage pressure was magnified by the refugee crisis, in which more than a million people poured into the continent in 2015.
The Greece default and the threat to the euro in 2010-11 was another spark. Unemployment in the Southern European countries is still near record highs. Black markets thrive there.
Now we've entered the real stage, a populist revolt against globalization, immigration, and Wall Street financial trickery.
Brexit passed against the polls in the...
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