World economy steered for another crash
By siliconindia   |   Wednesday, 24 June 2009, 00:49 IST
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World economy steered for another crash
Melbourne: The world economy will have to face more crises in the coming two years, the effects of which will be bigger than the recent downturn, a respected U.S. forecaster warned on Monday. Author Harry S. Dent, who had predicted Japan's slip into recession in the 1990s and the present slump, dismissed the claims that the worst was over for the world economy, and that "green shoots" were emerging from the fiscal firestorm. He said that the baby-boomer generation was set to cut back on spending, sending the share and property markets into downward curves that would overshadow the recent recovery. "We're in the middle of a bear market rally," said Dent. According to Dent, share markets are likely to gain for the next few months but will fall towards the end of the year as the global banking system will suffer another meltdown, grounding in 2011. "Post-war baby boomers in the Western world were spending less as they aged, in a long-term demographic shift similar to that seen by Japan in the 1990s," said Dent. "Peak spending is age 46, so we've been saying for decades, we're going to have this great, great boom and then around the end of this decade baby boomers are going to peak in spending, prepare for retirement. Their kids are going to leave the nest and the economy's going to slow just like Japan did in the 1990s." Dent said Australia is likely to experience less severe downturn as compared to the Western countries, even with its proximity to Asia.

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