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Dialing into the economic future

67These guys are good: by which I mean right! They called the 2008 recession a year and half out: TEC members were warned [stridently!] to get ready. One in my group lost 75% of revenue and made profit!
A great plus among many of TEC membership is access to the Brian and Allan Beaulieu of ITR Economics. Allan was in town Tuesday with an optimistic message but a dark punch line.
The good news? Having forecasted a soft end to 2014, he expects slower growth in 2015 for Canada. This does not import caution. He advocates investment for growth. Why? To be ready for a solid 2016/ 17.
What’s driving the optimism?
– deficit spending > US has no appetite for austerity > 2060 = balance budget!
– non res construction is improving
– retail sales improving
– world is calm
– employment rising
– banks lending
– leading indicators up
– delinquency is very low
Wait a moment! Is this provocative to you? Are you thinking of someone who could benefit from this sort of perspective? ▶Hit forward now cc me and here’s the text.
Getting back. Then batten down the hatches. Recession will be back after that run and should be a hard one. Leading to the ultimate – a depression in the offing for the US. Not until 2028. But then…
Why? Just makes sense. As Alan said, “We have no appetite for austerity.” US keeps adding $1T each year to the $17T debt they already have piled up. A trillion here, a trillion there, pretty soon you’re talking real money!
They don’t call the stock market, except when they do. They forecast a correction for the back half of 2014. Here it is. The observation is that the market is running on air, it’s unsupported.
The biggest danger to Canada is – wait for it …. the US. The US will hurt us by end of Decade. They will drag us into a depression. Not just a recession. A depression. Why? Alan had 10 reasons. #1? THEY HAVE NO APPETITE FOR AUSTERITY. And that is what they need. $16T and adding 1T per year with no change in sight. Attempted insularity from reality. Doesn’t work. The interest alone will consume 50% of the budget by 2035.
US health care spending is much higher for an aging population. The medical system has a structure and culture of inefficiency. The baby boomers must die, consuming soon 50% of govt expense. US costs are way higher than any other country. This will bankrupt US, unless there’s a sudden cure for cancer, heart disease and Alzheimers.
There is not the popular or political will to fix it.
Not that the rest of the world is doing a lot better. Russian, Chinese economies are headed down. In GDP/ debt, Japan is worst, UK = 2nd, US = 3rd. And “developed” economies are locked in a struggle to hold up failing Japan, Europe. It’s not a great prospect.
But for now? See good news above. Use 2015 to grab market share and make investment to get ready to rock for ’16, ’17. Borrow the cheap money until you can’t sleep. It’ll never be this price again…
So that’s it! If you want a closer look, buy their new book: How to Prosper in the Coming Decline: Alan and Brian Beaulieu. No, don’t just buy it. Read it! And do what they say!
What are you hearing?
And what are you doing on that basis?


Sincerely,
Doug Bouey
Catalyst Strategic Consultants Ltd.


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Bringing out the best in you, your company and your people.

Doug Bouey, President
Catalyst Strategic Consultants Ltd.

Calgary, AB // Phone: 403.777.1144
Email: boueyd@catalyststrategic.com

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