The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away. This is your Concise Reference Guide to Understanding Why and How Best to Survive It [Paperback]

Daniel A. Arnold (Author)

Book Description

Publication Date: November 25, 2002

The Great Bust Ahead is a concise, straight to the point book laying out in stark terms the case for a coming 13 year depression of unprecedented magnitude. It will be worse than the 1930s, beginning nominally in 2012, but perhaps as early as 2009-2010. The book is very easy to read and requires no prior knowledge of economics. Down to earth things the average person can do to prepare for what is coming are covered.

January 2010 Update
1. First, read the prior year update below.
2. The January 2009 update predicting a 2009 rally of perhaps 30% from a new low of around 7000 did happen . . . and more!
3. With NASDAQ now added from 1985 onwards to reflect its then significant percentage of the total market s capitalization (see chart on books ws at . . thegreatbustahead . . ), the correlation with the demographic becomes even more stunning than just the DJIA alone.
4. The 2007-09 deviation from the demographic is a manmade short-term (at this point) deviation. As described in the book, short-term is 1-3 years. We may yet recover in 2010 and start to follow the demographic line again.
5. However, as per the book, we have now entered the period of great danger from 2010 onwards. The demographics based depression could begin as early as 2010. This is based on the fact that if a single age of 49 is used for the book s charts, rather than the five year groupings, the demographic peaks in 2010 (Chart 8 in the book) rather than 2012. So, we may now continue to climb the curve to 2012 (which is an actual DJIA peak of about 20K), OR see the crash begin at any time from now onwards.
6. Riding this last period is highly dangerous and must be done with great care as you will be embarking upon brinkmanship. If the projected DJIA returns to following the demographic a very enticing potential DJIA gain of about 90% by 2012 is in the offing. After 2009 s 60%+ rally from the low, 90% over the next 3 years does seem very possible but, as we know, that rally was NOT at all reflective of a recovery in the economy. The sub-prime legacy and further residential and growing commercial foreclosures may drag us down yet again in 2010/11.
7. Per the book s 2002 warning, I still recommend being out of all stock based investments no later than 2010. Then wait for long bonds to peak around 6% (probably in 2010/11). Then invest in medium to long term treasuries. These bonds should then offer a substantial gain when interest rates crash again in the first year or two of the depression.

January 2009 Update:
1. 2008 was the victim of a self inflicted sub-prime financial crisis. This has nothing to do with the demographics based massive depression that is yet to come, as described in the book. The sub-prime consequences are however very similar though mild so far compared to what is coming our way. The book clearly spelled out that along the way unpredictable short-term (1 to 3 years) disruptive events could happen. The sub-prime crisis is just that. It should be regarded as the warmer upper or hors d'oeuvre for the big one that is now rapidly closing in on us all.
2. It is unknown at this point whether the sub-prime based crisis will drag on beyond 2009 and then blend into the demographics based massive decline which could begin as early as 2009-10.
3. There is the strong possibility that we will see an interim recovery manifested as a rally in 2009 of perhaps 30% on the Dow after a new low of around 7,000. The only certainty is that historically in the long-term the Dow always returns to the demographic. The immutable demographic remains in a very strong upswing as it moves toward its 2012 peak before crashing. Also waiting in the wings are trillions of dollars earning very little in money market funds.

See ws for additional info

Editorial Reviews

Review

October 2007 Update:
In 2002 when this book was published, in addition to the massive depression beginning around the end of the decade, it forecast:
1. The economy, as reflected by the DJIA, would resume its upwards march in late 2002 or 2003. This is exactly what happened.
2. The DJIA would have a snapback to 13,000 to 14,000 and the FTSE to 6,000 to 7,000 by 2004, but delayed possibly by wars/politics/terrorism/scandals. This is exactly what happened. The full snapback was delayed for the reasons described, but the DJIA has closed over 14,100 and the FTSE over 6,700.
3. The DJIA returns from 2003 to 2012 would average a historically long-term normal of 7% to 8%. So far, with the delayed full snapback for the reasons described, DJIA actual returns have averaged a more modest 5.8%, as would be expected.
4. Interest rates would increase from 2003 onwards. This is exactly what has happened. --author

From the Publisher

If there ever was a book that should be read by the entire adult population, this is it. The events described in The Great Bust Ahead will be the greatest story of the first quarter of the twenty-first century, if not the century. All of our lives are going to be dramatically affected beginning in just a few years from now. The depression of epic proportions that is predicted has THIRTY MILLION unemployed and stock market losses of over eighteen TRILLION dollars. The book leaves you with the conviction that for the first time you understand what the economy is all about. Everything presented in the book is so factual, so unchallengeable, it is hard to know what to say other than "go read it" and then start preparing as best you can.

See all Editorial Reviews

Product Details

• Paperback: 64 pages
• Publisher: Vorago-US (November 25, 2002)
• Language: English
• ISBN-10: 159196153X
• ISBN-13: 978-1591961536
• Product Dimensions: 8.1 x 5.2 x 0.2 inches
• Shipping Weight: 3.2 ounces (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (59 customer reviews)
• Amazon Best Sellers Rank: #56,799 in Books (See Top 100 in Books)
  • #2 in Books > 4-for-3 Books > Business & Investing > Investing > Introduction
  • #19 in Books > 4-for-3 Books > Business & Investing > Personal Finance > General
  • #47 in Books > 4-for-3 Books > Business & Investing > General

Customer Reviews

Most Helpful Customer Reviews

72 of 74 people found the following review helpful:

3.0 out of 5 stars Apocalypse maybe!, January 15, 2007

By 

R. M. Armstrong (Surrey, UK) - See all my reviews
(REAL NAME)   

This review is from: The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away. This is your Concise Reference Guide to Understanding Why and How Best to Survive It (Paperback)

This book, written specifically for citizens of the US and the UK, is one of the most sobering I have ever read. To the layman at least, it appears to be argued logically enough, the basic idea being that in the western economies the spending of individuals constitute the lion's share of GDP. In the next few years some 100m baby boomers in the US will start to leave the highest spending age group (45-54). As people nearing retirement tend to reduce their spending and start to withdraw their savings from more risky investments such as the stock market, this will cause a depression even deeper than the 1930s and stock markets to dive. The book forecasts that some 30m may become unemployed in the US alone. (A similar picture emerges in Japan though the age band is lower.) Almost every major stock market move in the last century or so can be accounted for by such demographics. These apocalyptic events are forecast to happen any time from 2009-2013 and it is recommended people be out of the stock markets by 2010 at the latest. The depression may last to the mid 2020s.
I just wonder how globalisation may affect the situation, both in terms of increased exposure of western companies to Asian markets and the vast numbers of increasingly wealthy Asian middle class who might invest some of their spare cash (and there may be an awful lot of it) in foreign markets. It must have been somewhat difficult for western individuals to invest directly in Asian markets, and vice versa, even in 1987 but in 1929 it must have been all but impossible.
I cannot agree either with some of the steps recommended to protect oneself either. If currencies weaken then treasury bonds may not quite be the saviour they are portrayed. The traditional safe havens in times of turmoil - precious metals such as gold and silver - are not even mentioned. This may be because they are traditionally associated with inflation. However, they also come into their own in times of currency crises and "funny money" i.e. when the money supply threatens hyper-inflation. Investing in foreign stock markets such as India and China, nations which should continue to grow strongly for the foreseeable future surely should also be considered. With such strong growth in Asia, I find it difficult to believe another of the book's predictions which is that the oil price may possibly fall as low as $5 a barrel!
I consider this book - and others like it - to be a warning as to what might happen rather than what will. Nevertheless, if it prompts individuals to review their investments and to diversify accordingly it will be no bad thing. I just fear so many people may be so indebted for years to come that they won't be able to.

66 of 69 people found the following review helpful:

3.0 out of 5 stars The Alpha Group that Leads the Herd, August 28, 2004

By 

David "Elliotteer" (Acworth, Gabon) - See all my reviews
(REAL NAME)   

This review is from: The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away. This is your Concise Reference Guide to Understanding Why and How Best to Survive It (Paperback)

Mr. Arnold's title attracted my attention because I, like many financial observers, do see a depression on the horizon. His use of the 45-54 year old baby boomer demographic is interesting and echos certain ideas of Elliott Wave Theory and Socionomics.

The author's conclusions, formed using a relationship between U.S. population growth and the Dow Jones Industrial Average, support a coming financial crisis of tsunami proportions, but his optimism that things will not erupt until the beginning of the next decade and his investment recommendations for the immediate future are arguable.

A purchaser of this hour-long read would be advised to immerse himself in Robert Prechter's, Conquer the Crash and Fiancial Reckoning Day by Bonner and Wiggin. These books better illustrate the world as it is, bringing together the influence of world money supplies, gold, interest rates, world politics and, very importantly, social mood.

Where Daniel Arnold sees the correlation of the population and the Dow Jones, Prechter documents the predictive value of the Dow in measuring social mood. I would allow that Mr. Arnold has accurately pegged the 45-54 year olds as the alpha group that leads the population's mood, or herd mentality, as a result of its purchasing and investing power.

Read this book. Look at the charts. Just don't make any immediate investment decisions without considering that our world is on the verge of a massive "asset devaluation" that will transcend stocks, bonds, real estate, and for a time, precious metals. The looming possibility of a world-wide liquidity crisis triggering liquidation of assets to cover the costs of mounting debt, should be of greater concern.

Arnold issues several warnings, should his predictions come true, and offers a number of actions individuals may take. Most notably, he supports why personal property most likely will be at risk to theft or destruction in an environment of rising unemployment and rising crime, but on page 51 advocates, "even if you would not support gun-control during healthy times, consider supporting gun control legislation to help take the dangerous edge off the crime wave that will hit during the depression." Libertarians and 2nd Amendment supporters will have a real hard time with that one.

45 of 46 people found the following review helpful:

5.0 out of 5 stars A CONCISE, EASY TO UNDERSTAND, BLUNT WARNING, November 8, 2006

By 

Reader (California) - See all my reviews

This review is from: The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away. This is your Concise Reference Guide to Understanding Why and How Best to Survive It (Paperback)

Like most reviewers, I found this brief book to be a highly believable warning of the coming huge depression. How can you argue with a thesis that accounts for the US economy's ups and downs in detail for nearly a century!! Unlike the few, (like Special K below), who completely miss the key message, IT IS DEMOGRAPHICS that controls everything. Any economist will tell you that 70% of GDP is simply us (we are the demographics) spending our paychecks and, as Arnold points out, it's more like 90% when we add the government's spending of our taxes which they take from our paychecks. Arnold's thesis is a better developed version of noted economist Dent's theory that specific demographics always control where the economy is going. It's not really theory anymore - it's plain commonsense, which is what comes out in Arnold's book. Dent also predicts a massive "Mother of all Depressions" starting around 2010. Special K and his ilk, who are quite happy I'm sure to (correctly) attribute the coming Social Security crisis solely to demographics but want to insist that the economy in general cannot possibly be, are the ones that are going to lose everything in what's coming. Go read Arnold to understand (concisely WITHOUT 200 extra pages of added irrelevant "fluff") that demographics is really all that counts - and why. My God, he even shows how the Japanese near depression from 1990 to 2003 was caused by exactly the same demographic data within Japan. What more do you want? Read it.