MELBOURNE: The world economy will face a crisis in the next two years even bigger than the downturn currently buffeting the global financial system, a respected US forecaster warned on Monday.
Author Harry S. Dent, who predicted Japan's slide into recession in the 1990s and the present slump, dismissed claims the worst was over for the world economy and that "green shoots" were emerging from the fiscal firestorm.
Dent said 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.
"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," he said.
"(Their) kids are going to leave the nest and the economy's going to slow just like Japan did in the 1990s.
"Japan has already gone through a housing bubble and a peak in generation spending ... their stock market declined for years, housing declined 60 percent, and all the government stimulus could not put Humpty Dumpty together again -- that's what we're looking at."
Dent said Australia's proximity to Asia, the world economy's growth hotspot, meant it was likely to experience a less severe downturn than other Western nations.
From http://articles.economictimes.indiatimes.com/keyword/baby-boomers
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