Author reconstructs the relationship between Harry Dent’s ‘The Great Boom Ahead’ projections and demographic data within the context of the Austrian school of economics theory.

The non-profit Humanitarian Efforts Reaching Out (HERO) is an organization, based in Northern Arizona, that is providing medical care through outreach missions in several places in the world. Two missions to Honduras, in Central America, were conducted in 2008 and 2009. A group of four are leaving again in June, 2010. This is a short film about the work they are doing and the challenges they face getting medical care to villagers in remote areas of Honduras.

Notions about real estate and housing developed primarily as the result of radically different approaches and behavior by homeowners and investors compared to other asset classes like stocks and bonds. The key difference is the time horizon. People routinely own real estate for many, many years, while they rarely hold positions in a stock or mutual fund for more than a year or two.

This is the fifth in a series of posts putting together the major factors showing why we are in the early stages of the deepest economic contraction the western world has experienced since the beginning of the industrial revolution.

Author shows the historical interrelationship between the consumer price index (CPI) and monetary policy as another way of presenting the Austrian school logic in economic analysis.

Author believes the monetary authorities now find it necessary to cool things off to avoid public outcry over the increased cost of living. This is accomplished by attempting to reverse the artificial credit creation techniques used to create the boom in the first place. Interest rates head higher. Capital goods industries are the first to feel the pinch as projects are postponed and curtailed. Unemployment rises and the cycle starts anew. He concludes by arguing that we are in the early stages of the greatest economic contraction since the fall of Rome and the probable collapse of our fiat currency regime.

Since the great depression, each new economic cycle has increased in amplitude and required even larger doses of Federal Reserve largesse. Dropping short term interest rates to one per cent in the wake of the 2001 recession ignited the housing bubble. Today, even zero per cent short term interest rates have only minimal stimulative effects even when added to deficits measured in the $trillions.

Author shows how the events of the most recent global financial crisis were predicted in 1949 by Ludwig von Mises. This is the first in a series about the roots of the current financial crisis and how to restructure our economy to avoid another economic crisis.

The general principle of investing for those who want the highest returns was best put by Sir John Templeton who said that if you invest in the same things everyone else has you will get the same results. However, numeracy might lead you to understand that, for most people, it is a bad idea to invest for outsized returns as opposed to just safely beating the bank.

An ideological battle has been going on in America – not the historical battle from the 1960s of communism versus capitalism – but, rather a battle between those who seek to sustain market fundamentalism as a credo, and those who believe that regulation of financial markets will help reduce the tendency toward moral hazard. We’ll all have to watch carefully how the debates on financial reform in Congress play out.