An Economy That's Heavily Medicated

You know what the problem with this economy is? It has a lot to do with success and how it breeds complacency.

Think about it…

Frank Whittle submitted his complete engine design to the British Air Ministry in 1930, giving birth to jet engines and “easy” travel. We can hop on a plane and complete an across-country trip in two hours that would normally have taken 17 hours, if not longer.

The discovery of Penicillin in 1928 revolutionized the medical world. When antibiotics were introduced in 1942 (at least that’s when the term was made known), suddenly we simply needed to pop a few pills to feel better. We didn’t need to rest and recover… Just throw back that pill and we’re back to the races.

The first computer, the ENIAC (Electronic Numerical Integrator and Computer), was invented in 1946, thanks to United States Army financing. Since then, electronic communications has become so pervasive that fax machines are almost extinct and landline telephones gather dust more often than not. Social media has created a generation that has lost the art of communication. Don’t like someone? Break up with them on Twitter.

These innovations along with electricity, cars and phones have transformed our lives immeasurably… but they’ve also made us complacent!

A Controlled Economy is Not a Healthy One

Even the creation of the Federal Reserve in 1913, to provide stable interest rates and economic cycles, has done us no long-term favors…

In fact, the Fed was responsible for the greatest bubble and depression in history, during the 1920s and 1930s… and it has the (dis)honor of creating and now inflating the current, even more insane, bubble (good luck on that).

Actually, you could think of the Fed as an “antibiotic” for the economy… it seems good at first, but is it really? I’d say: “No!” Or better, only if used judicially in short-term crises, not for long-term policies.

Antibiotics have allowed us to eradicate thousands of life-threatening diseases in the last 70 years. But we’ve overused them, a fact that Martin J. Blaser argues in his new best-selling book Missing Microbes: How the Overuse of Antibiotics is Fueling Our Modernrn Plagues.

He shows how our 10 trillion cells are exponentially outnumbered by our 100 trillion bacteria. When we overuse antibiotics to cure every little cough or virus, these antibiotics not only destroy the bad bacteria, they kill our good bacteria, which has evolved over the eons.

Adding to that is the fact that antibiotics allow us to “ignore” what ails us (as I mentioned earlier). By not resting and letting our natural systems perform optimally to heal and restore us, we further unbalance our bodies and ultimately do more harm than good.

In the same way, the Fed is overeager to control an organic system as though it were mechanical. Rather than letting the economy’s “invisible hand” do what it’s supposed to do, the Fed interferes and throws the system out of kilter.

Antibiotics (and monetary policy) should be used selectively. Not every time we have a cold or a headache (or an economic downturnrn) — only in a short-term life-threatening circumstance, as in late 2008 or early 1930. But the convenience has lulled us into complacency.

Just like the overuse of monetary policy has done to the economy, antibiotics have led to an increase in obesity, diabetes, asthma, and allergies and countless other problems.

And all of this convenience — from a reliance on the Fed to “cure” us, to antibiotic abuse, instant communications, instant gratification, you name it — has resulted in us losing our understanding and appreciation of the pain that’s needed before we can enjoy greater gains.

In short, our economic progress has made us a bunch of wussies! And it’s time we man- and woman-up, as individuals and as a society.

We need to stop polluting our environment, which is the very base of our free-market capitalistic system and our unprecedented wealth.

We need to stop taking a pill every time we have a little discomfort.

We need to stop allowing the Fed to pump the economy full of cash when all we really need is a time to recuperate and reset — and to simply deleverage excess debt and financial bubbles.

We have a great reckoning coming on many levels in the next decade, when our 250-year Revolutionary Cycle hits. And we’re here to prepare you to deal with this new reality, this winter season that we haven’t seen since 1930 to 1942… and this even larger 250-year reality.

Despite all of the “this is not a bubble” and “soft landing” talk the financial media spews daily now, history is crystal clear on one thing: the next six to 10 years will not be pretty… especially not after so much debt and stimulus. A reversal into deflation and depression during the next few years is practically pre-ordained… as is the inevitable arrival of an antibiotic-resistant bug that will wreak havoc.

Since you can’t stop the insanity, protect yourself, your family and your business now! And keep reading. It is better to get out of the stock and other bubbling markets sooner than later… like now!



Follow me on Twitter @HarryDentjr

Harry Dent

Bestselling author and founder of Dent Research, an affiliate of Charles Street Research. Dent developed a radical new approach to forecasting the economy; one that revolved around demographics and innovation cycles.