Global Peak of Our Lifetimes Occuring Now!

I’ve been warning the world, my book readers and newsletter followers for a long time that we are in a time period from 2007 to 2037 that should see a major long-term stock and real estate peak that may not be exceeded in most of our lifetimes, and maybe not even in many of our young adult kids’ lifetimes.
 

Why? The strongest demographic boom in history is slowing down as the massive Baby Boom ages in the developed western countries, and affluent younger people have fewer kids. This is why every boom bursts. The very positive trends that made it rise, ultimately work against it. In this case, the more successful the economy is, the more affluent households get, and more affluent households clearly have fewer kids, so they can get them all into the best schools like Harvard!
 

And the developed Asian countries of East Asia, Japan and South Korea have seen greater declines in birth rates as households get more affluent than in North America and Western Europe. The U.S. and Canada are in a plateau peak of my Spending Wave on a 46-year birth lag for peak spending between 2007 (Boomers) and 2037 (First Wave and Peak Millennials) before dropping off substantially longer term. Southern Europe peaked in 2010 and has seen major declines in demographic spending trends since. Northern Europe already peaked a bit later in 2011, do not have the same level of Millennials to follow as North America and will peak on about a 4-year lag to the U.S. from 2011, plateauing from 2025 to 2027.
 

In the emerging world, China has been the clear star country as it has urbanised the most rapidly of any major country in history from the early 1980s into the early 2020s- just under 20% urban to 67% now. Urbanisation is the strongest factor for emerging countries- more than rising spending into around age 46, as people who simply migrate from rural to urban areas have three times the GDP per capita, and almost overnight, due to more specialised, higher paying jobs in urban areas. But China’s urbanisation was not natural, it was strongly pushed by the government encouraging builders to keep constructing homes and offices beyond the natural demand to stimulate the economy in order to keep an unelected government popular.
 

China will likely slow markedly in such urbanisation after hitting around 80%, as most developed countries have. But the huge problem in China is that it has more than 22% vacant homes- enough to satisfy the needs of the remaining 17%+ that will keep migrating before a natural slowdown around 80% occurs by 2036-37 or so. This in line with the U.S. Millennial first wave peak in 2037. Then the whole world slows down from around 2038 through 2042-43, before Asian trends go full throttle again into 2050, and lesser so into around 2065.

After this we would likely see the next Global Great Depression as we should have seen between 2008-2022/23. And I still think we could see that on a lag from late 2026 into early 2029 or so! The big picture demographically is: Southern Europe peaked the U.S. plateaus 2007-2037 with a Great Depression in between to shake-out the greatest combined stocks and real estate bubbles ever. Northern Europe follows from 2011 forward with a similar deflationary bubble burst crisis to the U.S., but not as extreme due to less of an ‘everything bubble.’ And East Asia sees the greatest bubble burst, led by real estate in China…that spreads around the world. The Chinese will never see higher real estate or stock prices, for many decades- if ever. The next “Big Thing” to follow China is Southeast Asia and India, especially India into around 2050-65.


























 

Chart: Shiller 400 Shiller P/E Ratio Hits Second Highest Level Since 1870; 1929 3rd

The first sign of a major top in U.S. stocks comes from the infamous CAPE (Cyclically-Adjusted P/E Ratio) from Robert Shiller. At near 42 it is very close to the all-time high- by far of 44, at the early 2000 Nasdaq first bubble top. I would not expect a higher P/E this time as the last one so clearly preceded a 78% crash in the Nasdaq without a significant recession…just from overvaluation, like now. Hence, investors would not be as surprised this time and would naturally start to see this coming a bit sooner.
 

Chart: QQQ Is Finally Testing the Top of a 5-Year Channel: Is This THE Top?

The stock markets will, as usual be the leading indicator of such a major shift in trends. So, let’s look at what looks like to me to be the final peak in the leading global stock indices. Here’s the best leading stock index after Bitcoin for U.S. stocks- the Nasdaq. Why? It leans more towards the tech stocks. It looks to me to have likely peaked on May 1st in a beautiful Channel Pattern with a classic overthrow-rally at the end. This is the type of pattern that occurs at a major top, but will need to see a turn back down into the channel soon to confirm. The trend is peaking, but stocks have gone up for so long that they think they’ve “died and gone to heaven.” They will fight a reversal back down at first and keep making slight new highs, until the major long-term downtrend becomes more obvious. A break later this year below the bottom of this channel pattern will be a major sign that we have seen a major top, likely of our lifetimes- and not just another minor top still on the way up.

























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Chart: S&P 500 Following QQQ Top with a Very Bearish Megaphone Pattern

The S&P 500 is following the QQQ with a very bearish Megaphone pattern. This is the most dangerous topping pattern. Each time a new high is made, it reverses to a new low. That is even clearer than the channel pattern for the QQQ above for calling a major top. Stocks want to go higher due to the massive momentum, but the fundamentals keep saying “It’s Over!”
 

Stocks have also been looking like tops in Europe, first with the DAX on January 13th, followed by the UK FTSE on February 27th. Those are the two highest quality stock indices there with the FTSE more typically peaking last. Hence, the rest of Europe should soon follow. But Asia is the new growth leader globally, starting with Japan and moving to South Korea, China, and ultimately India. The Nikkei just saw a dramatic, panic-like “catch-up” rally to the developed world. In just less than one year, the Nikkei advanced?! This country (by my forecasts way back in the 1980s) peaked demographically in 1996, and then had a minor bounce and peaked at lower lows in 2020. Despite this continued long-term decline as far as the eye can see, Japan had its catch-up bubble…and so did South Korea. These waning demographic countries having a last gasp bubble to me- is the final signal pointing to a top now or soon in the global “Everything Bubble.” The recent, dramatic 3X bubble in two years for gold (and silver) is also a sign the last bubbles are joining the party- the all-inclusive bubble of all times!






















 

My simplest advice after 37 years of writing my newsletter is: Don’t listen to the more-often correct advice of your financial advisor to just hold stocks and risk assets through the next correction. This will not be another correction on the way up like we’ve seen since 1942 and more so since 1982. This is very likely to be “The Crash of Our Lifetimes” as was the 1929–32 crash for the Henry Ford generation, and both on the infamous 90-year Super-Bubble Cycle. This one should be well worth giving up any minor gains still ahead after such a bubble, and waiting at least through this 4-year cycle typical down year, to see if this great crash starts to unfold in a likely first crash of 40%-50% in just a few months this year. If so, it will likely be followed by a 70%-90% crash into late 2028 or early 2029. After that we can re-evaluate, and should see another strong boom into late 2037, with the first peak of the Millennial Spending Wave.   EG