An eye-catching title to grab your attention, and the book certainly does not disappoint. Niels Jensen avoids trotting out the old pros and cons of passive investing but instead pursues several big picture, important, interesting themes, focusing on structural mega-trends he says are set to disrupt investors around the world.
These include:
• End of the debt super-cycle and low interest rates, and mammoth pension liabilities across the developed world.
• Retirement of the baby-boomers and the impact of ageing and demographics on economic growth.
• Rise of the East – is China a threat or an opportunity for Western economies?
• Death of fossil fuels and the massive potential benefits from fusion energy.
• Mean reversion of wealth-to-GDP and the potential endgame of the global financial crisis post 2008.
When viewed together, the structural trends listed above may well combine in what Mr Jensen refers to as “a perfect storm” that may lead to long-term low levels of economic growth.
The approach Mr Jensen takes throughout the book is to communicate in clear and understandable language, well-supported through research and references. Plenty of useful graphs and formulae are quoted, and it is essential that you do not flip the page over to get on to the next juicy glimpse of Armageddon. I draw attention to the importance of chapter 8 and the mean reversion of wealth-to-GDP and the huge implications for us all.
To Mr Jensen’s credit, he makes it very clear the trends he examines are not the only ones we should be concerned about; he simply highlights them as being high on his priorities. One area touched upon but sadly not explored in any depth is the subject of automation and how this will interact with and impact upon people and finance and the global economy.
Mr Jensen also takes the stance of not only highlighting potential problems from a financial perspective but also making suggestions on what has to be done to avoid a possible cataclysm.
Published by Harriman House. Nick McBreen is an independent financial adviser at Worldwide Financial Planning
