I think what will happen is that things will revert to the mean, not implode or collapse, e.g., some pundits are claiming that the housing market is collapsing. But if you look at historical numbers, the last couple of years were deviations from the mean, and so far what we are seeing is reversion to the mean.
nahb.com
After so many years of the stock market being above the mean, it wouldn't surprise me to see years of the
market being below the mean, but it would surprise me very much to see widespread economic collapse. There's no justification for it, IMO.
Another thing which we are seeing, and some are extrapolating incorrectly, IMO, is that some industries which
used to be new and growing strongly are now maturing, and the level of growth they once experienced is
unsustainable, e.g., personal computers, fiber optics, cell phones. Just because these industries are no longer strong growth industries doesn't mean they will collapse. There will be consolidation because they will become (have become already?) commodities, there won't be any real reason for so many brands to exist, and the strongest companies will cannibalize the weaker ones. This happens all the time, if you take a look at history, take a look at the automobile industry, the oil industry, steel, trains, farming, these are just the ones that come to mind.
Once the gold rush ended in California, the economy in California didn't collapse, it changed. The guys who got rich in the beginning were the ones who found gold mines. The guys who got rich in the middle were the ones who sold picks and shovels and ran whore houses and saloons. But the ones who got rich in the end bought land, grew oranges, built and sold houses, and so on.
One door closes, another one opens. You just have to be nimble. The people who will get screwed are the ones who can't adapt. |
