The US is sailing into unchartered waters. The country could experience a massive contraction and a 1930s type depression. In that case, the purchasing power of these
Phoenix, AZ (PRWEB) July 15, 2010
H. L. Quist, Author and Historical Economist, forecasts that the coming economic downturn and devaluation of the US Dollar will reduce superstar salaries.
The $100 million pay packages of Lebron James, Amar'e Stoudemire, Kobe Bryant, Joe Johnson ($124 million) et. al., marks a moment in time that portents a systemic change. Just as absurd valuations of .com stocks in early 2000 and home prices in 2006, these "mega deals" signal another top with unexpected results to follow.
Quist says, "American Citizens' fears of recession and their reduction in consumer spending could reduce attendance at all sporting events and lower ticket sales by 10% to 20% over the next couple of years." In addition, many sports franchise owners will experience asset and income contraction in their core businesses which, in combination, could make these "mega deals" non- performing.
More importantly, Quist adds, a market or government mandated devaluation of the US dollar will negatively impact all fixed income contracts over a five year period. Going forward, a 25% to 50% loss in the purchasing power of the US dollar is quite possible as our government faces a debt and currency crisis. On a broader scale, Quist opines that more State, Municipal, and Union Pension payouts along with Social Security, face the same double-edged sword with the prospect of serious social and political ramifications.
Quist, who has accurately forecast every major boom and bust cycle in the US since 1987, says, "The US is sailing into unchartered waters. The country could experience a massive contraction and a 1930s type depression. In that case, the purchasing power of these "mega deals" would loom large -- as long as the owners could make payroll."
H. L. Quist is the author of five books including "The Aftermath of Greed: Get Ready For The Coming Inflationary Boom," and "How to Profit From The Coming Inflationary Boom, And Avoid The Next Crash." He publishes "The Contrarian Market View" monthly newsletter and can be heard on his weekly Internet Radio Show, "The Myth Buster."
H L Quist