Ep. 257 — Alan Beaulieu: Debt Complacency, Reshoring, and the 2030 Great Depression

6 min read

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Episode Summary

You’re staring at record demand, your customers can’t get enough, and the temptation is to add trucks, add headcount, add debt, and ride the wave. That’s the move that takes a healthy company out at the knees in 2030. I sat down with Alan Beaulieu, principal at ITR Economics (94.7% forecast accuracy at four quarters out since 1985), and got into the cyclical theory behind the Great Depression his team is calling for at the end of the decade. We covered why boomers, debt, and the cost of entitlements are an unstoppable train. Why the inflation owners are feeling right now is real but temporary, and what to actually put in your contracts so you stop eating margin every time plywood doubles. How rate of change and leading indicators give you a 12-month view instead of straight-line guessing. Why reshoring is real and durable, and what US-China tension means for your supply chain. And the part most owners miss: the playbook for the next nine years is different in each phase. Invest and take risk now. Strip personal and corporate debt by 2029. Then have dry powder ready around 2036 when $2M becomes $4-5M for the owners who didn’t overextend. Real conversation, real numbers, and the kind of macro view you can actually plan against.

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## Top 10 Takeaways
  1. You cannot opt out of the 2030 cycle. Your only choice is whether you’re positioned to prosper through it or get crushed by it.
  2. The inflation you’re feeling right now is temporary. Don’t bake it into your 2022 assumptions or you’ll be wrong both directions.
  3. Put a PPI-indexed price adjustment trigger in every contract. When inflation is quiet it costs you nothing. When it isn’t, it saves the company.
  4. Straight-line forecasting is what kills good operators. Today works, tomorrow works, and then the world changes and you’re overextended.
  5. Rate of change beats year-to-date every time because it tells you whether business cycle momentum is actually building or fading.
  6. Your three-month rate of change tells you the next quarter. Leading indicators tell you the six months after that. Now you can plan.
  7. Strip personal and corporate debt to as close to zero as humanly possible by the end of this decade. The mansion and the Porsche can wait.
  8. Reshoring is real and durable. If your suppliers are coming back to North America, your supply chain risk goes down and so does your container exposure.
  9. The CEO who says no to the boom mentality looks like they’ve lost their nerve. They’re actually showing more nerve than the operators buying at the top.
  10. When everyone’s panicking in the depression, you deploy the cash you protected. That’s how $2M becomes $4-5M in a few short years.

Sound Bites

“You cannot not be part of it. It’s a question of whether you’re going to prosper in it and be prepared for it. But you cannot opt out and say, you know, I’ll just ignore the whole thing. It’s just not possible.” (@TBD) — Alan Beaulieu

“100% of the companies on the planet that I’ve ever met are underpriced. Meaning in some corner of the business, there’s something you could charge more for.” (@TBD) — Alan Beaulieu

“Human beings are straight line forecasters, straight line thinkers. As long as this data set continues, as long as this world doesn’t change, this will work. There’s the falsehood. This world will change.” (@TBD) — Alan Beaulieu

“Make sure personally and corporately you have as little debt as is humanly possible by the end of this decade. Do not stretch at the end of this decade. You go comfortable and conservative.” (@TBD) — Alan Beaulieu

“The only way to be intentional, which is designing your plan on purpose, according to where you want to go: if you don’t know where you’re going, then it’s going to be very difficult to navigate those waters on the way there.” (@TBD) — Ryan Tansom

About This Episode

Alan Beaulieu is principal at ITR Economics, the forecasting firm with a 94.7% accuracy rate at four quarters out since 1985. He’s co-authored Make Your Move, Prosperity in the Age of Decline, and But I Want It with his brother Brian, and has delivered economic analysis workshops worldwide for over 30 years. ITR is best known among owner-operators for its long-range call on a 2030 Great Depression and for holding itself publicly accountable to its forecast accuracy year after year. This episode is the follow-up to two earlier conversations with Alan’s colleague Alex Chausovsky on the same long-range outlook, now updated for the post-pandemic inflation, supply chain, and US-China dynamics owners are sitting in today.

Resources Mentioned

  • ITR Economics — Alan’s firm. — itreconomics.com
  • Make Your Move by Alan & Brian Beaulieu — The original book on using rate of change to read the business cycle.
  • Prosperity in the Age of Decline by Alan & Brian Beaulieu — The framework behind the 2030 Great Depression call.
  • But I Want It by Alan & Brian Beaulieu
  • Changing World Order by Ray Dalio — Referenced on the three stages of money and reserve currency cycles.
  • Big Debt Crises by Ray Dalio — Referenced on historical debt cycle mechanics.
  • Changing Fortunes by Paul Volcker — Referenced on Bretton Woods and hard-money discipline.
  • The Reshoring Initiative — Source for the long list of reasons manufacturing is coming back to North America.
  • Vicki Tennican — The Century Club — Referenced on 100-year companies and the Evergreen mindset.
  • Intentional Growth™ Training (Arkona) — Ryan’s digital course on running the business to grow value. — arkona.io

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