CEDIA Industry Pioneer and Futurist predicts big downturn for US economy in general and CEDIA industry in particular. Our industry has profited greatly from the Real Estate Bubble - which has burst.

Edward Jaffe, founder/co -founder of Home Tech, Control Freaks and MDL Lighting Design asks that industry leaders give more thought to how the CEDIA industry will respond to a different economic environment than what we have enjoyed recently.

It is important that members of this industry understand the connection between our Boom and the Real Estate Bubble. This will be the last CEDIA show where industry growth and consumer confidence will be taken as a given. Both exhibitors and attendees need to give serious thought to how their business will adapt to a shrinking economic environment.

Negative interest rates, growth of monetary aggregates, asset inflation, baby -boomer peak income, tolerance to high levels of debt, confidence, high nominal net -worth's and other factors that have nothing to do with technology or our industry have been pumping up the amount of money people spend on their homes.

The fundamentals that drove this cycle upwards are already fading. If falling home prices, declining new home construction, a credit crunch and numerous other economic problems have not hit your business yet - - they surely will at some point. And, the last time we had big downturns in construction - - there were not many people doing custom home electronics - we now have many vendors chasing the same dollars.

Don't fall into the trap of: "Oh these clients of mine will always have tons of money and be happy to spend it". That is not the lesson of history - - in the 1930s on Long Island most of the great estates fell out of use, were given away, burned or abandoned in spite of low -levels of mortgage debt and cheap energy and labor. Luxury home construction and luxury spending will dry up quickly once our current asset -bubbles deflate further. When it comes to luxury homes - we are already overbuilt.

The implications of these concerns will vary depending on the reader. I welcome a dialog with anyone who feels that these issues need more open discussion.

Edward E Jaffe, IES
Industry Pioneer
802 -380 -2874

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