“Folks suppose I’m loopy after I say the inventory market will go down 86% on the S&P — the worst case but additionally my most definitely case,” Harry Dent Jr., the candid, controversial strategist, argues in an interview with ThinkAdvisor.
“Folks say, ‘Harry, the Fed received’t let that occur,’” says Dent. “Nicely, ultimately, when there’s a battle between God and central bankers, I’m going to guess on God!”
A number of of Dent’s forecasts have been off-base, however the “Contrarian’s Contrarian” has been on goal with some vital prognostications.
He appropriately predicted Japan’s 1989 bubble burst and recession, the dotcom crash and the populist surge that thrust Donald Trump into the presidency.
For a number of years now, Dent has been forecasting “the crash of a lifetime.” Now, he says, 2024 would be the yr it hits — “two years later than it ought to have,” in keeping with his calculations. However “it’s beginning now,” he insists.
Within the interview, the strategist — whose impartial analysis agency, HSD Publishing, produces month-to-month newsletters that Dent and accomplice Rodney Johnson every write — predicts massive crashes in each the inventory market and actual property, which can set off a deep recession.
Watch out for a weak January 2024, he warns. It would foretell “the kind of crash I’m speaking about.”
Something good to spend money on proper now?
“There’s nowhere to cover” besides “the very best secure haven”: Treasury bonds, Dent maintains.
Within the latest cellphone interview with Dent, who was talking from his San Juan, Puerto Rico, base, he declares: “We want a recession to throw out the dangerous stuff so we will go into the subsequent increase lean and imply.”
Listed here are excerpts from our dialog:
THINKADVISOR: Are Federal Reserve insurance policies a assist or hindrance?
HARRY DENT: Folks suppose I’m loopy after I say the inventory market will go down 86% on the S&P — the worst case but additionally my most definitely case.
Folks say, ‘Harry, the Fed received’t let that occur.’ Nicely, ultimately, when there’s a battle between God and central bankers, I’m going to guess on God!”
“If [the market] doesn’t go down that a lot, the central financial institution is compromising the subsequent increase — which would be the biggest increase.
In my interview with you in January, you predicted “the crash of a lifetime,” which you’ve been predicting for a while now. You stated then that after “yet one more new low, we’ll be down 50%-60%.” Why hasn’t that occurred?
It’s two years later than it ought to be. However the crash has began.
My error is so easy. My charts pointed to late 2022 as the largest down cycle in fashionable historical past.
I didn’t suppose it could be attainable to maintain pumping up one thing [the economy] on pure fumes — simply printing cash, throwing cash into the markets, which retains the wealthy, wealthy and spending.
So the [up] market has lasted longer than I assumed. However I believe it’s cracking. All of the market must do is break all the way down to a brand new low, but it surely simply can’t do it.
Do you continue to see a recession looming?
Sure. We want a recession. That is the longest we’ve ever gone with no recession or a serious inventory market correction or crash to clear the decks and throw out the dangerous stuff so we will go into the subsequent increase lean and imply.
The longer the increase, the extra the overinvestment, zombie corporations and debt. It’s a must to wash out all of the excesses.
Although the Fed is mountain climbing like loopy, individuals suppose they’ll change on a dime in the event that they need to and can stimulate once more. They don’t suppose the Fed will let the market fall too far.
What are the implications?
If we maintain doing this endlessly, it implies that the subsequent increase will in all probability be a nothing-burger with the millennials as a result of they’re going to be sharing all our extreme, overly valued monetary property and dangerous money owed into the long run since we didn’t permit these to be weeded out.
This can be a warfare of central banks in opposition to free markets. Ultimately, the free markets are going to win as a result of they’re the closest factor to God on the subject of cash; and the central banks are a bunch of educational individuals who by no means ran a enterprise.
What’s a giant mistake that the central banks made?
