“Folks assume I’m loopy after I say the inventory market will go down 86% on the S&P — the worst case but additionally my most certainly case,” Harry Dent Jr., the candid, controversial strategist, argues in an interview with ThinkAdvisor.
“Folks say, ‘Harry, the Fed gained’t let that occur,’” says Dent. “Effectively, in the long run, 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 important prognostications.
He accurately 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 12 months 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 companion Rodney Johnson every write — predicts massive crashes in each the inventory market and actual property, which is able to set off a deep recession.
Watch out for a weak January 2024, he warns. It can foretell “the kind of crash I’m speaking about.”
Something good to spend money on proper now?
“There’s nowhere to cover” besides “one of the best secure haven”: Treasury bonds, Dent maintains.
Within the current telephone interview with Dent, who was talking from his San Juan, Puerto Rico, base, he declares: “We want a recession to throw out the unhealthy stuff so we are able to go into the following growth lean and imply.”
Listed here are excerpts from our dialog:
THINKADVISOR: Are Federal Reserve insurance policies a assist or hindrance?
HARRY DENT: Folks assume I’m loopy after I say the inventory market will go down 86% on the S&P — the worst case but additionally my most certainly case.
Folks say, ‘Harry, the Fed gained’t let that occur.’ Effectively, in the long run, 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 following growth — which would be the biggest growth.
In my interview with you in January, you predicted “the crash of a lifetime,” which you’ve been predicting for a while now. You mentioned then that after “yet another new low, we’ll be down 50%-60%.” Why hasn’t that occurred?
It’s two years later than it needs to be. However the crash has began.
My error is so easy. My charts pointed to late 2022 as the largest down cycle in trendy historical past.
I didn’t assume it will be doable 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 feel 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 out a recession or a serious inventory market correction or crash to clear the decks and throw out the unhealthy stuff so we are able to go into the following growth lean and imply.
The longer the growth, the extra the overinvestment, zombie firms and debt. You need to wash out all of the excesses.
Despite the fact that the Fed is climbing like loopy, folks assume they’ll change on a dime in the event that they need to and can stimulate once more. They don’t assume the Fed will let the market fall too far.
What are the implications?
If we maintain doing this ceaselessly, it signifies that the following growth 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 belongings and unhealthy money owed into the long run since we didn’t enable these to be weeded out.
It is a struggle of central banks towards free markets. In the long run, the free markets are going to win as a result of they’re the closest factor to God in terms of cash; and the central banks are a bunch of educational individuals who by no means ran a enterprise.
What’s an enormous mistake that the central banks made?