“Individuals assume I’m loopy after I say the inventory market will go down 86% on the S&P — the worst case but in addition my most probably case,” Harry Dent Jr., the candid, controversial strategist, argues in an interview with ThinkAdvisor.
“Individuals say, ‘Harry, the Fed received’t let that occur,’” says Dent. “Nicely, in the long run, when there’s a battle between God and central bankers, I’m going to wager 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 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 yr it hits — “two years later than it ought to have,” in line with his calculations. However “it’s beginning now,” he insists.
Within the interview, the strategist — whose unbiased analysis agency, HSD Publishing, produces month-to-month newsletters that Dent and companion Rodney Johnson every write — predicts large 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 is going to foretell “the kind of crash I’m speaking about.”
Something good to put money into proper now?
“There’s nowhere to cover” besides “the most effective secure haven”: Treasury bonds, Dent maintains.
Within the latest telephone interview with Dent, who was talking from his San Juan, Puerto Rico, base, he declares: “We’d like a recession to throw out the unhealthy stuff so we will go into the following growth lean and imply.”
Listed below are excerpts from our dialog:
THINKADVISOR: Are Federal Reserve insurance policies a assist or hindrance?
HARRY DENT: Individuals assume I’m loopy after I say the inventory market will go down 86% on the S&P — the worst case but in addition my most probably case.
Individuals say, ‘Harry, the Fed received’t let that occur.’ Nicely, in the long run, when there’s a battle between God and central bankers, I’m going to wager 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 best 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 stated 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 must be. However the crash has began.
My error is so easy. My charts pointed to late 2022 as the most important down cycle in fashionable historical past.
I didn’t assume it will be potential 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 right down to a brand new low, nevertheless it simply can’t do it.
Do you continue to see a recession looming?
Sure. We’d like 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 will go into the following growth lean and imply.
The longer the growth, the extra the overinvestment, zombie corporations and debt. You must wash out all of the excesses.
Though the Fed is mountain climbing like loopy, individuals assume they’ll change on a dime in the event that they must 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 most likely 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 unhealthy money owed into the long run since we didn’t permit these to be weeded out.
This can be a battle of central banks in opposition to free markets. In the long run, the free markets are going to win as a result of they’re the closest factor to God relating to 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?