‘Everything bubble’ will burst, gold to $900, Bitcoin to $3k before hitting $500k – Harry Dent

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Getco news special coverage of the vancouver resource investment conference is brought to you by first mining gold, hello, i’m michelle macquarie, and this is kitco news coming to you from the vancouver resources investment conference, where over 5 000 people have gathered, including some of the world’s top Member economists, like the one and only harry dent harry so good, to have you with us nice to be here michelle and, as a recap, harry is the founder of hs dent investment management he’s also the president and founder of dent research. He is known as the contrarian contrarian and is also a best-selling author harry as the contrarian contrarian. We want to have you back on the show, because it looks like one of the predictions that you made last time that you were in kipco could be shaping up to be very accurate. Last time we spoke was in january of this year, and you said that you expected 2022 to be the worst year ever for equities, that this is when the everything bubble was going to burst. You, unlike most people, put a timeline on things because most people shy away from that dangerous thing to do a dangerous and a bold and brief thing to do.

And you said that you expected a sell-off to begin in the second quarter of 2022 and into the first half of 2022. We will see a 40 drop in equities that that would be the first wave, but that, ultimately, you were predicting a 90 crash in equities. Is that an accurate summation of what you said last time it is i’d, say 86 is my target for equities, which is the biggest thing we’ve seen since 1929 and 32 and yes, first half of 2022. I actually my target. Is this first crash?

It’S only the first crash of the bigger crash over a couple years – we’ll probably bottom around july, mid july, so we’re in that first crash, so this first wave has begun. First wave has begun. I think there’s now not a big chance, we’ll see another slight new high. I think stocks are going down and you need to sell on weakness, because this is not going to be another correction. Okay, people are used to it last 30 years.

You know up correction. No, this is the beginning of a long-term bear mark. Well, as we speak today, we have seen a bit of a bounce back people buying the dip. We have the best and p up a little bit today, the nasdaq up a bit today, even crypto markets are seeing a slight bounce, yeah you’re saying that this is just the usual classic investor conditioning of buying the dip yeah. They say that bear market rallies are the strongest rallies because when something finally peaks people don’t believe it at first.

So it goes down and then people buy the dips because they’ve been taught to do that. The whole downturn, so the rallies are strong, but but at some point these rallies are going to be disappointing. I think this will be it. We’Ve gone down, we’ll have a rally here and if we go down to new lows in the next month or so, which i expect them to say july people are going to finally say uh-oh something’s wrong. You know something’s wrong that we may have really seen a peak in stocks and i’m saying january 4th in the s p, 500 was the peak and major markets around the world have been peaking for a whole year from february 2021 to recently.

So this, if a normal peak in correction – oh everything goes down. No, you don’t see markets peak one after the next, unless it’s a long-term top so harry. What makes people get that shock factor that you’re saying that is going to be different from the reactions that we’ve had since i’m going to say what since 2008, really what shakes things up? Well, you have to get kicked hard because again, look at this since, since the early 80s, the market’s only gone up yeah, you have big. We had big corrections in 87 and 2000, 2002 and 2008 and nine, and it keeps going up.

People are now thinking it can only go up. You have to get shocked out of that. You know what the shock is. History shows a 40 crash within the first several months, but what makes that 40 crash happen? Uh something goes wrong and things are way overvalued.

What people don’t get people think? Oh, the economy’s strong. You know what the economy’s strong, the federal reserve’s put like: five trillion dollars of money printing in the last few years and five trillion dollars in the government in fiscal stimulus. It’S all stimulus the economy underlying from 2008 to now is weak. So so the problem is that when things finally go down, it’s going to be stronger than people think because the economy is so weak without this stimulus.

We’D have nothing here all right. Well, let’s talk a little bit about the fed, because jerome powell promised me that inflation was transitory. Okay turns out, it is transitory, because the economy is going to go down okay, so you do believe that inflation is going to lead to to deflation that when that starts to time, inflation only leads to deflation. In history, we had the strongest inflation in history. In the 1970s, people forget that you know what that was baby boomers biggest generation entering the workforce in massive numbers at great expense.

Young people cost a lot of money to raise and incorporate in the workforce. Now it’s the opposite: we’re going towards deflation and what the fed is doing here: they’re, fighting deflation and they’re going to lose that battle all right. Well, let’s break that down, because right now we have uh jerome powell, saying that he is going to continue with an aggressive rate tightening schedule. He spoke today saying he is going to do whatever it takes to fight inflation, even if that means raising rates above what he says is neutral, so i’m assuming that’s above yeah about two or three percent yeah. At the same time, we have calls of a recession increasing from all corners former federator ben bernanke, saying expect stagflation he’s saying the fed is acting a little too late behind the curve.

Here, no question about that. One bernanke’s saying that, as the fed tightens more that increases the risk of a recession. The likes of a former goldman sachs, ceo, lloyd, blankfein, also saying a recession is very, very likely. So, do you see the fed backpedaling on the rate hikes given this or is fighting inflation still in the fed’s mind its top concern? They are committed now, after over stimulating for so long since 2009.

They are now forced into tightening when the economy is a lot weaker than they think they think. Oh, the economy is okay. Well, they printed so much money they’ve, given people so much free money. It looks okay as soon as this thing falls, it’s going to be stronger than people expect. So so i i do not think the fed is going to have four type tightenings.

I don’t think they’ll get that far before the economy is a recession inevitable. Yes, i i think the recession, my indicators, ecri, my best leading indicator, says we’re already on the verge of a recession, now not six months from now we’re about to go into recession already – and this is after 10 trillion dollars half of our gdp of stimulus. How can you stimulate that much and go into a recession again why the economy is the weakest? It’S ever been, as my indicator said 30 years ago, but can we get a muted recession? No, you there’s no soft landing.

I will say that there is no soft landing here. The fed is hoping for that. They don’t understand the underlying trends of the economy. They just think if they do the right interest rates. No, there’s no soft landing here.

We are so overstretched the biggest bubble in everything real estate financial assets come out. Everything even gold has been in a bubble. It’S going to crash. I want to get to the everything bubble, but let’s just stick with the fed here for a minute, because even if we have a recession, it doesn’t necessarily mean a 90 86 to be more precise equity crash. Can the fed continue to kick the can down the road as it has been doing for since 14 years yeah?

Can it continue that the answer is no 14 years come to the end longer than even i would have expected with all the stimulus in the world. You can’t keep a dead body going. Okay, i mean really it’s just simple: the economy died in 2007, which i predicted 30 years before. It happened. Baby boom greatest boom in history growing up spending money, predictably, at age 46, now 47, and then we would have a downturn from 2008 to 2023 until the next, the millennials came along and drove us up.

They are fighting this downturn when the fundamentals are weak, so they are assuming the economy’s stronger than it is. The economy is only strong because of their stimulus, so there’s nothing. The food can do yeah when they pull back on the stimulus. This economy is going to go down so fast. They will not even well.

The tapering is supposed to begin in june. What if they push out, that deadline helps a little stocks. May i think stocks already peaked on january 4th and again, why there’s been a succession of tops and major indices, including the us, the small caps and the nasdaq around the world over the last year? That is only something that happens at a major long-term top. So i think the market’s already topped january 4th for the s p, 500 and we’re heading down and and and the federal reserves going to find out that their something for nothing stimulus, didn’t really work in the end, and people are going to find this out only When things crash, i’m telling you you can find it out now: okay, so if the fed back pedals a bit on tightening and doesn’t continue with its tapering schedule, it’s still first of all, they’ve waited and everybody said it’s too late.

Even the fed says too late. They can’t, if they backpedal, it, says, they’re scared. The economy is weak, they cannot backpedal. Now they can be a little gingerly here, but that’s a sign of weakness. So this is, i think this is when they have stimulated things so far, that there is no getting back to normal.

They will live or die by this, and i think they’re going to die by this so break down how this inflation becomes deflation in what timeline? What can we expect very quickly because, okay, i have an inflation indicator, it’s workforce growth. You know, you know what costs money to the economy, young people, anybody have kids, they cost and produce very little. Okay. We had the greatest inflation in the 70s, not because of bad government policies or deficits just because the baby boom entering the workforce.

Now we have the opposite. We have deflationary tendencies as baby boomers die faster than millennials rise in their spending. We’Ve never seen a smaller generation, follow a bigger one, never seen this before. So that’s why they have to stimulate so hard because the millennials yes they’re, going to start spending, but the baby boomers will continue to spend less until they die by 2042.

I can put a number on anything you want to put when people spend the most die.

Anything wait so 2042. What what’s that? That’S the that’s when the last baby boomers will die on average, so so the trends, even though people say oh harry, the millennials are gon na. Have the millennials are not anywhere near the size of the generation. The baby boomers.

The baby was caused the greatest boom in history, which i called in in the early to mid 80s from 1983 to 2007, and ever since, why have they been stimulating so hard and more and more and more because you’re fighting a downtrend biggest generation in history is Dying dyers are not spenders um well, but we do have. You could argue generation, okay, those are a bump baby. Boomer is a 10 foot wave if you’re thinking like a surfer, these are three foot waves. A three foot wave cannot replace a ten foot weight. Well, you do use demographic models to predict democracy.

That’S my signature. You were correct in the economists. Don’T study demographics. You were correct when you predicted the japanese stock market crash in uh. The japanese could do no wrong.

They were already done so because you’ve had a history of being correct on that front, our viewers want to know what should they be doing now. If this is the everything bubble, where do you put your money? What do you do harry? You just said it it’s the everything bubble, so you have to be out of everything. There’S only two things to do well in a crash when everything goes down: stocks real estate commodities, everything including gold in the end treasury bonds, the safest, long-term bonds 30-year treasuries from the united states government will be the safe haven.

Is the u.s government in good? Is the united states going to go into recession but we’re the best house? We have way less money printing than europe and way less money more than japan. We’Re the best house, our bonds, 10 30 year.

Treasury bonds will be the safe haven. Gold will not be, and i’m in a conference where everybody thinks gold’s going to be the safe haven. Not it wasn’t in 2008, and treasury bonds did go up when everything went down in 2008.

Why is gold not the place to seek refuge in the storm because it’s a financial asset? It’S it’s the king, i would say of of the commodity sector, and it will do very well in the future when we get past this, because india is the biggest driving factor after china, india will be the next china and indians love gold.

I’Ve never been a country where people love gold more than any gold is an asset that has bubbled like everything else. All financial remember, i said all financial assets have bubbled all will crash only the treasury bonds, the safest bonds go up in that scenario, as happened in 2008, gold went down, only thing went up in 2008 was treasury. So give me your gold price line over the next uh. I guess five years, yeah! Well, okay, i would say in the next year or two down to 900 to a thousand and i’m telling you that’s going to look good compared to other commodities and stocks stock’s going to be down 86, and then i see gold in the next global boom, which Will be dominated increasingly by southeast asia and india and they love gold.

I think gold could go to three to five thousand in that boom, but not in the bust. It’S people think bitcoin’s a safe haven, bitcoin’s the biggest bubble here, new industry. They think goals to save them. No gold is not the safe haven. So when is gold going to five thousand, when when do we come in the next global boom from 2024 to about 2037

And and the next inflation commodity boom into 2038 to 2040
Gold will benefit from both of those trends, so you see us coming out of this by 2024.

Yes, okay, so if we just have to write out this, i believe the economy takes longer, but the credit yes, the worst of the crash should be by the end of 2023. If it continues to go forward in the government – and you see gold at 5000 by 2024 or beginning, i think gold could be three to five thousand in the next global boom between 2037, when the millennials peak in spending and 2038 to 40, when the next commodity Bubble gold is really the king of the commodity bubble, so i think gold could be three to five thousand by 2037 to two thousand forty thousand thirty, seven, all right yeah. So so, if it does go down to nine hundred a thousand, i think that that’ll be for gold buyers, the the buy opportunity of a lifetime, but what would i rather buy i’d rather buy global stocks, especially india, global stocks in emerging markets is where you’re putting Your money during the schools, that’s the future, all developed countries at peak now we’re the last in the us. Europe’S already peaked in demographics we’re the last now last time we spoke, you said that bitcoin does actually have a potentially bright long-term future that you anticipated bitcoin to come crashing down with all of the other assets. But ultimately, you had a pretty good outlook for bitcoin by 2037.

I believe was the date you put out. There explain that okay bitcoin here’s the best definition. I heard at a conference for another speaker and i’ve stolen this line ever since it’s the digitization crypto currencies are the digitization of all financial assets. Is that a big deal or not? So that’s what it is bitcoin large, perhaps is that defy or is it bitcoin?

No, it’s defy, but bitcoin i see when it grows and gets more acceptable could be the standard that everybody’s talking to this conference about gold coming back means that no gold will never be the standard. It cannot keep up with the global economy, we’re in a digital economy now and bitcoin could become the new standard for the the digital economy in the future, replace it gold in that function. So so i would i and i think, bitcoin and i’ve tracked this versus the dot-coms. I compare the the cryptos to the dot-coms in the late 90s. It wasn’t just a bubble in tech stocks, it was the dot-coms amazon.

Okay, amazon was a nothing burger and became the greatest retail in history, so this is gon na crash and i think bitcoin could go down to three to seven thousand and then go to half a million to a million in the next global boom. So that will be the buy of an of a lifetime, but i wouldn’t touch it with a 10-foot pole, even down 50 60. Here all right. I want to break that down a little bit. So bitcoin goes down to around 3 000

Three to seven thousand in the next two years, two years in in the global crash, all financial assets in bitcoin is a new financial asset.

It’S like the dot com, but ultimately you see bitcoin going to half a million dollars, half a million to a million dollars by 2037., and you know what that that would be enough for it to overtake gold as a global standard for money. When you say global standard, do you see fiat currency being pegged to a bitcoin standard? What do you mean by that um? It could be.

I mean you have to peg to something i mean here’s the thing, this crash after the greatest bubble in history, when everybody took off the shackles, is going to show that you can’t just print money and grow okay and everybody’s done it. U.S is not the worst player here, europe and japan or worse. When this crashes, it’s going to say, we need a new standard, we need something real and we need something for the digital realm. Gold is not that i think gold will grow to three to five thousand in the next boom, because indians love gold.

They like it as jewelry indians, wear jewelry in places. We can’t even imagine they wear more jewelry compared to their income than anybody. I’Ve met in the world, so indians love gold, but the globe is going to love bitcoin long term. Bitcoin is going to be the new digital standard. I think for money and that’s the standard, so other things crypto are our innovations in in finance but go.

I think bitcoin becomes the global standard, it’s not there. Yet it’s not big enough. It’S not widely accepted but, and i think it’ll crash the most. I think bitcoin, like i said four to seven thousand from 69 that’ll, be the that’ll crash more than stocks. That’S what i would if, if we have this crash, i’m predicting the next two years, the number one thing i’d buy, be bitcoin or ethereum coming out of it number one thing: you’d buy bitcoin and that’s the next new wave like the dot-coms, like amazon, were in The 2000-2002 crash – okay, you know, amway amazon went from six to 136 in two years and back to six bucks that would have been the buy of your lifetime back in 2002.

Harry the last time we spoke when you made this forecast, we didn’t have the factor of russia’s invasion of ukraine. That has since happened and not really. According to putin’s plan, it’s dragged on quite a lot longer than he expected. We’Ve also got finland and sweden saying that they want to join nato. Putin’S latest comments have been that he’s, seemingly okay with that, provided that they don’t get military uh strengthening from other nato countries.

We still don’t really know how this entire conflict plays out. How does this fit in to your forecast other than being potentially uh a useful thing for the fed to blame things on? Yes, i i see it as a trigger okay, you know when things are going up and up and up people need to see something’s going wrong to make them at least think twice about high valuation. We’Ve never seen real estate, that’s overvalued way, more and or stocks. Even almost like 1929 but real estate is the most overvalued in history everywhere.

You need something to say, something’s wrong, to get people to think. So it’s a trigger for this collapse. It will not be the cause of this collapse in financial assets, but how do you see this conflict playing out? I mean it’s been. It’S been useful.

Oh, i guess in terms of the federation, is has the worst timing in history to do this he’s being aggressive at a time when the world not only does not want it, but the world can go into a downturn and he could be blamed for triggering the Downturn, even though it wasn’t really him, so i think it’s, i think it’s the death of putin. I think putin has bad timing here and – and i i really wish – instead of just you know, advising financial advisors and investors. I wish i could advise governments, because these economic downturns would would tell you to do things differently, but do you see a diplomatic off-ramp for this for this conflict? How do you see this conflict result? No, no, i i see putin got aggressive because he saw an opening right and he’s.

He wants to take over everything he can of the old russian empire and he did it at the wrong time and he’s going to be punished, for it he’s already being punished for it and public opinion globally and when the economy goes down. They’Re going to blame. It on him for triggering this down so, but but do you see him just pulling his troops out of the ukraine? Do you see him becoming potentially more aggressive? No actually in the downturn, he might become more aggressive because the world’s distracted by everything else so yeah.

I think ukraine’s already kind of uh he keeps taking over his satellite nations around him he’s going to keep doing that, but i think it’s going to go down as a bad move for him. Historically, he’s not going to be looked like, he was smart to do this right, but is there a way for this to end in a somewhat um? Shall we say peaceful resolution only because the world goes into a global mark, my words not recession, depression, like the early 30s and everybody says who cares about this? In other words, it’s no longer a big issue. Well, what about commodities?

Because, prior to our conversation, this didn’t happen, and now we have been seeing a big rally in agricultural commodities concerns of food shortages. How does that factor into the everything bubble? Because people are still going to need to eat yeah, but commodities bubble? More than anything, the difference between but soft commodities, okay, difference between commodities and stocks, commodities have already crashed and then they’re in a rebound. They go back down to new lows.

The crb commodity resource board index will go to new lows by my forecast, something like 100, but it will not go down as much as stocks which are at new highs. Commodities are not at new highs, so so commodities continue to go down just because the world’s slow and people spend less on everything, including basic stuff. Okay, well harry ahead of this interview, i asked our viewers to send in some questions and one of the top questions and you’ve kind of touched on this. Already was your outlook on the? U
S housing market, which you said, is also going to be part of this crash, so elaborate on that well number one.

It’S the biggest part of the crash. Most people don’t own that much in financial assets like stocks, you know in their 401k plan they own some everybody owns real estate in the united states. You know everybody can afford to does so when real estate millennials, don’t that’s been part of the problem. Well, they’re. The winners here the millennials, are going to kiss the ground when this happens.

What i’m saying, because real estate will go back down to 2008 to 2012 levels? The lows we saw after the last crowd. Remember stocks crashed quick real estate took years to hit a bottom really mostly 2010 to 12

Real estate will go down at least at those levels and become affordable to the millennials for the first time in their lives. They’Re the winners guess who the losers are? People like me, baby boomers, who’ve, invested in real estate and keep saying you can’t go wrong.

Buying real estate own real estate and real estate goes down now last time, 34, even the great depression. 26. This is the biggest decline. This will be 40 to 50 real estate. We’Ve never seen that before that’ll be a shock.

Is there any development or scenario that will make you reconsider your forecast? No, the what you have to once you get a bubble. It has to deflate and bubbles, never deflate. Slowly, everybody says we can have a soft landing. There is no soft landing anywhere in history to a major bubble, but it can be deferred a bit and then come down later.

So i don’t see, i will not be happy and say people invest again until i see this bubble deflate and i have my targets in stocks in real estate. I have all my targets. If we get to these targets the next few years, i’ll say you can invest for the long term again right now, if you are invested in financial assets, you are going to lose a lot of money. I think in the next two years, all right so as we wrap up i’m sure our viewers would like to know what your targets are for those particular assets. Okay, i think the s p 500 brought in is going to go down.

86 percent, that’s 670! It’S been up to almost like 4 800 at the top okay real estate down 40 to 50 percent. Last time it was 34. I mean that this is what hits people the most when their home goes down in value and they’re under water in their own home and can’t even borrow against their own equity. So that’s that’s!

My focus and commodities go down even lower and gold goes to about 900 to 1 000 in the crash and then zooms in the next bill and when all of those low targets are met. That’S when you’re saying it’s safe to jump back into the water. Only only when things get back to reality, which they are nowhere near, so everybody thinks well. The fed keeps doing this that no we’re in a bubble. That’S already so extended, there’s nothing.

The fed can do except extend this a little longer. The only way to get back to normal is to have a crash, there’s no other way to get there harry. How are you positioned right now? Then treasure bonds, just treasury bonds, just treasury now normally in good times, you diversify, and you know these asset risk assets, stocks, bonds and and real estate stuff. In this there’s only one thing: everything again my statement is without any qualifications.

It’S the greatest financial asset bubble globally in all of history, and it has to come down. So all financial assets come down except the very safest, which is only the treasury bonds of the best governments and especially bad house, in a good house in a bad neighborhood. The u.s treasury bonds, the only place i’d put money otherwise, and if you don’t, if you’re too scared to do that, just be in cash, just go to cash, everything will come down and your cash will buy more of all financial assets. But i like the treasury bonds, they go up in 2008.

They went up all right, so cash or u.s treasury bonds is your best advice to write out what is going to be the ugliest equity crisis and if it doesn’t happen by the end of 2023, then i’ll shut up. Okay, that that’s the end of my bad cycles, where it’s most likely to happen. So if this doesn’t happen by 20,

You will never hear from me again that’ll be interesting. We like hearing from you, but at the same time, don’t really necessarily want you to be right, but at least we’re giving our viewers the tools to protect and prepare themselves for that scenario.

But again, as i always say harry, i applaud you for putting your neck out there with specific timelines. Thank you for giving us your time here on kidco news. Okay, thank you. All right, harry dent, appreciate it getco news. Special coverage of the vancouver resource investment conference is brought to you by first mining gold.

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