Harry Dent doesn’t mind standing out. If you have followed gold at all, you will notice this in the following quote from Harvard Economist Warns “$700 Gold by Mid-2017″ (7/9/16).
“While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise” says Harvard economist Harry Dent in his latest report. “I’ve never been more certain of anything in over 30 years of economic forecasting.” …
Dent warns that we are about to experience an economic crisis far worse than 2008 — the full-blown collapse of the stock market and massive deflation.
End of Fiat Money – Economic Crash
Well gold bugs know that (at least during the last decade) when stocks fall, gold falls with it. But will it this time? What does Dent see coming? He says that America will unravel, debts will soar, markets retreat, taxes skyrocket and incomes shrink. He sees an event looming that is of epic proportions, and he says, “more money will be lost – and made – in the 24 months following this event than any time since the early 1930s.”
When exactly it will come? Not so sure. Anywhere from several months to, “We believe that the next five years will be the most extraordinary in economic history.” Well for an event of the scale he describes, fives years really does mean immanent. It means that the financial system is in an end-game. That is why things have gone so upside down, to where “bad news is good news” because bad news means the central banks will inject the corpse with more financial juice. To where lower oil prices, which in normal times meant money saved and good times for the economy, now means the economy is too anemic to want to buy and consume any. And to where lower unemployment just means more folks have given up looking.
He says that subsequent to the 2008 crash, the stock price cycle was disrupted by, “the artificial flooding of trillions of dollars in the name of the Fed’s Quantitative Easing program,” but that it will soon revert to the norm. And (he is big on population cycles) due to the aging of the population, that norm is down. He allows that retiring baby-boomers will be turning in, “their blue chips and growth stocks for CDs, bonds and dollars…in order to start funding their retirements!”
This he says will lead to a total economic stall.
Businesses will stumble and defaults will escalate… the problem will feed on itself… and everything we’ve been buying up is going to get very cheap… very quickly…
- Property Prices Will Shed a Further 40% …
- The Dow and S&P … will tumble as much as 70%… by early 2017 (and probably lower) in the years to follow… and they won’t start to recover again until around 2020 at the earliest.
- Banks Will Crash – Again! But even bigger and harder than they did in 2008 … And the government will try to bail out only the biggest banks – but they won’t be able to this time. It is actually the smaller community banks that will survive …
- Commercial Property Market … always gets hit the worst in major downturns. And in the next three and a half years, a further $1.7 trillion worth of commercial real estate loans and mortgages will come due…with bankrupt cities like Chicago and Detroit leading the way…
- And the “Safe-Asset Slaughter” Will Follow. …the investment that many will argue is the safest in the world is going to crash.
I thought he must be referring to the massive bubble in government bonds; but he is referring to a bubble in … gold! He says, “You don’t have to be an economist to see that gold’s 670% run-up since 2000 is a classic bubble pattern … .” And, “bubbles almost always retreat to the levels at which they started, or even lower.”
Now this is precise. Commenting that, “Historically, gold tends to rally in anticipation of a financial crisis, then collapses when debt deleveraging and deflation sets in,” he advises, “selling any remaining holdings of gold and silver on such a rally. By early 2017 or so, the next stop for gold will be around $700.”
End of Spending
He is not saying that gold will drop because boomers will stop buying it. He is saying that gold will drop because boomers will stop buying other things. He is saying that the bulge in the population is at an age where folks have earned all they could and have leveraged what they earned as much as they could, and it is like a shark. It has to keep swimming or it suffocates and dies. As the boomers stop spending, the end of the population and the end of the debt cycle converge, and the debt and the economy completely collapses. Governments will attempt to replace the collapsing private debt with public debt, but the economy will collapse anyway (see Fiat System Fading). He says that private debt dwarfs public debt, and, “when millions of individuals, banks and businesses ALL pay down their debt down simultaneously, especially when many debts default and are restructured… it’s catastrophic.” But, “The enormous deleveraging of private debt will NOT cause inflation in the decade ahead – it will cause deflation!”
End of Commodity Cycle
He also adds that there is a very accurate 30 year commodity cycle, that is also ending, and, “the great commodity boom of the last decade has run its course.” And he’s not just doom and gloom. Around 2023 the cycle starts up again and he expects, “to see the biggest commodity boom in modern history when commodity-intensive emerging countries will drive most of the global growth.” Mark your calendars!
Birth of Asian Boom
But he sees one country at the beginning of a mega-cycle right now,”beginning to see a demographic boom surge through its economy (as) waves of young people enter its workforce … .” If you buy his newsletter, he will name it.
And finally he says that if you buy his newsletter you will learn, “why you should start hoarding the one investment everyone is telling you to sell, sell, sell! …the U.S. dollar … .”
It’s only $49, as it turns out, and with a good guarantee. And no, I am not being paid to post this.