Harry Dent, the outspoken financial author and economist, is not backing down from his bold “crash of a lifetime” declaration he made last December.
In a recent interview with Fox News Digital, Dent warned that the “everything” bubble has yet to burst and could potentially cause a more significant crash than the Great Recession.
“In 1925 to ‘29, it was a natural bubble. There was no stimulus behind that, artificial stimulus per se. So this is new. This has never happened,” Dent said on Tuesday. “What do you do if you want to cure a hangover? You drink more. And that’s what they’ve been doing.”
“Flooding the economy with extra money forever might actually enhance the overall economy long-term. But we’ll only see when we see this bubble burst,” he added. “And again, this bubble has been going 14 years. Instead of most bubbles [going] five to six, it’s been stretched higher, longer. So you’d have to expect a bigger crash than we got in 2008 to ’09.”
As we approach the middle of the year, U.S. stocks closed out the month of May with gains. The tech-heavy Nasdaq stood out with a 6.9% increase, while the S&P 500 rose by 4.8% and the Dow Jones increased by 2.3%, Fox Business Network reports.
Nearly two weeks ago, Nvidia, a tech and A.I.-heavy company, made a bold move by announcing a 10-for-1 stock split. As a result, its shares skyrocketed past $1,000 just three days later, hitting an all-time high.
“I think we’re going to see the S&P go down 86% from the top, and the Nasdaq 92%. A hero stock like Nvidia, as good as it is, and it is a great company, [goes] down 98%. Boy, this is over,” Dent noted.
“We have never seen [the] government sustain a totally artificial bubble for a decade and a half, and see what happens after that,” he continued. “But I can tell you, there has not been one bubble, and this is far larger and longer, one major bubble in history that has not ended badly, period.”
The only adjustment to Dent’s prediction is the timing, indicating that market bottoms are likely to appear sometime between early to mid-2025.
At the heart of the bubble is the real estate market. Dent had previously predicted that housing prices would return to 2012 lows this year, and on Tuesday, he claimed that U.S. homes have already doubled or more in value compared to what they will soon be worth.
“No time in history has housing been so widely owned and so many people having second and sometimes third homes just for speculation,” Dent said.
“If you understand what the real cycles are, you don’t have to buy the most expensive home in history right at the top of the market and then moan for 14 years while it goes through the next downturn, like ’29 to ’42 or ’68 to ’82,” the author noted further, “or what would have been, without all this $27 trillion stimulus, 2008 to 2022.”
“I just say what I see and, frankly, don’t give a damn if people don’t like it, because you [have] got to choose: are you going to tell the truth, or are you going to make people happy?” he reacted. “They call me a ‘perma-bear.’ This is absolutely, uncategorically B.S.”
“Looking at it from history and standing back, nothing’s more obvious,” Dent continued. “A lot of other bubbles in history just do not have the steepness or the magnitude. Why? We’ve never realized the power that central banks can have to just print money out of thin air.”
“Because it’s in a leading sector now in this early stage that has bubbled the most. That’s how you know a leading sector; it crashes. Bitcoin’s already been down over 70%. We haven’t had a recession yet, so that’s how volatile it is,” he explained. “It crashes the most, that’s what I would buy if I could buy one thing two or three years from now near a bottom.”
Dent also wanted to remind investors of something: “The government created this bubble 100%… totally artificial, injecting a drug to artificially perform stronger. And again, everything from human life to history shows, you don’t get something for nothing, and bubbles always burst… it’s a much, much higher possibility than anybody gives it.”
