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Financial author and economist Harry Dent told Fox that we’re currently in an “everything” bubble that still hasn’t burst, and when it does, it may be worse than 2008.
“From 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 told Fox. “What do you do if you want to cure a hangover? You drink more. And that’s what they’ve been doing.” (TAKE A POLL: Should the Government Take Immediate Action to Curb Inflation, Even if it Means Higher Taxes?)
“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 continued. “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.”
What To Watch
Fox noted that stock ended in May with gains “as the tech-heavy Nasdaq stole the show, finishing up 6.9%. The S&P 500 was up 4.8% and the Dow Jones was up 2.3%.” But Dent has dire concerns about it all.
“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 continued. “We have never seen [the] government sustain a totally artificial bubble for a decade and a half, and see what happens after that. 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.” (TAKE A POLL: Do You Agree That Small Businesses Are the Backbone of Our Economy and Need More Support?)
When Is The Crash Coming?
Dent believes the market will bottom out sometime within 2025. The crash will hit housing hardest, with prices currently more than double what properties will soon be worth, he forecast. ”
An analysis published in March argued that a recession could trigger a U.S. debt crisis. “”Nobody’s totaling this up: Twenty-seven trillion [dollars] in debt and deficits from the government and money printing combined since the 2008 downturn to get us through that long ditch and spending,” Dent said in April. “And now the millennials are ready to spend money 2024 to ’37, as I also predicted a long time.” (TAKE A POLL: Will Traditional Colleges Become Obsolete Due to Online Learning?)
Overstimulating the economy during the pandemic was part of the problem. “When you overstimulate and flood so much money in, people over-invest, overspend, over-borrow. So, they’re borrowing from the future already. Then, when you turn around and have to clamp down because you created 9.1% inflation overnight in a zero-inflation economy, by the way, and that’s another thing my indicators have been predicting for a long time,” he explained. “Then you get this mess like, oh, my gosh, now you’re going to force all this debt in excesses to suddenly deleverage.”
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