Prediction of gold outlook
Harry Dent, the founder of HS Dent, predicts that gold, which has been rising since 2023 and is currently priced at over $1,930 per ounce, will reverse the trend and experience a spectacular collapse as “the biggest crash in our lifetime” enters its second wave.
By the middle of 2024, gold, according to Dent, may reach as low as $900 an ounce.
“Gold is not a safe haven,” he insisted. “I’m predicting that gold goes down to $900 to $1,000. That will be a lot less than other commodities… that is still a 40 to 45 percent fall from here.”
Dent has a history of making accurate predictions, including the Japanese asset bubble, the DotCom bubble, and the 2016 presidential election of Donald Trump.
He claimed that the Federal Reserve’s loose monetary policy, which has led to booms in numerous asset classes, particularly equities, has created a “everything bubble.”
He projected that after the NASDAQ reaches its bottom of 10,088 in 2022, there will be a “massive crash” in an already bearish market.
He also said that “the next wave” downwards are likely to occur when this level of bottom is hit. He anticipates a 92 percent decline for the NASDAQ and an 86 percent decline for the S&P 500 from their all-time highs.
According to Dent, gold will fall below $900 per ounce along with other assets, but will ultimately rise to $4,000 after markets rebound and the next economic boom occurs.
The Fed cannot sort it out
The Fed’s efforts to increase its interest rates by 425 basis points over 2022 in order to relieve rising prices are projected to not be able to prevent a market crash.
“If [Jerome Powell] turned around and pivoted on this, it would look really ridiculous that he tightens a little bit, and then has to turn around and go back to easing,” he said. “That would prove how weak the economy is and make the Fed look reckless.”
He continued by saying that if the Fed switched to a looser monetary policy, it would lose credibility. “By the time the Fed realizes they over-tightened after overstimulating, and want to stimulate again, they’re not going to have much credibility,” he maintained.
“You don’t have to tighten in this bubble. All you have to do is stop feeding this bubble. So, even if they pause, we’re not going to go back to normal. The stock market is still going to be on the weak side,” he said.
Despite his suggestion that a Fed tightening pause would be “smart,” he stated it would not prevent the eventual drop in equity prices.
The next giant economy
Because of its expanding population and high proportion of young people, Dent, whose economic research focuses on demographic patterns, predicted that India would become the next economic superpower.
“India and Southeast Asia will do much better than China [in the long-run],” he suggested. “One day, around the 2050s or 2060s, India will be the largest economy in the world and the U.S. will still probably be a little bigger than China.”
Dent predicted that China’s economy would collapse over the next century as a result of its aging and shrinking population as well as its excessive investment in real estate. Also, he said that this nation had “overbuilt their economy… 22 percent of their homes and offices are empty. They just build stuff to stimulate their economy. They don’t print money. They print condos.”
“India is the next super large country that can urbanize at 1 percent per year,” he said.
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