Harry Dent: Huge Stock Market Crash Likely Within 10 Months

Harry Dent Jr., aka “the Contrarian’s Contrarian,” never beats around the bush.

“Get out…!” is his message to both stock market investors and President Joe Biden, as he tells ThinkAdvisor in an interview.

Investment-wise, “there’s nowhere to hide but in the best high-quality 10- and 30-year U.S. Treasury bonds,” he argues. 

As for Biden, he recommends bluntly: “Get out of the way…If not, [you’re] going to regret it.”

Dent, whose HSD Publishing produces monthly newsletters that he and partner Rodney Johnson write, correctly predicted Japan’s 1989 bubble bust and recession, the dot-com crash and the populist surge that put Donald Trump in the White House in 2016.

Many of Dent’s predictions, however, have simply fizzled.

For a number of years now, he has predicted the biggest crash ever, when the stock market’s  “monster bubble,” as he calls it, will finally collapse, and “the crash of a lifetime” will ensue.

“We’re getting very close,” he says in the interview.

He argues that the crash will be a time to make money and details a scenario for selling stocks and making the best investments right now.

He also opines on the likelihood of a recession and gives his assessment of artificial intelligence, which he dubs “the screaming new baby. It’s the future.”

Prior to subscribing to the HS Dent Forecast, folks are offered free newsletters, each of which, he points out, include a few of his trademark “Harry’s Rants.”

Here are excerpts from our conversation, which took place July 5: 

THINKADVISOR: Do you still think the stock market’s crash of a lifetime will happen this year? 

HARRY DENT: Yes, I do. But I don’t know exactly, although we’re getting very close. It’s already starting to burst now, but it could really start bursting six, eight or ten months from now. 

It’s difficult to predict [timing] because of the distorted economy as a result of the huge government stimulus.

Please elaborate.

The stimulus from 2009-2024 has caused an artificial giant monster everything-bubble. It’s the biggest bubble in history and will have the biggest burst in history.

It will happen fast and hard. We’ve never had this much extra money injected into the economy — $27 trillion in stimulus — and such growing deficits.

That money basically ends up in the financial markets. [Thus], this bubble. We haven’t had a meaningful long-term downturn since the 1970s.

The bubble is the price of putting all that money into the economy. It distorts it, and it particularly distorts the market.

What should financial advisors be telling their clients, then?

Get out of the market. All you can do is get out of the way, give up your gains for now — whatever you’re making, 10%, 12%, 5%, 7% — and let this thing work itself out.

Then get back in when the market goes down to fair value, which would be 2009 lows: down 86%-87% on the S&P 500 and 92%-93% on Nasdaq.

If you get out of the stock market, what’s best to invest in?

The safest thing to be in is cash and T-bills. There’s nowhere to hide but in the best high-quality U.S. Treasury bonds.

This downturn and the deepest recession to [follow] are about making money. You make money by going into the safest long-term investments on earth: 10- and 30-year U.S. Treasury bonds, the [global] king of bonds.

Why buy those?

When this bubble bursts, there’s going to be deflation, and all financial assets will go to nothing. U.S. Treasury bonds are a deflationary play after a bubble. 

You need to hold them only during the crisis, probably about two, maybe, three years. They’ll go up in value.

When they skyrocket and stocks are down 80% or 90%, gold is down 50% or 60%, corporate bonds are down 40%, junk bonds are down 70% or 80%, real estate is down 50% or 60% and you know you’re near the bottom, that’s when you sell the bonds and start looking to get back into good long-term stocks and real estate.

What would you personally buy when you think the downturn has bottomed?

Probably bitcoin, the leader in crypto. I’d buy Nvidia and all [other] leaders of what’s new.

Would you buy Nvidia now? 

Don’t be like everybody else and think you can’t go wrong buying Nasdaq 100 top tech stocks. They’re the most overvalued in history.

The leaders in a bubble crash the most. So you don’t buy them now. Nvidia is going to go down 96% or 98%.

But isn’t artificial intelligence the hottest thing to invest in now?

AI is the screaming new baby. It’s the future. Crypto is the future. Crypto is the digitization of all financial assets.

Over the next couple of decades, bitcoin will become the digital standard. That’s when the global economy is mostly intangible goods, not tangible.

But what about gold, the standard? It’s considered the safe haven.

Gold doesn’t correlate with the new economy. In fact, it doesn’t correlate at all. It grows only 1% a year. Gold isn’t a digital safe haven like bitcoin could be.

So you’re also saying that the crash you forecast will kick off a U.S. recession?

Yes. You’ll see a lot of debts go bad. That will make the recession worse. It might be long lasting or else sharper and quicker. 

You need to clear the decks with a recession. You can’t have a healthy boom without a healthy bust before that.

The government went crazy and printed $27 trillion in stimulus money, and then they keep pumping money into the economy. That shows that the economy is very weak underneath. Or why would it require all that stimulus to keep going?  

The government has been holding off this necessary recession for 14 years [by injecting stimulus money].

There are consequences to printing money out of thin air and running huge deficits. 

The real consequence is the largest, longest everything-bubble in modern history. There’s only one thing that can happen: It has to burst.

When the dam finally bursts, we’re going to have the biggest [collapse] of a bubble.

Of course, if [the economy] goes down again, they’ll just print way more money. But there’s a diminishing return in doing that. It will have less impact after you’ve stretched the economy so much more.

What are your thoughts about President Biden and former President Trump and the 2024 election?

I think God saved Biden [given his apparent cognitive and physical decline] from getting crucified. 

Biden is screwed any way you look at it. He should say, “I’ll be the nice guy and get out of the way” — and then run and hide somewhere. If not, he’s going to regret it.

I like him. I don’t like Trump. He’s the biggest a—— I’ve ever seen. He’s a shrewd a——, smart enough to know better.

Whoever is elected [other than Biden] will walk into a crisis already happening; and so [they] won’t be blamed for it. Then we’ll get out of the crisis, and the party in charge will be a beneficiary of the turnaround, particularly the non-incumbent party.

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