However, Harry Dent, founder of HS Dent Investment Management, believes that this trend may not continue in the near future. Harry Dent predicts that gold could lose value in the $900 to $1,000 range over the next 18 months.
HS Dent’s founder’s speculative bubble theory and its potential impact on the economy.
On Tuesday, HS Dent founder and financial author Harry Dent spoke on the popular U.S. program of Michelle Makori, the senior anchor and editor-in-chief of Kitco News. Dent expressed his belief that “the biggest crash in our lifetime” is approaching and that gold will be one of the hardest hit commodities this year. This outlook differs from that of many “gold bugs” who believe that 2023 will be a positive year for the yellow metal.
This week, economist Peter Schiff said the rise in gold’s value is due to its perception as “a hedge against inflation and a weaker dollar“. Historically, gold has been considered a reliable store of value and a hedge against inflation and economic uncertainty. Similarly, Jim Cramer, host of CNBC’s Mad Money, has pointed out that those who truly want to protect themselves against “Inflation or economic chaos“should”stick to gold“.
Harry Dent strongly disagrees with this outlook and predicts that gold will lose a lot of value over the next 18 months. “Gold is not a safe haven“, said Dent in his interview with Makori. “I predict that gold is going to go down between $900 and $1,000. That will be a lot less than other commodities…that’s still a 40-45% drop from here,” he added. Dent has already identified several financial bubbles that have been manufactured over the years and called the current situation “a bubble of everything“.
While Harry Dent thinks 2023 could be tough, he predicts mid-2024 will be even worse. “I have a feeling that the bottom of stocks will probably be reached in July 2024 or so“, Harry Dent said in the interview, noting that the tech-heavy Nasdaq Index (IXIC) could hit 10,088 again. “So, we’re just at the beginning. To know that this crash is continuing and will be much deeper, we have to break the last floor (…) which is 10,088.“The financial author added:
The stock boom from 2009 to the end of 2021 was 120% artificial. It was just [the U.S. central bank] boosting more and more to keep the stock market going up… That’s taking a toxic financial drug, which, when it eventually crashes and fails, leaves you with a legacy.
Harry Dent predicts that bitcoin will be the hardest hit asset in the next economic crash, but he remains optimistic in the long run.
Harry Dent assumes we are entering the next wave of decline after a period of sideways movement. “This bubble has finally burst, it has begun to burst“, Dent told the Kitco anchor. “Now, a bubble of this magnitude, like the one in 1929 or 1972, which was not a bubble but was a long-term bubble…“. “It takes two and a half to three years for a complete crash to occur. All we have seen so far, and we have seen it, is the first crash“, Dent added. He believes it will be hit the hardest of all assets and stocks.
HS executive Dent expects bitcoin to crash to the $3,250 range, hitting the same low as when Covid-19 crashed in March 2020. “I think it goes down to $3,250, then starts a longer-term boom“, opined Harry Dent. The investor sees crypto-currencies as the next big thing and believes they have the potential to lead to the digitization of all aspects of finance and money. “There are $600 trillion“in financial assets,” detailed Harry Dent, “and to digitize that and expand trade to make it more efficient is a “huge thing.“
The real purpose of crypto-currencies, according to Harry Dent, is to restructure the entire financial asset market, which is the largest financial number in the world. The world’s GDP is about $100 trillion, Dent explained, while financial assets “is the largest multiplier“, around $600 trillion. “This is why I’m optimistic about bitcoin and crypto-currencies“, said Harry Dent.