Posted on 05/05/2015 4:04:54 PM PDT by Citizen Zed
Best-selling author Harry Dent says the stock bubble we have today is the biggest in history. Dent contends, “Now we’re in a third bubble, and each of these bubbles peaks at higher highs, and then they each crash to lower lows.”
“We’ve been looking for the Dow to peak right around here between 17,000 and 19,000. So, we are right in the middle. We are looking for an even bigger correction likely in late 2016 to 2017. This whole thing has been in an artificial bubble”
“We’d be in a depression right now if it were not for $11 trillion or $12 trillion free money printed out of nowhere. So, this is an artificial environment, and this has never happened before. The charts look to me that we are at a top, or after a 20% correction, a top later this year.”
Dent goes on to say, “I think the crash is finally going to start this year, but it will be at its worst in late 2016 early 2017. I expect new lows on the Dow, and I think it will go to 5,500 or 6,000 in this next crash.”
Dent thinks deflation is what’s coming, not hyper-inflation. Dent predicts, “When debt is restructured and financial asset bubbles burst, you are destroying. I’m estimating over $100 trillion in wealth will disappear.”
“When you create money by magic and QE and bank loans, it can disappear like magic. Now you see it, now you don’t. When that money disappears, there’s fewer dollars chasing the same goods. That’s deflation, and gold is not going to like that.”
Dent goes on to explain, “People don’t realize that there is not near as much government debt, or Fed created debt, than private system money. Banks create most of the money. They lend against asset that aren’t even theirs, your deposits, on a 10 to 1 basis.”
“Banks only have to have 10% reserves. They can take a little bit of money and create a lot of money. At the peak of the debt bubble, we had $10 trillion in federal government debt and $42 trillion in private debt. ”
“It’s not so much the Treasury bonds held outside the United States, its dollar denominated loans. Most emerging countries buy in dollars. They buy and sell commodities in dollars. The gold bugs get everything right except they don’t get how fast this money can disappear.”
“There is no good house in the neighborhood here. Way more dollars will be destroyed here. Way more than yen and euros. So, the dollar will go up in value because there will be fewer of them. Fewer dollars chasing the same goods is deflation and paradoxically makes the dollar more valuable”
“I’d rather have cash, and I’d rather have U.S. dollars.”
On the U.S. dollar, Dent says, “It’s already had an incredible run, and we have been predicting in our newsletter that the dollar would step back after hitting about 100 on the dollar index. We think it will step back to 94 and go sideways for a while.”
“My target is 120 and this deflation, like in 2008, it was bad for gold and was good for the dollar. I think gold is going to bounce for several months now, but only a little bit, a couple of hundred points at most. Then, it is going to go crashing down again.”
“So, I say gold will go up some and the dollar will go down some for a while. The next turn is going to be a bigger crash and gold down and dollar up.”
“Our target for gold is $700 to $740 per ounce by early 2017. Ultimately, it could see $400 to $250 several years down the road.”
>> then they each crash to lower lows
Ah, so over the long haul, the market ratchets itself DOWN?
HAHAHAHAHAHAHA! Arrr HA HA HA HAHAHA!
sorry, I lost control. That flies in the face of, like, real facts.
Money in stock bubbles never “disappears” — it was never really there in the first place.
The value of stock is not realized until it is sold.
And the money paid for overpriced stock before the correction — is in the sellers bank account.
Maybe it wasn’t real wealth in the first place, just made up money
How’s his record?
But that $100 trillion is backed by the Full Faith and Credit of the United States Marine Corps.
Expect further military action against creditor nations long before any such "disappearance" takes place.
So, if there are a million shares of stock, and they all sold for a dollar, there is a million dollars worth of stock.
But if one guy sells his 10 shares for $100 each, all of the stock is suddenly valued at a total of $100 million. Until the next guy sells his hundred shares for $1 each. And suddenly $99 million “disappears” when, in fact, there was never more than $1,000,990 invested.
I don’t know about his record, but his timing is close to this guy’s:
https://www.youtube.com/watch?v=qD_w-ygl6Ow
the fracking boom saved Obama’s butt, but it’s all about to come crashing down now.
Can anyone explain what “deflation” is REALLY..?
I mean in really simple terms.
Yes, it makes a person sound super smart to throw that around all day BUT WHAT DOES IT MEAN..?
Can you help me out?
“Inflation is where more and more dollars chase basically the same fixed stock of physical goods, with the effect that general prices rise. Each dollar Joe6Pack has buys him LESS, with the effect that he’s getting POORER, even if he ears a tiny bit more”
“DEFLATION, by contrast, is where............with the effect that..........Each dollar Joe6Pack has buys him......with the effect that...........even if..........”
Kay if you’re super sophisticated, can you fill in my blanks up there?
I’ll be super impressed.
Essentially that’s it, yes. But it’s always intimated that it’s calamitous:
You and I walk into a beer shack, anticipating $5 beers.
“$2 each”, says the bartender.
Everyone starts crying —but I smile.
Am I crazy, or are the others?
I don’t understand how a general fall in prices levels is BAD.
How is it bad? Cuz I have always heard “deflation” murmured in susurrent tones by gold buys and folks watching for black helicopters.
What gives?
Your answer is good, but...I can’t consider it complete, somehow.
Deflation affects wages too. If good prices go down, workers salaries go down too. Some may be let go b/c they can’t make a living selling items for lower prices and smaller margins.
I’m sure you left out deflation’s effect on stock valuations for the reason that they remain uneffected, right?
If he’s right, I will be bargain hunting like mad again, as I was in Feb 2009
Prices fall to ridiculous levels for most things but still few can afford them even at such prices. Money buys much more, when you can find it. Most can’t. That’s deflation.
I just added another aspect. Sorry if I offended you for not writing what you desired to see.
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