Harry Dent says that “in our lifetime” there will be the biggest economic crash.
In an interview on Friday, economist and best-selling author Harry Dent said that a big financial crash is likely to happen around the middle of June. Dent, who has a history of making controversial statements, thinks that the current market bubble will burst and cause a financial meltdown.
According to Dent, the US Federal Reserve’s loose monetary policy has artificially inflated the stock market and is to blame for the boom. He thinks that “this crash” will cause the S&P 500 to fall by 86% and the Nasdaq to fall by 92%.
The stock market and the crypto market will both go into a tailspin, the expert said. He predicted that Bitcoin will fall 95–96% from its high point in November 2021.
“Bitcoin will drop from $69,000 to between $3,000 and $4,000,” he said. “It’s exactly what Amazon and the dot-coms did.”
Dent says that he is pessimistic because he sees overlapping problems. The pandemic shook up the world economy in many ways, causing people to lose their jobs and spend less. Also, investors and economists are worried about inflation and supply-chain problems that have never happened before in most wealthy countries. This has led them to realise that “this is not a big correction—it is a major crash, the likes of which you have not seen in your lifetime, and even the millennials will not see a bigger crash than this,” said Dent.
The economist says that even though the central banks have “declared war on recession,” “we keep falling back into it” because the economy is “really weak and really needs to get rid of a lot of really bad debt and zombie companies,” but the central banks won’t let the economy do its thing.
Dent warned that there would be a third wave of the crisis, saying that “it’s going to creep up” on the Federal Reserve “before they can reverse the tightening.”
“We haven’t cleaned up the huge bills and overvalued assets from the biggest bubble in financial assets. We have never seen a boom in financial assets like this. We haven’t let this boom burst and gotten rid of its waste, which is what we need to do. And I think that’s where we are right now,” Dent said in the end.
The economist sees “a crash more like 1929 to 1932,” referring to the Great Depression. He stressed that this is his “best prediction at this time.”