(Kitco News) – Gold, which is on sale for 2023 and is currently at $1,930 per ounce, will reverse the trend and have a dramatic decline as the “biggest crash of our lifetime” enters its second wave, according to by Harry Dent , Founder of HS Dent.
Dent called for gold to reach $900 an ounce by mid-2024.
“Gold is not a safe haven,” he continued. “I predict gold will go down to $900 to $1,000. That’s lower than other commodities… that’s another 40 to 45 percent drop from here.”
Dent’s track record includes correctly predicting the Japanese asset bubble, the DotCom bubble, and the election of Donald Trump as President in 2016.
Dent said an “everything bubble” was created by the Federal Reserve’s loose monetary policy, which caused a boom in most asset classes, especially stocks.
“The boom from 2009 to late 2021 in stocks is 120 percent artificial,” he said. “That’s all [The Fed] encourages more and more to keep the stock market going up… That is taking a toxic financial medicine, that when it finally falls and fails, you have a hangup.”
He predicted that a “big crash” will occur, in the midst of a bearish market, once the NASDAQ reaches 2022 below 10,088.
“I feel like the bottom at this point for stocks is probably going to be … July or so in 2024,” Dent said. “So, we’re still in the early stages. To know that this crash is continuing and going deeper, we need to break the last low … which is 10,088.”
“The next wave” downwards will occur when this critical level is reached, he added. From its high, Dent expects the NASDAQ to fall 92 percent and the S&P 500 to fall 86 percent.
Gold will crash, along with other assets, to $900 an ounce, Dent said, but will eventually reach $4,000 after markets recover and the next economic upturn occurs.
Dent spoke with Michelle Makori, Lead Anchor and Editor-in-Chief of Kitco News.
The Fed Can’t Fix It
The Fed, which has raised its interest rates by 425 basis points by 2022 in an effort to cool rising prices, won’t prevent a market crash, Dent predicted.
“If [Jerome Powell] turns and spins it, it seems really funny that he would tighten a little bit, and then have to turn around and go back to easing,” he said. “That would prove how weak the economy is and make the Fed look careless. .”
He added that the governor will lose credibility if it is pivoted to a loose monetary policy.
“By the time the Fed realizes they’ve overtightened after too much stimulus, and want to stimulate again, they won’t have much credibility,” he said. “The government [printed money] that it doesn’t work now and it’s backfiring with central banks.”
Although he suggested that a Fed tightening pause would be “wise,” he admitted that it would not prevent the inevitable crash in equities.
“This economy just keeps increasing the stimulus,” he said. “You don’t have to tighten this bubble. All you have to do is stop feeding this bubble. So, even if they stop, we won’t go back to normal. The stock market will still go on. the weak side.”
The next economic superpower
Dent, whose economic analysis revolves around demographic trends, predicts that India will emerge as the world’s next economic superpower due to its growing population and large youth segment.
“India and Southeast Asia are better than China [in the long-run]”One day, in the 2050s or 2060s, India will be the world’s largest economy and the US may even be slightly larger than China.”
Dent admits that China’s aging and shrinking population, along with overinvestment in buildings, will weaken its economy for centuries.
“China is ahead of their demographics,” he said. “China will go in 2100, from 1.4 billion people to 770 million.
He added that China is “overbuilding their economy… 22 percent of their homes and offices are empty. They’re just building things to stimulate their economy. They’re not printing money. They’re printing condo.”
His prognosis for India is more positive.
“India is the next largest country that can urbanize at 1 percent every year,” he said.
Although he predicts a low gold price in 2024, Dent said that India’s development bodes well for the long-term gold price forecast. He specifically pointed to the country’s gold consumption, which is the second largest importer of gold in the world.
“If India is the next big thing, gold will flourish, because Indians will buy and use gold for security and jewelry and so on,” he said. “So, gold, for fundamental reasons, will do well and go up in the next boom.”
To find out Dent’s long-term prediction for the price of Bitcoin, as well as how to deal with the “big crash” he predicted, watch the video above.
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