USA: Harry Dent, an economist and the author of several best-selling books, predicted a significant financial crash for mid-June on the David Lin report last week. Dent, who is known for his contentious predictions, thinks that the current market bubble will burst and cause a financial collapse.
According to Dent, the stock market has been artificially inflated as a result of the US Federal Reserve's loose monetary policy, which has caused the bubble. He projects that "in this crash" the S&P 500 will fall by 86% and the Nasdaq by 92%.
The economist cautioned that the cryptocurrency market would crash alongside stocks and estimated that Bitcoin would fall by 95–96% from its November 2021 high.
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According to him, "Bitcoin will fall from $69,000 to about three to four thousand," and he added, "It's exactly what Amazon and the dot-coms did."
Dent attributes his pessimism to what he perceives as overlapping crises. The pandemic severely damaged the world economy, resulting in job losses and lower consumer spending.
Investors and economists are now aware that "this is not a big correction — it is a major crash, one that you have not seen... in your lifetime, and the one that even the millennials will not see a bigger crash than this" as a result of unprecedented inflation in the majority of wealthy nations and supply-chain disruptions.
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The economist claims that in spite of central banks' best efforts and their "declared war on recession," "we keep falling back into the recession" because the underlying economy is "really weak and really needs to get rid of a lot of really bad debt and zombie companies and the central banks won't let the economy do its thing."
A third wave of the crisis is on the horizon, and Dent warned against it, stating that in his opinion, "it's going to creep up" on the Federal Reserve "before they can reverse the tightening."
"We still need to address the enormous debts and overvaluations caused by the biggest financial asset bubble in history. A financial asset bubble like this has never occurred before. We need to allow this bubble to pop in order to get rid of its excesses. And I believe that process is now underway," said Dent.
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The economist says he anticipates "a crash more like 1929 to 1932"—a reference to the Great Depression—and emphasises that this is his "best forecast at this time."