A major financial crash is likely to occur by mid-June, warned Harry Dent, an economist and author of several bestselling books, in an interview on Friday. Dent, who is used to making controversial predictions, says the current market bubble will burst and lead to a financial meltdown.
According to Dent, the current bubble is the result of the US Federal Reserve’s accommodative monetary policy, which artificially inflated the stock market. Dent expects the S&P 500 to crash 86% “in this accident” and the Nasdaq to fall 92%.
The crypto market will go into freefall alongside stocks, the economist warned, predicting that Bitcoin will fall 95-96% from its peak in November 2021.
“Bitcoin will go from $69,000 to around three to four thousand,” he said, adding that “that’s exactly what Amazon and the dot-coms have done.”
Dent points to what he sees as overlapping crises as the reason for his pessimism. The pandemic has upended the global economy in many ways, leading to job losses and reduced consumer spending. In addition, unprecedented inflation in wealthier countries and supply chain disruptions have raised serious concerns among investors and economists, forcing them to realize that “It’s not a big fix – it’s a major crash, one you haven’t seen…in your lifetime, and one that even millennials won’t see a bigger crash than this” , Tooth added.
According to the economist, efforts despite central banks and their “declared war on recession” “we keep falling back into recession” because the economy below is “really weak and really needs to get rid of a lot of really bad debt and zombie companies and central banks won’t let the economy do its job.”
Dent warned of a third wave of crisis to come, stressing that in his view “it will go up” on the Federal Reserve “before they can reverse the crunch.”
“We have not cleaned up the massive debts and overvaluations of the biggest financial asset bubble in all. We have never had a financial asset bubble in such an area. This bubble was not authorized to break out and get rid of his excesses, which we need to do. And I think we’re in that process now,” Tooth concluded.
The economist expects “a crash rather from 1929 to 1932” referring to the Great Depression, emphasizing that it was his “Best forecast at this time.”
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