"WORST Crash EVER..." - Harry Dent

[00:00:00]When there's a bubble crash, and I did every stock bubble in history back to the late 1700s when they started, the first crash is the fastest and hardest.

[00:00:08]Stocks will go down 40 to 50% in two to four months. In other words, it's they're going to go down 80 or 90 cuz bubbles don't go down 50% like normal bear markets, long you know, like the 72 to 82 crash, okay? That was more like 50% in stocks, okay? Bubbles are more like 29 to 32, 80 90%, but the first whack will be the hardest and fastest.

[00:00:32]So, people who wait to see, "Well, uh the stocks are still going up. I don't want to miss anything." They will get hit the hardest right off the bat. So, that's one of the tricks you got to know if a bubble like's going to burst is famous old investor back from the Roaring '20s, he said, "I always got out a bit early." You know, that's what it is.

[00:00:51]Cuz when bubbles burst, they go up twice as fast on the way up and they go down twice as fast. And even the crash will happen on a normal bubble in two to three years, and the bubble up will happen in five to eight years. So, crashes [music] are faster and harder. Every time there's something new, last time in the last bubble burst or the last of 2008 crash, it was the subprime mortgages.

[00:01:14]They were giving mortgages to people who had minimal credit and zero to 5% down in many cases. I mean, the Roaring '20s did not see a real estate crash nearly as bad as stocks because credit was hard to get. The Roaring '20s, even people with good credit, 50% down in five-year duration. So, that was the last thing.

[00:01:34]Subprime mortgages was the non-regulated new thing to come up and bubble up and create a lot of debt quickly, and then of course, those were the first things that >> [music] >> that defaulted and caused the problem.

[00:01:45]That's what private credit is now. It's going up to something like three to four trillion in a short period of time.

[00:01:50]That's enough. That doesn't compare to the total trillion of debt in the country, which is much higher, but that's the trigger. I mean, I think you put the nail on the head there. This is the stuff that was unregulated and people can get a little more risky and that's what everybody the people that industry do. And it's the stuff to crack first and get the avalanche going. And again, I'm telling you, nobody's going to believe this till they see it. My thing is, we got an avalanche that's been waiting to happen for many, many years and it just takes a private credit bubble burst to start the avalanche. And if you've ever seen anybody could stop an avalanche, I want to hear about it.

[00:02:29]Never. Once an avalanche starts, boom.

[00:02:32]This is going to be an avalanche cuz it's an everything bubble and it's a longer and bigger bubble. I can't even compare this to the roaring 20s bubble or even the late 90s bubble we had before. That was not stimulus driven or government driven. The government with massive stimulus to fight the baby bust downturn from 2008 to '22, which I predicted that decade before it happened. To fight that downturn and to keep the economy going and roaring, they had to create a bigger bubble. And now that bubble's got to burst and it will be the biggest, fastest bubble in history. And that's why the government's going to have a hard time stopping something that they created instead of the just the natural markets. Again, like the 90s bubble or the roaring 20s bubble, those were not artificial bubbles. They were just things were good and people got excited and overvalued assets. That's a normal bubble.

[00:03:22]Housing's going up unbelievably.

[00:03:24]Housing's never gone up this much in such a short period. This housing bubble makes the first one look not that big and that was way bigger than any time in history. So, it just takes something to start it and then as things start failing, that failing just gets everybody more sensitive. First of all, it means banks clam up so people can't get new debt to buy houses stuff so easy or the rates go up cuz the risk is higher. So, it just gets started and at some point where people will just lose faith in the economy and that's when the government says, "We're going to do a new 10, 20 million stimulus program."

[00:03:56]And people say, "Been there, done that."

[00:03:58]Cuz what That's all we've done since 2008. Basically, it falls apart, and then they just stimulate bigger the next time. They keep stimulating, bubble burst, create a bigger bubble burst. At some point, people go, "Wait a minute.

[00:04:10]We've seen this picture before." And then the government loses credibility, and they will have to come in and try to save this. I'm just saying, this bubble is so big, and they've been so instrumental in causing this one. This was not investors that just went nuts.

[00:04:24]The government's debt is crazy all around the world, too. So, the government doesn't have credibility, and therefore their efforts to go against this and print money and throw money in the economy and bail out companies and stuff will be too little, too late.

[00:04:38]People look at the government debt, okay? The private debt is three times the government debt in our country and in most countries. And then, like you say, then there's all the unfunded liabilities that they don't even put on the books. There's no way you can have people living longer when they started Social Security and Medicare and all these things is in the '60s and stuff, people didn't live that long after they hit 65 or 70. Now, the typical, even men will live the longer you live, the longer you live. So, you can't even look at average statistics. People like me, I'm in my early '70s, okay? Well, my chart says I'm going to live to be 86.

[00:05:16]That's way longer than the typical male they say is 77 and female at 80. So, people are living longer and longer, and they're promising more benefits, and they're not raising the retirement age.

[00:05:26]So, this whole system is out of whack.

[00:05:29]And again, it's another reason they don't show the unfunded entitlements, cuz that would be even worse. I'm glad you brought that up. This is just a debt bonanza beyond an every debt bubble in history has caused a financial asset bubble, and every financial asset bubble has burst. Period. The fastest was the Mississippi Bubble in France. It was up for 2 years, massively, like 10 times a year, and then crashed 99% in 1 year, half the time the crash of the 2-year bubble, same ratio. Stream bubble, only rich people in it, so it didn't kill the everyday person like today, but that's what happens. And bubbles are predictable. People ask, "Well, well, when this is going to crash?" All these economists that didn't call it will say, "Oh, that was a black swan." Baloney.

[00:06:15]Bubbles occur when the most important new technologies, from automobiles to the internet and now AI and crypto and Bitcoin today, okay? They are way these bubbles finance massive investment in these new technologies. And and these technologies will do the same thing.

[00:06:32]Nine out of 10 companies will fail, but the ones that succeed will get bigger market share and then bring these new things mainstream. Automobiles were only affordable by the rich by 1914, and by 1929, everyday people and citizens had one. And then by 1950s, every household had two. That's how technology works.

[00:06:52]So, bubbles aren't bad, but as an investor, when you see a bubble, you better know how it ends. It only ends one way. And bigger the bubble, bigger the burst. And I cannot find a bubble this big. The first hit will be the hardest to stocks cuz stocks are the most liquid and they're owned by the top They're 80-some percent owned by the top 20% and 40% owned by just the top 1%.

[00:07:15]Those people will respond faster. So, the first time you know that this bubble is starting to burst, stocks will suddenly go down 40 to 50%, maybe even more this time, in just two to four months, which means if February 2nd, that's a possible top for the S&P 500 here recently, okay? If this is the top, then we could see this first crash by April, May, June. And it could be, you know, the biggest, sharpest crash we've seen all time. That's going to wake up people right away. That's the first thing you see. And then a lot of people pick there, and then the stock market will immediately retrace about half of that back in a short period of time, and all the people that sold there will say, "Oh, we're idiots." And then they'll buy back in. And then it'll go back down, and it'll have the next wave. So, rule number one, any major bullish move or bearish move, and now we're going from long-term bull to bearish, every stock wave will go three waves. One wave, a correction against that, a third wave, correction against that, a fifth wave end of the movement up or down. So, we'll see a three-wave downturn. First wave crash the hardest and fastest, probably into the summer if it's starting now. Then it'll bounce, say maybe into the summer early fall, and then you'll see another wave come out, and it'll be at least that big, but probably not as fast, and then that'll bounce down the line, and somewhere in 2028 you'll see the last wave down, and where there you look for extreme sell-off. A bubble, you're looking for it to be 80 to 90% down before you buy it. And this all the way down people will be saying, "Oh, look at all the times that you'd have bought a 50% crash." Yes, that wasn't a bubble burst.

[00:08:50]The '70s crash was not a bubble burst.

[00:08:52]Strong boom, high value, not bubble. So, you got to wait until stocks are really down, and that's when you buy long-term again. If I had to say when I think that opportunity will come, if we're peaking now, it'd be late 2028, early to mid 2029, where you could go back and buy for the millennial boom that will now not be hindered by all this baby boom debt and bubbles and stuff, and you'll see a millennial boom that won't be as bubbly from about 2028 or nine into 2037 before that bubble kind of plateaus out for a long time. And the millennials are unique generation. They're more people than the baby boom, but the height of their boom will not be as big, and it will hit its maximum impact on the economy earlier, and then plateau for a long time. So, it goes up into 2037, plateaus into 2054 demographically before it goes down longer term. So, that's a whole different thing. But, again, once this bubble crashes, there's going to be a open runway, much like the Roaring Twenties or the '90s, for stocks to come back strongly and globally [music] into at least 2037. That's when the millennial boom will have its biggest impact. And after that, America will never have one of these >> [music] >> big generational booms again. We just kind of like plateau out. When, you know, Japan had their big boom and then crashed in the '90s and never, until recently they've had a bubble, but they didn't go anywhere for decades because the bubble was over and their demographic expansion was over. Japan's only shrunk since then in population and will only shrink more in the future.

[00:10:27]That's going to happen to the whole developed world now. I have a quote in all my books that says, "In particularly real estate, will never be the same again. There will not be a bigger generation coming behind the millennials who buy their big house, you know, a decade or so from now, to buy that house from them in higher numbers. There will be lower numbers competing for that house, so they will not see the appreciation and the appreciation will not hold up as much. One of the big trends, baby boom caused all this greatest boom in history, baby boomers from 2017 to 2041 are going to do the worst thing you can do for the economy, die. One thing people go from spending the most in their life age, late '50s, '40s, early '50s, it may be 80,000 or 100,000, okay? And then plateau and then eventually go down to 50 or 60 in retirement. It's another thing to die and go to zero from wherever you're at.

[00:11:18]Die and disappear. Baby boomers, the biggest generation, is going to do nothing but die, started 2017, be over by 2041, and I will be one of them and I'll be dead a few years before that.