Harry Dent, an American financial communication writer and founder of HS Dent Investment Management Company, warned that the huge foam of stocks, real estate, cryptocurrency and other assets was about to burst, and the consequences would be catastrophic.
He said in an interview, "I believe 2024 will be the largest 'plane crash year' we have ever seen in our lives."
The writer and financial historian accused the excessive government expenditure in recent years of causing "all foam" in asset prices, which will certainly burst in the future. The S&P 500 index experienced a significant decline last year, but has rebounded by nearly 25% this year, only slightly below historical highs. In recent months, housing prices have also soared to record highs, and the value of Bitcoin and other cryptocurrencies has more than doubled this year.
"This collapse will not be just a correction," he said.
Dent said that the S&P 500 index may plummet by more than 80%, reaching its lowest level since the financial crisis, average US housing prices may fall by half, and cryptocurrencies may plummet by more than 90%.
He said that such a sharp drop may make authorities think twice before considering increasing budget deficits and artificially pushing up asset prices in the future. By May next year, there will be clearer signs of impending doom.
His 2009 book "The Great Depression of the Future" briefly appeared on the New York Times bestseller list.
He said that investors are very lucky that this year's stock market rebound has basically eliminated last year's losses. He said that if they exit the market within the next six months to a year, and his prediction is proven to be correct, they will avoid huge losses and be able to buy back stocks at extremely low prices, earning generous returns.
"When the asset foam bursts and the price of everything, especially the housing price, returns to reality, imagine that you can not only buy the house you want at half price... You can buy twice the good house here with the same mortgage," he said.
In recent days, market sentiment has improved. Previously, the Federal Reserve stated last week that it may not raise interest rates again to curb inflation and expected three rate cuts in 2024. The easing of inflation, falling interest rates, and the prospect of the US economy emerging from recession have prompted investors to push the Dow Jones Industrial Average to a new high this week.
However, Dent believes that the so-called soft landing is a daydream and expects severe economic pain in the coming year as the full impact of the Federal Reserve's interest rate hike becomes apparent.