Gold has seen a significant price increase in 2023 with the spot price rising from $1823 per ounce to the current $1937 per ounce. However, Harry Dent, founder of HS Dent Investment Management, believes this trend may not continue in the near future. Dent predicts that gold may lose value to the $900 to $1,000 range over the next 18 months.
HS Dent founder’s “bubble everything” theory and its possible impact on the economy
On Tuesday, HS Dent founder and financial author Harry Dentspokewith Kitco News lead anchor and editor-in-chief Michelle Makori. Dent expressed his belief that the “biggest crash in our lifetime” is approaching and that gold will be one of the hardest hit commodities that year. This view differs from that of many “gold bugs” who believe that 2023 will be a positive year for the yellow metal.
This week, economist and gold advocate Peter Schiff said the rise in gold’s value is due to its perceived “hedge against inflation and a weak dollar.” Historically, gold has been viewed as a reliable store of value and a hedge against inflation and economic uncertainty. Similarly, Jim Cramer, host of CNBC’s “Mad Money” program, emphasized that those who really want to protect themselves against “inflation and economic turmoil” should “stick with gold.”
Dent strongly disagrees with these views and predicts that gold will drop significantly in value over the next 18 months. Gold is not a safe haven,” Dent said in an interview with Makori. I expect gold to drop to $900 to $1,000. It will be much less than other commodities … but it will still fall 40 to 45% from here,” he added. Dent has previously pointed to several fabricated financial bubbles over the years, calling the current situation “every bubble.”
Dent thinks 2023 may be tough, but he expects mid-2024 to be even worse.” “I think the ultimate low at this point in stocks … is going to be around July 2024,” Dent said in an interview, noting that the Nasdaq Index (IXIC), which has a high percentage of high-tech stocks, could reach 10,088 again. ‘In other words, we’re still in the early stages. We need to break the last low to know that this crash will continue and go deeper … and that’s 10,088.” The financial author goes on to say
The stock boom from 2009 to late 2021 was 120% artificial. It was just (the U.S. central bank) stimulating the stock market more and more to keep it going up … It was taking a toxic financial drug, and when it finally went down and failed, you were going to get the hang of it.
Dent predicts that bitcoin will be the asset hardest hit by the upcoming economic crisis, but he is still bullish on the long term. Dent speculates that after a period of flatness, the next wave of declines is beginning. Dent asserted to the Kitco anchor, “This bubble has finally burst, and it’s starting to collapse.” Now, a bubble of this magnitude was not a bubble, as in 1929 or 1972, but it was a long-term (downturn). It would take two and a half to three years for a total crash to occur. All we’ve seen so far is the first crash,” Dent added.39} As for Bitcoin (BTC)Dent sees it taking the biggest hit of all assets and stocks.
HS Dent executives expect Bitcoin to crash to the $3,250 level and reach the same lows as during the Covid 19 crash in March 2020.” I think it will go down to $3,250 and then a prolonged boom will begin,” Dent opined. The investor sees cryptocurrencies as the next big thing, potentially leading to the digitization of all aspects of finance and money. Dent detailed that there is “$600 trillion” in financial assets and that digitizing them and expanding transactions to make them more efficient would be “huge.”
According to Dent, the real goal of cryptocurrencies is to reshape the entire financial asset market, the largest financial number in the world. The world’s GDP is roughly $100 trillion, while financial assets are “the biggest multiplier, roughly $600 trillion,” Dent explained.” That is why I am bullish on Bitcoin and crypto,” Dent said.
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