10/20/09 Stockholm, Sweden – In an interview with Moneynews, Harry Dent, author of The Roaring 2000s Investor and The Great Depression Ahead, said that “deflation in turn will trigger crashes in stocks, bonds and real estate.” According to Dent, the deflation will be caused by “way too much debt in our system,” and he advises investors to stay in cash.
His debt calculation includes corporate at $11 trillion, government at $14 trillion, and the financial sector at $17 trillion. The solution he suggests is that “we have to restructure this debt.”
He goes to say that he expects the deficit to get up to $3 trillion in the next two years. It’s an urgent prediction that’s roughly in line with our take on the markets. It’s also a useful insight to take into consideration when you’re planning your personal investing strategy. Dent is part of a growing chorus of voices warning about impending financial danger.
The full story and video of the interview is available in Moneynews coverage of Dent’s perspective on the coming big crash.
Rocky Vega
Rocky Vega is publisher of The Daily Reckoning. Previously, he was founding publisher of UrbanTurf and RFID Update, which he operated from Brazil, Chile, and Puerto Rico, and associate publisher of FierceFinance. He specialized in direct marketing at MBI, facilitated MIT Sloan School of Management programs, and has been featured on CBS. Vega graduated with honors from Harvard University, where he was on the board of Let’s Go Publications and directed business programs involving McKinsey, Goldman Sachs, and Harvard Business School faculty. He is also enrolled at the Stockholm School of Economics.
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I’m still waiting for Dow 20,000 and Dow 40,000 — two of Mr. Dent’s prior calls.
Interesting article. While i think that the markets are close to topping out, I think going forward a better investment than shorting the market is to stay long gold and gold mining stocks, which should continue to benefit from the Fed’s efforts to prevent deflation. I recently came across a bunch of good articles at http://www.goldalert.com/gold_news.php that discuss government economic policies and investment implications and the relationship between the dollar, the gold price, and gold mining stocks. There are many serious consequences of the money printing, and I do not feel that a society can print its way to prosperity.
Remember that everything is manipulated these days, including gold prices. The government has at its disposal amounts of money that are unprecedented resulting from 2008 speedy approvals. This money is being used to manipulate markets at their will