Oil Price Plunge Trigger for Next Global Crisis-Harry Dent

4By Greg Hunter’s USAWatchdog.com  (Early Sunday Release)

Economist Harry Dent says falling oil prices will be a trigger for another economic calamity.  Dent explains, “Normally, oil prices falling in a good economy like the 80’s and 90’s, where we have falling inflation and booming productivity and good demographic trends, this would be a good thing.  It is a good thing for consumers and businesses, but it is a bad thing for financial markets and our whole debt structure.  We have the greatest debt bubble in history.  It’s the greatest asset bubble in history, including stocks, commodities, real estate and everything.   The last time this bubble burst was in 2008 because of the subprime crises.  A small tranche of loans went bad, and it triggered a whole debt crisis . . . that’s what I see.  I see a fracking bubble here.  What’s happened is because of demographic trends, which we predicted years ago, trends in developed countries are set to slow.  It will be aging baby boomers spending less money, very simple to see.  In addition to that, you get this fracking revolution with all the low cost money from the Fed stimulus and zero interest rates, and what you have now is we created two million extra barrels of oil a day just out of Texas and North Dakota.”

Dent, who has a new book out called “The Demographic Cliff,” goes on to say, “Now, the only way to counter this is if OPEC and Saudi Arabia said we’re going to cut production.  Well, Saudi Arabia said no, we’re not going to do that because we don’t like these frackers.  They are competing with us long term, and they are seeing this as an opportunity to squeeze out their competition.  The more the price of oil falls, the more of these frackers and other marginal countries like Venezuela go out of business when they can’t compete.  It’s a good long term move for the Saudis, but I think they are miscalculating that they could help trigger the next global crisis.  We have more debt than we had in 2008.  The demographics only get worse in more and more countries. . . . So, I think this is the trigger for the global crisis.  There’s $500 billion in leveraged loans with the fracking industry.  I think this thing is going to blow up.” 

Who is to blame for the shaky economy we are in?  Look no further than the government, and Dent contends, “What’s happened is the government has created a bubble with all this low short- term interest rates and all this stimulus, and their only defense is to keep this bubble going. . . . We got the greatest bubble in debt in modern history by far.  We have the greatest asset bubble across the world in real estate, commodities, stocks; everything is in a bubble.  When these bubbles burst, the whole system comes down.  They are doing everything to prevent it, but everything they do to prevent it from blowing up is making it worse.  This is a game they cannot win–mark my words, cannot win, and we are going to see a major crisis . . .  especially over the next two years.  These falling oil prices trigger these fracking firms.  They have 20% of the junk bond high-yield debt in the United States, and that’s all it takes to trigger another financial crisis, just like the subprime crisis back in 2008.  All it takes is a trigger and the whole debt thing comes down.”

On the stocks, look out below.   Dent says, “The next crash is going to take us to a new low around 5,500 on the Dow. . . . That’s going to be a 65% to 75% crash.”

On the U.S. dollar, Dent says, “I have debated all these experts, including Peter Schiff, and they are just wrong.  They are right about an economic crisis, and they are right about the unsustainability of this bubble and debt.  They are dead wrong about what happens when debt deleverages.  History proves this 100% of the time.  When a debt bubble deleverages . . . money is destroyed.  When there is less money chasing the same goods, you get deflation–not inflation.”

On gold, Dent says, “We’ve been predicting gold will go down for many years now, and the next target is $700 per ounce.  I think we will see that in the next two years at a minimum.”

Join Greg Hunter as he interviews financial guru and best-selling author Harry Dent. 

(There is much more in the video interview.)

After the Interview: 

If you would like to get a copy of Harry Dent’s new book, click here.  If you would like to receive Dent’s free newsletter, click here and scroll down and look on the right side of the page.

 

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Comments
  1. Michael

    Greg, I am being somewhat funny and some what sarcastic, but when Harry comes out the near term bottom is probably in.

    Also, please don’t forget to bring Harvey Organ back to Account for his call.
    Thanks!

    • beth

      Harry Dent came out in late 1999, right before the top in March 2000, with a book called something like DOW 40,000. He had a big seminar at the Beverly Hills Hilton as I recall. Listen to this guy at your peril! It was like a pep rally.. He’s clueless…

      • Richard

        I know he was dead wrong in 2000 and I told him he would be wrong when I met him at a seminar in 2000 he held in Palm Springs, CA., however, don’t bet against him this time. You must be able to sense that things are not right.

    • Winston Churchill

      You might be a little premature re Harvey organ.
      December still has a few weeks to run.Judging by the new COMEX “collar”
      pricing rules for gold and silver, which become effective Dec. 22nd,
      something big is brewing in the paper PM markets.
      Buckle up.

      • allen ols

        greg, BTW, HERE IS A GOOD CHEMTRAIL REPORT.

        This is a message I received, from a credible source. This message is (allegedly) from a USAF pilot, who flies Aerosol Tankers, as part of the secret Indigo Skyfold (geoengineered aerosol “chemtrail”) program.
        Please save this text, and forward the video! (The text was too long for Youtube to put in the description, so I will put the entire message in the comments section.)

        http://sgtreport.com/2014/12/the-haarp-report-secret-chemtrail-flights-pilot-speaks-out/

        December 14th, 2014 | Category: Fascism, Geoengineering/Climate, News, NWO Tyranny

        • allen ols

          ALSO;
          Robert Fitzwilson; KWNews;

          Einstein lived in an era when the nuclear weapons of war that he dreaded were present and had already been used at the end of World War 2. What none of us could have imagined are the new weapons of war that have emerged since his era. Among them are lasers, drones, miniaturized reconnaissance devices, “dirty bombs” and weaponized diseases (although catapulting deceased and diseased animals over fortified walls in ancient times was a common tactic). Computerized theft of wealth and intellectual property as well as computer viruses such as Stuxnet (first seen in the attack on the Iranian nuclear facilities are additional modern tools for warfare). Disinformation in social media sites and global government surveillance operations are pervasive as well.

          The ease and severity of the ongoing computer attacks against Sony Pictures by the North Koreans should be a warning to every government and individual that protecting against such intrusions is probably a lost cause. It was also reported that the Russians recently demonstrated jamming devices never before imagined against a U.S. destroyer in the Black Sea. The story was that all systems, including the weapons systems, were repeatedly disabled by a single aircraft which then staged mock bombing runs on the destroyer to demonstrate the point. The destroyer supposedly was equipped with the most sophisticated systems in the U.S. weapons arsenal.

          The Chinese have also been testing a plane that can fly at unheard of speeds. If the plane advances to deployment, it could deliver nuclear weapons in a fraction of the time thought possible. Anti-satellite systems are probably in place by the competing countries as well. Our national electrical grids remain dangerously exposed to the possibility of an electrical magnetic pulse attack (EMP). It was recently suggested that 100 million people could lose power if such an event occurred in the United States.

          • allen ols

            also;
            here is a great video on field dressing a BUCK, fresh after kill.
            Here is a great video HOW TO GUT A FRESH KILL DEER, IE BUCK, called field dressing. takes 7 minutes. I recommend long forearm length rubber gloves, and a jug of water to wash off residue. al ols
            http://thevictoryreport.org/how-deer-minutes/…

        • Jo Zon

          Harry is smart. I’m not smart. When the economy breaks and everyone is poor I can wipe my butt with dollars so they are useful but gold is just pretty but I want it, look how it shines. I bet other people want it too. I can trade it for stuff. I can trade dollars too but only to people that need toilet paper. I like penut budder, do you like penut budder? I bet Harry does.

          • chuck

            you smart too Jo Zon

        • foggygoggles

          Here’s another link, in which TPTB are now admitting to chem trails.

          http://www.activistpost.com/2014/12/elite-think-tank-admits-to-ongoing.html?m=1

      • Michael

        MAYBE, but given his track record, which you can find with a simple Google search suggests those who believe it may be disappointed come Jan. 1….we shall see.

    • Charles H.

      Michael,

      Karl Denninger would be great too!

    • Web Guy Perth

      Trying to figure out whether the gold price is going to shoot up before the financial system collapses is certainly tricky. It seems like the comex will trade a billion dollars in gold contracts even if they have only one ounce of inventory. They will just cash settle like they have since April 2012 and not call it a default. Even if the have no gold, with no regulators actually doing some regulating, this could go on for quite a while despite shortages in the precious metals. It is going to take the Russians and the Chinese to actively buy gold at higher prices and be public about it to cause this rigged casino to pop. So now I have the US government which is completely captured who have gone completely rogue trying to start a war without realising that the Russian technology is further advanced. The chinese have no conscience and Putin who is no angel looking like the cleanest dirty sheet.
      It reminds me of that parody song “Too Depressed to Commit Suicide”
      I have retreated to my darkened room for the day awaiting further developments.
      See song https://soundcloud.com/neville-greenwood/my-darkened-room

    • George

      Greg – Harry seems like a nice man, however his view on gold is not realistic if ‘westernized fiat money were to die’ – He avoids the brics topic, and has no idea of the efforts of Karen Hudes and her team. I would like to hear Karen’s view again both before the Holidays and After – Someone you should interview again is Bo Polny, I just learned that the CME Group have implemented a 5 min. stop when both gold and silver reach gains of $100 and $3 respectively ! Effective Dec 22nd.

      I enjoy your publication, and look forward to riding this mess out relying on your
      credible commentaries.

      Sincerely
      George

      • archivesDave

        George, Karen Hudes has gone over the cliff:
        First she declared there are massive gold deposited in Hawaii
        then when pinned down, she said they are in the Philippines.
        I emailed her asking WHERE in the Philippines.
        NO REPLY!
        Now she’s into shape shifting Uber Elites!

        • Angie

          Agree on Hudes. I did not know if she was being used, a deceiver, or just a nut. I am convinced that she is a complete nutcase and should become a Prozac spokeswoman.

    • Ed

      Harry Dent is a great contrarian indicator.
      “the Chinese and Russians are wrong” ??? Where does he get off?

    • RMG Gold

      Harvey forgot gold is a currency still in use today and MOST importantly not ALL people run to treasuries for safety. Many will buy REAL things… restate (farmland), gold, Silver oil wells and many other things that are not based on a potential promise to pay from an entity who’s is bankrupt
      As we all know Bric’s are moving away from the dollar, as this sentiment continues globally we will see the real value of the dollar sneaking out of the Fed’s secret hiding places.

    • James in NY

      It was a good eye opener for other possible scenerio’s. I think it holds some merit. In the initial collapse dollars may indeed have buying power, shortly though my expectation is the wheel barrel that went to the bakery filled with money gets stolen. The paper sits blowing in the wind, while a new sign gold & silver accepted in big letters replaces price signs at the local bakery. I can only hope that bankers world wide finally get held accountable for theft, among many other crimes against humanity. They have it coming! My justice shall not be imposed, a shame really, yet my justice tends to be barbaric and unaccepted in todays world. That’s lucky for bankers. No ear necklace I guess, bummer.

  2. smaulgld

    I agree with Harry on the demographic cliff (re stocks) and oil ( its not good for the financial markets) but not gold ($700 nope!).

    He is correct there is a fracking bubble- a fracking mess I call it. (He is wrong re demographics re oil as there is massive population growth and oil demand in the world-see China and India)

    Plenty of money was borrowed at low rates and raised on Wall Street on the assumption that shale oil would take off and solve three issues while making everyone rich:
    – The US would become energy independent;
    – it would create jobs; and
    – the US would no longer needs Saudi Arabia to create demand for the dollar because the export of shale oil would create its own demand for dollar and replace much of the Saudi Arabian demand.
    Since Saudi Arabia has only one card to play – oil, they can’t allow the U.S. to make them less relevant through shale oil competition.
    The Shale oil industry can’t make money at $57 a barrel so all the potential benefits vanish and worse as lots of shale loans won’t be repaid, shale stocks will crash.

    While the low oil prices are good for consumers in the short term-the trade off is not a good one- U.S. consumers can spend more money over the next few months but the US loses high paying jobs in the fracking industry and all that money invested in it may go up in smoke and cause a financial melt down. (agree with Harry)

    I call this shale oil implosion the black snowflake that sets off the avalanche.

    Cheap gas is not really a good trade off -consumers can spend on cheap Chinese goods for a few months while another made in the USA industry goes down in flames.
    More here:
    https://smaulgld.com/black-swan-cheap-oil/

    Re gold- Harry is wrong if he thinks the dollar will be allowed by the Fed to grow stronger by raising interest rate. That would make oil even cheaper and cause even more deflation. The Fed will is made up of members who have it stuck in their craws that deflation is the enemy that must be fought. They can only fight it with more helicopter drops of dollars-this time perhaps instead of a QE- they’ll dump it directly into the economy.

    Harry thinks that the fed would lose credibility if they kept printing money-that won’t stop them! Especially if the Bank of Japan and the European Central Bank are printing their currencies. The Fed will print and print and lose its safe haven status.

    When dollar denominated debt goes bad, people won’t want dollars.

    If it finally becomes apparent its QE infinity around the world there will be a rush into gold and silver.

    BTW having your money in an “investment account” is as a risky as having it in a bank. “They can’t steal your money” LOLOLOLOL Thanks Greg for mentioning MF Global and street name.

    Harry fails to recognize the value of having an assets that don’t rely on counterparty risk – like gold and silver.

    Hang on! Its going to be an eventful next few weeks, months.

    • Oracle 911

      Hi
      I agree with you, he is wrong in lot of things, simply because not every bank will fail at same time. So the money which will destroyed at first will be these in big US banks (and some European bank because the derivative exposure), then the rest of the US/Western banks will go Cyprus (not at once), then the FED will start QE. After this the and before QE the rest of the world will want something valuable for their US$, so hyperinflation coming.

      So the best thing the CB can do is buying PM’s, so China and Russia is far from being dumb, especially when we look at the GOFO, which signalizing the West run out of the gold. According Jim Willie the London PM vaults are emptied at fastest peace. When will Jim Willie come back?

      BTW criminals in COMEX are implementing a 400 US$ circuit breaker from 21st December of this year.

      My 2 cents
      Oracle 911

      • smaulgld

        oracle
        If the global collapse is in part triggered by a collapse of the US junk bond (shale oil) market it doesn’t seem to make sense that people would want dollars. In 2008 people rushed to dollars because there were no alternatives. Since then the Yuan has risen in stature due to more international deals using it and their massive accumulation of gold.
        In 2008 initial people dropped gold but within months gobbled it up. This time the dollar wont be the knee jerk safe haven Harry thinks it will be

        • Oracle 911

          I agree with you or rather we agree with each other in this matter.

          So if the collapse is triggered by big US bank or by US$ denominated asset, then a question arises:
          Who in his/her right mind will go into US$ or into US$ denominated assets (with counterparty risk)?
          From this point Dent’s advice is dead wrong, rubbish and dangerous.

        • Outlookingin

          “I have debated … all these experts and they are just wrong.”

          Sorry Harry, YOU are just wrong. Yes, some assets will suffer price deflation, but as far as fiat currencies go, they will suffer much higher inflation as central banks print to oblivion! Leading in some currency cases to hyperinflation.

          All the above are precious metals positive. $700.00 gold? No, won’t happen. Add another zero. Remember, high inflation is a political event. Hyperinflation is strictly a currency event.

          Sorry Harry, about gold you are just wrong, however your other financial analysis is spot on.

        • Tom

          exactly. Harry’s assessment is based on NO CHANGE in the world’s economy. In his view king dollar will effortlessly remain on his throne despite the golden BRICS prince who is younger, smarter and far more attractive and is gathering his followers for a coup.

  3. imaginer

    My studies in Sociology covers, demographic and economics and Harry Dent is correct in my view. I like the way he thinks regarding cycles. So here is my 2 cents.

    This author, Michael Clark, thinks in terms of cycles in a philosophical way.
    5th Comment Down – A Take On Oil Prices…and The Global Economy…
    http://seekingalpha.com/user/428250/comments

    The Prudent Bear says…
    http://www.prudentbear.com/2014/12/the-collapsing-periphery.html#.VIuyjCvF8jU

    Dr. Michael Hudson says…
    http://michael-hudson.com/2014/12/backfired/

    The Fourth Turning says…
    http://www.fourthturning.com/html/winter_is_coming…1.html

    The Bible alludes to this cycle wisdom, “there is a time for all things…”

    And last, but not least Peter Sellers says in the movie “Being There” – The seasons.
    https://www.youtube.com/watch?v=TYeVQzTVyLk&html5=1

    We might as well adapt, time marches on.

    Great work Mr. Dent and Mr. Hunter.

  4. Smaulgld

    Harry also fails to realize that oil is down because Saudi arabia is ramping up supply and dumping oil on the market.
    Silver is in a supply demand deficit and gold is approaching that. Silver is needed in industry for solar and electronics and there are no silver stocks, it gets mined and used.
    If the price of silver is well below mining costs, it won’t get mined then the price HAS to rise

    • Colin - 'the farmer from NZ'

      Smaulgld
      I just read in the below link that Opec doesn’t intend to change its targeted output of 30 million barrels per day even if the price falls as low as $40. Furthermore they will wait at least 3 months before considering an emergency meeting. The next scheduled meeting is not until June 5
      Where will this leave the fracking industry of the world, I’d say – a fair bit of it fracked.
      Cheers
      Col
      http://www.bloomberg.com/news/2014-12-14/u-a-e-says-opec-won-t-change-output-even-if-price-drops-to-40.html

      • Smaulgld

        Thanks Colin
        I saw that and it’s further proof the price of oil is dropping not because of deflationary pressure but mostly because opec in massively increasing supply in response to a small decrease in demand.
        Who would do that other then one who wants the price to go down?
        Sounds just like the naked short selling of gold and silver – manipulation

    • Colin - 'the farmer from NZ'

      Smaulgld/Greg

      One small thing may have escaped Obama and the PTB. But then again Mr Obama doesn’t seem to dwell in the real world does he.
      I am a beef farmer. I export beef….. in the real world. When I export beef a weakening of the NZ$ means an automatic and considerable increase in my farm income in terms of my local currency. Conversely anything I need to import e.g. fuel, champagne, caviar, Ferraris etc. quickly go up in price as well. This is basic economics and works for little old me in NZ just the same as it does for giant oil exporters in Russia.

      This effectively means that the Russian oil industry is not doing as badly out of the fall in the ruble as Obama would like to ‘think’ they are. Furthermore the Russians have low costs of extraction in many cases and won’t have the negative effect of high costs of imports because they don’t even have to import anything in order to extract this oil. Seems to me they are the big winners both ways here.

      Furthermore Russian oil baron Leonid Fedun indicated that OPEC has an agenda of cleaning out the US marginal fracking industry at least as far out as 2016. If the price drops to say $40 per barrel how much of the US fracking industry will remain standing by 2016. I will hazard a guess – three parts of buggerall!

      Just my thought but has Opec completely sucked Obama/Kerry in with this move where Washington ‘thinks’ they are helping to bring Russia to their knees but in effect all they are doing is destroying the entire US fracking industry – and probably forever.
      Then again to coin a Watchdog phrase “is this too stupid to be stupid”
      RE the pending demise of the fracking industry, we have an old saying down here;
      “It is an ill wind that blows nobody any good.”

      Cheers and best Xmas wishes to all. [except Obama and Kerry and a few others that spring to mind]
      Col

      • Smaulgld

        Colin
        Thanks for the thoughts. Where russia is harmed is as in your example the balance of payments. It does not have a diverse economy so it has to import a lot of goods .What it imports has become very expensive as a result in the decline in the rouble.
        So russia is indeed harmed but as you point out so is the U.S. Fracking industry , it’s high paying jobs and the bonds and derivatives surrounding the industry

      • wd

        Colin,

        Another excellent point of how this is not heurting Russia. I keep emphasising this with others but they all think I am nuts. What if the frackers get destroyed and Russia can hold out and then completetly dominate oil market.

        I am amazed at how the world keeps underplaying him- it really makes me wonder how can they not see their own demise- Putin has learned the horrible pitfalls of communism he knows that it is a death wish. He knows there is only one way-and I keep saying that he is a masterful tactian and strategist-look where Russia was and is now.

        We are only hurting ourselves, I have heard that Obama is an egomaniac and cant stand the fact Putin keeps playing him- heard from a decent source ( cant prove it). Nice point Colin Z

        • Colin - 'the farmer from NZ'

          wd
          Napoleon had a go at the big bear.
          Hitler did too.
          History shows that these guys didn’t do too well.
          What makes Obama and Kerry think they will do any better.
          Oh…. thats right …. these two are not capable of rational thought. Neither is Nuland. These three reckless and moronic psychopaths wouldn’t have a clue between them.
          Putin will run rings around them.
          BTW I still regard Obama as potentially a worse threat to the security and peace of the world than Hitler. Last time I stated this on the WD there was nary a whisper of disagreement. Lets see how I go this time.
          Cheers
          Col

          • Charles H.

            … they won’t come after you, Colin: but they will come after us…. SSSHHH!

    • Brad

      I like your style but some quick info on silver mining. 80% of the silver mined is by product from the mining of other metals, 20% is directed at obtaining silver directly. So 80% of silver mining will continue unless the price for base metals falls below production costs. Cheers

      • Smaulgld

        True but a loss of primary silver mine production would remove 20% of the mining supply which is about 80% or the total annual silver production.

        About another 20% of silver supply is from scrap. A lower silver price would help dry up that market too as it would become less economical to retrieve silver and or to resell it .

        As to other mines that produce other ores and mine silver as secondary product, lower prices will curtail out their overall output too. The concept that silver is a “by product” is overstated as the mines clearly factor in their silver production in their overall cost of mining. A lower silver price will act to curb their mining activity as well even in the absence of lower price of the primary ores.

        Under the scenarios above supply falls while demand does.
        https://smaulgld.com/silver-supply-demand/

        • Smaulgld

          Supply falls while demand does not.

          • Smaulgld

            Even if there is ONLY a reduction in supply from the primary silver producers that is still a massive loss of supply, but as shown above, secondary mining and secondary scrap production would most likely also fall, so conservatively you would lose 30% of the current silversupply while demand at conservatively remains constant.

  5. imaginer

    Sorry for the bad link.
    http://www.fourthturning.com/html/winter_is_coming…1.html

    http://www.fourthturning.com/html/winter_is_coming….html

    (This is Greg Hunter and these links are broken.)

  6. William Betts

    Greg:
    I had a prof once that said you could look long enough and you could find some guy that would tell you s#!* smells good. Gold going to $700, China crashing, Russia starting WWIII. The dollar becoming strong in this coming depression. We will see!!!!! Betts

    • Econ1

      Most of the posters here could give a better (i.e. more factual) interview. Harry seems to be clueless about Frank/Dodd and how it affects bank shareholders/depositors or the latest bank bailout inclusion to latest budget vote.

      Greg Hunter proves to be a very kind and generous interviewer. Keep up the good work Greg; you are a one in a million guy.

  7. Thomas1

    Harry Dent will have to explain why the PTB didn’t declare a debt default after Lehman.

    Yes, that would have meant all assets prices would have approached zero, and the government would have declared default on treasury securities.

    Then, as now, I’m not sure they wanted to risk a global confidence blow.

    ZIRP indicates a fear of deflation.

    The Chinese, Russians, Indians and the number of central banks who want repatriation of gold stores, say something entirely different. Harry Dent may call that imprudent investing.

    I think we’re about five weeks or less from a monumental gut check, Greg. I’m sleeping reasonably well.

    The bullion bank suppression scheme is faltering, according to Andrew MacGuire at http://www.kingworldnewsblog.com.

    You only have to be wrong once to destroy yourself financially.

    Semper Fi!

  8. Mike M

    He’s wrong,look at everything the Federal Reserve did get us to this point and now they’re going to let the economy crash ? I wish Dent would have explained how we get out of this mess after this big deflationary collapse happens.How will the govt fund it’s deficits ? Will they cut spending,or does the Federal Reserve keep printing ?

  9. Karen

    Mr. Dent seems to complete ignore the loathing other countries are showing for the US and the US dollar. Right now they still have to play with our monopoly money, but they are planning to leave the game soon. I think failing to take into account that Russia and China have other plans which include abandoning the dollar and Mr. Dent just dismissing these countries as being in “bubbles” reveals that his argument about gold decreasing in price and the dollar continuing to the a “safe haven” is not very well thought out. There is a lot more going on with these countries and their leaders than Mr. Dent gives them credit for.

    • Al hall

      Karen- I’m on your side. Dent think all these other experts are wrong??
      talk about crazy talk. Dr. Jim Willie is calling for $18,000 gold within 2 years.
      China is not full of financial dummies. I was told by insider friends many years ago, “China is the big one, keep your eyes on them”. And get out of anything paper!!- that includes money!

      • Karen

        Al, Mr. Dent in one sentence dismisses 1/6th of the world’s population and their spending habits (i.e., buying all the gold they can get their hands on). I see this often when talking to Americans about the global economy. They can’t seem to think beyond our own borders. American hubris at its finest.

        • allen ols

          karen al correct

  10. Jeff L

    Harry says…………”They are dead wrong about what happens when debt deleverages. History proves this 100% of the time. When a debt bubble deleverages . . . money is destroyed. When there is less money chasing the same goods, you get deflation–not inflation.”…………….. First off, the gov can not stop printing money. They can not allow rates to rise. Yes prices would fall in a deflationary environment, but only assets tied to debt (like your home). In this scenario tax revenue would drop like a rock. So again the gov would have to INCREASE printing. Stagflation is what it’s called Harry. Your one statement really jumped out… ” History proves this 100% of the time “……. Yes history has shown that a fiat currency fails 100% of the time…… Since there’s no other way to pay our debt we will print. That’s inflationary anyway you look at it. Stagflation= homes, stocks, paper assets down/oil, gold, hard assets up.

    • allen ols

      jeff l

      agreed!!!

    • OzFan

      “History shows that a fiat currency fails all the time”

      Touche!

      Harry’s USD and investment bank advice is DEAD wrong.

      Nice retort by Greg with MF Globa…..customers got shafted on that one, while JPM ran off with what was less (see stolen gold).

      There’s no way in the world that when the markets crash you want to be anywhere near an investment bank with its counter party risk and corrupt ethics…..screw that advice – its just flat out dangerous.

  11. Snorky

    Dent is a deflationist. He goes all in on one side of the bet (at least he says he does) and looks in the rear-view mirror in regards to what will happen. Plus, naturally, he has a newsletter and a book. He may or may not be proven right. But NOBODY can realistically get in-and-out of markets at exactly the right hour/minute/second and then buy back in AND expect the product to be there/available plus expect to have their cash safely tucked away somewhere (safe in Ameritrade? Right, sure thing). And even if you could, it would ruin your health. Best to hedge on both sides – deflation and/or inflation. The goal is to survive (for me at least).

    • West Tejas

      Harry has some good ideas about demographics but ignores his previous bad calls. Please go to the grocery store and show me all the deflation in food. Gas is just signaling another stock market crash like it did in 2008 just like the recent crashes in gold and silver. There’s a pattern developing here just due to all the manipulation and intervention its correlation is distorted.

      • allen ols

        west tegas

        u nailed it.

      • Snorky

        I don’t even consider what is happening in oil to be ‘deflation’ per se (same thing applies to other commodities, including precious metals, uranium, etc.). I think it is more due to ‘price controls’ via derivatives. However, if these derivatives go ‘belly up’ (i.e., the counterparty cannot pay), then we may have true ‘deflation’ (i.e., a collapse/shrinkage of the money supply). That is another way to look at this situation.