Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

Stock Market Crash… Economic Collapse
economyandmarkets.com ^ | 7/21/2014 | Harry Dent

Posted on 07/22/2014 7:24:08 PM PDT by Signalman

You can’t deny an economic collapse. We are about to see the greatest stock crash of our lifetimes

I recently read a good article in Barron’s by Randall W. Forsyth called “Deus ex Machina 2.0: Is the Fed Trying to Take Human Nature Out of the Credit Cycle?”

It was particularly interesting in light of the Bank for International Settlements’ warning that central banks are stoking financial bubbles that will burst, creating an even larger financial crisis… and that they should reverse their endless stimulus policies sooner rather than later.

Music to my ears: Were they singing my song or what?!

Of course, central bankers like the Fed’s Yellen had to come out and counter this sober view; the same view I’m trying to share with you… of an insane world where there’s unlimited use of financial drugs to keep history’s greatest global debt and financial asset bubble going forever.

And it really is insane!

How could any intelligent economist argue, with a straight face, no less, that taking more and more financial drugs to keep the high going is fiscally responsible?

Yet that is exactly what Yellen did (and continues to do)!

She quoted Greenspan: “Because there’s no way to identify a bubble until it bursts, it’s better to clean up the damage when it does pop than to try to deflate it in advance.”

What B.S.!

This coming from the so-called “free-market capitalist” who stoked the technology and housing bubbles into the turn of the century. Every time the economy would slow, he increased the “crack” drug of easy monetary policy in the system, pushing interest rates lower and creating greater speculation.

At the end of June, Yellen stated that she hoped the Fed’s low-interest-rate policy would not create excess speculation.

Are you kidding me?!

You let traders lever up 30 to 50 times, with near zero, short-term money costs, and you hope there’ll be no speculation?! Do you think Wall Street is full of boy scouts?!

An Economic Collapse is Unavoidable

You mean that housing prices more than doubling in six years, with no appreciable increase in real incomes, and with mortgage lending advancing from 3.3 times pre-tax income to 9.2 times tax income, all stoked by record-low interest rates, was not identifiable as a bubble?!

Was an advance in the Nasdaq from 800 to 5,050 in just five years not a sign of a bubble?

How about the recent three-times advance in the S&P 500 in a totally artificially-stimulated economy that can only grow at 2% (on average), despite $2 trillion a year in fiscal and monetary stimulus?

Or how about China’s stock market going up 6.6 times in two years…

Or the Shanghai real estate market going up 6.63 times since early 2000?

These are not identifiable bubbles in the Fed’s eyes?!

This apparent blindness sends a very clear message: The Fed’s real intention is to take over the free-market capitalist system and program the economy to grow at 3% a year with 1% to 2% inflation…

To annihilate the very dynamics of success and failure that created the greatest wealth in human history (a dynamic that is now spreading to emerging countries)…

And, of course, to never have recessions or downturns or bank failures ever again.

Oh, like that’s realistic!

These people know nothing about the free-market system and its dynamics for creating wealth.

In fact, it’s a horrible crime that these people are in charge.

These central bankers shouldn’t even be allowed to babysit our children, never mind control our economic policies!

Thankfully, I’m not alone in my views of the Fed’s incompetence and unspoken intentions. There’s also David Stockman, who is our keynote speaker at our Irrational Economics Summit this year.

He says it best in the subtitle of his 2013 book The Great Deformation: The Corruption of Capitalism in America.

And there’s Forsyth, who seems to be alone in his chosen profession, being one of those scarce purveyors of the truth in the financial media.

Unfortunately, no matter what anyone says, this endless stimulus and denial can’t last, and when it ends, the repercussions will be devastating.

In fact, I’m only getting more bearish as the stock market continues to edge up in the face of a 2.9% decline in GDP (in the first quarter), slowing earnings growth, and the Middle East turning into an outright Shia-Sunni religious war.

Beginning this year, we’ll see a sharp drop coming into early 2015 (I’m taking Dow 10,000 to 11,000)… then another slide into late 2016 or early 2017 (when the Dow will sink as low as 5,000 to 6,000)… and finally a third fall into early 2020 or so (with the Dow slamming into the 3,300 to 3,800 mark).

I know that the stock market looks invulnerable at this point. But that’s exactly when you should be the most afraid… and cautious. This is precisely how bubbles suck in even the skeptics before they burst.

And bubbles don’t correct. They burst violently. My article on the “10 Rules About Bubbles You’re Going to Want to Know” will explain the details. Remember the Nasdaq? It lost 40% in just the first crash in 2000 before it bottomed down 80% in late 2002.

Time to prepare.


TOPICS: Business/Economy
KEYWORDS: crash; dent; economy; stocks

1 posted on 07/22/2014 7:24:08 PM PDT by Signalman
[ Post Reply | Private Reply | View Replies]

To: Signalman

Been reading this Chicken Little stuff for 30 years.


2 posted on 07/22/2014 7:26:31 PM PDT by RIghtwardHo
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

“Dogs and cats, living together...MASS HYSTERIA!”


3 posted on 07/22/2014 7:26:37 PM PDT by ButThreeLeftsDo (Please $upport Free Republic.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman
What a crock of Chicken Little.

If the world can get rid of Obama...we are on the verge of a Renaissance.

4 posted on 07/22/2014 7:29:38 PM PDT by RoosterRedux (Obama: Race is his cover...jihad is his game.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ButThreeLeftsDo

Yep..... what’s crazy is that most who think this economic collapse is coming also believe the dollar will loose all of its value. And, to prepare for this event they take everything out of the market and put it in cash. Go figure....


5 posted on 07/22/2014 7:30:38 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 3 | View Replies]

To: kjam22

Heavily invested in lead.


6 posted on 07/22/2014 7:32:10 PM PDT by ButThreeLeftsDo (Please $upport Free Republic.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: RIghtwardHo
If you manage to hedge correctly and make a ton of money while everyone else is losing their shirt, then how safe will you feel? How safe it that account of yours suddenly flush with short sales and put options? I agree. I've seen such dire warnings since I was old enough to be aware of them in the late 1970s.
7 posted on 07/22/2014 7:33:26 PM PDT by sefarkas (Why vote Democrat Lite?)
[ Post Reply | Private Reply | To 2 | View Replies]

To: RIghtwardHo
Me too. I'll go this far-- when the market is at an all-time high, on a multi-year bull run, clearly inflated by infusions of hundreds of billions of dollars of Monopoly money, it is probably not the time to get in.
8 posted on 07/22/2014 7:34:10 PM PDT by hinckley buzzard
[ Post Reply | Private Reply | To 2 | View Replies]

To: ButThreeLeftsDo

We’ve got a few rent houses that are paid for and producing nice retirement income. You can’t go wrong owning investment property. People will always need a place to live. Nothing wrong with owning enough lead too :)


9 posted on 07/22/2014 7:35:41 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 6 | View Replies]

To: kjam22

Actually, they are the ones buying gold. And gold won’t go up. The big boys are going to need it to pay their derivative margin debt.

Dent’s whole “thing” is based on a massive demographic collapse—the transition of the Baby Boom into retirement wholly unprepared for it. Add on all of the crap Obama has done and it just magnifies the impact.

People will be selling all of their assets—and no one will buy.


10 posted on 07/22/2014 7:36:39 PM PDT by Vermont Lt (If you want to keep your dignity, you can keep it. Period........ Just kidding, you can't keep it.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: hinckley buzzard

Problem is you could have said that in Jan of 13. And the market made 28% in 2013.


11 posted on 07/22/2014 7:37:18 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Vermont Lt

You know.... the interesting thing here in Oklahoma. When the real estate bubble burst... home values went down some (not as dramatically as other parts of the country because the bubble was not as large here)... but even with property values dropping, monthly rental prices continued to go up. People always need a place to live.


12 posted on 07/22/2014 7:40:27 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 10 | View Replies]

To: Vermont Lt

Gold.... I’m not sure what value gold will have in an economic collapse. I can think of a lot of things that would be of more value (ammunition etc) than gold. I know its a precious metal, but what is it worth from a practical perspective? Its only worth what it will buy or the dollars it will buy?


13 posted on 07/22/2014 7:46:16 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 10 | View Replies]

To: kjam22

“We’ve got a few rent houses that are paid for and producing nice retirement income.”

OUTSTANDING!


14 posted on 07/22/2014 7:47:00 PM PDT by ButThreeLeftsDo (Please $upport Free Republic.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Signalman
You can’t deny an economic collapse. We are about to see the greatest stock crash of our lifetimes

No we're not. What a moron.

15 posted on 07/22/2014 7:51:04 PM PDT by montag813
[ Post Reply | Private Reply | To 1 | View Replies]

Comment #16 Removed by Moderator

To: kjam22

I put a pair of apartments over my garage for much the same reason.


17 posted on 07/22/2014 8:00:07 PM PDT by MSF BU (Support the troops: Join Them.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Signalman

We’re dooooooomed!


18 posted on 07/22/2014 8:01:56 PM PDT by tumblindice (America's founding fathers: all armed conservatives)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

Mr Dent seems to really be mouthing off here. Anybody know his track record?


19 posted on 07/22/2014 8:08:54 PM PDT by upchuck (It's a shame nobama truly doesn't care about any of this. Our country, our future, he doesn't care.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: MSF BU
Good plan. I'm still deep in the market, but each year I move some out (pay the taxes on it when I do) and into real estate.

Here's another good plan.... I've done a couple of these. In OKC, 125k will buy a 1500 sq ft house 20 years old or so. You buy the house and pay cash for it. You sell it to someone with marginal credit. Someone that traditional lending institutions won't lend to. There are people who make mistakes during their 20's and get into their 30's and get their act together. They have money and jobs but not good credit yet. You sell to them for 135k. And they give you 10 to 15k down. You loan them the balance at 6.5%. You amortize the loan on 20 or 30 years but balloon it in 10. Their plan is to repair credit and eventually refinance. You're out of the deal in 10 years either way. You collect their taxes and insurance just like a mortgage company would and escrow it etc. YOu can manage the whole thing on one excel spread sheet.

If you've picked the right couple... and you'll have lots of couples to choose from.... you've just set up a 6.5% investment with a real asset behind it. Not the obama market behind it, and not some municiple bond from a city that may file bankruptcy some day. They own the house so you don't have the traditional landlord "fun". Honestly, I could sell a house every single day like this. if Finding people to buy them is EASY EASY EASY. And if they default, you get the house back and start over. You can't get a better deal.

20 posted on 07/22/2014 8:12:02 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 17 | View Replies]

To: kjam22

I am not advocating any direction. I am just saying what Dent thinks.

I have my 401(k) sitting in almost all cash. It’s funny—my retirement savings have been maxed out since I was in my early twenties, so once I hit 65 I will be set. Getting there is another issue altogether.


21 posted on 07/22/2014 8:14:58 PM PDT by Vermont Lt (If you want to keep your dignity, you can keep it. Period........ Just kidding, you can't keep it.)
[ Post Reply | Private Reply | To 13 | View Replies]

To: upchuck

The NEW Gold:

1. Food and water
2. Medicine
3. Guns and ammo


22 posted on 07/22/2014 8:17:01 PM PDT by mason-dixon (As Mason said to Dixon, you have to draw the line somewhere.)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Vermont Lt

I’ll be 55 this August. I retired after 33 years in the oil and gas industry, a year and a half ago. I picked up a real estate license. Its been the best year and a half of my life :)


23 posted on 07/22/2014 8:19:00 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 21 | View Replies]

To: mason-dixon

yep


24 posted on 07/22/2014 8:19:17 PM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
[ Post Reply | Private Reply | To 22 | View Replies]

To: mason-dixon

Amen brother! Can’t never have enough of that.


25 posted on 07/22/2014 8:29:19 PM PDT by upchuck (It's a shame nobama truly doesn't care about any of this. Our country, our future, he doesn't care.)
[ Post Reply | Private Reply | To 22 | View Replies]

To: kjam22

Brilliant


26 posted on 07/22/2014 9:07:10 PM PDT by MattinNJ (It's over Johnny. The America you knew is gone. Denial serves no purpose.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: RIghtwardHo

Me, too. But I’m afraid if I say “It ain’t gonna’ happen”, it’ll happen.

And I’ve always said that we can’t keep making a living by selling stuff to each other without there being a “re-boot” eventually.


27 posted on 07/22/2014 9:43:00 PM PDT by VerySadAmerican (Liberals were raised by women or wimps. And they're all stupid.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Signalman

I’ve been of the opinion since about 1995 that the powers-that-be are determined to manipulate the financial system to the point of bringing down every country in very short order.

This scene from the movie, “Sneakers” sums it up.
https://www.youtube.com/watch?v=coDtzN6bXAM


28 posted on 07/22/2014 10:01:38 PM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

Yellen is on the BIS’ Board of Directors. BIS warning is a CYA for what’s about to happen. Central bankers don’t want to get lynched for their concerted effort to overthrow the dollar as the world’s reserve currency as a means to consign the United States to Third World status.

Note that the BIS is filled with socialists and follows the lead of a ChiCom who has stated he wants to kill the dollar. Only two Americans on the Board if you count Yellen. And she’s a bloody Marxist.


29 posted on 07/22/2014 10:11:08 PM PDT by peyton randolph (Show me the man and I will find the crime. - Lavrenti Beria)
[ Post Reply | Private Reply | To 1 | View Replies]

To: hinckley buzzard

Bank for International Settlement - The Central Bank of the Central Banks.


30 posted on 07/22/2014 10:54:00 PM PDT by stocksthatgoup (Turning the Party over to the so-called moderates wouldnÂ’t make any sense at all." -- Pres. Reagan)
[ Post Reply | Private Reply | To 8 | View Replies]

To: peyton randolph

Do people think what is going on is just an accident?


31 posted on 07/22/2014 10:56:14 PM PDT by stocksthatgoup (Turning the Party over to the so-called moderates wouldnÂ’t make any sense at all." -- Pres. Reagan)
[ Post Reply | Private Reply | To 29 | View Replies]

To: stocksthatgoup

Most believe it is an accident or “market forces” / “capitalism” run amuck. Yet what we have bears no relationship to true capitalism and what’s being done is clearly intentional.

These are not dumb people where stupidity can explain their actions. They’re smart but evil.

Would not surprise me to see the end goal is a global electronic fiat currency in the next 5 years where digital zeroes can be added or subtracted from the end of your accounts depending upon your loyalty to the state.


32 posted on 07/22/2014 11:48:33 PM PDT by peyton randolph (Show me the man and I will find the crime. - Lavrenti Beria)
[ Post Reply | Private Reply | To 31 | View Replies]

To: kjam22

OK is a good place to be I think. Economy is stable and for the most part the state government is populated by sensible people. I was stationed at Fort Sill twice and really enjoyed the area, despite the initial reputation as an area bereft of a lot of big city benefits, OKC is only an hour away and the cost of living is about 25% of where I live.


33 posted on 07/23/2014 7:59:13 AM PDT by MSF BU (Support the troops: Join Them.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: kjam22
EASY EASY EASY

You worked through the early '80s in the oil business. You know that nothing is easy. Oklahoma depends on oil.

34 posted on 07/23/2014 8:24:20 AM PDT by Kennard
[ Post Reply | Private Reply | To 20 | View Replies]

To: kjam22

In my mind, it’s a way to preserve some of your wealth once order is restored and a new currency is established. But I wouldn’t be sitting on a pile of gold waiting for the goods to come to you during the crash.

(I really don’t want to see this happen. I’ve been reading this doom and gloom for the last 5 or 6 years and it makes me sick.)


35 posted on 07/23/2014 2:00:44 PM PDT by CommieCutter ("For an idea to be too simplistic, it must first be proven wrong" --Thomas Sowell)
[ Post Reply | Private Reply | To 13 | View Replies]

To: RIghtwardHo

hasn’t he been pretty much on target?....


36 posted on 07/26/2014 10:14:26 AM PDT by cherry
[ Post Reply | Private Reply | To 2 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson