Harry Dent Warns of "$700 Gold by 2018"

Crash stories amuse me, especially when they are from someone with a proven track record of being spectacularly wrong.

Investors are fleeing to gold in a desperate attempt to weather the recent market volatility… but is this long time “safe-haven” actually poised to collapse wiping out trillions of dollars of wealth in the process?

One highly respected Harvard economist is stating an emphatic “yes!”.

“While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise” says Harvard economist Harry Dent in his latest report. “I’ve never been more certain of anything in over 30 years of economic forecasting.”

Market volatility, worries over the Europe Central Bank, negative interest rates, and China are among a laundry list of events that are driving panicked masses to buy the yellow metal. But this is only inflating the gold bubble that is poised to pop at any moment, he says.

Dent, who pioneered a whole new science of economic forecasting in the early 1980’s has been able to accurately predict almost every major economic event over the past 30 years. —including the collapse of Japan, The Great Tech Boom of the 1990’s, and the 2008 market crash.

Market Volatility?

Dent is amazingly funny. Volatility has never been lower.

Harry Dent Contrarian Book Covers

Economist Harry Dent made a fortune with a series of 100% ass-backwards books.

Special Talent

Harry Dent has a special talent. Few people are perfect contrarian indicators. Even fewer brag about their success while being 100% wrong.

Mike “Mish” Shedlock

Comments (24)
No. 1-24
El_Ted0
El_Ted0

I remember him from the 90s and his arguments about demographics impacting the markets seemed sound and he was right about Japan. He hasn't been right about much, since.

ppp
ppp

I am surprised the regulatory agencies have allowed him to continue with the rubbish procrastinations he puts forward.

Jcbl
Jcbl

When you see the words "highly respected, noteworthy, etc. Harvard Economist" you can save yourself much angst if you just stop reading. Take a walk instead. You will be just as well informed and will feel better as well.

Mike Mish Shedlock
Mike Mish Shedlock

Editor

In the article, he said don't buy gold, buy this instead. I clicked on the link and he never said what "this" was. It was an ad and the page would not easily let you go.

Realist
Realist

Whether you are hosting a blog or want to hawk books - sensationalism sells. Its not about being right or wrong. Its about getting people to notice. Dent has made a lot of money selling books. He has probably lost money following his own advice.

thimk
thimk

There exists so much global liquidity in the world via major central banks that past correlations are moot. Unless major haircuts happen we don't really know what direction the markets will go. W. Richter had an article that showed the feds haven't started QT yet. https://wolfstreet.com/2017/10/20/is-the-fed-getting-cold-feet-about-the-qe-unwind/

Carl_R
Carl_R

In fairness to Dent, you left out his 1991 book, "The Great Boom Ahead". In it, he forecast the greatest real estate boom of all time, the Dow to 15,000, followed by a crash and depression beginning in 2008. He should have stopped there, however, as nearly every forecast he has made since then, as you point out above, has been wrong. His method is valid - Demographics does drive economic cycles, including boom-bust cycles, and credit expansions-contractions. His problem, however, is that while it's valid for long term understanding, he attempts to use it for micro-forecasting the economy, a purpose for which it isn't suited. A second problem is that while history repeats, it rhymes, not identically repeats. For example, prior baby booms have reverted to saving as retirement approaches, leading to a depression, while the 1954 boom, comfortable that Social Security and Medicare will take care of them, have continued to spend as retirement approaches. That boosts us now, but leaves less for them to spend in retirement. It rhymes, but isn't an exact repeat.

Carl_R
Carl_R

Mish, I watched a portion of a similar presentation he had awhile ago, and I suspect the recommendation was similar. As I recall, he recommended investing in the one thing everyone tells you not to invest in...cash. Sell the market, sell gold, hold cash.

Mike Mish Shedlock
Mike Mish Shedlock

Editor

Holding cash or US treasuries is reasonable IMO

Maximus_Minimus
Maximus_Minimus

Great, hopefully students can ask for a refund for their very expensive education when the gold price goes up. It's only fair.

Ambrose_Bierce
Ambrose_Bierce

I think he's right, there is no bubble, just economics, paper securities are going parabolic, trade in your gold for a e-ticket.

truthseeker
truthseeker

This is at least related to the subject. Back in the 80's a friend of mine and I used to trade silver but mostly foreign currencies. One learns in a big hurry why less than 3% of those who regularly trade the futures market make money, because when the market moves against you, and you start loosing your ass, your emotions take over and you sell. Also when you may be long say the Swiss Frank and an important economic report comes out which back then was the money supply or the trade deficit, your stop gets gapped so that your price turns out to be on the low for the day-thus programmed trading makes sense. The only time I ever made any real money was in 1985 when we had the secret Plaza Accords to take down the dollar. Since most traders like to square their positions on Friday so they could relax over the weekend, I loaded up in the Swiss Frank on Friday a contrarian bet that was absolutely wonderful as every Monday it would open up 80-120 points because of the Plaza Accords that I didn't know about. I would sell and then buy again on Friday thinking I was so damn smart, at least until it ended.

PeterEV
PeterEV

I've have read several of Dent's books but the one thing I think he got right was his graph of comparing the relative number of people in the 40 to 50 year age group to the S&P 500. When did the stock market take off? In the late 1980's when the relative number of people in that age group started increasing. When did the "Great Bull market" turn over? When the relative number of people in that age group started to go negative. He forcasted a depression after the 2010 time frame. Where are interest rates today? Near zero, is that an indication that the economy is not doing well or is it an economy doing well? While there are other factors such as investing in China, higher oil prices in the 2008 time frame that have had an effect, his basic premise that the people in the 40 to 50 year age group have the monetary means with better positions and better paying jobs and likely teenagers who want to go to college all add up to more spending. However, I thought he was nuts with his Dow 40K while forecasting slack growth in the 2008-2020 time frame. I think we might make it there sometime in the mid to late 2030's depending upon how the popping bubbles, automation, energy, etc. situations effect our economy. I'd rather concentrate on preserving my health, capital, and helping my kids succeed. Buying and selling gold??? Personally, I think there is an upside but I can't eat gold and how do I tell if that gold coin in a seller's hand is legit???

truthseeker
truthseeker

Oh yea I remember this friend of mine used to say me when we were trading-I sure hope I break even today I sure could use the money!

MntGoat
MntGoat

Doom and gloom sells. These guys that sell newsletters, books, blogs, all know this. Newspapers and news media have know this for hundreds of years. Bad news outsells good or average news. There is something dark about us humans. Harry Dent knows this. He is a marketing guy.

Pater_Tenebrarum
Pater_Tenebrarum

To Peter EV - it is really not very difficult to ascertain whether a gold coin is or isn't legit, since they are all standardized and there are only two metals with a specific gravity close to that of gold (tungsten and plutonium). Since it doesn't pay (at least not yet) to make fake gold coins with tungsten - it is only used to make fake bars from 1 kg upward - standardized coins are easily testable. In fact, only platinum (which is even heavier) is close enough in weight to gold that one would be unable to know whether a coin is legit by simply eyeing its size and testing its heft by hand. The Weber-Fechner law stipulates that weight differences in excess of one third can be easily identified with one's own senses. In other words, once you are familiar with the size and heft of one ounce gold coins, it should be almost impossible to fool you with a cheap fake.

KidHorn
KidHorn

I recently read that is costs roughly $1,000 to produce an ounce of gold. It's an average based on produced amount divided by expenses for the worlds largest mines. That puts a reasonable floor on the price. It might dip below that short term, but long term, the mines will shut down before selling at a 30% loss for very long. The cost of production have been steadily going up. All the easy gold has been mined.

pete3397
pete3397

He's clearly hedged his bets. He can point to this: “While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise.” See how that works? When gold doesn't get to $2000 an ounce or more, he can claim he was correct, even though his prediction of $700 an ounce is wrong. He can hide that fact and point to how he was "right" regarding spectacular price increases. That does beg a question though: who are the economists predicting $10,000 per ounce gold prices?

AussiePete
AussiePete

Pete3397 "who are the economists predicting $10,000 per ounce gold prices?" - Jim Rickards for one

J-M-Keynes
J-M-Keynes
  • Dent did make 4 good predictions:1) Japan was te weaken
stillCJ
stillCJ

Editor

A perfect contrarian indicator indeed. I knew Harvard had some nutty professors, but I didn't know Harry is employed there, so that's another contrarian indicator. Excuse me now, I must go buy some more gold.

mpowerOR
mpowerOR

The "great crash" hasn't happened yet... not because HD got it all wrong, but because TPTB were never going to allow the US economy to crash while the US had a minority president, period. Now that Obama is gone, all bets are off. QE = 8 years of wubby blanket for Pres. Obama... that's all.

mpowerOR
mpowerOR

IOW, Trump will be the primary market crash Fall Guy... the script is so obvious a blind man could read it...

mpowerOR
mpowerOR

IOW, Trump will be the "crash" Fall Guy... the script is so obvious that a blind man can read it...