The value of gold has experienced a significant increase in 2023, with spot prices rising from $1,823 per ounce to the current price of $1,937 per ounce. However, Harry Dent, founder of HS Dent Investment Management, believes that this trend may not continue any time soon. Dent predicts that gold may lose value in the range of $900 to $1,000 over the next 18 months.
HS Dent founder’s “everything bubble” theory and its potential impact on the economy
On Tuesday, Harry Dent, founder of HS Dent and financial author, I speak with Michelle Makori, lead anchor and editor-in-chief of Kitco News. Dent expressed his belief that “the biggest crash of our lifetime” is coming and that gold will be one of the hardest-hit commodities of the year. This perspective 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 claimed that gold’s rise in value is due to its perception as “a hedge against inflation and a weaker 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, emphasized that those who really want to hedge against “inflation or economic chaos” should “stay in gold.”
Dent disagrees with this outlook and predicts that gold will lose significant value over the next 18 months. “Gold is not a safe haven,” Dent said during his interview with Makori. “I’m forecasting gold to go from $900 to $1,000. That will be a lot less than other commodities… that’s still a 40 to 45 percent drop from here,” he added. Dent previously identified several manufactured financial bubbles over the years, referring to the current situation as the “everything bubble.”
While Dent thinks 2023 may be challenging, he anticipates mid-2024 to be even worse. “I think the bottom at this point for stocks is probably… July 2024,” Dent said during the interview, noting that the tech-heavy Nasdaq (IXIC) index could hit 10,088 again. “So, we are still in the early stages. To know that this crash continues and will go much deeper, we need to break the latest low… which is 10,088.” The financial author added:
The stock boom from 2009 to the end of 2021 was 120 percent artificial. It (the US central bank) was just pushing more and more to keep the stock market going higher… That’s taking a toxic financial drug, that when it finally goes down and fails, you have a problem.
Dent Predicts Bitcoin Will Be The Hardest Hit Asset In The Next Economic Crisis, But Remains Long-Term Bullish
Dent assumes that we are starting the next wave of decline after a period of sideways movement. “This bubble finally burst, started to burst,” Dent told the Kitco host. “Now a bubble of this magnitude, like the one in 1929 or 1972, which was not a bubble but was a long-term (recession). It takes two and a half to three years for a complete accident to occur. All we’ve seen so far, and we’ve seen it, is the first accident,” Dent added. In terms of Bitcoin (BTC)Dent believes that it will be the most affected among all the assets and shares.
The HS Dent executive expects Bitcoin to crash to the $3,250 range, hitting the same low as during the Covid-19 crash in March 2020. “I think it goes down to $3,250 and then a longer-term boom starts.” . Dent opined. The investor sees cryptocurrency as the next big thing and believes that it has the potential to lead to the digitization of all aspects of finance and money. “There is $600 trillion dollars” in financial assets, Dent detailed, and digitizing that and expanding trade to make it more efficient is a “big thing.”
The true purpose of cryptocurrency, according to Dent, is to restructure the entire financial asset market, which is the largest financial number in the world. Global GDP is about $100 trillion, Dent explained, while financial assets “is the biggest multiplier,” around $600 trillion. “That is why I am bullish on bitcoin and crypto,” Dent said.
What do you think of Harry Dent’s predictions about the future of gold and bitcoin? Do you agree or disagree with his assessment and why? Share your thoughts in the comments below.
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