#403 Harry Dent on the Everything Bubble - And the Only Safe Haven Left

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Speaker B: hey everyone. Welcome back to another episode of the Julia LaRoche show. Making his debut today is Harry Dent. He is an economic forecaster, best selling author and also author of the HS Dent Forecast newsletter. In this episode, Harry explains why we are in the everything bubble, which is the biggest one that we have seen in history. He also thinks that we are headed for the biggest crash which is we've ever experienced some happening sometime in the late 2000 and twenties. And he shares where he is finding opportunity and a uh, safe haven. And it's not in gold. I really enjoyed this conversation with Harry. I'm so glad he finally made his debut on the show and I hope you all enjoy this one as much as I did. Harry Dent, economic forecaster, best selling author and author of the HS Dentist Forecast Newsletter. It is such an honor to welcome you to the show for the very first time. Really appreciate you taking the time today, Harry.

Speaker A: Nice to be here Julia.

Speaker B: I am thrilled to have you because you are someone who's been recommended multiple times and we always love having folks making their debut. Let me tell you really quick about the show how we usually kick things off Harry, and that is always with a big picture macro view. Um, we love to ask our guests for, for their macro view, their outlook on the economy, markets and the framework in which they are looking at the world. And one of the things about the show, Harry, is you can take all the time you need to set the table when it comes to that big picture macro view. So what does that look like for you today?

Speaker A: Okay, Julia, first, uh, I got known from my demographic cycles I discovered early on because I was consulting at new ventures in California after Bain Co. Doing I go for Fortune 100 to new ventures in Californ, exact opposite. And these new ventures were dealing with the young baby boomers back then. And I said I quickly realized, oh my gosh, there's a whole new economy, whole new generation, emerging new values, new markets. And, and, and you know, I got to study all this stuff and make sense of it. So, so my research I did while I was literally CEO of six new ventures and consulting to many others. Seeing this new economy emerge in California after walking out of you know, Bain and Company after business school and consulting the Fortune 100 companies, you know these lagging edge giant companies that were just struggling to fight off the Japanese back then. So, so I got to see two economies in depth real quickly. And in school um, M. My father was in politics so he didn't, he wasn't a business guy but he had a lot of wealthy business donors and they said man, study accounting and finance. That's what I did in undergrad. And boy was that, was that the best thing. I mean they, they were right about that. And then at Harvard Business School I got to really get into business strategy and marketing and the things I like more. Um, and it took me many years of studying the entire history. There is the, the greatest textbook ever nobody knows about. It's called the history of Civilization. Okay. And, and that's 11 volumes. 11, 000 some pages. I went through that whole thing over a couple of years and, and, and I could not. GDP wasn't even a word back then in history. But I could study. They always talked about inflation and in my own work shows that inflation is just the, it's not a negative thing. It's just the leading indicator. The investments to incorporate young people before they grow up and create a boom in the economy. So, so I was able to go back and study cycles all through ever since the agricultural revolution, you know, 10,000 years and, and, and you know from that I mean just cycles become obvious. I mean 5,000 civilization cycles on and on down. But my important, most important ones today are a 45 and double that 90 year technology innovation cycle. That's where the bubbles come from. And that's why we're in an era where we've seen the bubble into 2000 and now this second bubble. Uh, we have not seen that. You have to go all the way back to the roaring 20s and early 1900s to see these sort of bubbles. So that's the 45 and 90 year cycle. And the 90 year is the most important important in stock market and economic history. The other one is even simpler. Uh, again consult these new ventures. I realized I gotta understand new generations. Well, new generations have caused our economy to peak every 39 years. So 29, 1960, 29 was the Henry Ford generation. I call them their peak in spending collectively rising into the Roaring twenties. And then the Bob Hope generation. I call them the. From 1942 and World War II into 1968. And that was the long term peak of the stock market back then adjusted inflation and all the way back in the early the mid-80s when I really was getting my research together, I was predicting back then we're gonna see the greatest boom in history. And it's gonna peak in late 2007 when the peak number of baby boomers were at their peak spending at exactly age 46. People thought I was a nut. Now I'm getting a lot of flack for being bearish. I was the most bullish economic economic forecaster ever in the 80s and 90s. And people would tell me, harry, your stuff sounds great, but there's no way in the hell the Dow is going to hit 10,000 by 2000. That was my forecast back in the late 80s when I started speaking. They said not even a chance because it was 2000 back then. And everybody's view was, oh, America's a great country, but we're over. The Japanese are taking one industry. They work harder, they're smarter, and the Chinese behind them. And I'm like, no, no, no, no, no, no, no. They're taking over thanks to us, our old industries. We dominate everything from Hollywood to high tech information. And we will continue to. And we have, huh, the strongest baby boom in the developed world. And they're going to cause the greatest boom in history. So again, only people would listen to me in the 80s and early 90s were small business CEOs. I started speaking for tech, which is now called Vistage, uh, networks, uh, of small business CEOs around the world. And so, so they're more open to this. I mean I would have flopped in corporate America back then, tell you the truth. They just said, oh Harry, you know, nah, nah, nah, nah, nah. And so, so that's how I got known. And then I started publishing books. And the great boom ahead was my first bestseller in 1992. And then my real big bestseller, Win the Bubble. Real. The boom really started to show itself in the late 90s was the roaring 2000s. And I've had 11 books but those, the roaring 2000s sold as many of all my as my other books because timing's everything. And I had predicted this in the great boom ahead. And people said, uh, Harry, again, logic sound. No way we're going to get to 10,000 by 2000. And of course it was more than that. We got to 12,500 by 2000. So nobody could say you're crazy anymore. So, so, so, you know, that's my history. I mean these are simple cycles. And that was the Biggest thing I got from my research, it's, everybody thinks, you know, the long term is hard to predict. I'm like, no, the short term is harder to predict because in the short term, more and more cycles and political impacts, all that stuff can impact. But in the long term, all those little wiggles go out the long, there's only a few long term cycles that really matter. And, and I just described two of them. There's one more, a, uh, geopolitical cycle that is bullish for about 17, 18 years and then adverse for 17 to 18 years. So three cycles allow me to track the past and then predict all the way out to the 2000s and 70s with reasonable accuracy. And, and, and again, people say you can't do that, but the truth is you can. The long term is much easier to forecast than the short term. Again because only a few key cycles, these things like generational waves of spending and then these waves of technological innovation. I mean, it should be obvious that things like automobiles and electricity and phones just changed life. I mean, we suburbs would not exist without these things, you know, and, and now all this, you know, computers and microcomputers and software and, and, and, and, and now AI. AI's in its infancy. And you know what happens in the infancy. You get the biggest bubble projecting the future when, when you don't have to be tethered to anything. And then you get a big crash. The biggest crashes happen in the early stages when really big technologies are, are first entering the mainstream markets and growing rapidly and before they really show their stuff down the line. So, so that's, that's another leading indicator. I can take the birth index, move it forward 46 years. I know exactly when each generation is going to peak. And the millennials are just peaking one year later than the baby boomers. And it's the same, the same in Japan and in East Asia, in Europe, all the, the, the developed countries, uh, I just use overall workforce, um, for the emerging world, so I can predict emerging countries. Um, and I'm telling people today the biggest single trend is that India is just emerging like China did in the early 80s. And over the next four decades it will become the next China. It will become even a bit richer than China. And its population is going to keep growing to 1.7 billion from 1.4 today, while China is going to shrink from 1.4 today down to 800 million over the next five decades. So these are huge trends. And secondly, there is no other country to overtake the United States in the developed world. We are still going to be the leading country, developed world. Australia will outgrow us because they have high and high quality immigration from Asia. No, nobody complains about immigrants hardly in Australia because they're highly educated. Um, but the only complaint is, yeah, they're taking white collar jobs now. They're not just taking entry level. But still. If you look at births and you look at immigration, um, you can see the future out decades and decades. And these technology cycles have two kind of bubbly surges in each 45 year cycle and then the 90 year cycle is double. That's where the real bubbles come. So we are in a unique era. You can't understand it without looking at the early 1900s, the last time we were in this 90 year bubble cycle. But when you do this is, this is the greatest boom we've seen in history. And right now we're over the baby boom in that bubble. But, but the governments stepped in in 2008 for the first time in history and said we're not going to allow a Great Depression. I was telling people 2008 is going to look just like 1930. And that's exactly what it looked like. Ben Bernanke was the Fed chair back then and his thesis was the Great Depression. So he knew that's what it looked like. It looked like the beginning. And they've just been stimulating and printing money ever since. $31 trillion of stimulus since the 2008 downturn began. And I predicted the top in late 2007 with my stupid simple indicators all the way back in the mid-1980s when I first came over. And so people were shocked by that downturn. I wasn't. And when it happened I'm like, this is just the beginning. And the what governments did was say, well, I mean they threw in a trillion in 2009, thought that would cure this short term crisis. It wasn't a short term crisis. It was a 1314 year demographic downturn. Just like 1930-42 and 68 to 82 long term recessions or depressions. And so what they've done this time, which is unique and to me ill advised, was just stimulate with deficits and money printing. So we just covered over a Great Depression, like, oh, we don't have to have depressions. Well, I was a turnaround manager. I learned early in my career both at Bain and dealing with turning around small new ventures, there's nothing better than a crisis. Nothing wrong with a crisis. It just accelerates change. People will make bigger changes, act harder, more urgent, uh, including firing half the company if you have to, to save the the other half. They'll do that in a crisis. So, so I don't see crises as a problem. Problem is, governments have fought this downturn since 2008 and now we've got a bubble that is so long and so big, we'll be lucky if it does only crashes as much as 1929-32. And by the way, that was 89% for the Dow. And the Dow is more like the nasdaq.

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Speaker A: Mhm.

Speaker B: Wow. Okay, what a frame up to the conversation then. Um, you're just pointing out right now a massive bubble. Characterize it for us, I take it, the everything bubble. How do you see this one ultimately playing?

Speaker A: Number one, Roaring twenties was the biggest bubble era before this, and before that, the 1820s and the 30s, um, where you get bubbles of this magnitude in stocks. Well, this one was everything. Real estate didn't bubble that much in the roaring twenties because lending was so, so archaic. Okay. In the roaring twent twenties, in a boom, um, you had to put fit, I mean and people of means only had to put 50 down and they only got a five year mortgage. So so that's that, you know, that's why real estate didn't bubble as much as stocks in the roaring twenties. And when the crash happened, stocks were down, you know, 89. And real estate only went down 26%. Okay. Which is not that terrible. Uh, we went down more than that just in the 2008 recession in real estate. This real estate bubble, um, started in 2012 when real estate bottomed a few years after stock and it's just gone straight up, you know, for, for 14 years. Can't even compare this real estate bubble to the first one or any bubble before it. So my projection is just is always to go back to the last major low, which is 2012, not that far back. That would say, Julia, the average house in Ohio going to have to go down 60% versus 34% in the last recession, which is way more. Nobody thought real estate could ever go down substantially. And I'm saying no, it can. So 60%. So imagine what high end real estate does in New York or California, you know, or places like that. Um, 70, 80%. This has never happened. Real estate is way worse than a stock crash because stocks are largely owned by the top five to 1% to 20% real estate's own broadly by 60, 70% of the population. And again has never gone down on levels like I'm predicting. It has never even gone down as much as it did from 2006 at 12. So this is what makes this downturn dangerous. But, but, but the worst of it, Julia, if, if the government had not fought this, I mean with $31 trillion, that's, that's more than all our GDP, one and a half times our GD entire collective GDP in that time period. That's how much stimulus was okay. Then fought this. The bubble would have happened that it would have burst 2020-22 would have been deeper than 2008-9 and we would have been over it by now and we'd be in the millennial boom, which is 2024 to 2054, you know, long term. But the best of it's into 2037. So we'd be into a boom. What we've really done by not cleaning up the debts and zombie companies and the stuff which we do in recessions and downturn, we've compromised the millennials boom. But so the baby boomers didn't have to lose money on their financial assets. And that's just not fair. So, so baby boomers are going to get hit by this later than they think now that they're in retirement and need it the most. And the millennials are the ones that will be in. The younger people will benefit if we have this big crash, bring financial assets down which means housing 60 to 80%. That'll be the best thing that ever happened to young people. They're going to be jumping up and down, especially if they got priced out and never got to buy a house. So far, the millennials are complaining we can't even buy a house. And I'm like. When I have them as an audience, which is not often because I'm usually

Speaker B: speaking, I'm a millennial, and I just

Speaker A: bought my first house. You're the lucky one.

Speaker B: I just bought my first house. And I'll tell you, the largest demographic who watches my channel, they're the boomers. I love my boomers. But, yeah, I just. Well, I hope I'm okay. I just bought my first one, Harry. I got tired of waiting. It was right, though. It was very difficult. I, um, feel like I got a good deal, relatively speaking.

Speaker A: Well, if you get a good deal, if you're. The key thing is if you're not in a. In a real bubbly market.

Speaker B: No, I'm in Raleigh.

Speaker A: An instant indicator because. Because stocks are easy. They all go up and together and similar, you know, price, earnings ratio stuff. Housing is very different regionally and stuff. So if you want to say, well, gosh, okay, what's my downside? If I just bought a home like, you look up what a house like yours or what your house was worth in the middle of 2012, that would be the best estimate of how far it could go down. And it might not go down that far because the government's going to fight this downturn as well. But you got to realize, government's already fought since 2008, for 17, 18 years. This downturn blown their wad, and they're going to look really bad, and people are going to go like, well, wait a minute, you've already done this. And every crash has taken us the lower levels. And of course, that's my forecast. This crash will take us to lower levels than the last one. So there's a point where people are going to wake up and say, I know it sounded a little hokey to just print money out of thin air, but now we know. And. And, uh, so it's going to be hard for the government to come back and say, oh, well, we did 10 trillion last time, so we're going to have to do 20 trillion this time.

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Speaker A: They don't usually bark this loud, but we're. We babysit all the Americans that move here to Puerto Rico. We babysit all their dogs. That's when they go, you know, when they have to travel. So, yeah, we called the Puppy palace here.

Speaker B: I love, uh, Puppy Palace. There you go. All right. Um, let's talk about the markets, though. What is your thought process there? Um, even though you mentioned it really only affects, like, the top percentile, but how far do you think, uh, markets might have to fall?

Speaker A: Okay, again, if we go back to the last low in Real Estate, 2012, and that's a lot more than people would think for stocks, it's worse. They would have to go back to the last major low, which was March 2009. That would be a 90% crash for the S P, 596% for the NASDAQ. That is worse than 1929-32. Now, when I was making these forecasts, you know, years ago, you know, that that was more like 70%, you know, but that, that means depending, uh, on what the government does. And again, I think they're going to lose a lot of credibility here if we crash harder than ever after all this stimulus. Uh, but this, this could be the worst single stock crash in all of history. And without even compare, it Will definitely be the worst real estate crash in history because real estate does not go up normally as much as stocks or go down. The problem with real estate is people buy it largely with high debt. 50, 60, 80, 70, 80, 90% debt.

Speaker B: So.

Speaker A: So their equity disappears very quickly. Most of our country, or, uh, most people around the world in developed countries are going to be in negative equity on their home. If I'm even half right, that's the disaster. Because that really hits the banks. That hits people where it really hurts, in their house. And that hits the banks. Because banks lend against houses. Most people don't borrow money to buy stock.

Speaker B: I mean, Harry, 90% is. Wow. Um, that would be really just back to 2000.

Speaker A: I just laugh. I'll tell you one thing. I mean, I mean, I'm a chartist. I had to become a chartist over the many, many years I was fundamental guy. Uh, there's fundamental analysis, like, you know, these demographics and technology innovation and there's just charts and technical analysis. Anybody, if I put these char stock chart in front of any chartist and they didn't know what it is, it'd be crystal clear. They say, oh, yeah, we're going in a major 5th wave top and there's going to be a first, a wave crash, and it's going to go back to the last major low, which would be early 2009. And that would be 90% on the S&P 500. It would be a slam. I mean, if I showed that chart and didn't say what it was, any chartist would say, yeah, obvious. It is that obvious. It's not going to be obvious to anybody because this boom's gone so long. We're like in bubble land. I mean, we don't even recognize the bubble because we're in it. And nobody can afford for this bubble, not just the government, nobody can afford for this bubble to burst. And so nobody's going to want to see it. And when it finally happens, I'll guarantee you one thing, when it finally happens, people will be very quickly to say, what were we smoking? We knew this. We knew it didn't make sense that we're only growing because the government just prints money out of thin air or every year spends, you know, way more than they take in. We have not had a balanced budget since 2001, and the deficits have been enormous since 2008. This is unprecedented. This is crazy. It's a drunken brawl. And it'll only be obvious when the crash. Another thing my research has shown, and nobody else does this. I don't know why, because they don't want to. When bubbles do crash and I looked at every stock bubble since the stock market started in the late 1700s. The first crash of something that's going to be 70 to 90% is typically 42% in 2.6 months and up to 50% in 2.6. In other words, by trying this for if that happens again, we could see by year end, stocks down, the S P down. I, I'm actually predicting 54% back to the last major support and the NASDAQ down 64% people. I mean that could happen by year end and then people panic and sell and then it'll bounce substantially and then they'll feel even stupider and then they'll get back in and, and then it'll get creamed by the next wave down. I mean this is, this is terrible. I mean all I can do, I can't stop the government. Um, nobody's going to listen to me in the government. Um, all I can do is warn the people that'll listen. Look, this is a really good time to be as conservative as you can be. And, and if you want to. And the best thing is just to sell real estate. You don't have to have long term and, and sell your stocks and then rebuy if I'm right. And you, all you have to do to see if I'm right is see if we have this first crash. That's all it'll take to give it significant validation. And that could happen by. If this doesn't happen by year end, then you might say, well Mary, maybe Harry's wrong. Maybe the governments really aren't going to ever let this happen. I mean I don't believe that. But, but it won't take long to figure out if I'm right. But if you wait to see if I'm right, you'll end up selling when it's down 50, 60%. It'll retrace about half that crash and then you'll feel even stupider than you did when you were down 50 to 60%. Mhm.

Speaker B: Yeah, I think.

Speaker A: And sold. And panicked and sold.

Speaker B: Yeah, I think you said that you get a lot of flack these days for being more bearish. But as you pointed out, like in the 90s, I do I get very bullish.

Speaker A: No, I actually got more flack by being too bullish. In the late 80s and early 90s. People just thought America was dead. Mhm. But I know I do. Of course I get a lot of Flack. But I'm like, look who's telling you this. The economist who was the most. Nobody ever in the entire earth has been more bullish than me. Never. Not one. There's been some people close, not many. So it's not coming from a perennial bear, it's coming from somebody that was super bullish and people didn't believe that. And now how could, how, how could I do anything else and say if we've had the greatest bubble in history, of course the downside is going to be higher than anybody would think. Bubbles don't correct. They burst. There's no except zero exceptions to that. Mm mhm.

Speaker B: So um, let's talk about how you might want to be positioned. Um, how long have you been out of. I take it you're out of stocks, right?

Speaker A: Yes.

Speaker B: How long have you been out of stocks?

Speaker A: We started, we got people out in late 2021 and then told people in 20, you know, when we saw that wasn't enough to be a first crash. You can get back in if you want to. Um, what we're recommending now is for aggressive investors to be, to take a certain amount of your money, as much as you want to and just bet on stocks going down. You just want to capture this first wave down because the rest of it's going to be too tumultuous. But the first wave down should be very strong and very decisive. And like I say, if it doesn't happen by the end of the year, then you, you back out. But you'd be, you buy what I call the best thing to buy because it's high volume S Q Q Q that is triple short. The QQQ and the QQQ is the NASDAQ 100 which is the raciest of the major indices. So, and I tell people only buy a third if you want to be 100% short. You want to do more than that. Just realize how much risk you're taking. Just, you know, so, so buy a third sqq just for the first crash. If this first crash happens and by the end of the year we're down 50% or something like that and there's been. Take those profits, get out. You can take a little break if you want to wait for bound. But then I advise just buying the highest quality bonds. And that's very simple. The easiest way is to buy TLT. It's an ETF that holds equal amounts of 10 year US treasuries in 30 year. Now you can buy just 30 year because they're more leveraged but this TLT is the easy thing to buy and sell. And my calculation today, and it went up 40% in the 2008 crash when everything else went down, including gold. Okay. My biggest argument is with the gold bugs because they think gold is going to say and I'm like, no, it didn't save you in 2008 and this is just going to be 50% or more worse. So, so not gold. Um, and then once that crash happens, you get in TLT and that will, that will do well as the recession gets worse and when it gets really bad as in 2008, it will explode. TLT literally exploded in the second half of 2008, did better than any investment and was the only major investment that went up when even gold and stocks, where stocks went down substantially but even gold was down 30 or 40% at that point. So that is, there is, I wish I could say there's a diversified portfolio for this. It isn't. You just have to be in the best safe haven. And thus far, without a doubt, especially in the 2008 crash, which again nobody expected. The treasury bonds were the only safe haven in the end.

Speaker B: And again which you just said nobody

Speaker A: checked in market in the world. So easy to buy direct 30 year treasury bonds or through the ETF. TLT half 10, half, 30 year. I think it could, I think my projection, if I'm right and we get a very serious downturn, TLT would literally double in value in just two to three years. And then you sell that and then you start buying stocks in real estate again because the worst should be over.

Speaker B: Help us understand like for that layperson, why like longer dated Treasuries. And you said like nobody expected it during the financial crisis, like what's the reasoning behind it? What do you think might be the misconceptions out there?

Speaker A: Okay, number one, in a downturn, the only thing that does well are like very high AAA corporate bonds and major governments like the us the treasury bonds, okay, they're the safe haven. Why the government's going to pay them off no matter what. You know why? No corporation can print money. Oh yeah, they can issue stocks, but if things are down or they can issue bonds, but if the economy is bad, they're going to pay a huge premium for that. Only the U.S. government, I mean it's the last resort. It's the ultimate safe haven. Only the U.S. treasury bonds went up at the worst of the 2008 crisis. So we already have history in the past that this happens. So it's the safe Haven. And again, people say, but gold, it's the only true money. Well, why did gold. Gold did not go down as much as stocks at first, but it did end up going down 30 to 40% in the second half of 2008. So it wasn't the worst place to be, but it wasn't a safe haven either. Only the treasury bonds went up. I didn't look at AAA corporates as hard, but, but because Treasuries are always better. But, but corporate bonds went down. I mean, default risk goes up. So, so that's it. When you have a crisis, there's very few places to run. And, and no question in my mind, the US Treasuries are the best, uh, because there's just nothing safer. Because again, they can print as much money as they want to. Even if the markets don't like it at the time, they can still do it. They're not going to default on the principal and interest of their bonds because if they ever do, with their huge debt, it's going to kill them for the rest of their life. They'll have to pay 1 to 2 percentage points forever if they ever default on these bonds. So they're not. And they don't have to. They can print as much money as they want.

Speaker B: You mentioned gold not being a safe haven. What's, what's the deal? Like, why, why are you opposed to gold?

Speaker A: Well, here's a very, very, very big reason. Gold didn't look bad a few years ago. Okay. Or silver. Gold and silver just joined. What did we call it earlier, Julia, the everything bubble. And that was to me, I'm like, oh my gosh, it really is everything. Because even, because gold and silver do tend to have that safe haven quality. Okay, well, they bubbled. So, you know, gold went from 1600 to, uh, 5600. I mean, gold bubbles. Silver bubbled even more. So so now for gold just to go back to its last low, even closer in 2016, it would be down 60%. So I used to say, hey, you can have gold if you want because maybe it'll only be down 20%. But that was before gold and silver literally joined this bubble. Nothing went up faster in this bubble than gold when it finally joined. Gold just went straight up, uh, faster than stocks when it finally joined. Now when, if we do have this crash, there's two places I would be buying long term. India, because it's the next China, and you're going to be catching it at bargains on top of that. And nobody's going to see that still, um, and um, the uh, emerging market stocks, because that's where all the demographics is. So India and gold. And why gold? Because gold's going to get beaten down. But, but the secret to India, one big difference between India and China, they both got zillions of people. They're Both moving from 20% urban to 70% over time and all this great stuff. And no bigger lover. Indians love gold. They buy it both for jewelry because they're not. Well, it's a way for poor people to show off a little wealth. And they also buy it for his investment because they don't have a brokerage account at Merrill lynch or something like that. They can store a little gold. So they buy it for both consumption and investment. And I have already measured. The Indians spend three times as a percentage of their income on gold as the Chinese do. So if India is the next big, big, uh, thing, its stocks are going to do great like China did, but they will elevate gold with them.

Speaker B: Mhm. Okay.

Speaker A: And gold is a great diversifier in a portfolio. So for the commodity portion, let's say 20% of a, a portfolio in the future, I would recommend just buy gold.

Speaker B: But I take it you don't have any right now, right?

Speaker A: No gold. I have gold heading down and overvalued at 5600 top.

Speaker B: Yeah. I've had my goal for a long time though, Harry. Uh, I've held my gold for a long time, so.

Speaker A: But, but why lose the games? I don't care what anybody bought something for.

Speaker B: Yeah.

Speaker A: And people come to me all the time. The biggest question I get after presentation is real estate. People say, oh, Harry, yeah, I got this house and that house, you know, oh, I should sell the one with the big mortgage, right? Get rid of that mortgage. I'm like, no, the bank owns most of that house. You should sell the one where you got all the equity, cash that in, and then have a whole chest of money to buy everything at the sale of a lifetime in history on all financial assets for the next boom. That's, that's the one you, you sell the one with. Don't sell the one that you have equity in and make that yours. The bank, if you kept, and if the one that doesn't have that, uh, has high debt even in that case, the bank may have to come to you and write off half your loan just to keep you in it. So you, so you win that way as well.

Speaker B: So to that point, Harry, um, you're looking to deploy capital when we have this kind of Washout, if you will. How are you thinking about right now having like liquidity dry powder? How are you thinking about that side of the equation at this moment for like when this might happen? I imagine, um, I mean I think it could possibly happen like by end of this year. But like we're in the late 2000s now. It's going to be, I can't believe it's going to be 2027 in just a few months at this point.

Speaker A: But there's two, two dry powders and it's only a matter of duration. T bills is the safest thing. Okay. They're just three to six months, okay? So they're not going to go them down, but they're going to pay you four and a half percent interest or whatever today and they're not going to go down and preserve your money. Okay? So there's cash, but better to put that cash in T bills. I say take a step up, put it in TLT or 30 year treasury bonds because the treasury bonds will pay you another half percent of interest on that 5% instead of four and a half. And if we have a slowdown, even just a slowdown, okay, they're going to appreciate because inflation and interest rates, risk free rates, which they are the pituma, are going to go down only for the safe bonds because other bonds may see the inflation part of their interest rates go down, but the default risk is going to go straight up, maybe the highest in history. So that's why if you want to just be really safe and don't want to trust anything, just put your money in T bills and make four and a half percent and don't worry about anything. If you want to make a lot of money in this downturn without a lot of risk, buy the TLT or the 30 year treasury bond and get a little higher interest and potential for a uh, doubling or more if there is a major crash. So that's why I prefer that. And you could do some of both of that, but you still have the safety. There's the government's not going to default on their treasury bills or their treasury bonds and especially the treasury bonds. That's, that's where they borrow most their money long term they can't afford. They get the lowest rate of borrowing long term of anybody in the world. They can't afford to lose that. That will haunt them for decades and decades. So they're not going to default. And again can print money if they have to, even if it looks stupid, even if it looks desperate, they will not default on these bonds.

Speaker B: Harry, you were also mentioning like looking at things like the long term, like these longer term cycles. So let me ask you this. Um, I take it the thesis uh right now is that we're headed for a multi year washout sometime in the late 2000 and twenties which again we're already in the late 2000s. So my question for you is it

Speaker A: should have happened already but they put it off.

Speaker B: But yes, a little delay.

Speaker A: No bubble can last forever.

Speaker B: So the question is what does the so called like other side look like when we get through this um, multi year washout? What does that look like? Um, and maybe even let me add to this question. What should policymakers be doing differently as we go through that? So let's kind of like tease this one out.

Speaker A: Mean the policymakers that are still in office.

Speaker B: I mean I don't even know m

Speaker A: that this is going to look, nobody's going to get reelected if this happens sort uh, of thing. But, but, but basically just look at the last boom. Okay, what happened from 82 now? Okay, China was the new, the merging world was, was urbanizing for the first time. China was leading that with very heavy top down stimulus which is always dangerous. But they did. Um, so China was the biggest bubble and the US was, was the developed country that had the best demographics and the best free market system. Still does and always will be as far as I can see. Um, that benefited from the greatest boom in history which was something I could predict with two simple indicators back in the early to mid-80s. Okay, so, so that's what happened in the last boom. This big crash washes all that out, all the bubbles and stuff. So you start fresh. Okay, well what happens in the next boom? Well the Next boom, the US will not be as strong as 82 to 2007 but it will still be the best of the developed world and still lead technology um, for as far as the eye can see. So US is and it's going to be on sale for the best prices. So you want to buy things like QQQ, the NASDAQ 100 that captures the raciest side. But this time China's the opposite. China has 22% empty real estate. They over expanded to keep their economy going. They're not elected. So how do they keep their cap their people happy and stop from revolting? Give them a great economy and ever ending growing incomes and jobs. Well guess what, Guess who's the most exposed to real estate in the world? Not rich people in Australia or the United States or Europe. It's everyday people in China that often have not one little house. They have a second or third more than anybody in the world because they've learned to trust real estate. They don't speculate in stocks, okay. Real estate's what they do. And the government encouraged it. They just kept telling developers, build, build, build, so the economy grows and we'll back you up if things go bad. Okay? So and investors, they just bought, bought real estate. So again, again, substantial number of everyday people with a 12,000 U.S. equivalent income. Okay. Which is maybe worth 12, 24,000 there double in purchasing power sample. But still, still relative poor middle class people often have a second or third home sitting down the road empty just for speculation. And they don't even rent it out because there's not even a rental market. Renting in, in China makes you look like a loser. So, so that is the biggest disaster I see these everyday people, yeah, the China and the Chinese, top down Communist party did this to look good, to stay in power. And now people will be so mad at them. You won't see. The Chinese government will disappear. They're gonna, they're gonna move to Afghanistan or somewhere in the hills because people are gonna be so mad at them. I mean, I can't even imagine what. This is gonna be a uh, bubble. It's gonna be hard for everywhere in the US Again because real estate impacts people much more than stocks and many more people. China, oh my God. I. And when and when it's over, where do you invest in China? They have, they built enough real estate, offices, homes, everything, condos for until they urbanize fully from 67 today to 80% in the future, they don't have any way to grow substantially. China will never be the same. Who's going to look good? India. India's got the same population as China. India can learn from all of China's mistake. India will not see as big a stock or real estate crash, especially real estate. India can learn and do the right things. And India will for the next. From late 2000s into 2055 before their demographics kind of plateau. Um, and their urbanization is going to continue to grow even past that. India is the only big growth engine and the second one is southeast Asia. So that's the future. That's why this time the only difference. I want to buy U. S Tech stocks again. Okay. When they're down the most in history that I want to instead of buy. I don't even want to buy China for a comeback. I want to buy India in southeast Asia. And funds and leading stocks there because they're going to start afresh, uh, and learn from China's lessons, but have even more demographic and urbanization potential to grow than China had. And again, if you'd have told people how much Chinese stocks and real estate was going to go up in their early 80s, they would have told. Told you you were crazy. And of course, I'm the guy that gets that sort of comments all the time. Okay. With. I'm not crazy. This era is unusual. We've never seen demographic surges like this. And every technology advancement is far greater than the last one. Okay? Automobiles are powerful, but computers, my God, computers are so tiny. And they get everything, you know, um, so that's, you know, all I do is study facts. I don't study theories. Okay. And if I can find something. And the first great fact I found, and I had to do it for my new venture clients that were. That had all these young baby boomers. So I had to research baby boomers, and I found this spending cycle. Enter the workforce 20, earn and spend more money till age 46, plateau into 54, and then spend less money the rest of your life. What? That's the most important statistic I'd ever seen in history. Not one economist knew that. Not one. Or they did. They didn't know the importance of it. That's why to innovate, you almost have to come from a press perspective. People can't see the truth if they're in the bubble. Nobody in the bubble is going to see the bubble because they're benefiting from it. They're. And they're not only that, they're high on the bubble. If people are high, they don't make good decisions. That's why, hey, I don't know how many drugs are going to have, from alcohol to heroin to cocaine, that'll make you feel really, really good for several hours. What is that? Followed by you feel really bad, and you feel even worse when people told you all the crazy stuff you did while you were high. This is. This is. This is, should be the biggest reversal in history is bigger, bigger than 29 to 32. And that was by far the biggest. And everybody's going to suddenly say, uh, I knew this was good to be true. It's going to be obvious when it happens before that I can only convince about 1 to 2%. And that's all I can do. And again, if this doesn't happen in the next few years, we may just go into this long mediocrity, which by the way, Julie, uh, that would be the worst scenario for the economy long term. I know the economy because I've studied it in depth and I know the economy doesn't, doesn't favor booms over bus. They're both part of the same equation. The busts are where the great innovations happen. All the restructuring and all the new technologies emerge when you're being challenged. And the booms are when those things move mainstream into mass affordability and people have entirely different standards of living just a few decades later. But you don't get the boom without the bus, you don't have anything to innovate. Unless those babies were born from the baby boom, the young people, and unless those new technologies were born in the innovation stage, when people are younger, younger people innovate, older people because, you know, rising people consume and older people invest and dominate investments.

Speaker B: Well, Harry, this has been so wonderful having you make your debut. Before I let you go here, um, let's let the audience know where they can find, find more of your work and follow your work. Um, and if you have any parting thoughts for them, the floor is all yours.

Speaker A: Yeah, yeah. I mean, real simply, harry dent.com I have a newsletter, but I have a free newsletter. I mean, and this is not a, uh, nothing newsletter. I send an article in a chart every week and I give a rant like a five, six minute version of this once a month. That's for free. Okay. Our newsletter. People get a lot more. But just there's no risk in saying, look, I know I'm saying something radical. I know people are going to go, well, uh, I don't know, but, but, but it's a big but. If I'm even half right, um, you're going to wish you'd have done some things different. So, so this is a way to just keep in touch with me for free. And it's easy. You just go to Harry Dent dot com, put in your email, you're done. Nothing more.

Speaker B: Well, Harry Dent, economic forecaster, bestselling author and author of the HSD Dent Forecast newsletter, thank you so much for being so generous with your time, all of your knowledge, helping us all learn, get better, get prepared. We really appreciate you. And Harry, we'll have to get you back on, uh, for an update as well in the coming months.

Speaker A: Yeah, yeah, yeah, I'd say, uh, October is like one of those times. If we're going to have some sort of crash, it should be visible by October.

Speaker B: Okay.

Speaker A: Not far.

Speaker B: Right before the midterms. Awesome. Well, thanks again, Harry. Really appreciate it.