Economist Caution: Prepare For 'Massive Wealth Destruction'

Take immediate steps to protect your wealth . . . NOW! 

That’s exactly what many well-respected economists, billionaires, and noted authors are telling you to do — experts such as Marc Faber, Peter Schiff, Donald Trump, and Robert Wiedemer. According to them, we are on the verge of another recession, and this one will be far worse than what we experienced during the last financial crisis. 

Marc Faber, the noted Swiss economist and investor, has voiced his concerns for the U.S. economy numerous times during recent media appearances, stating, “I think somewhere down the line we will have a massive wealth destruction. I would say that well-to-do people may lose up to 50 percent of their total wealth.”

DYI Comments:  DYI continues with our forecast of a peak to trough decline of 45% to 60% as stocks are now bid up to 1929 levels [except for the last 6 weeks before the peak in 1929].  The Fed's will not be able to come to the rescue as interest rates are now sub-atomic low levels.  Once sentiment swings to the bears no matter how much QE the Fed's throw at the banks stocks will drop until the bears are exhausted.  This could take as short as 8 months or as long as 2 years.

The rest of the article goes a bit off the deep end especially regarding hyper inflation.  With a market drop off such as this deflation will be the result.  Wage demands are simply not there to support higher inflation.  Only until the 2020's when Boomer's exit the work force in large numbers but continue consuming [at a lesser rate] soaking up the excess labor.  This will move us to a labor shortage sparking inflation as wage demands will be rampant.  The 2020's will be mark by high inflation, high taxes, and a labor shortage.  The remaining portion of this decade will marked just the opposite with low taxes, low or possible deflation, and excess labor.

The biggest surprise will be valuations after the drop even at our maximum of 60%.  Stocks at that time will only be moderately undervalued not at the secular lows of under 10 using the Shiller PE10 model.  It will most likely take one more cycle to complete that task.  All told this could end up being a 20 year bear market as DYI marks the secular top in December 1999 at 44.20.

DYI