Bubble

News

Harry Dent: Stocks Will Fall 70-90% Within 3 Years

Laying out the thesis of his new book The Sale Of A Lifetime, Dent sees punishing losses ahead for investors who do not position themselves for safety beforehand. On the positive side, he predicts those that do will have a once-in-a-generation opportunity to buy assets at incredible bargain prices once the carnage ends (and yes, for those of you wondering, he also addresses his outlook for gold):

DYI:  The above link is Peak Prosperity they have a 42 minute podcast interview with Harry Dent.

The question is, is this possible or more importantly probable?  Absolutely!  This is all possible due to the reckless Feds who have brought us 8 years plus of sub atomic low interest rates along with massive QE.  These imbalances will be worked off bringing back to earth this gargantuan bubble.  Is this probable within the next three years?  Very possible but as with any markets we never know the flight path (time and % drop) back to secular undervaluation.  All we can do is measure the market’s valuation with any degree of certainty and invest accordingly. No doubt a 70% to 90% sell off would totally invert the market from secular over valuation to secular under valuation.

Global oil glut disappearing faster than expected

DYI:  Oil prices are well known for their volatility in the short term, longer term due to dwindling reserves energy prices are in a secular bull market.  Technologies such as fracking will extend the life of oil fields but major new discoveries arrive at a snail’s pace far slower than the world's growth.

 

As long as prices rise in a slow and orderly pace our economy can adjust to those changes, however if prices spike (international tensions, war etc.) high energy costs behave as a massive deflationary tax. This will send our economy tumbling down and very possibly the U.S. stock market.

DYI’s oil indicator is negative as prices have risen from a year ago more than 75%.  Recently oil prices have dropped back a bit however our negative reading will not move back to positive until prices are less than 10% higher of the previous year or go negative.

As the headline indicates if oil prices ratchet up this would spell tough times ahead for the market especially since it is so overvalued.

Why

 America Needs

Term Limits

Rep. Maxine Waters:  Trump must be impeached because Putin Invaded Korea

She meant "Crimea" you might say. Don't be so sure. Members should be given a blank map whenever they talk with presumed authority about anywhere abroad. They should be forced to find the place they are about to start talking about before the microphone is switched on. If they can't, they shouldn't. 

DYI: This is from Ron Paul’s institute show casing many of our representatives and high lighting the desperate need for term limits.  The above headline speaks for itself.

DYI