Harry Dent, the esteemed economist and founder of HS Dent Investment Management, has raised a red flag regarding a looming global stock market collapse of catastrophic proportions.
Speaking toFox News, the 71-year-old financial guru, well-known for his bold economic predictions, has indicated that a financial disaster of unprecedented magnitude may be on the horizon.
Dent's alarming forecast comes as the global stock market closed the month of May with notable gains, leading many investors to believe that the current state of affairs is stable.
The financial expert highlighted that the so-called "everything" bubble has yet to burst, and when it does, it could precipitate what he described as the "crash of a lifetime."
During his interview, Dent drew parallels to the historical market crash of 2008, emphasising the uniqueness of the current economic landscape. He pointed out that, unlike previous natural bubbles in the 1920s, the current situation is fueled by artificial stimuli, creating an unusualscenario in the financial world.
Reflecting on the prolonged duration of the ongoing bubble, which has persisted for over 14 years—far surpassing the typical lifespan of economic bubbles—Dent stressed uponthe potential severity of the impending crash.
He predicted that the fallout from this crisis could surpass the impact of the Great Recession of 2008-2009, with potential declines of up to 86 per cent in the S&P and 92 per cent in the Nasdaq sometime in 2025.
According to Dent, even high-flying stocks like Nvidia may not be spared, suggestingthat even stalwarts in the market could face a significant downturn. Despite acknowledging the quality of companies like Nvidia, Dent warned that they could even see sharp declines, with potential drops of up to 98 per cent.
What is the 2008 Financial Crisis?
Here is a brief timeline of events that panned out into the 2008 Financial Crisis-
- 2000-2006: The housing market bubble inflateddue to lax lending practices, low interest ratesand high demand for mortgage-backed securities.
- 2007: Signs of trouble emerged as default rates on subprime mortgages rose, leading to the collapse of several subprime lenders.
- March 2008: The Federal Reserve bailed out Bear Stearns, a major investment bank, to prevent its collapse.
- September 2008: Lehman Brothers, a prominent investment bank, filedfor bankruptcy, causing panic in financial markets.
- September 2008: The U.S. government bailedoutAmerican International Group(AIG), one of the world's largest insurance companies, to prevent its collapse.
- 2008-2009: Stock markets plummeted, credit markets froze, and global economies entered a severe recession.
- 2009: Governments worldwide implemented stimulus packages and bailouts to stabilise financial institutions and jumpstart economic growth.
- Aftermath: The crisis led to increased regulation of the financial sector, including the Dodd-Frank Act in the US,aimed at preventing a similar crisis in the future.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
