TDI Podcast Highlights: Harry Dent (#538)

On TDI Episode 538 With Guest Harry Dent,  We Discuss:

  • Bitcoin
  • The Economy
  • Harry Dent’s new book and his take on what is happening and what will happen in the markets

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Bitcoin:

  • Still seeing significant gains across most cryptocurrencies.
  • Coinbase opened up more than 500,000 accounts over just the last few weeks.
  • Bitcoin Futures are coming out through CBOE, CME and NASDAQ.
    • Watch out for the times that these trade as some of the contracts don’t trade 24/7 or even on the weekends.
    • Need to also be careful of the volatility, leverage and liquidity that is associated with these futures contracts.  The CBOE contract will be equivalent to 1 Bitcoin and the CME contract will be equivalent to 5 Bitcoin.
    • There has been mixed feelings as to whether or not the futures will cause the Bitcoin positions to continue higher or to look for a crash.
      • Institutional players may be able to now utilize these on a reputable market and thus pushing it higher.
      • The other side is that Bitcoin really can’t be shorted in the U.S. and futures would allow that ability which could cause some short selling.
    • Check out the BitCoin Ace Indicator if you are a TradeStation subscriber to help you make trading decisions on these new products as well as the index.

Economics:

  • Not much has changed and everything still seems to be healthy.
  • Manufacturing and Employment remains strong.
  • Slight tick down in ISM Services, but still a strong data point.
  • Things that could unhinge economics:
    • The Tax Proposal – What will make the final cut and how will the markets / economy be impacted by the various changes
      • Emerging markets may get hit with the tax proposal should repatriation be welcomed by Corporate America. They would essentially be moving lots of money and investments back to the U.S. and thus removing from these from emerging markets.

A Friendly Reminder:

  • Make sure if you are over 70.5 years of age that you are taking your required minimum distribution from your IRAs prior to the end of the year.

A Discussion with Harry Dent:

  • Zero Hour – Harry Dent’s new book that is out.
  • Predicting time frames and prognosticating has become extremely difficult due to government and monetary policy intervention.
  • Natural demographic trends continue to deteriorate.
  • The U.S. is the best house in a bad neighborhood.
  • After this stimulus wears off, we are going to see a crash worse than that of 2008.
    • Harry is equating this to cocaine addiction. Markets are running high and hot, but eventually the drugs catch up to you and the hangover is far longer and more detrimental than the high that it previously gave you.
  • Biggest bubble Harry is seeing is Bitcoin.
    • Best comparison is internet stocks from 1998 – 2000. They increased by 8-9 times over that period but then crashed by more than 80-90% with some going bankrupt.
    • Bitcoin is going to crash 90% or more according to Harry.
  • Gains in stocks have really only been gaining performance through corporations buying back their stock.
  • What is the cue for the crash:
    • Believes that once the U.S. Federal Reserve, Europe and Japan start pulling back on stimulus and tightening, this will be the cue for the crash.
    • However, Trump’s tax plan will continue to prop up the markets as well.
    • And so on, and so forth until the medicine runs out.
  • We are coming to the point where the government can no longer keep propping up the market and that is the point of Harry’s new book Zero Hour.
  • Believes we are getting to the point of such a large disconnect between political parties that nothing will get done. We may end up splitting into a Red and Blue America.
  • Doesn’t believe there is any way we can get back to 4-6% growth ever again. Workforce is retiring and demographics are deteriorating.

 

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