From 2022 on, I’d be buying gold hand hand in fist, it’s going to hold up better than most commodities,” said Harry Dent, founder of HS Dent, who is calling for gold to see its final rally to $2,200 an ounce next year before falling to multi-year lows until 2022. "I’m expecting gold to go up…when this crisis starts to build next year, it’s going to see more stimulus, it’s going to go up at first. I have a target of $2,200,” Dent said. “$2,200 is the strong resistance in the coming months and then crash back down to its 2015 lows, around $1,000.”
That leads to the next segment of our interview. Part two gold Harry, I know you have lots of views on gold. You have said in a prior, uh, media appearances, you don't hate gold. You're not a gold bug either. Uh, you thought you saw gold falling, uh, this year. Well, it's risen now. It's falling. So what's your sentiment now?
Okay. Gold, um, follows two things. It is the closest correlation with inflation. Uh, long-term it only correlates with inflation. Okay. And inflation peaked in 1980, and it's going to go down and keep going down in developed countries. Okay. So that's going good. It also follows the 30 year commodity cycle peaked in 1920, 1949 to 51, a double P and then 1980.
And now here again, a double P. In 2000 mid 2008 and late, uh, mid 2011 gold peaked on the second one. Um, so gold peak there came down now all this stimulus gold rallies with this stimulus up to a point cause they assume it's going to cause growth and inflation again because gold primarily correlates with inflation more than anything else.
I see gold. Uh, I predicted it would crash. When it broke 15, 25, it crashed down to 1,050 when it hit there. I said, you know, gold now is oversold due for bounce with all this money printing. And now I'm predicting. Gold. We'll probably watch. Watch. What's just happened in 2008 gold continued to go up. When stocks went down, syncing a crisis, money printing stimulus, which it loves.
Okay. And in the 2000 February, March crash, gold went up in the first two weeks of that five week crash, went down in the middle of it and came back a bit gold, ended up down, but not that much. I'm expecting gold to go up. In the early to mid, when this crisis starts to build next year, it's going to see more stimulus is going to go up.
At first. I have a target of 2200 that goes through the tops and gold all the way, 1980 and in 2011, 2200 is the strong resistance in the coming months. I think gold is going to go up to 200 at first and then crashed back down to it's 2015 lows around a thousand. And from 2022 on I'd be buying gold hand and fist.
It's going to hold up better than most commodities and gold. Is loved by the people are going to be driving the world, economy, Asians, and especially Indians and Chinese and especially Indians Indian spend more per dollar of income on goal than anybody in the world. It sounds like you are super long-term bullish on gold.
I mean, immediate term, we're going to see them, your commodity cycle with bottoms around 2023 just happens the bottom. When the demographics do and, and, but more important, the rise of Asia, the whole growth coming out no longer going to be Europe and North America, we do okay. Europe continues to lag. Um, East Asia is going to lag Southeast Asia and India are going to drive the next boom.
Um, and those people are going to be big consumers of gold in addition to all the others. Yeah. $1,000 is around the bottom for you. Yes. Around 2022. And then, you know, who knows goldbugs are saying, we'll go to 5,000. I say, yeah. I say, I agree with you when you're dead. So it'll be the next commodity cycle.
Again, I'm a cycle guy cycles on all types of next commodity cycle peaks between 2038 and 40. I will be close to dead, not dead by then. So I'm just hoping I see bowl at 5,000. You said it's going to rise to 2201st, but what's going to take us there. Vaccine news has been clobbering gold prices for the last couple of weeks.
Uh, the vaccine is not even out yet, right? It's just news. What happens when it's actually out. They don't want to see a recovering economy that needs less, they, they Goldsman going up on money printing. That's been the biggest driver of it. So if the economy starts to weaken again, goal's going to say, see, just like 2008 gold had a big run in 2008 forward when they started printing money.
Well hand over fist. So they're going to react to the money printing in the next round, probably in the first quarter, have their last thing. And again, what caused gold in 2008, it did the same thing. Money printing early on crisis. Good. When the deep relation set and remember what I said earlier, gold correlates almost a hundred percent with inflation.
It does not want to see deeply patient. Okay. So when depletion sets in, like when Lehmann brothers hit. In mid 2008, gold suddenly went down 33%, silver, 50%. It was not the safe Haven in the GFC. It will not be the safe Haven in this downturn either. Cause this downturn is going to see deflation that's, what's going to drive gold to a thousand bucks, give or take, but it goes up because it's not going to see that deflation early on.
It's just going to see ah, More money printing. Yeah. Yeah. I wonder though. I mean, if you think, well, you're right. Gold is nearly perfectly correlated with inflation believable. Yeah. 95%. I think 97% correlation with the, uh, with the tips index. Now, if you think inflation will eventually pick up why wouldn't the stock market pick up along with inflation.
No, no. I mean, we may get just a teeny from all this money, but I know the downturn always takes inflation down. I'm talking a really big downturn that will take us into negative inflation. We only touch that in 2008. Why, what did they do? People don't understand all this money. Printing is not. To create, um, inflation, it's the fight deep way.
And they want to get 2% inflation just to fight it. It's only been fighting deflation when deflation comes back in, it's going to be a point where they can't print enough money, Dave, and this has happened in the past. They can't print enough money because what I tell people, the central bankers unknowingly.
By goosing up financial assets. Remember the number 500 trillion, six times global GDP overinflated financial assets created a monster that they cannot control when the smart money and investors decide this ain't working no more. There ain't no amount of money. They can print to stop that that, that will take you.
Remember the number I said minimum $200 trillion in real wealth and money. Out of the economy globally, and you will never see inflation for a long time and it'll come back slowly in the next boom. You're not going to have to worry about inflation a year or two from now. It's going to disappear and go negative.
That's my one more point. The Dow gold ratio is something that I've heard from some prominent economists. Now what the argument here is that in the past we have seen periods when the Dow to gold ratio was one. Now, right now 30,000 points is when the Dow. Uh, let's just round up goal to $2,000, make it around nice round numbers.
So some quick math in my head, that's a fifth that's ratio of, you know, 30,000 to 2015. So 15 to one is a big, is a big grain. Do you subscribe to that theory? Well, I wouldn't know, ordinary times if we were not going from the greatest bubble in history into a deflationary reset. Okay. And, and, and it's hard to judge gold on this because in the thirties they control the price of gold.
They confiscated and control the price of it. So you can't say, Oh, what did gold do in the 19th? I'm telling you if gold had been free trading in the early thirties, it would have crashed. And so this is a temporary thing. Long-term goal will return to an inflation long-term goal. We'll definitely boom, with the next commodity cycle.
I think the next commodity cycle, David overall with gold as being a leader and the precious metal may be the strongest in history because emerging countries, which are going to be driving this next boom, Asia, middle East, and Africa. Consume a lot more commodities as a percentage of their income than they do, uh, you know, capital goods and things and, and stuff.
So I think gold is going to do well longterm. This is, this is a reset for gold. I have to remind gold buys cause goldbugs like Peter Schiff talk about, Oh, all these bubbles, bubbles, it's all artificial. And like Peter. Gold went from two 50 to 1934 in 10 years, and went from four 50 to 1934 in six years.
That's as big as any stock bubble. We've had gold bubbled with this as well. Gold is a financial asset in most people's mind and it correlates with inflation. But, but again, the mistake here is if everybody particularly gold buys, keep thinking. Escalating money printing is going to create more and more inflation.
And what do we have? I just debated Peter, Jeff. I said, look at this, all of this 10 years of 24 trillion of money printing and inflation is still sitting between one, 1.2 and one and a half percent. And it's near zero in Japan. And 1% in Europe, there is no inflation because they're just offsetting deflation.
You cannot create significant inflation and therefore that's a reset for goal. Gold investors keep assuming we're going to get inflation. One of the days from all this money printing and gold is going to go to 5,000. I am going to predict a day and you can send me out of town and tar and feather gold will not see 5,000 until at least 2038.
If it sees it then and gold is going to have to get, get. That there is not going to come. This is not going to be an inflationary crisis is going to be a deflationary crisis. When it sees that light June, we get June, 2008 goals said, oops, we've been going up in this crisis down there. 33% in a couple of months, silver down 50%.
That's when gold and silver got reality. Oops, deflationary crisis. But they got saved by the fed jumping in central banks and printing trillions of dollars. That looks like inflation again, Harry, last question. If you think that the stocks are going to go down, we're going to see a crash. If you think that gold will first hit, you know, around a thousand dollars before going back up, what do you like then?
What are the assets that you would invest in right now? Okay right now, it's very simple. What, and I studied the great depression and I kept saying, well, something must have gone up cigarettes, alcohol booze, you know, toilet paper, consumer staples, you know? No, just a lot of the stock market is price, earnings, collapse.
Not just slow down. You can have industries that don't. Maybe don't grow, but don't lose sales, but they still go down in value because overall people see risk. So what I like and what did well, only thing that did well in the thirties, depression, particularly the 29 to 32 grad highest quality bonds. You know what that is?
The very things goldbugs tell you to run from U S long-term treasury bonds. I am predicting in the crash where stocks go go down 70 to 90% in the next two years. The 30 year, the longest duration us treasury bond, which is only yielding about a one and a half percent. Right now we'll go up 30 to 40% in value.
You just sit in the safest investment. The one thing the U S government will pay off above anything else because they can't afford to lose their credit rating. Even at a downturn. Us treasury bonds and only, only the AAA corporates. Those are the only two things that survived. The 29 to 32 crash, went up a bit in value and did well for the whole 1930s deflationary period.
So that's it. But now I say you just do that. You're getting cash like, Oh, I like apartment rental, REITs that focus on affordable apartments. I like REITs that fo focus on medical care facilities, hospitals, because the baby boomers are still in a strong cycle for that in their late ages. So those things are good.
But outside of that, I want to get safe. And then re-invest like Joseph Kennedy. What did Joseph Kennedy do? Got that out of the top bought stocks when they were down. No. Remember this number 89%, not small caps, not junk stocks. Blue chip the best companies, RCA Ford, general motors at and T the fans of that era went down 89% venue by them.
Then I buy stocks. Then I buy gold and commodities, and I would get out of those safe bonds. And you know what else I buy at the bottom here. I buy junk bonds. They're going to have very high yields expecting endless defaults, and those yields are going to come down. Even though inflation comes back, modestly junk bonds will be a steal.
In late 2022, right now you just gotta be safe in play. The deflation plays and there aren't many high quality bonds, cash, uh, uh, rental, you know, uh, re reach that did focus on, on rentals, uh, for apartments, which people have to have and medical facilities. All right, Harry, thanks a lot for your time now, where can people learn more about your work?
Yeah know, I have a free weekly newsletter. If Harry dent.com, I have monthly newsletters more in depth, but this is for people to get to know us. So you just go to Harry dent.com put in your email address. You're on our free newsletter. And I'll tell you a lot more interesting stuff in the months ahead for sure.
And your YouTube channel, right. Yes. That's, that's where the ramps come with with that subscription as well. All right, Harry. Thanks a lot for your time. I appreciate it. And thank you for watching Kitco news. Stay tuned. .