The post-election market rally fueled by Trump’s victory has investors cheering for now. However, economist Harry Dent is still bullish on America’s private debt and the future of its economy, arguing that the euphoria will not last long.

“I can tell you one thing: bubbles never end well. There is no way to go from (a) extreme bubble and have a soft landing. Now that seems to be happening right now and we’ll see. But I’m telling people, give it (until) 2025,” Dent said on Fox News Digital a week after Election Day.

“I think the truth will be told next year if they can deflate this bubble without causing a crash, because I can tell you that (has) never happened in history. And I can’t even compare past bubbles to this bubble, given how global and how widespread it is.”

Former President Trump’s victory over Vice President Kamala Harris in the 2024 presidential election catapulted US stocks to record highs, fueling best week for the market of the whole year.

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Even so, Dent doesn’t budge from his June prediction that an “everything” bubble could burst in mid-2025. Furthermore, he now argues that Trump’s fiscal policies will not be enough to prevent a cyclical collapse tied more to private debt than federal debt.

Economist Harry Dent maintains his prediction that a market crash will hit the US economy by mid-2025. (iStock)

“Obviously, he’s seen as pro-business, and yes, tax cuts — everybody likes tax cuts. But we already have the longest streak of runaway deficits, 16 years. I haven’t seen a balanced budget since 2001 or anything like that. It’s just crazy,” Dent said.

“And I think that’s the big risk here, that Trump may appear to be a good thing to jumpstart the economy,” he continued, “but if he’s going to cut government spending, I’d say that’s going to start a slowdown that’s going to build. on himself”.

Politicians cannot prolong the inevitable, the economist added, while stressing the likelihood of a “very nasty recession when it is finally allowed to happen”.

“Covid was the biggest thing and I think that’s where central banks and governments made a mistake,” he said. “They overreacted to COVID… This would have been a good time to let the economy rest and build some momentum. But no, they doubled down and stimulated themselves harder than ever. And then they suddenly got 9.1% inflation.

Estimates of dent that private sector debt in the US it stands at $630 trillion in financial assets, growing five times faster than global gross domestic product. The “trillion dollar question” is not a question of whether a market crash occurs, but rather Whenhe believes.

“I know the best cure for the economy. It’s called recession or even depression sometimes,” Dent noted. “This will wash away (and) a lot of bad debt will fail. That’s what happens in a recession. It is healthy to borrow and for companies to invest equity, also growing in a boom. But recessions occur, or occasionally a depression, after a bubble boom. And this is a bubble boom.

“So people have lost track, especially central banks that are run by economists who, I always say, look like… they’ve never run a business… Failure is the secret of capitalism. It’s not just the opportunity to innovate. It’s too (rapid) to allow failures to happen and take them out of the economy And we haven’t done that in 16 years.

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Overvaluation in the market ultimately damages the “economic indicator no. 1 that hardly anyone looks at’: the velocity of money, which is defined as the rate at which domestic consumers and businesses exchange money in an economy.

“The velocity of money has dropped like a rock since 1997, right in the middle of the first bubble forming … it just shows that bubbles are not healthy,” Dent said.

The generation that could suffer the most from next year’s market crash it’s baby boomersmany of whom are entering retirement and relying on their portfolios.

“If all these financial assets that they have for retirement go down and they get less income because they’ve left their jobs, or they just have a small pension or something like that, they’re going to be in big trouble… But I’m telling you , if I’m right about this crash, and Treasuries go up as a safe haven, they’re going to do nothing but go down for the rest of our lives there, because low inflation is not a good environment for them,” he explained the economist.

“So I think the next few years are going to be ugly. The question mark is, when does the curse begin? Positioned tooth. “I think central banks know that better than anyone. They just can’t say that because they don’t want to scare anyone.”

If anything gets markets off to a strong start in 2025, it is bitcoin. Dent told Fox Digital that he has bought more of the cryptocurrency since his last interview in June.

“But I think in the short term, it would be hard for me to buy anything else aggressively if we had the kind of crash that we talked about because bitcoin could go down to the 15,000, 16,000 levels, the last major low. .”

“I make my long-term projections by comparing bitcoin to other innovative new technologies, such as the dot-com revolution of the late 1990s, that bubble and what followed. Bubbles finance the new revolution. So they’re a good thing,” Dent. added. “Bitcoin, I see it going to 800,000 to 1 million by 2037 to ’40. So, I have a long way to go. were the purchase of life I would be hard-pressed to buy anything else at those prices.”

At the moment, market traders are “on board” with the post-election bubble, even though Dent compared it to being on the Titanic.

“When everybody gets on the boat, that’s when the Titanic sinks. So I think everybody’s on the boat now,” he said.

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“Look at the reality, look at the charts and see how much again, I’m just talking about housing going back to 2012. That’s (a) 62% collapse in housing, which would be twice as bad as the crisis of 2008. And that was bad for most people,” Dent said.

“Stocks, since 2009 alone, that’s 89% in the S&P 500 and 94% in the Nasdaq. This is a total removal. From 1929 to 1932. You have to at least admit that’s a possibility here. .”

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