Historical Housing Crash Started "SELL NOW" says Economist Harry Dent, Jr.

Do you believe we can have a soft Landing no it's impossible people have to realize the enormity of this bubble there is not a comparable bubble in real estate this is going to be worse than the than the crash before and it's going to be way worse than the real estate crash in the Great Depression this is going to show why the Federal Reserve and central banks shouldn't be manipulating the economy these people Are dictating economies playing with the money supply and it's dangerous because of these giant lags this is a first in the world

economists don't understand this because they think it's all politics I don't study you know how much time I spend studying politics none I don't care who gets elected president they don't drive this ship and all I can tell you since there's no precedent for a bubble this big in This Global it's not going to end [Music] well Economist and bestselling author Harry D says home prices will crash by at least 50% and we'll never see them as high as they have been over the last several of years at least In Our Lifetime now if this

is true in order for this to happen we would have to have a massive financial disaster headed our way but before you turn your nose to Harry's predictions listen to what Harry is saying and then ask yourself despite His timing being off so far as Harry or nobody for that matter can control the last ditch attempts from the government to kick this can down the road you have to ask is there truth to what Harry is saying and I will say this if we don't have a massive recession this would be the first time in

history that no economic downturn comes after an economic boom now many economists believe including Harry Dent that will see the largest economic bust in history Way bigger than the 20 8 Global financial crisis and maybe bigger than the Great Depression and some of these economists are saying it's already begun I hope you enjoy the [Music] show Harry welcome back to the sax realy podcast so great to see you yeah yeah down in Puerto Rico where the weather's almost damn near perfect it's unbelievable yeah all the way the good thing about having m Mountain unlike Florida

is the mountains get all the rain so we get all the Sun and they get all the rain so we have plenty of water and plenty of sunshine both did you guys see anything from that last hurricane that uh no that went good I mean we got one dad bad day like a bad rain day and when but it went well below us yeah we we are in the strike zone so one out of two serious hurricanes we are gonna get so we got lucky on that one yeah well today we're going to talk about

the US Economy especially the housing market and you've said recently that the stock market will crash the housing market will crash and the debt bubble will explode and it's it's kind of all happening now as the government's ability to prop up this economy I think has been exhausted so yeah yeah this yeah we're at the end of the greatest debt ball and and and we've never seen two bubbles in a row that's another unique thing two real estate Bubbles and Two stock Bubbles and this time the stock and real estate bubbles for kind of curring

together so that's a trip well we've never seen a housing bubble like this I don't I I don't believe I mean I've been serving the housing market for about 35 years and uh since 2020 home prices have absolutely exploded um in your opinion has this uh housing market crash finally started well you know I I I think it's just cresting now I think it's about to start I I tell people you know in real estate look at the stock market because the stock market tends to be the more leading indicator for the economy and then

housing tends to follow and difference if you look back at the last downturn where stocks peaked in late 2007 real estate started peaking before but real estate didn't bottom until mid 20102 when stocks bottom in early 2009 so so when you see the stock market start to fall that's when you start to Say okay I don't have long to sell my house uh if I'm looking at selling uh because because this this real estate bubble is the second in a row never happened before by the way even the Roaring 20s there really wasn't much of

a real estate bubble because loans were hard to get back then in the Roaring 20s a mortgage loan was was 50% down in fiveyear terms you have to pay off the whole loan in five years so the stocks got speculated in and got bit up real Estate just had a normal kind of boom and bust it only went down 26% in the Great Depression you know stocks went down 89% in the Great Depression so this that's what's different this time real estate really is even more so the heart of this bubble and financing you know

since the kind of the 80s forward and particularly the mid90s forward financing has been so easy and interest rates keep getting pushed down by the fed and and falling inflation um and and That was all because of the baby boom so so this this really has been the most Global and the biggest real estate bubble in all of history in fact I'm telling people I don't think we'll ever see one this big again and we haven't seen one this big uh previous even going back to the 1800s or something so this this is a big

deal and and you know normally people say hey it's my house you know I'm gonna be in it forever okay well yeah yeah if if you're thinking of Trading up don't do it now you know stay in your smaller home and wait if you're thinking of selling and maybe retiring and and and downsizing a few years from now because you're an aging baby boomer well well sell your big house now and wait a few years for the to see if this crash sets in which I think is very very very likely um to buy so

so real estate's the biggest purchase we make and again never before a bubble like this because of such EAS such such easy Financing for for housing mortgages and and I'm telling you the people who I feel most sorry for in the world are the Chinese Chinese have incomes like more like 12 to 15,000 in US dollar equivalents and the typical Chinese household is buying one little house and then buying one or two more and leaving it empty not even renting it out because they think real estate is the road to wealth so so as bad

as our bubble may be the biggest we've ever had in the US and Bigger than the one uh that peaked in in um 2006 and crashed 34% on average in the US this bubble will be bigger here but the Chinese are going to see the real estate bubble burst of all times and and that is going to take that economy down in a way nobody expects and and China will never fully come back because they're the only emerging country that is has has seen a peak in demographics that in other words their population is aging

like the developed Countries even though they're emerging country with lower incomes and they have some urbanization left but but I I'm telling you the real estate bust in China is going to go down and hit history and going to make us feel good about mate oh a home price is going down 50 to 60% here now real quick I mean I was I you know I was previously Wonder Hey the last one was 34% on average that means upscale homes were going down 50% or so and again nobody ever thought I I Was told all

growing up real estate's the one thing that never goes down they're ain't making more of it and stuff well that proved that wrong but this bubble has gone much longer much higher and and now just I'm looking at just getting back to the 2000 mid 20102 lows not that far ago and that is about a 60% drop for the average house and of course that could mean 70 80% or more for high-end homes and condos and and one of the funniest things I get every Time I give a presentation usually some some you know older

lady will come up to me and say Harry you know let me tell you about my house in La Hoya it's on The Cliff it's the it's the greatest house that's got this and that certainly Harry my house isn't going to go down and I'm like Martha I'm sorry the bigger the bubble the bigger the birst the best houses are going to Bubble the most in a in a market like this and go down the most and they'll still be the best Houses and that's exactly what I want to buy on the other side a

few years from now the best houses in other words somebody may be looking at a you know 3,000 square foot house today to trade up into and then we come out of this you may be able to buy a 4 to 5,000 foot house for less than the 3,000 foot is today and so this is going to be what I call the last great buy opportunity in real estate we did get one in in in 2012 and and and and shortly after that and Otherwise you know you'd have to buy back in the early 80s

in the deepest recession back then so so this is a huge threat to what is the biggest asset for most households more most people own more real estate than they do stocks only the richest people have a li amount of stock the the biggest threat to your net worth but also the greatest buy opportunity just a few years from now if if you'll be patient and if you'll sell any Unnecessary re real estate let's say let's say you have a nice home you're living in and you got a vacation home and maybe you're you're considering

retiring in that vacational okay uh okay it'd be best if you could sell the most valuable house and the one with the most equity in it now and raises much cash so then you can have the most to buy real estate at the at the buy opportunity of a lifetime years from now so and then the other good thing about Real estate just before you know you ask more questions is it real estate does take longer to bottom so so there's going to be a longer opportune buying opportunity here last time it was like 2009

to 2012 where you could have still bought them near or near the bottom so I think this one will be you'll be able to start buying houses maybe in 2006 at great bargains and that may extend out to 2008 or longer so this is so so people should really be looking at real Estate vacation uh investment um main homes everything retirement and say what do I really want and then be waiting to pounce knowing this is going to happen and and build up all the capital uh you can now and and some people will come

to me in my presentation say oh how hey I got this house with a big mortgage on it my second house doesn't have much oh I should sell the one with the mortgage I'm like no keep the one with the Mortgage the banks may have to write that down for you if it goes down enough you may get a freebie there sell the one with the most almost everybody gets that one wrong they think they should keep the one with the most equity and sell the one with the most debt no keep the one with

the most debt because the bank you're very likely to be able to if things get as bad as I say a 50% or more drop in real estate banks are going to have to renegotiate loans with people And you may get that high mortgage house written down so you sell the house create a big the the the house you own the most of get a big pile of cash and then maybe get your mortgage written down a few years from now with the government helping to subsidize Banks do that and I think they'll have to

do that and you just you just win across the board interesting will you uh I want to unpack a couple things that you said um because I really never uh thought about Him the way that you mentioned it first is well first let me say that uh here in Maryland back in the GFC we were probably one of the states that was hit the hardest and the slowest to come back and people don't really realize it they they're they're so shortsighted they only think about what's happened since 2020 and you're exactly right I have a

client that I sold her house last year they paid 1.3 million for it in the peak of the market in 2006 and you know they Couldn't get out of the house in the plus until 2022 and I mean it took that long for the prices to come back and yeah and but the what I want to say here is you maybe think about something that um you know one of the look I've been saying since 2022 and I know timing's off you've been saying the same thing but we agree that this housing bubble is not

sustainable and I've been saying it since 2022 that We're having a a crashes is about to happen but none of us could predict the government stimulus in the way that they've propped it up and kicked the can down the road and I want to dive into that a little bit but you said something very interesting that now we're in the second largest asset bubble ever with housing but you mentioned back in the 20s even the Roaring 20s we didn't have the real estate bubble that we had because of you know interest only Mortgages five and

sixe mortgages and yeah they needed 50% down to get those and you know but what you said people want to say this will never happen again because loans are tighter than they've ever been or what that's not true yeah but it's but what you just said is the truth back in the 20s look it's still easier today historically easier today to buy a home than it was ever before well yeah that that's been a Big change since then um and and and people don't appreciate that it was hard to get a mortgage back then you

almost had to be in the upper crust just to buy a decent home back then and and and that's not the case now and and and and and now real estate again because of government pushing real interest rates real interest rates lower and and and these zero rates which even now Powell said Rec you know we may never see these zero rates again you know I think They're going to be low long term but you're right zero rates because they push them to low this is this is the number one thing to create a housing

bubble and the reason why we had what I call a second artificial housing bubble to follow the natural one into 2006 that was the greatest boomman history which I alone started forecasting in the early mid 80s I said people this is not a recovery from the long 70s recession this is the greatest boom in history With the largest generation ever and we're going to see a boom in 2007 that's going to last longer and go higher in stocks and real estate and anybody think and people thought I was crazier back then than they think I

am now when I'm bearish okay and people call me now a Perma bear this is one of the few times I've been bearish in my whole forecasting life but that you know that that's what people do but but yes it's just there's never been a time where it Was so easy to fin real estate and again for Chinese on S and the Chinese on such low income there compared to here imagine buying two or three small homes and you make $15,000 US dollar a year that's what the ja typical Chinese person is and a lot

of those people have a second or third home and S and one or two of those are out of two or three are sitting empty not even renting out so it's just this is a once in history sort Of event stocks since they were created in the late 7 and irons have always bubbled and burst and the rich have always driven them much more than anything else but almost every you know 60 70% of households buy real estate 60 70% of people don't have anything significant in stocks and other financial asset but they buy real

estate and so when the FED what they did particularly as you said it was it was covid that really blew the top off Because Co hit and and and there's been and I I calculated I'm the only guy talking about it since the 2009 down 20089 downturn when they really started stimulating $27 trillion do in stimulus 19 of it government deficits that go straight in the economy and the other nine million of it eight million of it went straight into the financial markets they buy bonds and push all fin that's more money chasing all Financial

assets And it always ends up in the best ones real estate and stocks it doesn't sit in in government bonds which people buy so so they this this overreaction to co I I was saying what's wrong with governments covid is a natural disaster it's just like the influenza that happened 1918 to 20 it hit for two years everybody got it then it went away they out of the 27 trillion I've talked about in stimulus in the last 15 years 11 of it came in the two years after covid so it was this Over reaction to

co took inflation that right with my indicators longterm going down towards 1 to 2% never to be high again and shot it up to %. and then that forced the FED to to raise interest rates 525 basis points and right now I'm looking at this and saying we haven't really felt that much yet usually that's a year and a half lag my theory is since we had such a giant magnitude of stimulus especially after covid and such a giant tightening that it may be taking More like two years for these to filter in and and

so we're not going to know how much this tightening which already done they already went to 520 even if they started loosening in September which is the earliest anybody thinks and that'll probably just be 50 B bases points not much out of the 525 this thing's going to keep this tightening keeps hitting for a year and a half to two year after this so so so this is this is going to go down as a huge this Is going to show why the Federal Reserve and central banks around the world including Mario B BR drogy

and all the ECB people over in Europe shouldn't be manipulating the economy what's free market capitalism the markets are a bottomup system that work way better than top- down bureaucracies and dictatorships and everything else that's been tried in history that was the greatest innovation in history democracy broad participation of people and free Markets which really rewards Innovation people think democracy and and and capitalism or or brothers and sisters no they're opposites One Rewards Innovation strongly the other one includes everybody even if you don't contribute much and that that allows people to you know identify with

the system and support it it's the best con it's the best marriage like male and female in history so so what we're doing now since 2008 I mean democracy's been weakening For a long time a lot way you know special interest and all this stuff stuff and lobbying but but free market capitalism got attacked 100% by central banks starting in early 2009 and and I call that the greatest crime in history this is what has made us rich and and and now academic people do you know anybody in any Central Bank any head of any

Central Bank in the world that's ever had sex or run a business or looks like they ever had sex or actually run a Business and and the answer is probably know these people are dictating economies playing with the money supply and it's dangerous because of these giant lags and everybody saying oh the yeah they this the tightening didn't matter that much we wait another six or 12 months we won't know until early to mid 2025 how much it hits and I think by then even with a little easing it's going to be worse than people

think why The greatest debt bubble in history I can not compare this bubble period to the Roaring 20s or the 1820s and 30s which is the other great bubble period of the 1800s or the one from 18 Civil War into the 1870s which came the long depression over 20 years okay I can't compare it to those because this bubble has been longer and bigger and again the first bubble was natural just 25 to 29 bubble inide it was natural the economy was so good good inflation was falling For natural reasons and people just get Giddy

and they and and things end up in a bubble okay no this is the second bubble and and two bubbles which started in in 95 and and and are peing here looks like in 2024 this is the longest greatest and only double bubble period in all of modern history and all I can tell you since there's no precedent for a bubble this big in This Global it's not GNA end well no and everybody says a soft Landing there hasn't been one bubble short even the tulet bubble it was two years up and one years down

but the the landing was down 98 99% that was the first modern bubble in the steepest and fastest only driven by the rich only richest people were speculating in these tulip bulbs and stupid stuff driving up a $2 Tula bulb to a thousand bucks that's kind of what kind of happened in reality that Bubble Burst 98% in one year so this can only end badly and it Is and this is not a Us bubble it it's a bubble in everything and the Japanese that hit them first and their real EST their stocks peaked in late

89 and only went to New highs 35 years later recently and that's about to crash bigger than they've ever seen and their housing peaked in 91 and have never seen and will never see new highs again so real estate goes down longer and comes back slower because the real estate is is is demographic and it's local stocks Are Global I don't care how bad we get hit in this crash even if the US is slower to come back particularly because of the real estate markets and stuff stocks are Global and they'll come back with the

world and the world will come back especially emerging markets and and in some of the places that have stronger demographics than us and of course Japan has continued to lose no matter what happens because Japan was the first developed country peak in their Demographic Trends longterm and everybody else is following China is now the first and already is peaked in their demographic Trends emerging country and all emerging countries will follow but it'll take decades for many I mean India won't Peak until 20055 demographically in Southeast Asia 2045 so there's there's tons of growth in the

merging world and and and and all of that but but for for all the developed countries Us is plateauing between 2007 and 37 and and again I am saying that when Real Estate crashes this time more than last time only back to 2012 lows which doesn't sound that much but it is 60% now for the average house 70 80% for the typical upscale house we will never see real estate prices to those highs in any of our lifetimes and probably not even our kids wow stocks in some places will I don't think our stock market

will will ever see these highs either I don't Think the Dow will ever see 40,000 in any of our lifetimes again and real estate definitely W yeah let's dive into some of the reasons but first I want to talk about and you know you mentioned Japan doesn't Japan have like a hundred-year mortgage or something crazy yeah yeah they go out to 40 to 60 and I think they do have some 100 y more and and that's what people do to stretch it and all but again Japan people say Well when house prices go down no

Japan uh Will never ever be the same because unlike the unit we have the option we have high immigration and we have the option since we're the most attractive country still in the world to up it if we really wanted to ask for it okay Japan has aging demographics and no immigration they've never allowed much immigration and their culture doesn't want immigration I don't blame them that they have a great culture but they are a dying Japan is the example to the rest Of the developed world of how the entire developed world is plateauing or

dying in only a few countries like Australia New Zealand and and Norway Sweden and Finland five small developed countries in the world have demographics that go higher in the future all the rest of them are flat to down forever as far as you can see this is a first in the world economists don't understand this because they think it's all politics all they study is politics and politics and Politicians and what they're doing and this bill and that I don't study you know how much I I spend studying politic none I don't care who gets

elected president they don't drive this ship they don't make that many decisions and they take too long to impact even if they do doesn't matter to me if Joe Biden's reelected or Trump gets in okay maybe for certain bills or certain things but for the over World economy I don't base any on that okay the baby Boom generation caused the greatest boom in history when it failed governments overstimulated everywhere and now the millennial boom that when the US will Peak around 2037 has already been pre-bed you know it's already been mostly played out with all

the stimulus people have bought homes bigger than they could afford or they bought homes earlier than they could otherwise all the stimulus and so and then once we wash this out I I think you know we're Going to be very slow to come back even though the Millennials are finally driving us up again after the Baby Boomers why we didn't allow the economy to do what it does best it knows how to boom and scale up it also knows how to detox restructure debts I always tell people one of our big biggest in invas underrated

is bankruptcy there was a time when we didn't have bankruptcy in the world you went bankrupt they just you know pillaged and took your all your Assets you went bankrupt your your your credit was destroyed forever and game over somebody came and say oh hey why don't we bankruptcy have a little period renegotiate and then do a win-win for the credit so the company can keep going otherwise the creditors lose everything if the company goes under so we have chapter 11 reorganization instead of just chapter 7 B that was a huge invention in history that's

what the economy is going to go through this is Going to be make the economy stronger that we've never had a debt bubble this pervasive This Global but but again it's been a bubble in everything all Financial assets stocks real estate Commodities everything all these bubbles will burst the cost of living will come down which will help the everyday person more than anybody and and and and what I tell people and I'm usually lecturing to richer audiences by far I'm saying you guys are the ones in trouble here you're The ones top 20% own 86%

of the financial assets that are going to go down here this the major theme of this is not the downturn and how high the unemployment how long it last is how much Financial assets go down that's the rare event that's what hit the richest people the hardest where is unemployment I would way rather be the everyday guy and lose my job for a year or two while getting benefits from the government than than a a wealthy person that loses 80% of their of their net worth and it takes for and it never comes back that

level or very slow to come back I'd rather be that guy that lost his job for one or two years and get some welfare I hope you're enjoying Harry's interview so far and now I'd just like to mention that this episode is brought to you by our own saxy.com if you're interested in buying selling or renting and you're in Maryland we hope that we're your number one choice at least give us a call and a Chance for your business and if you're anywhere else in the country you can visit saxy.com we have an amazing broker

Network all over the country simply click on your state the city dropdown to find an agent in your town this is a new program for us and if there isn't an agent already in in your town please send me an email and I would be sure to connect you with somebody that I trust now back to the show what you just said I mean I I've never heard anybody Say it and it makes the absolute most sense so even the people that are running this country I mean they're rich they're wealthy and so what's happening

is um we're about to do a massive transfer here of assets and um we have built what you're saying is because of the prosperity of America over the last 30 years really I mean even though the GFC even though the dip whatever but you take the last just call it 30 40 Years of prosperity where you know the average American the baby boomer has been able to amass this asset which really comparing it to the Chinese they're doing it on a much smaller scale they only make a little bit of money but they believe in

this real estate asset but now when we look look at it the Millennials they can't afford this asset debt even the debt that comes along with it so we look at more mcmansions now than we've ever seen historically in the United States I mean when post World War II when soldiers were coming back the government cut red tape to build affordable housing these were three bedroom one bath houses everything looked the same and at that time the Bob Hope generation was young coming out of where they were the young soldiers who now needed to become

the new homeowners and so that was a very timely time to do that sort of thing and and that's the problem that the lucky Millennials here are the ones that did get priced out and Didn't end up buying a house could they afford to because when this happens they're going to turn around and say oh my God forget that 2,000 sqare foot house we're looking at Honey or bigger three and a half to 4,000 one that has gone down 70% and the Govern govern telling yeah okay banks are a little skittish about lending the governments

are going to be pushing Banks and rewarding them for Lending they're going to want to see This recovery and the only way is to stimulate home buying by these Millennials that never got to buy home that is just like after World War II that's going to be the way to pull us out of this so the government yeah and then you have all this the land and then you have all this inventory that is 36 4,000 ft 5,000 foot houses they can't afford to heat and cool it let alone even if their parents gave it

to them they're going to be in trouble because The taxes alone the property taxes the insurance the HOA fees and everything else they're going to need a bulldozzer to those houses so even but what you're saying makes it is probably come down so will the property taxes and other things they'll have to yeah and but but to your point this reset is really coming and I don't know that the way you just described it I don't know that it's even possible to stop it the only way that you could stop it would be Hyperinflation and

that would be the government printing more money you know injecting you know doing more quantitative easing and that's just going to push asset prices even higher so I mean I it's brilliant the way you just described that and I mean if if people can't you know if people are so quick because we are so shortsighted in looking back and I get it to in the comments we saying you know you're wrong with your projections you're wrong with I'm going how can I be wrong I don't want to be right but when I'm looking at okay

the only way that this can correct in the same trajectory would be that if employers tomorrow all of a sudden said I'm going to take the biggest line item on my income statement salaries and I'm going to make it even more I'm going to pay everybody double and triple what they're making right now so that they can afford to live and Harry I think that you would agree that's not going to Happen well well again everywhere I go and Australia is my favorite place to speak but they're also the most delusional people there think High

housing prices good thing High housing prices real estate prices increase the cost of consumers living and business cost and government and who who owns more offices than governments okay so so this housing thing coming down is going to improve our long-term standard of living the trick here is if you haven't Bought one thank God and don't be tempted to yet if you can sell one or two of your houses sell and create as much cash flow as you can if you can sell anything I mean how price I mean I bought a house when I

moved to Puerto Rico because I got a deal that was just could not resist I already bought something that was 30 40% lower than it should have been because it sat on it sat empty for five years after a death in the family and they just threw it Back on and didn't even know what it was worth you know I just saw it and bought it right when I was telling being my newsletter not a good time to buy house well I've already covered we get and Puerto Rico is going to hold up way better

all Americans moving here upscale homes but even if it goes down 30 40% I won't even be close to what I paid for it and we're adding value to it so I was able to not have to wait my wife has not had to have me wait to buy a house when We moved to Puerto Rico because we got lucky but man I'm telling you right now uh I want I want to look at a couple charts um because I think I think this is going to support what you're saying um even though it wasn't

meant to and I think that uh we're smart enough if people would just look at the data and information instead of just turning their nose to it and saying you know that's not true or whatever and then all of a sudden waking up one day and saying Wow I mean let let's just say we you know hope for the best and plan for the worst that like you said if you haven't bought a house house yet and you were depressed about it you may find out that the tide has shifted and now you can get

what you want and you'll say wow I'm glad I didn't but there is going to be a painful road to get there because one of the reasons why people think of the GFC I was in it I mean I I work in real estate and you know people thought you Know well well the subprime mortgages were the only thing that uh was the Catalyst for the foreclosures or people turning in their keys and it's not true what was happening was and I know this P firsthand uh because I dealt with the people and I watched

it happen people were saying oh I could buy the house across the street which is nicer than mine for $150,000 less than my mortgage payment I'm going to stop paying my mortgage and they just basically turned In the keys and this was so it wasn't just the fact so when we look at okay real estate prices and they have come down by the way at least in our area in the markets that we Trend um the Brokers that I speak with you know some areas are already taking 20% 25% haircuts um you know we're seeing

inventory explode we're seeing days on the market explode we're now seeing more seller contributions than we ever have in the last four years because you know they Didn't have to fix things two years ago now sellers are and sometimes it's a costly repair so that is a a that is an improvement you know on affordability but what I want to look at these articles because housing wire and I subscribe to this and you know um I have the premium version so I can get a whole bunch of you know uh data that they just don't

push out in the news but in this there's an article that was uh this article here that was dated July 10th uh By Mike uh Simonson he he's the CEO and the founder of a real estate analytics firm uh altto research and by the way a lot of these firms are really they're crapping up everywhere um Lance Lambert I just interviewed Lance um he has his own now data analytics he was with realtor.com and then uh was with Fortune uh magazine but um this article states that and this is Harry this is the critical part

that people they look at these headlines and then they doubt the Ability that all of a sudden one day they wake up and find out you know they weren't reading the data correctly but it says now only 76% of American Mortgage holders have an interest rate below 5% now you you may say well that's a lot of people but look at the details here that is down from 85% level from just two years ago so appears the low uh interest rates of mortgages are starting to churn to higher mortgage rates as we've seen you Know

now mortgage rates have been over 5% for more than two years but still historically low but not once you consider the asset bubble but in this chart uh here um it talks about uh there we go it it it shows um which is really interesting in this chart it says that if we average and and this is you know Mike uh Simson here writing this but it says if we average a loan of value ratio across loans in the country we see a dramatic improvement over the last Decade in 2013 nationally we had a 70%

loan to value ratio on outstanding mortgages now after a decade of dramatic home price appreciation and an expanding economy mortgage holders in America have only 48.3% but what people aren't realizing is that's the bubble right I mean that Bub quick that can be wiped away so when people are looking at this chart they kind of feel like they're safe meanwhile their property taxes have gone Up their HOA fees have gone up their repair costs have gone up hundreds of percent in a lot of cases over the last decade I mean what was 20 500 to

put in a HVAC unit is 25,000 uh you know now to to have with every you know all the everyone's expenses gone up but let's look at this next chart um it says improvements in loan to value from 2014 to 2024 with higher numbers imply stronger borrowers throughout the country and this map Beautiful as it is shows everybody like hey if you live in Florida you are 27% strong mortgage holder now here's what people don't realize houses are not a fungible thing I mean you can't take an exact there is no exact analysis to say

we look at this data and it's like okay this data is great but it's not accurate because what people don't realize is when they let their home maintenance go and you know Things start falling apart and things start breaking and what they really don't realize is a house is not a liquid asset you have to have somebody buy it in order for these values to be good so when inventory starts flooding the market and these buyers are saying yeah I think I'll wait a couple more weeks or months and see where it's going because it's

a downward Trend these sellers and mortgage holders are in for a rude awakening yeah that's another thing you Know if stocks are going down I can sell them in a second even as they're going down real estate clams like you say when when things start looking questionable real estate F real estate just gets hard to sell period that's why I'm telling people man if you've got real estate that's not dear to you and you're not going to be in five or 10 years from now or whatever or already retired or something then move it now

because it it it can get difficult very quickly again I can be down and say I wish I'd have sold stocks last month it could be down another 10% but I can still sell that stock in a few what do you think it kind of walk us through the scenario because I think that you're you're spot on with the fact that this can't continue and I think that we are in you know some pretty uh dangerous territories with the um respect to affordability and the housing cost is just it's when we look back I Had

a a a podcast with a guy um and he's a nice guy but you know I look at look I'm not trying to say that I know it all and I don't want to know it all but I've been in business for 35 years I've been in the housing market Serv in the housing market for 35 years that's a long time I've seen a lot of things from the 80s to the 90s to and and I interviewed a young guy and no no knocking on young people out there they're the future and hope of of

America and but you know it was funny because he said you know back in we got into this like debate I said you know we're in a really awful affordability crisis where homes really haven't been this unaffordable for the American family and he said actually that's not true he said in 1978 was the worst it was way worse than now and I'm like well how do you see that and what we've been sold in America is that Finance is their is our gauge not actual asset price so It's like what can the payment you know

what kind of what what's the payment what's the mortgage mortgage interest was high in the late yeah it was it higher but you could still three to four times your annual income you could still afford to buy a house and the crazy thing about it is I think it was and I could be off a little bit on these numbers but I think 48% of married couples had the mom working or at home working at home raising the kids not out Making an actual income um you know paying for the bills so back in That

70s period yes you may had higher interest rates people put more money down um they uh where the asset was three to four times their income now we have markets that are nine 10 times median income from medium priced home so you know you can you could take all this data and all this you know garbage but but Harry what do you think I mean you've been around you you've said it I mean you deal with A lot of people with a lot of wealth you're advising them you're an economist you're trying I mean you're

an author you forecasted you have a very long track record and it is hard to pinpoint you know people critics want to say oh you're you're Mr Doom the government is act I I called the 2007 top in in stocks that whole boom decades before it happened but the government hadn't started intervening they started taking over the economy in early 2009 that's When things changed and now everything's perverted and and and and they cause that's why this second bubble in stocks and more so in real estate 100% artificial it's not based on favorable demographics or

or productivity or anything else and some of those things have been good enough just totally artificial so it just means this bubble is more dangerous and is going to have to fall farther to get back into reality and and when that happens you get this Overnight Baby Boomers lose and and and and and and Millennials win especially the ones that didn't buy a home but even if you're sitting in a starter home and your next is going to be a double the size trade-up home you win if that trade-up home comes down to the cost

of your darn uh a starter home used to be so the Millennials are the winners in this and the ones that have bought will feel some pain but the Baby Boomers are the ones That got our sit back and say whoa because I'm telling you I can talk people out of stocks easy I've been giving speeches for 30 some years now the hardest thing to talk people out of is real estate because they're attached to it they fall in love with it and they've been told since they were a kid and by their grandparents and

their parents real estate's the one thing that never goes down in 2006 to 12 already disproved that and this one's going to Disprove it forever I studied the history there been plenty of real estate bust if you go back in history yes yes and it I mean every decade or so um since probably the Great Depression but even prior to that I mean we had natural Corrections where the economy would get out of place you know back into the 1800s we had panics through the 1800 yeah yeah we had panics boom bus we had pandemics

we had uh all kinds of things recessions depressions and you know but The difference was back then it happened every year two years and it would automatically adjust itself it was correct because we didn't have the government uh you know kicking the can down the road but what do you think um I mean you've had to have thought about this so if you had to talk about the progression and I know you said that you know first things show up in the stock market you know where you see real earnings I mean earnings reports are

Going to start I mean there's a lag effect but eventually these second quarter earnings reports are going to come out they're not going to look good uh you know stock holders are going to start to lose um interest this is kind of a decline that can happen like super fast but what do you think if you had to like step us through um not necessarily a timeline because we know that that can be padded but what would be the progression will it be higher Unemployment will it first start with earnings reports I mean what do

you think will get to the point to where we'll start to see a a pretty rapid deterioration well you know it's really simple the stock market is a leading in the stock market's always looking forward and so if something's going wrong they're going to smell it first okay and and so I I really track most the NASDAQ since it's a little more Progressive than the S&P 500 a a little More Tech warant and stuff so basically I'm you know the the 2022 NASDAQ went down 38% in one year that was the first warning hey folks

something's wrong be one thing at stocks correct 10 20% all the time 38% one year no well that was covid okay but but and and the only reason that didn't last long is because government's overreacted to co but it's the overreaction to co which is the problem now and it's created a bubble way bigger than it needed to be and so I'm I'm my major thing if I if I'm somebody and I'm looking at real estate I would basically the best leading indicator if the NASDAQ starts crashing again and I think you're going to see

that soon that's the first sign of something wrong that's when I start saying okay I got to get serious about selling any real estate that's marginal for me and I don't want to keep forever um and and and and get on it and don't be waiting for the best offer when you Get in that zone so I think stocks are the best leading indicator stocks tend to lead the economy by six to nine months and then the economy going down is what obviously hits Mo most hits real estate people are going to really I mean

real estate's the biggest decision you make the biggest thing you're you're you're making a a down payment that is leverag 10 20 times on the overall impact on the economy and your debt and everything it's the biggest thing we do So housing is what clamps up the most when the economy reflects it more than it's not going to react to the stock market but I'd use the stock market as saying hey the NASDAQ starts crashing again you better look at your real estate just ask a question there before you can continue because then I want

to talk about the economy and the indicators and what your projections are for that but do you think that we'll see all right we're we've we've seen and and I want to I I I can't let you get away without talking uh about the latest Janet Yellen interview with Yahoo finance so I want to definitely get to that but when when we look at the stock market as it dips and goes down um I it reminds me of leading up to 2008 housing crisis so when the stock market started to go down I watched investors

yanking their money out of the stock market and they were putting it in real estate which even jacked it up that much more And really created and I think that was really where the subprime that served that market because those people shouldn't even have been buying real estate and the second and third and rentals and rehabs and back that yeah so do you think that when we see the stock market or earnings reports or whatever or the forecasts come out and they're not as or the investors the smart money the more educated investor says hey

look I'm going to I'm selling now I'm getting Out of the stock what will they do with it do you think we'll see a um almost like a you know a a dead cap bounce to real estate I mean or or do you think that they'll be too Savvy at that point and too cautious to invest in real estate no no I I think what people have done and then totally incentivized by central banks around the world okay they cured the 20089 crisis by creating a bigger bubble okay and that bigger Bubble Hits real estate

for most people More than it does St way more ownership so so so all it takes is for Real Estate to stop going up and start to show any weakness and people already have overbought and overcommitted why because it seems like you can't lose as soon as there's any sign oh this is stalling and then it's it's going to start going down at certain places and it's going to start in the highend before the everyday and in certain areas you know the the bubbly areas like Florida and California First but once it starts people's antennas

goes up and the truth is they're already never before that people extended themselves and borrowed this much against Real Estate thinking you can't lose and this time at least you have a recent reference points because people didn't have a for a reference said oh yeah in 2008 real estate went went down 40 to 60% okay so people now know it can happen before then people Would tell me Harry this just can't happen because because because there's there's endless demand and there's not not enough Supply okay once that crash happens that's changed things so people saw

that crash a lot of people went to that so people gonna be quicker to react this time from my point of view they got educated by the last one yeah there's no way from my point of view I don't care about all the metrics oh affordability all I know is this real estate bubble Went higher and lasted longer than the first one so there's no way it's not going to be a bigger crash and and again I'm a chart guy I like to look like a at a chart as if I don't know what it

is first and if I just looked at the real estate chart it'd be a slam dunk we had a three-wave peak in 2006 a four-wave bottom in 2012 now in 2024 we're in a fifth wve Peak greatest single time real estate bubble ever and there's only one place this would crash to the 2012 Loa Now it might go lower than that but that is the most obvious Target and that what I'm trying to tell people if somebody said oh it's going back to 2012 loow oh no big deal no that's 60 something per for the

average house it's a huge deal deal that's how people don't realize how big the bubble's been since not the one in the 2006 that was the first bubble this bubble is bigger and longer and because the government pushed it so hard and pushed interest rates slow and made It so easy so people have to realize the enormity of this bubble there is not a comparable bubble in real estate I can compare this stock bubble to the 29 bubble in the crash commensurate okay and it will be about that I'm predicting 86% 7% down for the

S&P 92% down for the another that's right in line with 89% for the Dow in 29 to 32 real estate there is no oh let's find one like this this is going to be worse than the than the crash before and it's going to be Way worse than the real estate crash and the Great Depression because again there was no real estate went out more normally back then because it wasn't possible there was not the ability to get in a financing bubble makes 100% sense yeah yeah I mean you're looking just like you said I

mean for people listening if you didn't understand what Harry said clear as day I mean people invested back then when they took their money out of the stock market they Helped fuel the asset bubble of housing before the 2008 crash because they look back historically and said this is the safest bet there is and you know and now right the tech bubble burst in 2000 and people say well gosh real estate hasn't bubbled yet and real estate never goes that so people went D you're right they went and this is during a recession it went

right into real estate of stock the the fall in stocks caused people to go directly into speculating in real estate Instead of stock right and then that's why you got the 2006 bubble and again the bubble didn't burst because the economy got weak the economy was strong until the end of 2007 real estate peaked and started going down early 2006 precisely because it just got it priced itself out of its own market and and now we work we don't need a recession for Real Estate to start going down but any sign of recession and then

it just accelerates you know and that brings me Into the next part that I I I promised myself I wouldn't let you get away with without talking about it because you had mentioned um it didn't matter who the president was and you know and and and Harry in 35 years of self-employment I've always said that same exact thing it was like you know what that the president you know I'm okay I think it's I'm not going to go political on it but there's so many other people that are Running things that you know that are

pulling the levers right um and I think of got change things take a while to get through the whole legislative system and then get implemented yeah right so but Janet Yellen on the other hand so you know uh the Secretary of uh uh the um treasur treasury secretary um she last month was uh actually sitting down live in this U and I forget who the the um uh the interviewer was but uh I watched it and it was on Yahoo finance we'll drop The link below for anybody to see it but Yellen spoke on housing

affordability which to me I mean I thought I was listening to President Biden because I didn't understand what she was talking about um but she she said um the I mean she went over these programs that they're working on and I was I I tried even looking them up and trying to decipher like what the heck these things were and I'm like I don't even have time to do it but it didn't make sense it Wasn't like a clear to me in the housing market it wasn't like oh my gosh this is a great thing

coming um I think that when the government says that they're here to help I I see you know a lot more regulation a lot more cost there is no it's like a misnomer there is no affordable housing in affordable housing uh you know in in subsidized housing anyway and everybody fights that in their Community anyway they're like yeah we need affordable housing but but but But no I'm going to stand up and fight it when it comes to my neighborhood because I don't want it right but anyway she spoke on housing affordability and the biggest

thing that she was talking about was she said that a recession wasn't in the Outlook and that the US economy was strong and I'm wondering like what um you know and this is recent interview this isn't like this is after you know however many job revision reports about how wasn't it strong 439,000 jobs that were misquoted last year I mean these are documented not my saying it it's a fact and but yet we look at it and we go okay I know I can go off of what I know I'm not a rocket scientist I'm

not a I'm not an economist I'm a real estate broker right um that has survived in business for 35 years thank the Lord Lord but I look at it I go okay home prices are ridiculously high rents ridiculously High Cost of Living ridiculously high the interviewer Even said Miss Yellen have you gone to the grocery store I mean let me ask do you buy your own groceries cost of living is the biggest factor in cost of living and it's gone up the most it's the most inflated of all do you believe we can have a

soft Landing no it's impossible after a bubble bubbles end up here's the difference between a long recession like the 70s okay and a depression like the 1930s the depression followed a bubble Bubbles end up in depressions because bubble bring Financial assets the more extremes and they have to fall and it destroys wealth and and that's longer to come back you can lose a job and then it comes back and you're back at a similar wage and you come back normal you lose financial assets go down 60 70 80% only in a finan asset Bubble Burst

which only happened 29 to 32 and then 2000 to 2002 and now again 2024 I'd say to 27 or something like that those are rare and Those those have a bigger impact and take a much longer time to come out of you can't just skate over that okay and the truth is we have the greatest economy for decades after the Great Depression of World War II those are the worst two things that happened in all of us history back to back and it was followed by the wonderful 1950s where everybody was happy happy days they

call it happier than the 90s that was what the greatest decade for boom in history I call that in advance you know because the demographics were the strongest there but the r the the 50s was the best time in history because you came out of of you know adversity makes you strong you know what doesn't kill you makes you stronger so people look at my forecast for stocks down 80 90% real estate down 50 to 60 oh Harry that's the dis no this is will bring her economy back into balance after going extreme in balance

and make us much stronger and we need to Be stronger because we like most developed countries are aging our average age is going into the 40s when it used to be in the 20s okay and and like you say just 2025 years ago an average solid house in Ohio was 100,000 now it's 420 it's 4.2 times 25 years later when the cost of living's only gone up maybe 50 60% that's not good that's the worst thing young households are facing and like you said the I'm a baby boomer you know what I'm gonna be In

20 years dead I'm not going to matter the Millennials and the people younger than them are going to be the future and this reset and housing is painful it'll be for everybody including some of them is going to be the best thing that ever happened to them freeing up them to be able to afford a better house and have more money left over to buy everything else eating out food you know cars everything this is going to be the best thing that ever happened and then again It goes back to where did economists get to

the point of view of recessions are the enemy recessions are as essential as Booms for my real my re research and learned that in my first jobs I came out of Harvard Business School turning around a Fortune 100 companies in trouble to to doing the same thing with new ventures in California I could make six times the change when a when you're in a crisis you can make changes faster and that's for the better long term I Realize a crisis is an opportunity it's not a bad thing recessions are necessary recessions necessarily are 30% of

the time if you look historically versus boom and guess what it's the same exact ratio of being awake and functioning and being asleep and dreaming try not try not sleeping for three or four nights you'll be a crazy person so economists think recessions are the enemy and we have to prevent Them recessions are necessary and if you don't want to have a bad recession don't have a bubbly debt ridden boom that's the answer don't prevent recession that's like it's like stopping your your body from taking a crap it's not healthy they're it's elimination recessions are

a natural elimination after a growth period they go hand inand and yes if you have a healthy economy recessions are only so much and they're only 30% of the time it's a great tradeoff don't mess With Mother Nature don't mess with free market capitalism that's what I started this interview this is the biggest attack on free market capitalism since it was created by Adam Smith in the 1770s okay along with democracy 1776 okay the the the the Declaration of Independence in the US those two things were the big bang of all history and now we're

attacking both of them but we're really attacking free market Catal George Gilder he's old now but he was my Favorite Economist because he says it's not just about the freedom to innovate the economy has to allow and Foster elimination recessions you have to accumulate and eliminate to be healthy you have to eat and crap for crying out loud that's what economists Miss they think we just should grow 5% and never have that would be a good economy we grow four to five percent a year above average and never have a recession that economy would be

dead in two or three Decades recessions keep us healthy I think one one of the things that I love so much about talking with you is your hope because you know identifying and just like IID said earlier and I studied the booms and bus going back to the 1800s and recessions were quite frequent and like you said I mean that was healthy it was it it adjusted naturally Mother Nature did it but was smaller they were smaller yeah less less consequential and um so let's kind of End on uh because I like your hope and

I like the fact that you believe that at the end of this day we're going to be resilient and it's to be a way better uh life for our young our youth our Millennials our Z's our Alphas coming up um that want to have hope um you know here in the US so let's first talk to not so much the silent generation but let's talk to Baby Boomers if you had to think of one thing viced for the average not the wealthy not the you know not the You know impoverished but if you had to

talk to the majority of the class and you had to give them one you know statement or or words of wisdom what would you say to those baby boomers right now it's simple hunker down we have lived through and created we were the creators of the greatest boom in all of history don't look a gift horse in the mouth we have to consolidate that and do the recession thing here we have to shake out all these debt we have also The highest debts in the highest number of zombie companies in history that's the negative thing

welcome this Shakedown and then you're going to be the big winner if you do everything right now to sell all the financial assets you can especially real estate and certainly stocks stocks you can sell get out of stocks don't hold out for the next five or 10 percent you might miss worry about the 50 to 80% that come so fast you you you you never get out in Time and you lose most of your net worth for a long long period of time so you sell Financial assets examine everything you own real estate you have

to move the hardest s because it's take the longest stocks you can sell in a moment sell your stocks and work on selling your real estate you don't need and if you want to keep one of your do houses okay again pick the one with the most debt against it which you may be able to negotiate out of some of that debt then Sell the one with the most Equity so just this is a time to hunker down and just say look we've had the greatest times you don't get great booms without G but don't

listen to anybody that says soft Landing after the greatest boom in history it's impossible to have a great boom and then a tiny butt never ever happens and shouldn't happen this is going to be big when it happens so all you got to do is get out of the way and hey if you got a good job be extra nice To your boss and work a little harder okay or if your kids got a job tell them to quit bitching about the boss and then be nice to your boss because even in a downturn with

25% unemployment 75% of people still employed so so if you have a good job you want to be one of those 75 80% of people still employed and that's not hard just work harder and be nicer to your boss than most other people in your office or your company so it's easy to react to this you just gota The hard part is accepting reality the the the great bubble the easy times I mean everybody's gotten Rich sitting on their ass on their sofa in their $100,000 everyday home that's now $420,000 magically it's the same home

okay that wasn't deserved that was an undeserved game thank God for that and now sell everything you can liquefy everything you can what do they do with their currency the us all everybody say I mean All these people like Peter shift down there in Puerto Rico they have the same thing of bubble bubble bubble they think we're gonna end up in hyperinflation they're just going to print infinite more money okay they're they're already going in the opposite direction the balance sheet already going down not up okay so so you gold is not the safe haven

so again the thing is to get out of financial assets hold on to whatever work or job employment you have hunker Down so that you can have maximum ability to reinvest just be liquid everything this this I call it the crash of a lifetime but the flip side of that is the sale of a lifetime the last one was late really of a lifetime was 82 and before that uh 32 uh and to a lesser degree 2009 I I even say I don't say 2009 because even back then it was hard to read because that

downturn should have lasted longer you I I I somebody could said well why Didn't you tell people to buy an early 2009 well truthfully that crash should have lasted into 2010 if they hadn't come up with this massive uh stimulus which had never been done by people don't realize they didn't do this in the Great Depression they didn't trillions and trillions of dollars and again 27 Trill what I tell people think about this economy and it's been a little slower than in the past think what it would have been out like without that 27 Trillion

in stimulus infused by the US government alone and the US economy alone think without that over the last 15 years that's 10% 6 to 10% of GDP we would had negative GDP I.E a depression it would have been the 1930s my demographics forecast it would be like the 1930s what we did was we paved over a depression as if there's no consequence of that and I'm saying now you want to see the consequence it's right in front of you It's the biggest bubble of everything in all of history which has never occurred to this degree

and in everything ever so this is going to be very painful just to get back down to reality this not a punishment we're just going back to reality after governments panicked over covid and overstimulated in two years 11 trillion of this 27 I said came in two years after covid is that's not not going to go down as an overreaction and people G to see that created this second Artificial bubble and that created the greatest bust in all of history only to be rivaled by 29 to 32 that's what this think is going to end

up and it's going to be obvious people and when this happens people gonna immediately go oh my God what was I think I knew this is something for nothing people know this but when the bubble's happening they're getting rewarded their and their friends are doing it their neighbors are doing it and blah blah blah and their Relatives are doing it and they just go along with it and then they're they're getting rich and what's there to gripe about when this burst I'm telling you people will immediately everybody's gonna feel like I'm the stupidest person on

earth and the only consolation is no 90% of the people went down with you yeah everybody being in the same boat same bucket they house they lost you know 60 80% and couldn't sell it if they gave it away what about the youth There's homes you can't give away they have TW I mean China 22% empty homes that you can't even give away yeah how about the youth I know your advice just now about you know be grateful you have employment and be one of the unemployment were to go to 25% you know work to

be one of those 75 % that still stayed employed stay employed and you know part of that is helping your employer win uh by not complaining and showing up every day and doing the best That you can and you know uh being a good Steward of your opportunity uh but what do you say to them about debt because you know so many of them uh you know are running credit card debt and for somebody in their 20s with a $5,000 credit card balance that's as much I mean you may as well call that a million

dollars in debt uh because to them they're just getting soaked at 30% interest rate every single month paying the minimum payments and still needing To go even higher what do you say to these young people that are um caught in all this well you know older people naturally save more young people naturally spend more you do have to curve your spending here this is not the time to take certainly don't borrow at 22% on a damn credit card if you've got a 4 five% mortgage loan on the first house you bought and then like that

home and blah blah blah blah okay maybe you can stiff it out you're going to lose a Good bit of value in that home and stuff um but don't take on new debt and certainly don't even think about borrowing um accumulated credit card or high interest debt and and but if let's say your parent you just inherited some money from your dying parents and and you say well I got this mortgage loan at 4% don't pay off that mortgage loan with that hold that moneyy in cash cash is going to be king in this downturn

because everything's going to be on sale So don't pay down low interest debt don't take on new debt and don't take on any High interest but don't pay down debt if you do get a windfall or like an inheritance from your Teran and don't but don't buy a house with it either just wait a few years and you'll be rewarded so patience is going to be rewarded the most in your lifetime in probably in the next two to four years everything will be on sale ladies and gentlemen that is Harry Dan I I tell you

What this is great words of advice and wisdom guys as I always say if you you know hope for the best but plan for the worst we're going to come out of this okay so Harry before we before we get out of here you know uh how can people follow you harrydent.com I got a free Weekly Newsletter you get an article from me every week you get a rant from me every two weeks so this is a way to get to know us in this time uh and boy you need to be listening to more

than The mainstream people right now because nobody's going to nobody the Govern government and mainstream Economist couldn't afford to tell you what I'm telling you even if they thought it themselves okay because it would look like they're doing something bad for the country so you got to get the truth from somewhere and you can get it for free harrydent.com Harry thank you so much we'll do it again yes sir I appreciate your time all right W thank you so much For making it this far what did you think our interview today if you liked it

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