2 Picks If You’re Betting on a Crash

Focus: MARKETS

Harry Dent sees a meltdown coming this summer, and he’s already advising investors "to get 100% out of stocks," writes Shirley Won, reporter and columnist for The Globe and Mail.

Global stock markets are poised for a crash by summer, as Europe’s debt crisis and slowing spending by aging baby boomers put the brakes on global growth, warns US economic forecaster Harry Dent, Jr.

"It’s a replay of 2008 and early 2009—only the recession goes deeper," suggested the founder of Tampa-based economics research firm HS Dent. "The 50% to 70% decline will happen in the next two to three years, but I think you are going to see the strongest part this year."

Severe market downturns don’t usually happen in a presidential election year, but the Federal Reserve is "running out of bullets" to spur the economy, said the author and newsletter writer who predicted Japan’s severe downturn and the surging US market in the 1990s.

"We told people to get 100% out of stocks last Friday," Dent said. "You might miss the last 2%, 3%, 4% or 5%…but when it falls, it can fall so rapidly."

Unless the United States unveils more stimulus like its two previous "quantitative easing" or bond-purchasing programs, the recent market rally can’t last, insisted the author of The Great Crash Ahead. "You may get another bounce in the markets, but you just push the crash lower down the line into 2013 and 2014."

He sees Europe slipping into recession as it embarks on austerity measures, and dragging the United States with it.