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Dent: Markets are Waiting on Europe

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  • Description

    HS Dent CEO Harry Dent gives his outlook for the global economy.

  • Duration 4:18
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Business network.

For now we wanna switch gears here talk about the global economy next week sure to be a big one for the markets around the world.

We're gonna hear and ECB and the Fed so what should you watch for and are we got -- right tracker getting -- joining me now economic forecast for its.

Again -- Harry -- -- self serve up a wonderful CEO.

Nice to be here Taipei's a -- today's at the ECB will do an unlimited bond by a short term distressed sovereign debt we think.

What you -- again I think this is the desperate move that's the first thing to notice and second if there's any disappointment there's going to be some problems.

That Europe is the biggest question mark in the whole markets today because Greece is looking more -- more shaky Spain is looking more more shaking and have the greatest.

Real estate bubble and all of Europe and it is breaking down and we know in the US -- a real estate bubble -- how hard is to recover so.

I think there's going to be more more challenges in Europe the question is.

Does it start to blow up now start to blow up next year I know.

Thank -- you're gonna -- Problem I was going to say probably not sooner perhaps later to your forecast their hairy because the -- firming today -- Yields that we keep a close eye on you know -- Italy and Spain are coming down that's a good signing a drug himself -- a couple of weeks ago that he's intent on doing whatever it takes.

Are you optimistic in the short term.

-- you know you're custody something I think they well but the problem is would you would you what would your falling into a deeper recession.

More people are getting the problems more business as more banks.

Any day you can have a blow up of a bank in Spain or Greece could just missed its target so so again -- a fragile environment yes the markets are expecting stimulus there is gonna be stimulus and Europe and the fat.

But what if there's a problem in Europe or what if the Fed -- a little bit what of -- -- -- but the markets and a very tenuous moment I actually think.

The market's gonna go up a bit from here but we're probably gonna see some sort of disappointment in the next month and we're gonna see at least -- kind of a correction.

Before we get a better chart but I do believe seriously by mid next year we're gonna be -- a major bad situation in Europe and and in China.

I want to stick with -- for 12 and major bad situation is this a disorderly breakup of the eurozone countries.

Yes -- -- but because obviously they want to hold the Euro together for good reasons -- so many implications they don't.

But you can't do it with the weakest countries Greece Portugal Spain and Cyprus could -- to some degree pop without I think they have to go out Greece goes out first when Greece prozac goes out because it puts the pressure on Spain bank deposits -- Ronald there.

And and it could force out Spain and Portugal so that's the problem.

One country goes the other goes -- -- -- get these countries out the Euro -- the value they can do eurobond.

Because it would be more of a basis you can't do it -- these weak countries especially Spain Spain is gonna sink the Euro if they keep a map.

Okay devalue the Euro sink the Euro but not get rid of the Euro as a currency.

As -- whole word I think what we think the baseline is what's the lowest drop for the Euro which forecast there.

I think parity or a little bit below under the Euro should be -- parity with the dollar.

Historically and they got more problems than we do we both have major debt problems major demographic problems by our research.

But Europe has the more imminent problems.

I only have a couple of seconds here -- and you know we're talking mention China also some very highly -- focused political season here in the US.

Where are you optimistic it anywhere at all as -- getting this this whole global picture on the right track is there anything to be hopeful for.

The biggest hope is we've got so much -- around the world especially in private sectors much more than government sector.

If governments would help restructure private debt a stony out.

-- -- countries have already done this and are already coming out of the crisis doing better.

Were ignoring the biggest problem in the world the greatest private debt bubble and history way greater than the greatest.

-- -- -- Governments should work to restructure private -- we can't bring these high mortgages in business and financial debt in the future it'll sink our economies all of us Europe United States every.

Not carried at many thanks for your -- in your analysis your forecasting is always great analysts I'll tell you -- more and more the course is growing louder this problem of private debt bubbles it never really important he makes a great point you really.

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