Harry S Dent on the coming Great Depression

I have never heard of Harry S Dent until someone talked about him on T3B yahoo. After searching the internet, I found a recent interview with him:

JustSayNoWay.com: What was most surprising to you about your research in making predictions for this new book, and how are people reacting to it so far?

HARRY DENT JR.: The biggest surprise was how fast the oil and commodities markets melted down in the second half of 2008. Our 29 to 30-year commodity cycle still points into around late 2009 or early 2010. We would have expected oil prices to fall $50 to $80 and then retest the highs or make new highs with the stimulus program, and likely rebound into late 2009/early 2010. Now it clearly appears that the commodities and oil bubbles have already peaked and that we will merely get a strong bounce towards $80 plus with the anticipation of a rebound from the massive stimulus program.The reactions to the book thus far are good given that the economy and stock markets are so weak. Normally our books come out ahead of such changes in trends and people are skeptical of our contrarian predictions. This time we are warning that the worst is still to come and that we will see another major stock crash between mid to late 2009 and late 2010, and that we will not likely come out of this major downturn until around late 2012 or so.

We'll probably remember 2008 as the year of the Great Banking Crisis, following the subprime bubble. Why do you think so many people--both professional and non--were fooled into believing that the common sense adage "what goes up must come down" somehow did not apply to housing prices?

DENT: The hardest thing to convince people of in the last several years was that house prices could go down a lot! We would show the example from 1925 to 1933 and 1991 to 2005 in Japan. People have seen real estate go up their entire life and with only minor corrections. People can believe our predictions for another major stock or oil crash, but not real estate. Well, obviously, now they do believe it. We are saying that house prices nationally have to go down 50% to 55%, or back to at least the levels in 2000. Hence, there is another major crash in housing prices ahead as well with the worst slide likely from early 2010 into mid 2011. We don’t recommend buying real estate again until around late 2012 or early 2013. The bubble in real estate is the greatest in U.S. history. We wouldn’t see as large a decline if the bubble had not been so extreme. Housing prices only went down around 30% in the Great Depression as there wasn’t a major bubble before the deflation process set in.

We still seem to be victims of our own near-sightedness, somehow believing that Washington will save us. Meanwhile, we save very little (if at all) for our own retirements, while the Chinese save a lot. As companies and markets hunker down for the lean years ahead, what can the average person do to survive or prosper in such an environment?

DENT: First of all, the government cannot save us. They did not create this boom, the baby boom generation did – and they can’t stop the steep slide in spending ahead as that generation slows in their spending and accelerates in their retirement. At best we will get a strong temporary rebound, but that will be met with inflation pressures and accelerating oil and commodity prices again. At worst, and more likely, all of this stimulus will only create a modest rebound and that will be seen as a sign of serious weakness with the stock markets and US dollar crashing again. The best thing people can do is to save and to convert their stocks and excess real estate into cash during the temporary rebound in 2009. Our target for the Dow is just below 11,000 between April and July. Sell your investments and wait for all assets to deflate into late 2010 to late 2012. Then buy at the greatest bargains of your lifetime.
Sounds familiar? Definitely.