(KitcoNews) Bubbles pose a risk as the economy experiences excessive stimulation.

According to Harry Dent, founder of HS Dent, once assets start selling off, the descent will be rapid. Dent, in a conversation with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, highlighted the uncertainty until the second half of the year and the potential for swift developments. He attributed the delay in the anticipated mega crash to efforts since 2008 to prevent economic failure globally, resulting in pervasive asset inflation.

"We won't know until the second half of this year whether we'll be able to get through this. And the problem is that things could be happening very fast by then," he said. "Bubbles crash because they go to such extremes by nature - when people are just investing in things because they're going up."

Dent warned of a potential 60% drop in the stock market from recent highs, with the second wave causing the most significant damage. He emphasized that panic might ensue when the Nasdaq falls below a certain level, providing technical analysis in the video. Bitcoin, viewed as a leading indicator, could signal trouble for various assets, including real estate and gold, if its decline continues below $40,000.

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"The normal course is we have a recession once every decade. We have a boom for seven to eight years, and then we slowly go into recession for two to three years. That's how our economy stays healthy," he explained. "This is what we've been preventing since 2008. We're not allowing failure because they're scared failure will cause the whole castle to come down. This is way more global. There's almost nothing that hasn't bubbled."

Gold, despite potential record highs of $2,200-2,300 an ounce, is also at risk in the everything bubble. Dent drew parallels with 2008 when gold initially held up but eventually experienced a significant crash. He discussed potential safe havens during the correction and explored signals indicating the onset of the massive crash.

"A challenging economy kills the incumbent. So, if we even have a very slow economy in 2024, Biden is dead. If I were advising Biden, I would say, 'step out gracefully while you can'," he said. "In a weak economy, the Democrats' only chance is to have a new dynamic candidate."

The conversation touched on U.S. elections as a market risk, with differing opinions on potential surprises. Dent, known for accurately predicting Donald Trump's 2016 victory, suggested that a challenging economy could impact the chances of the incumbent, questioning Joe Biden's reelection prospects. He advised a graceful exit for Biden in the face of a weak economy, highlighting the Democrats' need for a dynamic candidate in such circumstances.

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