- Stock markets will plunge. The Dow will fall to 6000, a loss of 55% from current levels.
- The TSX will drop to 7500 in the short term and ultimately to around 6000 as well. To put that in perspective, the TSX low in the 2008/2009 crash was 7479.
- The Canadian real estate market, especially in Vancouver, will experience a real drop. It was predicted that home prices in Toronto would drop 33% to 50%.
- The Chinese economy will stall, and could become the greatest economic bubble in history.
- There will be a modest world economic recovery in 2013, with the United States taking a leading role.
- The United States Federal Reserve Board will spend $40 billion a month buying
mortgage-backed securities for an indefinite period.
- There is a concern that US politicians will not be able to prevent the so-called “fiscal cliff” looming at the start of 2013. If that event happened, it would mean $528 billion being pulled out of the US economy.
- There will continue to be economic uncertainty in Europe, with the potential for Greece to withdraw from the euro zone.
- The current slow growth situation will likely persist for the next couple of years.
- A blow up in the Middle East could further unsettle markets.
- The world economy will be affected by the outcome of the US presidential election.
- Because of the quantitative easing initiatives in the United States, gold prices will be stimulated.
- The US economy should outperform the Canadian economy.
*In the late 1980s, Dent forecast that the Japanese economy, then the darling of the world, would soon enter a slowdown that would last more than a decade. In the early 1990s, he predicted that the DOW would reach 10k. Both of these predictions were met with much
skepticism, and yet both eventually came to pass.