Episode Details

We are heading for the biggest crash in Australian history according to Harry Dent.

Crypto currencies are about to fall, the stock markets will crash and home values in the big cities are about to halve.

Is this really true?

Today, I speak to Harry Dent to find out what he really thinks.

I also speak to Dr. Andrew Wilson, and give you my thoughts on what's ahead.

Harry Dent Says Australia's Property Bubble Will Burst:

Here are some of the things Harry Dent said:

1. What's ahead is a global crisis of the developed world -leading to a worse depression than the Great Depression of the 1930's.
2. Bubbles cause an economic reset, but once that's over the markets can boom again.
3. The economies of many countries in the world are slowing.
4. Demographics will tell you when the different generations are going to spend money and when the slow down
5. China has the worst bubble in the world. They are also Australia's biggest trading partner.
6. Australia's real estate prices are the second highest (compared to income) in the world.
7. We have created an artificial bubble because so much money has been injected into the system by governments.
8. Bubbles build predictably, what's harder to predict is when the bubble is going to burst.
9. Stock bubbles crash twice as fast as they build.
10. When bubbles burst they burst by 70, 80, or 90%. Half of this comes in the first 2 ½ months.
11. Bitcoin has been leading the stock market crash by about two months.
12. Businesses are better off leasing rather than owning their premises, unless it's a totally strategic move to own the business.
13. You should take some equity from your real estate and short the stock market to hedge against downturns.
14. A typical real estate bubble is six years up and then six years down because people don't sell immediately when the bubble crashes.
15. Values aren't going to crash as hard in Australia as in other countries.
16. Things that will cause the bubble to burst include when US real estate starts to go down and bitcoin crashes.
17. The high-end property markets are what seem to be cracking this time around.
18. The most overpriced markets in the US are San Francisco and Los Angeles.
19. Once the bubble bursts, Australia is best positioned of all the developed countries to recover because of its proximity toAsia
20. Harry's new book has a whole new bubble model that looks at more than demographics.

Michael's Take on What Is Going On:

1. Investopedia defines it as:"A run-up in housing prices fuelled by demand, speculation and the belief that recent history is an infallible forecast of the future. Housing bubbles usually start with an increase in demand in the face of limited supply which takes a relatively long period of time to replenish and increase. Speculators enter the market, believing that profits can be made through short-term buying and selling. This further drives demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices - and the bubble bursts."

   For mine, bubbles are also accompanied by easing of lending criteria so that loans are easily obtained leading to rapid rises in housing credit, with many people who can't really afford to take on loans speculating and overcommitting themselves.

2. Do we have some of the features of a bubble at the moment? Yes.
3. Are we in a bubble? The answer is no.
4. Property values are not about to collapse.
5. Rising house prices on their own do not cause a bubble. The rise has to be followed with an increase in, speculation, b