Originally published September 17 2015
Stock market is 50% to 80% overvalued; experts warn historical crash now imminent
by J. D. Heyes
(NaturalNews) Despite the recent rebound in stock values following a major plunge caused by China's currency devaluation and resultant market losses, a number of notable economists and distinguished investors say the worst is yet to come – and it could be catastrophic.
As reported by the The Sovereign Investor web site, billionaire Carl Icahn is among those who have recently tossed red flags into the air. Icahn recently declared in a national interview, "The public is walking into a trap again as they did in 2007."
As dire as that prediction sounds, it is much tamer than those of some of his peers.
"U.S. stocks are now about 80 percent overvalued," Andrew Smithers, the chairman of Smithers & Co, said.
He went on to substantiate his prediction by using a ratio that proves the only time in history stocks were as risky as they are today was in 1929 and 1999; in those years, stocks fell by 89 percent and 50 percent respectively.
Bottoming outFormer GOP Rep. Ron Paul of Texas has not minced his words, either. He told CNBC in June that the stock market's "day of reckoning" is quickly approaching. When that day comes, Paul doesn't believe it will be in the form of a correction but rather full-blown "stock market chaos."
In Paul's eyes, "the fallacy of economic planning" has led to such a "horrendous bubble" in the bond market that it's only a matter of time before the floor falls out.
However, as The Sovereign Investor reported, there is another warning that should deeply worry everyone. This one comes from James Dale Davidson. The site notes:
As a renowned economist, best-selling author, and founder of Strategic Investment, Davidson makes the strongest case for a looming crisis — "Right now, there are three key economic indicators screaming SELL. They don't imply that a 50 percent collapse is looming, it's already at our doorstep."
His warning is alarming many of his peers. In using more than 20 charts to make his case, he makes the strongest argument yet that the market is teetering on the brink. It should be noted that he has a remarkable track record of predicting every major economic shift over the past 30 years.
For example, he successfully forecast the collapses of 1999 and 2007 in addition to the fall of the Soviet Union in 1991 and Japan's economic downturn, among others. In fact, says TSI, Davidson's forecasts are so accurate that he has been invited to counsel the likes of former presidents including Ronald Reagan and Bill Clinton. He's also managed to befriend notables such as George H. W. Bush, the late British Prime Minister Margaret Thatcher and billionaires Steve Forbes and current GOP presidential leader Donald Trump.
"I know that everywhere you turn things look pretty good. The market is near all-time highs, the dollar is strong, and real estate is booming again. But remember, the exact same scenario played out in 1999 and 2007. The economy is unraveling right now, and fast. Very fast," Davidson told TSI.
Not someone who likes to "preach doom"
"I'm not a man who likes to preach doom," he added.
In addition to warning of a 50 percent stock market plunge, he predicted that "real estate will plummet by 40 percent, savings accounts will lose 30 percent and unemployment will triple."
Not all is bleak, however.
"There is no need to fall victim to the future. If you are on the right side of what's ahead, you could seize opportunities that come along once, maybe twice, in a lifetime," he said.
You can watch his video presentation here.
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