Thursday, May 11, 2017

Economist Harry Dent honorably pays off bet between a Bull and Bear in the argument to predict direction of gold prices

In the gold sphere there are a ton of different analysts making predictions on where the price of gold is going in light of the Fed's half-decade long policies of quantitative easing, and near zero interest rates.  And of the more well known and popular analysts on either side of the fence, the one who stands out the most on the bearish side of gold is none other than Harry Dent.

Harry Dent is an economist who specializes in trends and demographics, and has a better than average track record of success in many areas of his analysis.  However he became the butt of many criticisms when a few years back he publicly predicted that the price of gold was going down to below $700 an ounce, and likely to reach around $250 before beginning a trend back up.

And the primary premises for his bearish outlook for gold?  That assets were going to hit a deflationary cycle and that gold is more of a commodity than it is money.

So with Dent's analysis out there for all to see in hear, it was not surprising that someone in the gold industry would take his forecasts as a challenge and seek to put Harry on the spot for his future price predictions.  And that someone was Jeff Clark from Goldsilver.com, and an associate of the site's founder Mike Maloney.

So what was the bet you might ask?  Well it was fairly straight forward... within two years time of the agreed upon bet, the price of gold itself would determine who won.  And if it crossed below $700 (or very close to that number) anytime intra-day or closing, then Harry Dent would be considered the winner.

If it did not, and of course we know that it never even dropped to three figures during that period, then Jeff Clark was determined the winner.

And the prize?  A single ounce of gold.

Two years ago I bet economist Harry Dent an ounce of gold that the price wouldn’t fall to his prediction of $750/ounce. 
He had made some noise in the gold community that year about how gold was going to crater. He advised selling your gold and buying dollars. He even stated that $750 wasn’t the stopping point, that the price would fall to as low as $250. 
I couldn’t pass it up. I wrote an open letter to him, citing why I thought he was wrong, and offered to bet him a one-ounce gold Eagle. I even raised the target to $800 and gave his prediction two full years to come to fruition. He accepted. 
My bet was a bold one at the time… if you remember early 2015, the gold price had been falling for two years, and showed little sign of stabilizing. Almost no one thought the bottom was in. Market participants had been decimated. Gold showed some life in January that year, but by the time we finalized our agreement in March the price had fallen another 12%. It dropped below $1,100 that summer, and by December hit $1,049. My wager was not looking so good. 
But gold never fell to $800—never even cracked three figures. I won. And yes, he paid up. (He kept his word and sent me a check for the proceeds, including a little extra for a purchase premium; you may not agree with his predictions, but this speaks highly of his character). - Gold Silver
In the end there is one thing to remember among all the forecasting that is and has taken place over the past several years, and that is that as we go through this current cycle of declining prices in the gold sphere, the price of gold has ended each year higher than the same time as the prior year going back to 2015.  And that trend is likely to continue as long as the economy needs to rely upon the central banks having to pump out more and more credit just to survive.

0 comments:

Post a Comment