Futures Now

Economist Harry Dent predicts 'once in a lifetime' market crash, says Dow could plunge 17,000 points

Trump rally is 'peak of a lifetime:' Economist Harry Dent
Trump rally is 'peak of a lifetime:' Economist Harry Dent
Dow to plunge as much as 17,000 points: Economist Harry Dent
Dow to plunge as much as 17,000 points: Economist Harry Dent
The triggers which could wipe out stock market gains
The triggers which could wipe out stock market gains
Economist Harry Dent defends his ‘bold’ forecasts
Economist Harry Dent defends his ‘bold’ forecasts

He's a market watcher known for making bold calls spanning decades. Now, Harry Dent is arguing that the Trump rally is setting investors up for an inevitable stock market crash.

Investors have embraced the prospect of President-elect Donald Trump's victory by sending stocks on a tear to new record highs. Dent, however, thinks there's trouble brewing.

"I think this is going to be a stock market peak of a lifetime followed by a crash very similar to the early 1930s. This happens once in a lifetime," Dent Research Founder Harry Dent recently told CNBC's "Futures Now."

He added: "I think this is the last rally in this bull market."

Dent may be calling for the rally's last hurrah, but he's also forecasting another ten to 20-percent jump for the Dow over the next few months.

Since Trump won the presidential election, the Dow is up eight percent and has closed in record high territory 14 times. Financials have soared 19 percent, and 10-year treasury yields have been rallying— they're now at 2.47 percent.

"The markets are assuming that he is going to create three to four percent growth on a sustainable basis," said Dent. "It is demographically impossible.... When the markets figure this out, they are going to crash."

Dent makes the case that the U.S. workforce will see negative growth, estimating that the population will grow just over a quarter percent over the next 50 years. He also points to rock bottom productivity that not even tax cuts can solve in the immediate term.

"You can't have stocks keep going up at this rate when earnings are going nowhere," said Dent. ""I think it [Dow] is going to end up between 3000 and 5000 a couple years from now."

Dent, who is also the editor of the "Survive & Prosper" newsletter, says there are other major factors which will spark an 'epic' pullback.

"I think the trigger is people seeing sometime early next year that Donald [Trump] will not be able to do everything that he said, and the economy may be slowing by then," he said. "The biggest trigger, kind of like the subprime crisis in 2008, is going to be Italy. Italy is bankrupt. Its bonds are trading at lower rates than ours which is ridiculous."

Not only could Italy send the European markets into a tailspin, Dent is also particularly worried about China.

The world's second largest economy "has the greatest real estate bubble, an overbuilding bubble, in all of modern history. That's going to blow, " warned Dent.

Yet, he says that this could also be the best time in decades to re-position for huge gains. "In the next few months, investors will have the best opportunity to switch their investment strategies and profit dramatically," he said.

Dent is telling investors to sell their stocks near the top and immediately convert into the highest quality bonds. He recommends 30-year Treasuries and triple-A corporate debt.

Still, "Futures Now" traders Jim Iuorio and Scott Nations challenged Dent on his record, saying his predictions over the last 15 years haven't materialized. They referred two Dent forecasts: The Dow would reach 40,000 in the year 2000, and a depression call from seven years ago.

"I make bold forecasts, and especially with things like [quantitative easing] and massive government intervention — yes, I'm going to miss some things. But, I have the guts to make these bold calls," argued Dent. "We've been right about gold. We got people out in late April... I think could see $700 in a year or two."