Cornell University organic chemistry professor and financial blog Zero Hedge contributor Dave Collum warns that the next ten years may be 'terrifying' for investors, believing that the US stock market is overvalued by 150%, and the next major sell-off will trigger panic.

Collum said: 'Regardless of what others think, all indicators suggest that the US economy has already begun to decline.'

Macroeconomic data is 'dishonest'.

Collum questions the measurement methods of inflation and GDP indicators: 'I believe these figures are not only inaccurate but also dishonest. We have long gone past the stage of trying to get things right. The entire purpose of the Fed is to keep the economy off balance.'

Market sell-off is imminent.

Collum points out that the market has been off track since around 1994. He cited the Case-Shiller P/E Ratio indicator, while also noting the sharp increase in debt levels at the time.

He said: 'From that time, debt increased significantly. Then the correction in 2008 brought US stocks back to fair value, but not cheaper. If you accept my argument that US stock prices are at least 150% higher than fair value, you must also accept my view that at some point, you will be very angry with yourself for not having avoided this disaster.'

According to Kollum, this kind of disaster can occur in multiple forms, "one scenario is the market dropping 90% like it did between 1929 and 1933. Or it could stagnate without inflation adjustment like it did between 1967 and 1981. But after inflation adjustment, the market dropped 70%."

He said, "I believe we are going to have a serious correction. When the selling starts, everything will be sold. People will eventually even sell the shirts off their backs. When the selling starts, you really don't want to own anything."

Kollum described, "We have never seen people so depressed at a top, you hear talk of civil war and ****. Emotionally, it feels like the bottom. It suggests that we may be in or approaching a major, transformative period. The situation in the next ten years could be quite dreadful."

Kollum believes that after 40 years, the market's return, adjusted for inflation, will be zero.

"The dollar will collapse at some point"

One key issue is the continuously growing level of US debt, which is close to $36 trillion.

He said, "The federal government is increasing debt at a rate of 7% per year, which means we are pulling consumption forward from the future. Why can't they keep doing this? Because the dollar will collapse at some point, and then we will have to pay it back in a catastrophic correction."

In addition to the rising debt levels, the accelerating trend towards de-dollarization threatens the US dollar's status as the reserve currency. Kollum said, "The de-dollarization story will unfold faster, accompanied by significant geopolitical movements. If the BRICS countries stop buying our debt, no one will buy our debt, which means the Fed must buy our debt, we will monetize the debt, and the dollar will take a hit."

In addition, gold reserves purchases by BRICS member countries have increased, with levels in 2024 remaining close to historical highs. Colm also pointed out that some gold purchase activities may not have been reported.

Editor/rice