Markets and the economy are facing a meltdown in 2023 that could escalate into a new world war, says market veteran who called the dot-com bust

• The market and the economy will have a meltdown in 2023, according to market veteran Gerald Celente.
• Celente, who previously called the dot-com crash, warned that higher rates could spark huge volatility.

Markets and the economy are facing a potential meltdown in 2023, and it could escalate a new world war beyond the borders of the ongoing Russia-Ukraine conflict, according to Gerald Celente, a 40-year market veteran who called the 1987 market crash and the burst of the dot-com bubble.

"We're talking about a market meltdown," Celente said in an interview with Kitco News on Wednesday, warning that interest rates have yet to peak and that means more pain for markets.

High interest rates have already weighed heavily on stocks, with the S&P 500 tanking 20% last year as financial conditions tightened. Officials are expected to continue raising rates until inflation is under control, with many observers warning that the central bank could overdo it and easily spark a recession and a collapse in the stock market.

Such a meltdown that Celente is warning of could even escalate what he says is a new world war that's already begun. He is among a number of Wall Street commentators who believe World War III kicked off last year with Russia's invasion of Ukraine, with fears building that the conflict could expand this year amid bouts of economic turmoil worldwide.

"The only thing that's keeping markets up are interest rates. They go high, and the market goes down. When all else fails, they take you to war," Celente said.

Though they haven't gone so far as to warn of a new global armed conflict, many of the biggest banking institutions are warning of significantly more pain to come for markets. Bank of America, Morgan Stanley, and Deutsche Bank have all predicted stocks will fall 20%-25% this year, but a more dire outcome will depend on whether the Fed will follow through with its plan to hike interest rates, which Celente believes could be a bluff.

"I don't believe a word that they say," Celente said, pointing to the Fed mistakenly calling inflation "transitory" in 2021, before backtracking on that claim in 2022. "We're forecasting a market meltdown if they do what they say they're going to do."

Celente believes other disasters could also strike the economy as interest rates soar. Chief among them is a debt crisis, as overleveraged households and financial institutions struggle with surging borrowing costs. He added that gold was the best bet for investors as volatility shakes financial markets, and predicted the precious metal could rally to $2,000-$2,500 this year. Gold was trading at around $1,921 per ounce on Thursday.