"I have no special reason to jump on one of our learned professions except they have been so hide-bound, narrow minded and conceited as to make a colossal mistake in (a) predicting a mild recession in 2001 and a slow recovery in 2003 and b) totally missing the fact that we are moving slowly and steadily and helplessly into our Second Great Depression in less than 80 years. And, Horror of Horrors, this is happening despite the fact that this once distinguished profession has been telling our country and its leaders for decades that another Depression was impossible with their current bag of tools to prevent it. The very sad reality is that they have no tools to prevent it, they have no tools to predict it is coming, and once here, they have no golden wand to sweep it away.
The Economics profession is so infatuated with its own techniques and group of Nobel laureate experts that they have literally made no progress since Yale's famous economics professor Irving Fisher made his great prediction of an unending period of prosperity just before the 1929 market crash and its ensuing Depression 1."
My growing unhappiness with the economics profession in this country has been building ever since my reading of Robert Prechter’s earth shaking book At the Crest of the Tidal Wave published in 1995. From the apparent lack of any outcry from our economics profession at its revolutionary vision of market crashes and depressions, one must assume that every senior economist in the U.S. was busily writing a paper for submission to the Noble prize committee. I wonder if its title might have been "How we ended Crashes and Depressions in the USA."
Elliott’s followers have traced the 20th century stock charts back to London in 1700, which now makes it possible to provide 3 centuries of continuous stock waves following the rules laid down by Elliott. These waves bring some very interesting conclusions of where we are now and where our stock market is going in the century ahead. It is not very encouraging as we will see in the summary that follows.
THREE CENTURIES OF ELLIOTT WAVES
Some talented successors to Ralph Elliott have painstakingly carried the long wave formations back to the start of American stock prices in 1785 and then, using British stock prices, have gone back to the early 1700s with great success. So we now know that the huge stock mania in London between 1720 and 1722, known as the South Sea Bubble, was the starting Wave I of a Grand Supercycle whose Wave 3 ended at the 2000 market top in this country and Europe. Bearish Wave 2 in London lasted 62 years from 1722 to 1784 and Wave 3, usually the longest of the 5 waves, lasted from 1684 to 2000. We are now just starting into a long wave IV that may possibly last about 62 years, or equal to the length of Wave 2, since this relationship is often seen in waves 2 and 4 at lower wave levels.
Since the 1929 Crash was at the lower Supercycle level, there is every reason to expect this crash starting in 2000 to be deeper and longer than that of 1929. It has already been longer and in the years to come should prove to be deeper as well. In fact, Robert Prechter has predicted that Grand Supercycle Wave 4, now underway, should eventually go below Dow 400 based on the patterns followed by all other major crashes. For instance, in 1929 the Dow started at 100, peaked at almost 400 and fell to 32 at the low. This means that many investors will be greatly shocked at the Dow level when it bottoms many years from now."
.........
THE TRAGEDY OF IGNORANCE
I have been telling this extremely sad story for at least two years. Just think about the serious problem in our country. Our leaders in Washington are being advised on economics by truly blind people. They haven’t a clue on what is now going on in the economy and have been truly blind to the Elliott Wave break thru for more than 70 years. As a result, we have suffered a second great stock market crash with no warning or corrective action. Alan Greenspan thought he detected some "irrational exuberance" in 1996, but he quickly discarded the thought and became a supporter of the "perpetual growth" theory in the "new" economy. Even his words resemble those of Irving Fisher in 1929.
I am not saying that our stock market crash and its following depression could have been avoided. But economists following the Elliott Wave theory might have alleviated some of the excesses in the stock market mania leading up to the Crash. Perhaps our economists will do a little better in the future, but I am not too optimistic. Their big problem is they seem to write and talk only to each other and that habit may be too hard to break. Hopefully, perhaps some other way may be found to bring Elliott’s great work into the leadership ranks of our nation.
THE ECONOMY
Attention all readers. The current down leg in the bear market is just getting started and has a long way to go. If you haven’t safeguarded your portfolio, please do it now before more losses are accumulated. The first major bottom may be at least two years away. And that will be just the first of several market bottoms. This is not a time to listen to the optimists who are constantly proclaiming a new bull market. Failure to heed this warning may cause you to lose most of your hard earned capital.
O Clubeinvest.com informa que nenhuma da informação
aqui facultada deverá ser entendida como conselho ou recomendação
de qualquer tipo de transacção ou investimento.
