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The founder of Elliott Wave International shares his perspectives.
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Yes, Bobby Prechter, the guy who's been calling for $100 gold since 2001. Way to feature the experts, dude!
Prechter has probably the worst track record of anyone on the planet. That's why CNBC likes to bring him on, to discredit anyone with a legitimate bearish view. Prechter falls for it every time.
I agree. I was going to ask the facetious question does he ever make a mistake? but i think that question has been answered. ha ha
you hang your whole argument on some theoretical construct that you sell to others and then make mistakes and try and sweep it under the proverbial rug. of course the deflationistas love this guy, he speaks to their inner self...
His bearish scenario has DOW 400. No, I did not leave off a digit. EWT has its moments of brilliance. I use it as a confirming indicator.
i concur
good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Prechter: blah ba blah ba blah ba blah ba blah..... A frickin' broken clock, and not even a very good one at that.
here is prechters record.. alf has killed him on his own elliot wave theories
http://www.gold-eagle.com/editorials_08/field112408.html
For those too busy to read the article here is one juicy quote:
"In August 2003 the gold price was in the region of $350 and there were a number of conflicting views about the future direction of the gold price. Robert Prechter, for example, was predicting a move to below $253 and possibly below $200."
HAHHAHAHHAHAAHAAHAHAHAHAHAHAA!!!! I mean the guy has some nerve issuing all sorts of "recommendations" and "predictions" all over the internet and TV. He should be especially banned from predicting anything about the gold market - ever again.
To all of you "Anonymous" quackers..... How about signing up for a unique handle so I can tell one quack from another........
"Quite a period of time", they all talk like this don't they....
I wholeheartedly agree on the bullish DOLLAR trade. I have sais over and over again. It would be the only LONG in my portfolio...if I were still a trader...
Long Live King Dollar!
Agreed. Let me repeat myself for the nth time on the forum. You are either an inflationist or a deflationist. There is no middle ground at this point. If inflationist you go long assets and risky currency. If deflationist you go long cash and carry currency (yen & dollar).
Do you see inflation anywhere? I don't, so guess what camp I am on... (though I can have respect for inflationists, I think they get part of the picture, but not all of it)
"You are either an inflationist or a deflationist. There is no middle ground at this point."
Frame the debate in such a way as to prevail? I am neither. I am a currency crashionist. Some call us hyperinflationists.
> I am a currency crashionist
SWR,
I don't k now if you coined that phrase, but I like it. It's a race to zero.
I am only framing the question as is logical. Hyperinflation is only a form of an extreme form of inflation. If this is your true belief, can you please show me the asset class that is now trading at 300% of its 2007 price? Any asset class would pretty much do.
The fact is that the inflation arguement has been beating the drum for two years and prices have only gone down. If you have a longer time frame can you please provide it and the catalyst you expect to generate this magical inflation?
If you want I can extend myself and explain the intricacies and limitations of fiat currency and how a debt crisis is deeply deflationary.
"I am only framing the question as is logical. Hyperinflation is only a form of an extreme form of inflation."
Not true. Actually, not even logical. Hyperinflation is a child of crisis, and there is no crisis to an indebted Government worse than a deflationary spiral. Either you believe the Government will acquiesce to the spiral, or it will fight it tooth and nail - or in this case "press and mouse".
There is a middle ground. We could have both, deflation followed by inflation, or concurrent: stagflation. Black and white always forget grey.
There is NO inflation in South CA. NONE. Maybe the modest tax increases but it will prove to be even more deflationary. Sorry but here my clients are freaking struggling.
If there is inflation it's not coming out of here anytime soon. Watch your inflation trades...China maybe done for a while. I just don't see any knew industry out here to blow any wage increases up anyones a$$ out here. Even Safeway and Walmart are cutting their prices! P&G is a bust..their stupid coupons don't even beat the "knock off" store brands prices. Has anyone seen inflation without wage increases? I mean is there a historical thing to look at? Every time commodities try to pull us up into it...the lack of wages decreases demand and back down we go!
Good luck with that inflation trade.
Is there a historical "thing"? A brief examination of Weimar Germany should help. I understand inflation was a small problem there, and wages certainly didn't increase in line with the rise in prices.
not true. its possible to perceive both depending on what your long. LOL
the expectation of inflation is what has caused inflation in metals especially....all BS
run over
Inflation in a depression is short lived when reality kicks in.
Governments are always the last to get this.
is there historical examples of deflationary crashes followed inflation? hmmmm...I'm pretty ignorant but I think delationists and inflationists are both right 'cause of Argentina and Iceland....their economies collapse, deflate but then there is a run on their currency, so anything imported skyrockets in price, while their assets sink (real estate, business stocks).
Question is, when and if there will be a run on dollars as there has been on other currencies??? Our economy is in bad shape with great debt, but relative to other countries are we much much worse?
Seems to me there is wealth slushing around there, making and breaking countries depending on where it is withheld or pushed...maybe we should just Goldman Sacs what the plan is?
Prechter and Schiff both predicted US Econ collapse since before 2000 but they gave opposite financial advise, so far Prechters advice since 2007 has been better, Schiff looked good in 2006 due to dollar drop and oil price. Even Prechter thinks inflation could be a concern, after everything completely crashes and capitulates, maybe then Schiff will be right. If shorts had listened to Prechter in late Fed, they could have saved themselves a lot of grief.
Queue the inflationistas crowing about how Prechter "has always been wrong wrong wrong!" in 3,2,1 ...
Wow, I couldn't even get the post off in time. Isn't it funny how Prechter is the one analyst who's never allowed to get any calls wrong, ever? All of Peter Schiff's clients who piled into foreign equities, meanwhile, well they just have "paper losses."
5Y returns of SPX - 0%
5Y returns of EFA - 26%
Schiff is doing aw-ite...Everyone lost last year except cash and lean hog futures. Time frame is key to any performance discussion.
I am a deflationista, that argument just makes so much more sense to me. I took the pill less swallowed, and that has made all the difference.
5Y Returns of SPX - 0%
5Y Returns of EFA - 26%
Schiff is doing aw-ite, as any performance discussion must include timeframe. Only place to hide in 2009 was lean hogs and cash.
As an aside, I am a deflationista as it resonates in my bones and inner self as a much richer and plausible argument. I have taken the pill less swallowed, and it has made all the difference.
It's as easy as shooting deflationistas in a barrel. Or maybe you can point to a Prechterism that paid off? Didn't think so.
Enjoy being prechterized, sheeple.
"Go short with maximum leverage," July 2007.
"Cover your shorts," early March 2009.
"Fannie & Freddie will go bankrupt," Conquer the Crash, published 2002.
I could go on and on, this is just trivially easy, but to some people there's only one market, and if you're not calling for it to fly through $3,000 they think you're not worth listening to.
Funny. Could you please point me to all those asset classes showing that famous hyperinflation rave? I would love to cash in. Hold my hand I want to learn...
I will leave the hyperinflation camp forever if someone can build for me a convincing case that the U.S. deficits are sustainable in an environment of persistent deflation and the U.S. will not default. Business and consumer defaults = decrease in business activity with subsequent loss of tax revenues, accompanied by increasing demands for saftety net services. While we try to support:
Last I checked, for FY2009 tax receipts were running behind the combined costs of just mandatory federal expenditures, DOD, and interest costs. Persistent deflation springs the debt trap.
http://seekingalpha.com/article/147420-dear-world-please-stop-lending-th...
Sovereign default = hyperinflation.
Printing our way out = hyperinflation.
What's YOUR plan?
Question.
How does the money get to the people to create this hyperinflation?
A.) Everyone gets a monetary raise?
B.) Credit for everyone?
C.) From a helicopter?
It doesn't need to get into circulation, that is another myth, it only needs to be created and be known to exist. Thought experiment: The current Fed balance sheet is about $2 Trillion. The Fed expands its balance sheet to $100 Trillion and deposits the new money in the reserve accounts of member banks.
you've just described Japan,(empire, dependecy class, zombie banks, interest on debt) and their stocks and real estate collapsed, what, 15 years ago...any hyperinflation there yet?...and it seems world would have easier time raiding their currency than ours. Their GDP/debt is bad, they are the kings of quantative easing for over a decade...still they are experiencing deflation....
is US really worse than rest of world? can see similar crash problems in Europe with collapse of east europe/loans to them, etc...so is US dollar going to collasped relative to their currencies or will their currencies collaspe? Do all currencies collapse? Due they collaspe serially? Who goes first?
The reserve would go last in this case.
CAD maybe the AUS first.
No default=Nuclear Submarines
or Nuclear Submarines=No default
you decide. But we are not backed by gold we are backed by "Nukes". You don't need gold when you have the ability to take it from anyone you want..even though you don't it's still a backing of the currency. Sorry I don't like it..I don't make the geopolitical rules I just follow the facts or the "biggest stick" as "Teddy" would say.
USSR Looots of Nukes, Nations opressed and Rouble reserve currency for the Comunist Commonwealth. Result default collapse and zombie nation. You dont see it yet?, don´t worry you are about to live it and experience it.
TRUST Backs fiat currency.
How is the confidence of the rest of the world in the USD lately?
Is it loved or hated?
Is there a list of nations waiting for the oportunity to kick the USA in the B...?
Nukes Yeah, keep dreaming a nightmare is comming and wont be a dream.
Massive demand destruction, credit destruction, long bonds are selling. QE isn't outpacing any of it even if some have the perception that it is. Dollar bullish makes sense to me.
Why is M3 still up according to www.shadowstats.com then?
Because velocity of money has halved since 2007
Typical miscommunication defenition wise. Inflation is broadly defined as;
Popular: increase of the general price level
But strictly (Austrian a.o.): increase of the money supply and consequent decrease of currency value
And yes there is no increase in the general price level since the velocity of money has collapsed. But 'strictly' there is def inflation.
Does it matter? Remember it's also a confidence issue, fiat money and all that.
That was interview with Prechter can only be catagorized as misleading...he's looking for the completion of the Supercycle which is catastrophic, this is why he published a week and a half early. Did the man have a gun to his head.
I'm also looking for completion of the supercycle although I prefer the terminology "Kondratiev wave" or K wave because it just sounds cooler. It's gonna happen. Based on fundamental reality, our leaders' NWO aspirations and the alignment of the planets, now is the time.
You have been warned!
I like to use the term "Dragon-King-Emperor wave." Because "Dragon-King-Emperor" is so super awesome it forces me roll my d20 to make a saving throw vs. awesome.
Right on!!! If have a wisdom of 18 do I get +3 to my
roll?
If there a feat I can take to get an extra bonus?
Finally I have a way to make this whole thing make some
sense!
T.
The Kondratiev wave is actually the Jupiter-Saturn cycle of ~57 years.
For the dollar only sentiment to support it...
That is not very much. First a double bottom around 70.70, then a double top around 89.60 (to me the second top is not decisevely higher then the first one) and now we are in the middle of both.
Spare a war in Europe or some other extreme event I can not see the Dollar going up over the old high.
I feel so much better now that I know you can't see a particular future event. The dollar is going to remain strong for years to come. What relevance does it have if you can't see it oh great bodhissatva? Please do tell.
Right on. The rabid anti-Prechter commentary only confirms the man's case. At the bottom of the bear market, he won't be so derided.
I can't help but wonder if currently we're just returning to the 50-day moving average on a nervous Asian wake-up call, and witness a bounce-off ~950 of the S&P 500. Risk still has a pipeline, which will presumably get one last ramp-up before the end of September.
wrong.
Here is a puzzler for y'all currency heads. What happens to "the dollar" if it falls sharply against the Yen but holds its ground against the Euro? Perhaps a flat DXY while the earth moves beneath us?
That to me seems the most likely scenario. Not only has the DPJ said they're fine with a stronger Yen, but they also want higher interest rates so their seniors can actually get some income on their savings. Add that with the Fed talking ZRIP to infinity and you got yourselves the basis for a carry trade.
Deflating currencies (rising in price vs other currencies) have by definition low interest rates. They are paying dividends through purchasing power gains.
Tired of being laughed at for saying 'it's an A of a B, of a 1,2,3', or 'my minor wave 1 just crashed my impulse down!'?
Well, kids, forget E Wave. The hot new stock picking trend is phrenology. Just take off your chapeau and feel your noggin. Every bump is an indicator, every bone trying to tell you where your receding hairline ends and the next bull market begins!
Funny you mention it. Phrenology is actually making a serious comeback as geneticists are studying physical traits of individuals with genetic predisposition to violence (higher testosterone, brain defects, etc).
Boy, I'll bet you just rake in the cash daily, don't you? You sound like a ship lost @ sea without a compass or rudder looking for something/someone to blame.
Yes, that's eww as in "stink up the room why don't you".
~$200 trillion of USD denominated debt, total money in circulation, a few trillion last I checked. A 10% default of US denominated debt will overwhelm the increase in US money supply by the fed. Total $ supply, bob says, should be thought of as CREDIT + MONEY, credit is 20-100x larger than money. doesn't take much of % of total debt to default to be incredibly deflationary.
It's nice when Prechter (and other guests) are allowed to actually speak without being interrupted. His interview on Bloomberg Friday was virtually identical.
All of Peter Schiff's clients who piled into foreign equities, meanwhile, well they just have "paper losses
They illegally overtaxed you back then through government scams and are just sitting on billions of it. Tax surpluses is stealing from tax payers. Time to get that money back and force them to lower taxes.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Prechter mainly called for cash in his book Conquer the Crash, with some gold and silver. He says to buy much more once deflation works its magic.
Had "average joes" invested their entire portfolio in short-term Treasuries from 2000 or 2001, avoided housing, etc., they would be in good shape today. On that count, Prechter was wildly accurate in his prediction. There are some short-term services from EWI, but almost everything out of Prechter's mouth involves extremely long-term forecasts.
when you can`t do, predict.
when you can`t predict, adopt a system that can predict everything, at some point.
nonetheless, props as a businessman
and when you can do neither ....
become a critic and post anonymously !!!!
agree, not to be used for short term calls.
since it`s not based on fundamentals, should be used more as 'something to keep in mind' imo
"...everything out of Prechter's mouth involves extremely long-term forecasts."
Even a stopped clock is right twice a day.
Thank you. And, some of us trade on time frames shorter than multi-decade cycles.
The only person who is capable of being wrong more often than a broken watch.
I believe he called it correctly in late February of this year
Analysis that beat Pretcher by 8 months on the August Low and strong US Dollar bull market rally.
U.S. Dollar Bull Market Trend Forecast 2009 Update
Dollar bullish is an easy call right now. A week ago, the 10 day bullish DSI was 3% - when EVERYBODY hates it (Gordon Gekko, this means you) it can't go down anymore.
Sure, for a while. Nothing goes up or down in a straight line. But how much and how long depends on how other countries manage their currencies. Which is why DXY is meaningless (and misleading) as it only measures the depreciation of the dollar versus some other toilet paper brands (relative rates of debasement) and is of no use if you wish to measure the loss of purchasing power. Look at the Gold chart if you want a real estimation as to the decimation the dollar has suffered, and will suffer in the near future. Been right for 10 years running now.
UUP had big volume today, and another follow through day to the upside.
He is actually just providing a practical history lesson.
If we go back to a year ago July/August 2008 we see equities start sinking as well as commodities ($147 barrel oil). At that point the 10 yr bond starts rising and tops in March 2009.
The same thing is happening again. I personally believe this next drop will be more violent then the last plunge (July 2008 - March 2009). Look at the charts for equities, commodities and bonds.
The fun has just started!
As I've said before, acquiring dollar-denominated debt is the same as shorting the dollar, while debt destruction is the same as going long the dollar. With the level of debt destruction that we will be seeing over the next twelve months, the dollar will rise. We are watching the beginning of it. As a corollary, Prechter is right about the decline of silver and gold over the short term. Watch silver make a new low this year.
The only thing counterintuitive to what Prechter notes about the dollar's inverse qualities is the forgone conclusion, um, UHC vote looming in Sept., and the need for a veneered consensus by way of a “rebounding economy” (um, the stock market).
If you are interested in EWT try these two sites. One has the $ at a bottom and one is skeptical. They chart many different things. They both do their own count and let you know where EWI screws up. I use EWT as a confirming indicator. When these two get on a count it is amazing - so EWT has its moments.
Daneric was on the old ZH blogroll -
http://danericselliottwaves.blogspot.com/
Kenny (of stockcharts fame) -
http://kennystechnicalanalysisblog.blogspot.com/
Here, here!!!!!!!!!!
Good job, ShankyS!!!
It's funny listening to all of the demented inflationists and goldbugs.
When you asks demented inflationists where the inflation, their head explode. Ben will do whatever it takes to defend the dollar at the last support level.
its so funny? funny how? a 10 % move puts gold at a new high...a 10 % move in dow has you how much below 2007 high? 2001 high? 2008 high? who's the putz? oh right I understand now...
Demented inflationists and gold bugs.
Still present I see.
I would add that hyperinflation, a non classic inflation, is always and will be again be the CONSEQUENCE of a CURRENCY EVENT no one understands now or will understand when it happens, which it will.
http://jsmineset.com/2009/08/17/no-safe-haven-in-the-bankrupt-dollar/
I love this guy's blog, Nathan's Economic Edge - he actually put together an incredible collection of charts to show we are in the middle of deflation. Deflation on investment assets that are financed. Of course, the government and establishment is doing everything it can to try to stem the deflation but losing out currently. If they over react, I would agree it would cause a currency crisis and we could see hyper-inflation. However, then there would be more people unemployed unable to pay for groceries and rent, and taxes would have to increase again to pay for it - unless they are suicidal I think they will need to manage the integrity of the dollar. If not, the appropriate picture to hold in the minds eye would be the guy on the bomb riding it down in Dr. Strangelove.
GG et al, I highly recommend reading it:
http://economicedge.blogspot.com/2009/08/week-in-charts-buckle-heck-up.html
Good choice, it's one of the Bookmarked.
Thanks... bookmarked also... he is seeing an ugly deflationary spiral... and I agree... deflation first... then possibly inflation if they keep monetizing. The hole left by the economic collapse was so great that the monetizing they have done so far can't begin to fill the hole... so the risks of near term inflation are minimal. I think we are moving back to a stronger dollar and as such I converted all my CAD to USD today. I personally think it will be a redo of Fall 2008... and hopefully they will just let it go so we can cleanse the system and then build on a solid foundation.
CAD/JPY and AUD/JPY are my 2 main FX positions to play now (short, unless due for an oversold rebound - like USD/JPY near 94). Dollar/Yen now trading in 25bps swings per 15-min intervals since pre-Japan open tonight. Might as well play the DXY VIX now with these moves.
The CAD has strengthened nicely against the USD and JPY... I converted into CAD when it USD/CAD was 1.29... so I think it is time to go the other way for while. I think the behavior of currencies are much easier to predict in this type of environment...
That site lost all credibility for me when I noticed the scientology link.
I was surprised by this comment, went to the site to look for any such link and found none.
He links to many of the Martin Armstrong articles that I like, but never saw any link to scientology.
Calling bullshit on this "Anonymous" unless you can find the link.
Oh the RH side, underneath his furniture picture, and above his blog archive.
Maybe I've got a virus on my computer that makes it show up, maybe you've got something that blocks it on yours.
It's a flash animation about 250px wide and 250px high.
Once it's finished it's animation it reads "scientology.org"
Yes, Apocalypse now, I see the scientology link,
as well. But his charts are cool.
A.
Soros is shorting the Dollar, no?
I thought the Dollar shorts were increasing?
Soros claims to be long the market and that we are in economic recovery. Join him at your peril. I love the guy, but he did get Asia spectacularly wrong.
Conclusion: We all make mistakes, you will sleep better if you go broke by following your own conscience than another guy's
this was BP on Bloomberg a couple of days ago
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.mUS75Cr_zg
prechter seems like a nice person
They illegally overtaxed you back then through government scams and are just sitting on billions of it. Tax surpluses is stealing from tax payers. Time to get that money back and force them to lower taxes.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Do you think any one is clicking over to your site, Ned? You have tons of junk flags, just move on please.
Say end of QE. But foreign purchases atrophying.
We're being traded by the most venal and lethal hedge fund of all the us gov't/Fed CoOp. They'll monetize hard again post OCT. If only after Bernanke reappoint. Play cool 'til then.
Eventually $ must fall, possessors must be dispossessed.
Long Debt must rise, equities must fall, debt must contract, and defaults must again work their domino chain. Taxes must rise, services must pull back. Only reason $ won't get much more dear (like GD1) is lack of backing. Issuers of fiat can make it dear/loose or strong/weak. WE are at their beck and mercy.
Everything else is Uncle Sam playing CRAZY IVAN.
Perhaps, Prechterites who happened to be on the right side of the market last year should feel lucky that they happened to look at the stopped clock when it was telling the right time. More importantly, the clock (Prechter) should probably be thrown away right now or they will risk giving all their gains back to the market. IMHO, Prechterites would be well advised to note these nuggets. I mean he may be right again this time but considering his track record below would make me think twice before taking his advice:
"Prechter has been out of the stock market since before -- note carefully, before -- the 1987 Crash."
http://www.marketwatch.com/story/is-prechters-bearishness-permanent
"Exactly how much Elliot Wave forecast fans lost depends on whether they actually went short the market when Prechter turned bearish. In that case, they are in a deep hole: down 99.2 percent over the last 15 years."
http://www.marketwatch.com/story/robert-prechter-remains-superbear
I rest my case.
Yes. Anyone looking at a 75 year chart of the Dow can see the secular and cyclical wave pattern. So what's expected from an "expert" is that he bring some predictive insight to it all. And his track record is dismal. In the broadest sense of the market movements he's never wrong. But as for timing the movement, he's rarely right.
I am not a huge fan of Elliot Wave, but please note that money market funds have outperformed the S&P since 1990. That would mean that being out of the market was the smart thing to do.
CXO Advisory: "Prechter's accuracy rate is about 33%, which is very poor."
I am not defending the guy. I am attacking the inflationist arguement... very different.
Furthermore, 80% of PM's underperform their stock indexes. 30% accuracy is actually AVERAGE within the financial industry. I don't need CXO (never even heard of them?) to tell me what to think, it is my job to know.
I love how a large majority on this list are quite ready to throw EWT and Prechter right out the window, especially when he had 2 back to back near perfect calls. Y'all aren't the only one bashing him, I've seen some of the legendary traders do it in the email list I share. While I am sure many of you are fantastic traders, instead of bashing him for being right (finally or not, whichever you want), however I am sure the majority of you are traders who have had their ass handed to them over the past two years. Why don't you stop hating and start learning the concept of "Debt Deflation"... research Irving Fisher and you'll learn the fundamental reason to be long the dollar. Until then, y'all are just player haters.
CXO Advisory: "Prechter's accuracy rate is about 33%, which is very poor."
Right on! Well said!
Dollar is debt instrument. Must be in constant use so its incremental devaluation is spread over uncountable transactions and debasement slips in slowly. As a hoarding instrument it's garbage. Seek to preserve wealth? Never use a paper currency. They are only paper for policy transmission, money velocity, and making exchange.
When fixed debts with interest exceed carry capacity of money supply, money supply must expand. $ must debase.
"currency devaluation proved effective in ending the Great Depression"--but it must be swift not the accustomed slow decay-like structure we have experienced.
http://www.financialsense.com/editorials/vronsky/2009/0403.html
Do not underestimate the foe against which you trade. He holds the laws, the enforcement, the policy, the currency, the entire system at his disposal.
You hold--some money, some analysis without the full,true view, and hope.
Trade wisely my friend. Or only take the long term view.
Those nuggets of wisdom are apprecitated. Wisdom, she is your friend.
“Wisdom is the principal thing; therefore get wisdom. And in all your getting, get understanding.”
Deflationistas do it for less
Really? I would think inflationists always get less after the crash.
Just kidding I'm not a deflationista. I predict deflation + currency crisis , like Iceland -- land of the eternal fail whale.
Deflisis? Currflation? "Oh shi0"
Seriously tho Prechter wasn't he saying we were all fucking dead in 2000? It's 2012 you dumbass!
12-21-2012 to be exact.
"I predict deflation + currency crisis , like Iceland"
Everything you have is worth less, plus everything you need costs more. The perfect scenario to destroy the middle class. It's not a conspiracy, it's what's happening, I don't know if anyone is "doing" it or not.
currency crisis = hyperinflation
Bingo.
Exactimento! Our inflation, for quite a long time has been masked as debt and transferred to debtholders, with the overcapacity of debt chasing the overcapacitization of the global economy. Without debt, the "bubbles" would have been seen for what they were and still are as they were happening, highly inflationary. Wages and prices did not keep up with the debt (inflation), so the inflation monster is still thrashing the economy of the average person and business.
As long as there is an enabler (the FED and Central Banks) of inflation through monetization, it will be alive and well. Inflation is morphing into insurmountable public debt that sucks the life out capital based economies. The exponential growth of public debt has no sign of subsiding and will continue to expand until the underlying instrument (fiat currency) defaults as inflation continues to morph into a more destructive force.
The MM is expanding negtively. I am not a scholar, but I understand Palyi's MPD. In essence, the MM has reached a point of no return - it takes more and more debt to produce less and less of truly positive GDP.
Viva la Banana Republic Americana!
The entire market has completely devolved into the following question: What will the Fed do?
Everything else is meaningless. They are currently taking any dollar strength from debt deflation and throwing it back into equities through OMO, believing Alan Greenspan that the market doesn't predict the business future - he believed and stated it caused the businesses to react. Now, this ridiculous ivory tower never ran a business - he was an academic and completely twisted the cause and effect with his belief that the market causes booms and bust cycles. There can be no increased spending without consumer confidence and access to credit, and their can be no consumer confidence or access to credit without jobs or home equity. I envision 0 employment and 100% taxes if we continue down this path - our only industry will be the military - 100% guns 0% butter.
Sounds about right to me. Also WWCD (what would china do?). If I were China I'd be getting land guarantees on my agency debt. I'd also make plans to rid the U.S. of their imbecile population so I could move my fat ass into the United States El Gordo.
no question is What Would/Will Goldman Sacs Do?, they seem to direct Fed more than Fed directs them...but we really don't disagree, because the Fed will do what Wall Street wants. Thing is GS will do anything they want, they can see the future, cause they make it, but even if they screw up and buy insurance against the a crash they knew was coming from an insurer who had no reserves to pay them, the government still makes them whole (and it wasn't a screw up, just like Pimco knew govt would back Fannie and Freddie, Goldman knew govt would make sure they got AIG money)
When Prechter or Schiff or anybody can tell me what GS Will Do, then I will trade on thier advise
buy lithium guys
the pumpers would like to derail the wahabites for your tax money
elctric cars or not, this is the next bubble
my 2c
sincerely
mega fone
WWCD. Get plenty o' slots for students at ivy league schools, right of first refusal on GSE collateral, military intel & technology, preferential trade & political treatment. AND like the movie HERO, if the object is unification of OUR LAND, then the small nation sacrifice for the globe. The feared assassin aligned with the power ambitions of the emperor. Short-term, many die, long term, many more live. NWO 2012.
More Prechter with less filtering: http://finance.yahoo.com/tech-ticker/article/298957/Dollar%27s-Hit-a-%22...^DJI,^GSPC,UUP,UDN,TBT,GLD,SLV
the dollar is only going to last as long as China's patience.
looking at the Tic numbers today, i'd say its about gone.
people looking for deflation to take gold to 200, or silver to 9, are as deranged as the folks looking for dow 10K.
the party is ending. question now is, who turns out the lights....
the dollar is only going to last as long as China's patience.
looking at the Tic numbers today, i'd say its about gone.
people looking for deflation to take gold to 200, or silver to 9, are as deranged as the folks looking for dow 10K.
the party is ending. question now is, who turns out the lights....
bob in the 70s and 80s did excellent job with his cycles and targets and did very well for me
the fact that so many here dont believe him is great
i will sit back and enjoy the decline
this week investors intelligence showed 49.4% bulls around the same as when a few months ago the spx fell from 950 to 875 area , as long as so many talking heads are bullish and looking for only a minor correction,i guess depends how minor that will be
yes no one is perfect but he has made some great calls over the years
:)
I am not a huge fan of Elliot Wave purely because once I was on their mailing list I was spammed daily by them.
I think the dollar will be looking pretty good vs the alternatives in the near future. Maybe not forever... but for some time. Especially when the mirage of Chinese/Asian decoupling proves untrue... again/still?
Question: When all the bad debt is destroyed/deflated... will actual paper cash be more or less valuable?
That is the big question. The quantity and velocity of money. Will velocity of hallucinated computer pixels accelerate to infinity as velocity of physical FRNs approach zero? Or will both approach infinity? Or does velocity of both converge to zero? What about letters of credit to pay for imports? Very complex.
http://en.wikipedia.org/wiki/Velocity_of_money
I agree dollar is okay for the moment, but you must hedge the currency risk somehow
.
I also believe that "decoupling" is a myth. It didn't work last fall.
When the bad debt has been chewed through, wealth will be transferred from society to the banking elite through inflation. That wealth comes from somewhere.
America can not prosper while government and banks consume so much of GDP while producing nothing of value.
Do people who yell about hyperinflation even know what the fuck it is and when it's actually happened?
Fiat money is relative. Meaning that if every fucking currency is circling the drain or if there are no truly superior currencies out there (amongst the traditionally strong currencies) then the odds of hyperinflation are pretty fucking slim.
Is that so hard to understand?
It is for people with zero sense of history. You know, the kind that make comparisons to fucking Zimbabwe for christ's sake.
You are equating money and credit, a huge blunder. Can the store of value function of money be printed? Of course not, unless we are all B school monetarist "true believers" which we are not. If "store of value" can be printed, why not just print our way to prosperity? You do not think through what you advocate. You are saying that if every central bank debased their currency tenfold and dropped it from helicopters that there'd be no pricing effect? Are you mad?
"Are you mad?"
Clearly, a rhetorical question directed at empty headedness.
It is as simple as this:
Debt is paid off with dollars. Debt needs to be paid off.
Dollars are needed. Dollar becomes valuable.
Once debt is paid off, if dollars exist, then they are worthless. MONEY = DEBT.
It is simple as this:
Dollars are created out of debt. Dollars are need to pay back debt. Excessive debt will create a need for dollars to pay back debt.
Once debt is paid down. excessive dollars become worthless.
Do research as to how money is created.
Fiat money is extremely relative in terms of value.
That's the beauty of it and why central bankers love it so.
There's a difference between inflation and hyper inflation.
It's a big difference. Some seem to think they're one and the same.
Of course there'd be a pricing if all central debased their currency there'd be a *nominal* pricing effect.
Nominal and real effects are 2 different things.
If everyone debases their currency at the exact same rate (percentage wise)than the real effect is 0.
The problem for specific currencies surface when their value changes in real terms relative to other widely used forms of currency.
We're in deflation.
Is inflation probable sometime in the near future? Of course.
Is hyperinflation probable? Of course not.
by Anonymous
on Mon, 08/17/2009 - 18:01
#39298
+++++++++++++++++
Nice coherent comment on the real nature of irredeemable non interest bearing notes as currency.
The hard currency haters are correct in slagging gold and silver as a non interest bearing currency. Perhaps they will soon apply the same standard to Federal Reserve Notes and any other derivative currency. Nah, never happen.
The entire banking system is stacked against savers. The legal position of a saver is that of an unsecured lender. The unsecured lender can demand unsecured notes from their bank if they figure that the microscopic interest rate gained on their unsecured deposits is worth the substantial risk in dealing with a largely insolvent banking system. No one has any doubt that the FDIC will eventually make good on savings deposits in their correspondent banks. FDIC has no assets to do that but has a line to the pocketbook of all that have deposits in their banks.
Even if FDIC makes good the losses of the depositor, it has zero obligation to pay the lost interest of the bankrupt bank.
I went through a 48 minute paper swap with a local bank in changing a 6 month CD to three months. The time involved for me to compromise my anonymity and agree to a lousy deal to be placed down in fourth tier in the recourse if the bank failed isn't worth the crappy interest payment that likely will be paid, but not guaranteed.
I figure that I am far better off to forego the interest increment now rather than having my funds be seized by the goo and held until they decide to release them with none of the contractual interest payment.
by Anonymous
on Mon, 08/17/2009 - 21:35
#39475
If everyone debases their currency at the exact same rate (percentage wise)than the real effect is 0.
Yeah sure.
And if equal opportunity thieves in each currency zone steal the same percentage by inflation, we all have the same genus of parasite, so all is well.
You college boys are our betters. Thanks for explaining.
I can't believe the reasoning of some people on this thread. If you believe that the FED will print money indefinately and that this will create inflation you have to buy the equity market and commodities (incl. gold) since they are both inflation protected and you have to short treasuries.
If on the other hand you believe all the money printing of the FED is a drop in the ocean compared with all the credit that is being destroyed, the crash of the velocity of money and the money multiplier then there will be deflation and the stock market and gold will crash and treasuries will rally.
What happens after a deflationary crash is a different story, but if you dont survive the deflationary crash you dont have to worry about it.
But please dont tell me the stock market will crash AND we will have inflation/hyperinflation, it just doesnt add up.
And by the way, just exactly how will we get inflation with CAPU at 68% and U-5 and 16%, the output gap is massive and will take many years of rapid growth to close.
"...all the money printing of the FED is a drop in the ocean compared with all the credit that is being destroyed..."
Again, the classic blunder of equating money and credit, just like you were taught in B school. Money is (supposed to be) a store of value, credit is not.
"What happens after a deflationary crash is a different story, but if you dont survive the deflationary crash you dont have to worry about it."
I agree with this, see below. I keep cash to avoid having to liquidate my currency hedges to survive the deflationary period.
http://www.itulip.com/forums/showthread.php?p=106493#post106493
Scroll down about 1/3 of the way and see charts titled "Argentine Inflation 1995 - 2009" and "Argentine Exchange Rates 1995 - 2009".
Deflation-induced default resulting in currency crash / hyperinflation.
"I can't believe the reasoning of some people on this thread."
I can't either, dude.
@5thTurning:
Have asked that same question a jillion times. Wage increases MUST accompany or precede inflation.
You are the only poster on several of these boards that I have seen who recognizes this basic eco 101 principle.
How can there be inflation, let alone hyperinflation if incomes are stagnant, taxed away, or FALLING? And nothing foreseen that they will magically reverse direction any time in the next decade?
The coming retirements of boomers is the only thing I can see that might create a labor shortage here in the USA (and negative death/birth rates in other countries) but that retirement day keeps being pushed out into the future because of ravaged retirement assets.
"Wage increases MUST accompany or precede inflation."
"How can there be inflation, let alone hyperinflation if incomes are stagnant, taxed away, or FALLING?"
Inflation and hyperinflation are two entirely different things that are frequently confused; hyperinflation is usually thought of as "high inflation", while IMO it is most often caused by a currency crisis. WHat causes currency crises? Sovereign defaults.
"If everyone debases their currency at the exact same rate (percentage wise)than the real effect is 0"
OMFG.
SW; yeah, some peoples reasoning is simply unbelievable.
Britain begins to default:
http://online.wsj.com/article/SB125058067452939477.html
Northern Rock Defers Payment of Subordinated Debt Coupons"LONDON -- Nationalized U.K. bank Northern Rock said Tuesday it was stopping payment of coupons on some of its subordinated debt in order to rebuild its capital, joining the list of British and European banks shifting out of the pricey instruments."
I might be wrong, but the whole theory of predicting the future value of asset classes by correlating past performance history waves seems looney. Why not astrology? Can anyone explain to me in simple terms the rational basis for Elliot waves?
What sometimes puzzles me is the large number of strong opinions on this site that do not include prices. It seems to me a valuable opinion about an asset or market would include a price, such as for the dollar. Is the correct relative price for the dollar a function as follows?:
$ = [M3] / [GDP x growth]
If you measured GDP in the unit of comparison (for instance, Euros), would you have an equation that told you the correct value for the dollar? Alternatively, if you are interested in inflation vs deflation, you could measure GDP in some hard asset, such as barrels of oil at the current market price - would this give you an equation that todl you the correct value for the dollar relative to oil?
This is a hypothesis & would welcome opinions, esp problems with the equation.
lol I still see it's very difficult for some to grasp the relative nature of fiat currencies and to some extent all currencies.
Currencies do not operate in a vacuum. For one currency to be valuable it must mean that there are other *less* valuable currencies out there.
Of course those nearest the printing presses obtain the full value of each printed fiat not but that leads to inflation not hyperinflation.
Furthermore, if every currency is debased at the exact same rate then you can't have hyperinflation in any real sense and inflation, in real terms, would be much lower than if some did debase and others didn't.
We do not operate in a closed economy. No nation/city state/country has every operated in a closed economy.
Villages in the bush and nomadic clans don't count. lol
The Anglo/American banking system has built one of the greatest ponzi schemes known to man. The world will be turned on it's head before they allow the USD (their main instrument) to collapse.
Conversley, it is not in the interest of many to see the USD collapse.
Not an expert but hasn't prechter preached for a deflation with a possible inflation afterwards? Schiff only mentions the inflation but on the other hand schiff is a buy and hold type of guy.
So even if they sing different tunes they can be both right.
By they way according to prechter you can have deflation in some areas and inflation in other areas. You can have stock value deflation and a currency inflation at the same time.
By the way you don't need salary increase to have an inflation, you just have to accept lower standard of living, judging from how people live in for example asia, american standard of living can go down a bit by having higher prices but with lower salaries, it's fully possible.
Here's an essay that debunks the logical foundation of Elliott Wave theory: orvinfive.blogspot.com
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