Short update showing that we've been in a 'soft crash' for a while now, with the value of the stock market sliding in 'real money'. Including the fact that the price of oil has increased because of the decline in the dollar. Prechter didn't expect all the massive inflation and devaluation of the dollar back in 2005, he thought gold was overvalued and would fall from $400! Yeah, no one expected Bernanke and our government to rapidly increase our money supply, kill the dollar and prop up/bail out wall street!! The market has been very bullsih (up) for 9 years which is unprecedented, the last crash in 1987 was bullish for 3 years... we have a ways to go!
He expects deflation and suggests to put your money in government backed t-bills for short terms (3months). The problem is that I think he still underestimates the motives of the federal reserve and the powers at be. No one would like to think that the government would want to kill their own currency. But we're going to have to if we want to continue to secure our interests around the world by funding our military. And we're never going to pay back our debts, our budget has been extremely out of balance for years and so is our trade deficit, we print money and it just flows to china,japan and germany! So here's what I think that they're thinking: "If we kill the dollar, the debt goes away, since it is held in dollars and our money supply is based on debt! pure genius! Make way for the North American Union and our new currency the Amero!!"
This problem of credit expansion shows no signs of stopping. The federal reserve made an emergency 0.75 rate cut the day after the world markets lost 5%-10%+. (our markets were closed on MLK day). This move by the federal reserve means they will keep pumping money into this system to keep it going. Look at the talk of "stimulus packages" from Obama, Hilary Clinton, Edwards AND Bush!! This will just make the problem worse!
This system of exponential credit and money supply is not sustainable.
Where do we go from here? Inflation, hyper-inflation, deflation, recession, depression...? We've already had about a 15% loss in less than a month in the us stock market, the Canadian dollar is worth more than ours, we have lost more than 60% against the Euro, the federal reserve keeps our M3 numbers secret (money supply), the world market is losing trust in the dollar, and gold is still climbing to new record highs...
Hold on for the ride, it's going to be a good one!