Written by Felix Minderbinder
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Topics: Economy

Thursday, 8 December 2005

image for Big-Time Economic Doom Coming, Says Financial Guru
Forecaster Robert Prechter

SAN DIEGO, CA--Big-time economic doom is about to start as the financial bubble economy of the United States bursts. This is according to economic forecasting guru Robert Prechter, CEO of Elliott Wave International, who has just been interviewed by Jim Puplava on the popular Internet radio program Financial Sense Newshour, out of San Diego. Prechter's forecast differs so much with the mainstream that the incredibly rosy ding dong optimism of the US government and Wall Street is laughable, practically a satire of reality and the truly awful economic situation.

Prechter is the author of the recently revised 2002 book, "Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression," and he is the world's pre-eminent practitioner of the esoteric science of Elliott Wave analysis, upon which he bases his contrarian forecasts.

Prechter believes that a deflationary depression is about to start in the United States and in the rest of the world, although we've been waiting three years for it since the book was first published. Now, he believes that a depression actually began in 2001 or so, but that a massive expansion of credit and debt is artificially keeping the US and world economy alive. The depression is now about to enter a deflationary phase, which will see the stock market fall, along with bond values, commodity values, and real estate values, as the money supply contracts and currencies gain in value. Many US companies are on debt life support which is about to be cut off. He believes that the stock market value could fall by a factor of ten. He advises everyone to keep their money in safe banks and be happy earning 2% interest or so.

"We are in a depression," Prechter assures us in the interview. "We haven't begun deflation yet, that's true, but you can also see a lot of signs that it is extremely difficult for manufacturers and other people selling their goods and services to do anything about it. Car prices keep going lower because of the competition from abroad. There's a lot of what I call deflationary psychology because there are people who can barely make ends meet, and the reason they are surviving is…so many foreigners are buying our bonds that people are borrowing their way into survival. Obviously that can't go on forever. Now instead of printing currency, what the Fed has mostly been doing is encouraging people to take on more debt, and the government has been taking on more debt right along with them. Debt is something that can contract and collapse, and I think that is what's around the corner."

Prechter's forecast, if true, means that everything the American government, George Bush, and others are saying about the state of the US economy is nonsense. To believe Prechter is to realize that the US is living in a inflated dream world supported by nothing but faith and which is about to collapse.

He warns, "we are in the very early stages of a depression, and the country is basically falling apart. What hasn't fallen apart yet is the optimism, the confidence and the dream world that people are in, but that is going to happen."

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The story above is a satire or parody. It is entirely fictitious.

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