A well known American author and stock market analyst has painted the ultimate bearish picture for the future of the markets.
Robert Prechter, past president of the Market Technicians Association and student of Elliott’s ‘Wave Theory’, has forecast a 70%-90% stock market plunge over the next few years.
His thoughts are reported on both sides of the Atlantic in the New York Times and the Guardian as well as Reuters.
Prechter’s predictions are based on his analysis of his version of the Elliott Wave theory. There are plenty of market bears about at the moment and talk about a double dip recession. But Prechter’s analysis is so extreme that another analyst, Ralph Acampora who has 40 years experience in the field, said that “…. if he’s right, we’ve basically got to go to the mountains with a gun and some soup cans, because it’s all over.”
Prechter told Reuters that "It is very clear there is substantial stockmarket risk". And talking to the New York Times he said '… winter is coming, buy a coat. Other people are advising people to stay naked. If I'm wrong, you're not hurt. If they're wrong, you're dead. It's pretty benign advice to opt for safety for a while."
His prediction, if true, would see the Dow Jones Industrial Average drop from just below 10,000 to somewhere between 1,000 and 3,000 over the next 5-6 years.
Prechter is advising people to go for safe haven investments such as US Treasury Bills and he also likes the Swiss franc. He puts US property prices at “about halfway down in their bear market” and says that the crude oil bear market that started nearly two years ago is not over yet.
Prechter has been known to be right in the past. He got the stock bull market right in 1982 and got out before the 1987 crash.
My guess is that The Economic Voice wouldn't exist if the owners thought everything was sweetness and light in the global economy. Whilst many of us first woke up as a result of the credit crunch and became aware of a property bubble it's fair to say that the further you look the more problems you come across. http://www.chrismartenson.com/crashcourse is a good place to start.
I doubt that Mr Prechter will be completely accurate in his forcast of a 90% crash in the stock market but that's pretty much what happened in the last depression so why not? And of course, timing is a wildcard. Prechter suggests a bottom in 2016 I think. The way that governments are inclined to protect the status quo at any cost could drag it out even longer.
Where are the nearest mountains?
Well Phil, you are definitely partly right there. Things are not sweetness and light at the moment, but be in no doubt it will swing the other way and there will be more booms and asset bubble inflation no matter what the politicians say or claim.
We just want to be in a position to remind people when it does happen.
@ Phil
"Where are the nearest mountains?"………..about half a mile away lol
That's what I thought, Richard. They might even be the closest to Southampton too!
Do you think they'll relax the law on gun ownership or will it just get ignored?
If there was ever a time when gun ownership laws faced a stricter criteria it is now……the words 'Moat' and 'Raoul' spring to mind
Yep. Can't make the ammunition anyway. It's back to bows and arrows I reckon.
As for Mr Moat…
He declared war on the police. They'll claim that as justification and take him out to protect the rest of society.