Photo by Nathalie Schueller."Bullet" Bob Prechter, backer of the famed Elliot Wave Theory, came out the other day with a dire prediction for the US economy. Prechter's prescient prognostication?? He sees the Dow sinking to below 1,000 over the next five to seven years due to a deflationary depression that will grip America and much of the globe. Whoahh!!!!
Even amongst bears that's a pretty bleak view. Hell, even amongst dedicated survivalists that's a pretty bleak view! According to Prechter, "U.S. house prices are about halfway down in their bear market." It should be noted that house prices are down about 40% from their peak.
Here is Prechter on Bloomberg discussing the US dollar and debt:
The chart below is how Prechter sees the next four to five years possibly playing out in the Dow. If this dire scenario comes to pass we'll have a lot more to worry about than just asset devaluation and deflation. Trust me, if the DJIA sees the bad side of 1,000, eating and surviving will be far greater daily priorities than our 401k values.
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ReplyDeleteMy honest guess.. in a few years, gold will be the equal of the DOW. Perhaps 3,000.. and lets see if the currency survives in it's current form.
you guys rock as always
ReplyDeleteThanks Mr. Kowalski....we dig your blog too!
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