The Day of American Austerity: What Will It Look Like? In the United States, the belt-tightening has just begun Since the start of the European sovereign debt debacle, the word "austerity" has been bandied about a lot. It wasn't an everyday word, and may send some people to the dictionary. Merriam-Webster defines "austerity" this way: enforced or extreme economy. But even knowing this definition might leave one wondering how "austerity measures" relate to Europe's debt crisis. The Associated Press (5/13) provided this overview: Austerity has been the main prescription across Europe for dealing with the continent's nearly 3-year-old debt crisis, brought on by too much government … [Read more...]
Prepare for your financial future
Position Yourself for the Rest of "Conquer the Crash" The earlier you prepare, the better To this day, I wonder why Robert Prechter's book Conquer the Crash has not been more widely recognized. It described in advance much of what happened in the 2008 financial crisis. Published in 2002, the book provided detailed descriptions of then-future economic scenarios. They were detailed vs. general. Prechter was specific in a way that would prove right or wrong; there was no gray. This is from the book: There are five major conditions in place at many banks that pose a danger: (1) low liquidity levels, (2) dangerous exposure to leveraged derivatives, (3) the optimistic safety ratings of … [Read more...]
Global Debt Market: Biggest Bubble of All Time?
The Global Debt Market -- The Biggest Bubble of All: This One Has Yet to Deflate (Are You Ready?) History shows that once a financial bubble bursts, it can take a long time to bounce back. Recent history offers an example: Real estate prices topped in 2006-2007 -- then came the worst part of the sub-prime mortgage crisis in 2008. Yet instead of recovering with the passage of time, real estate prices just keep getting worse: Home prices dropped for the fifth consecutive month in January, reaching their lowest point since the end of 2002. -- CNNMoney, March 27 As values sink and desperation grows, the number of owners giving their timeshares away for $1 -- or less -- has doubled in … [Read more...]
How to Handle an Economic Implosion
I came across some research on the subject of worry. Here's how it was presented: Things People Worry About: things that never happen - 40% things which did happen that worrying can't undo - 30% needless health worries - 12% petty, miscellaneous worries - 10% real, legitimate worries - 8% Of the legitimate worries, half are problems beyond our personal ability to solve. That leaves 4% in the realm of worries people can do something about. I thought about our gigantic national debt and weak economy. These seem to fit into both subcategories of "real" worries. You can't do much as an individual to solve the nation's debt and economic problems, yet you can prepare for a … [Read more...]
What All Major Depressions Have in Common
Signs of deflation are visible but the public will be fooled Deflation requires a precondition: a major societal buildup in the extension of credit (and its flip side, the assumption of debt). -- Conquer the Crash, 2nd edition (p. 88)Has the United States met that precondition? Well, consider that total credit market debt as a percent of U.S. gross domestic product was 280 percent in 1929 at the start of the Great Depression 380 percent in 2008 The current build-up of credit goes far beyond major -- it's unprecedented. It's been rising steadily for 60 years. The slope literally looks like the side of a steep mountain. Bank credit and Elliott wave expert Hamilton Bolton … [Read more...]
If the Economy’s “Recovering,” Why is the Largest-Ever U.S. City Bankruptcy on the Horizon?
What's really going on? As pundits chatter about an economic recovery, 80 miles east of San Francisco you'll find a city (pop. 292,000) facing bankruptcy: Stockton is on the verge of becoming the largest city in the United States to declare bankruptcy... San Francisco Chronicle (3/4) Bloomberg reports (2/25) that it costs the city $175,000 just to get a consulting firm's fiscal evaluation. Management Partners issued a report which said: ...the city took on a large amount of debt in anticipation of ongoing growth that now exceeds the city's ability to pay. Compensation packages exceeded sustainable levels and the city assumed a significant liability for improved retiree health … [Read more...]
How Does the Value of the U.S. Dollar Fit Into the Big Picture for the Economy?
Robert Prechter discusses his views on the credit crisis and the U.S. dollar More credit is denominated in U.S. dollars than any other currency. What does this mean for the value of the dollar as the credit crisis continues its strangle-hold on the world economies? Enjoy this video clip of Bob Prechter from an October interview with The Mind of Money host Douglass Lodmell, in which Bob discusses the debt implosion and the value of the U.S. dollar. You can watch Prechter's full 45-minute interview here -- no sign up required! Watch the full 45-minute interview FREEGet even more valuable insights as Mind of Money host Douglass Lodmell interviews Elliott Wave … [Read more...]
Preparing Your Finances for 2012
Looking ahead to a new year and planning for the future It's hard to believe that 2011 has passed so quickly and that 2012 will soon be here. Now is a good time to look back over the past year and assess your finances. Did your choices this year put you in better or worse circumstances? Do you have the information needed to make wise decisions in the next year? Are you prepared to protect your financial future? The following excerpt from Conquer the Crash explains the importance of preparing and taking action now so that you'll be ready for what's ahead. You can read 8 more chapters from Conquer the Crash -- 42 pages of critical information, including a list of imperative "dos and … [Read more...]
The Top 10 Market Myths Exposed
The Market Myths Exposed eBook sets the record straight Not knowing the truth can be hazardous in just about any type of situation, but especially when it comes to your financial future. To help you decipher market truth from myth, Elliott Wave International put together Market Myths Exposed, a free 33-page eBook that takes the 10 most dangerous investment myths head on and exposes the truth about each in a way every investor can understand. Originally published in 2009, it's still just as valuable as ever. Get your free eBook here. Here are the first two myths from Market Myths Exposed: … [Read more...]
A Not-So-Funny Thing Happened on the Way to the Economic Recovery
By Bob Stokes On December 13 the Federal Reserve left interest rates unchanged. The Fed's statement said "the economy has been expanding moderately." On December 15, economic reports included: weekly initial jobless claims hitting a three-and-a-half year low; the Philadelphia Fed's Business Outlook for December surprised to the upside; and the National Retail Federation raised its holiday sales forecast. Even so, a not-so-positive thing also happened on the way to the "economic recovery": "Americans got much poorer last quarter, as their collective household net worth suffered the biggest decline in three years." New York Times, December 8 Other things also happened on the way to … [Read more...]
