By James Stephenson Deflation is not just cost of living, but also declines in assets values and debts. Deflation started in 2008 with declines in stock prices down (40%), houses (20%) and commercial real estate. In a credit crisis, falling prices trigger more selling as we saw in late 2008. As people scramble for cash, falling asset prices actually reduce the supply of potential liquidity or cash. Don't be fooled by the "bear market rally" which will end. As the credit contraction continues, prices will be slashed to stimulate sales at any cost and deflation will be seen in cost of living and consumer prices. The "problem" is too much debt built up over 25 years - up 80% since … [Read more...]
Gold is Still Money
The following article is excerpted from a brand-new eBook on gold and silver published by Robert Prechter, founder and CEO of the technical analysis and research firm Elliott Wave International. -- Tim McMahon, editor Bob Prechter: Gold is Still Money By Robert Prechter, CMT Have you ever traveled abroad and taken a look at the local currency and wondered how the citizens of that country could take seriously what looks like “Monopoly money?” I’ve got news for you: You’re using the same stuff. Monopoly money is the money over which some government has a monopoly. It is the currency of the realm only because the state makes it illegal to use any other type. … [Read more...]
Do Central Banks Move the Markets?
Central Banks are like the giant gorilla of the investment world. Everyone thinks they can do anything they want. But can they? Or are they subject to the laws of the universe just like everyone else? They do wield a lot of clout for a day or so when a new announcement comes out but do they really have a lasting effect on the markets? In this article Mark Galasiewski of Elliott Wave International gives us a look at what the effect of the Central Banks really is. -- Editor Think That Central Banks Move the Markets? Think Again. By Mark Galasiewski The following is excerpted from Elliott Wave International’s Global Market Perspective. Conventional wisdom says that central banks can … [Read more...]
6 Questions about the Financial Crisis
March 11, 2009 Elliott Wave International, receives thousands of questions every year from web site visitors and subscribers on their free Message Board. Here the company shares 6 of the recent critical questions on the financial crisis and 6 answers provided by their professional analysts. For more free questions and answers or to submit your own question, visit Elliott Wave International’s Message Board. Q: Can increased government spending help stop the crisis? What do you think about the new mortgage bailout plan – or bailouts and proposals for additional government spending in general? The opinions on whether or not this will ultimately work seem so divided... … [Read more...]
Can the Federal Government Really Stop a Deflation?
The Last Bastion Against Deflation: The Federal Government This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide. The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation. By Robert Prechter, CMT Now that the downward portion of the credit cycle is firmly in force, further inflation is … [Read more...]
How to Protect Yourself During a Deflation
10 Things You Should and Shouldn't Do During Deflation This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide. The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation. By Robert Prechter, CMT 1) Should you invest in real estate? … [Read more...]
A Layman’s Guide to Government Intervention
This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide. The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation. By Robert Prechter, CMT I am tired of hearing people insist that the Fed can expand credit all it wants. Sometimes an analogy clarifies a subject, so let’s try one. It may … [Read more...]
Three Myths of Deflation and Recession
This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide. The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation. By Robert Prechter, CMT Myth 1: “War Will Bail Out the Economy” … [Read more...]
Take action in a Deflationary Environment
Editor’s Note: In the following article Robert Prechter shows you how to prepare for a deflation. By Robert Prechter, CMT The ultimate effect of deflation is to reduce the supply of money and credit. Your goal is to make sure that it doesn’t reduce the supply of your money and credit. The ultimate effect of depression is financial ruin. Your goal is to make sure that it doesn’t ruin you. Many investment advisors speak as if making money by investing is easy. It’s not. What’s easy is losing money, which is exactly what most investors do. They might make money for a while, but they lose eventually. Just keeping what you have over a lifetime of investing can be an achievement. That’s … [Read more...]
Making Preparations and Taking Action in Today’s Deflationary Environment
Editor’s Note: In the following article Robert Prechter shows you how to prepare for a deflation. By Robert Prechter, CMT The ultimate effect of deflation is to reduce the supply of money and credit. Your goal is to make sure that it doesn’t reduce the supply of your money and credit. The ultimate effect of depression is financial ruin. Your goal is to make sure that it doesn’t ruin you. Many investment advisors speak as if making money by investing is easy. It’s not. What’s easy is losing money, which is exactly what most investors do. They might make money for a while, but they lose eventually. Just keeping what you have over a lifetime of investing can be an achievement. That’s … [Read more...]
