The Sky Is Falling And This Is What Robert Prechter Says You Need To Do
Robert Prechter, a stock market analyst and noted author of the best selling classics Elliot Wave Principle and Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression, is a leader amongst financial and economic pundits, scholars who study the markets and the economy and know what they are talking about, scholars who use science and math and figure out how it all works. Many, many noteworthy professionals believe in his theories and for good reason – they make sense and are clearly capable of predicting the trends of the market and the economy. If taken backwards and the science applied to the last 75 years, it proves itself to be totally accurate. The Elliot Wave theory can predict the rise and fall of the stock market and thus, the economy.
To paraphrase, he says that everything is based on predictable cycles that repeat themselves over and over. If one pays attention to them and measures and watches carefully, one can implement appropriate investment strategies to meet objectives and needs. He predicts that we are about to enter an enormous correcting cycle where the values of stock will plummet lower than anyone can imagine. It will wipe out many fortunes and break banks, insurance companies, mutual funds and personal wealth. He explains that our economy is based on debt, not money, and that debt backs debt which backs debt again. At some time the market will adjust itself and implode with the values of everything dropping enormously, i.e. hyperdeflation.
If one is invested in higher risk paper, stocks, bonds, mutual funds, etc., you will lose much. If one is invested in low risk issues that are highly secure you may weather the storm. That is his basic position. When? Certainly within the next five years maybe the next two to three. It’s hard to predict exactly, but it is certainly coming.
I believe it makes sense to listen to his advice and plan accordingly. To take precautionary measures based on his theories is prudent and appropriate. I have concluded if he is right and I plan accordingly, I will save myself from huge losses. If he is wrong, it makes little difference. I may lose a few dollars in profits but will have security and peace of mind knowing my wealth is safe and secure in a turbulent economic world. Both results work for me.
The message to business owners is to rid your business and self of debt. When the economy crashes, as it most certainly will, your debt will crush your business and self. Your money will be gone if it is being held in debt-backed paper and you will have no way to recover. Rid yourself and your business of debt now and you will be able to handle the turmoil and deflation.
In short, do your debt workouts now to prepare for the coming downslide. Hold cash, not securities, and control your destiny. Work out your debt, that is the lesson and the warning. Heed it.
