DJI - End of the Grand Super Cycle?
Dow Jones wave 5 cycle from 1896 to 2022.
DJI perfectly tags Waves 1-2 and 4, with 3 and 5 being overextended. Wave 3 went to the 200% and Wave 5 went to the 223%.
For those who do not understand Elliott Wave Theory I would recommend reading EWT Principle by Robert R. Prechter Jr.
A controversial issue is whether the severe economic recession accompanying the termination of the current Grand Supercycle will take the form of either a deflationary depression or a hyperinflationary period. Robert Prechter has repeatedly stated that the collapse will take the form of a deflationary depression probably followed by hyperinflation. In an October 2006 interview, when asked to make his case for deflation and the key factors that supported it, Prechter said:
The credit bubble: the fact that we do not have currency inflation as much as we have credit inflation. And credit bubbles have always imploded. The amount of dollars out there that are greenbacks – actual cash – is minuscule compared to the dollar value of credit instruments. So in my view the Fed is utterly powerless to prevent the ultimate deflation of the credit bubble. And some people say, "Well, they can print money." Fine, that would just make the credit bubble collapse faster as soon as bond holders realize that's what they were doing. There's no way out of it. So that's the argument.
Well, the hyperinflation part is a pure guess based on politics. It has nothing to do with reading markets. I think the markets are telegraphing deflation, and I'm very confident about that. Hyperinflation to me is going to be the natural political response. I mean these people in Congress are so irresponsible – except to themselves and their families, of course. They always get re-elected so they're doing that correctly. I mean, it's working for them as individuals but it's not working for the country. Anyway, to save their own skins I think the most likely thing is that they will turn to the Treasury, whether they keep the Federal Reserve System or not, and say, "Let's print, let's get the machines going and print those greenbacks and spread them around."
Happy reading!
Brad
DJI perfectly tags Waves 1-2 and 4, with 3 and 5 being overextended. Wave 3 went to the 200% and Wave 5 went to the 223%.
For those who do not understand Elliott Wave Theory I would recommend reading EWT Principle by Robert R. Prechter Jr.
A controversial issue is whether the severe economic recession accompanying the termination of the current Grand Supercycle will take the form of either a deflationary depression or a hyperinflationary period. Robert Prechter has repeatedly stated that the collapse will take the form of a deflationary depression probably followed by hyperinflation. In an October 2006 interview, when asked to make his case for deflation and the key factors that supported it, Prechter said:
The credit bubble: the fact that we do not have currency inflation as much as we have credit inflation. And credit bubbles have always imploded. The amount of dollars out there that are greenbacks – actual cash – is minuscule compared to the dollar value of credit instruments. So in my view the Fed is utterly powerless to prevent the ultimate deflation of the credit bubble. And some people say, "Well, they can print money." Fine, that would just make the credit bubble collapse faster as soon as bond holders realize that's what they were doing. There's no way out of it. So that's the argument.
Well, the hyperinflation part is a pure guess based on politics. It has nothing to do with reading markets. I think the markets are telegraphing deflation, and I'm very confident about that. Hyperinflation to me is going to be the natural political response. I mean these people in Congress are so irresponsible – except to themselves and their families, of course. They always get re-elected so they're doing that correctly. I mean, it's working for them as individuals but it's not working for the country. Anyway, to save their own skins I think the most likely thing is that they will turn to the Treasury, whether they keep the Federal Reserve System or not, and say, "Let's print, let's get the machines going and print those greenbacks and spread them around."
Happy reading!
Brad