Robert Prechter on Deflation & Fiat Currency (3 of 3)

Robert Prechter of Elliot Wave October 3, 2009

My apologies for using the wrong US debt chart. The one on the video ends at 2005 - the situation is much MUCH worse today in late 2009.

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• deflation
• inflation
• hyperinflation
• Robert
• Prechter
• economic
• collapse
• recession
• depression
• fiat
• currency
• central
• banks
• federal
• reserve
• bernanke
• Marc
• Faber
• Jim
• Rogers
• Gerald
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• gold
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• real
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• deleveraging

[30percentplusreturns]

So true. The FDIC is the biggest moral hazard ever.

[anujbahl]

the fact is money is what people accept as money. recently, it's been paper money backed by promises. I don't know for a fact we will go back to a gold standard, but it seems the most logical choice. Gold has been used in the past as money and central banks still store it. Maybe money will be backed by a basket of commodities, who knows? I just know this ponzi scheme of money backed by nothing is unwinding.

[davidcalderwood1]

Anujbahl, what is your market opinion? Are you long, short, or is this just mental self-flagellation? For some of us, the money actually matters. 1978 Prechter wrote that the over-decade-long bear market was going to turn bull, ending a rally dating to 1784. The rally surprised even him and morphed into a mania, extending another 5-10% in duration. That's what happens to forecasts, in finance and in weather. (continued)

[anujbahl]

mkt finally rolls over, groupees like you will credit him for calling the top to the tick. In reality, he has been calling for a pullback since about DOW 9k. If you don't believe me, watch any of his interviews. And yes, I know he said that it, "may go higher." Well, I want to go on record as saying the mkt may go lower or it may go higher.

[anujbahl]

how was I wrong? Maybe it was semantics. He may have not said to short gold, but he has been bearish on gold. It centers around his deflationist argument. And I'm not throwing stones, I think Prechter is a genius. However, I have a problem with giving him credit for a call that he was on the exact opposite side of.

And Prechter is not a unbiased technician. He has a glaring bias and it's toward deflation. He has written about since 2000 and he's stubborn about it. I'm sure when the stock

[davidcalderwood1]

Dude, you're backtracking (and it's funny!) Should I copy and paste your words so you can review?

I have met the man, I've read quite a lot of his writing, the stuff that costs money to view (not just youtubes, like you). I learned much about markets from him, and I've synthesized that with a lot learned "the hard way." Defend him? Why would I? You were wrong and I pointed it out. Duh. He expects deflation; everything else depends from that. You follow your own path, pal.

[MarcusCMarcellus]

The point of this interview is to give a macro scale of basic themes, not to make specific recommendations. Investors must gather info from varied - and contradictory - sources to make their own decisions. Anyone who simply follows a "guru," be it Schiff, Rogers, Roubini, Mish, etc., will end badly. Prechter makes a good case regarding deflation; Marc Faber makes a better one for inflation, but they are not fully contradictory if you read between the lines. Think synthesis, not adversity.

[anujbahl]

Prechter will always speak with ambiguity to keep the followers thinking he's never wrong. Let me search for 5 minutes and I'll post a link to his bearish gold call. brb.

[anujbahl]

what exactly are you defending? you obviously are not familiar with Prechter's track record. Here's a starting point- do a search for "Prechter" on youtube and watch many of his old videos. He has been bearish on gold forever. I don't know of he said to short gold, per se, but he had been bearish for a long time.

It's similar to his Feb "bottom" call in stocks. He actually never recommended going long, just closing out shorts.

[davidcalderwood1]

@anujbahl Really? Can you identify the newsletter or book where Prechter recommended shorting gold? Funny, I have multiple newsletters on file where he said he was "excited" about gold from 2002 on. Your comment's factual inaccuracy renders your moot. No one (including Bob) knows the future. All any of us work from is probabilities, and the path taken can be the less likely path even when your forecasting method is good. Until your method shows more promise, throwing stones seems imprudent.

[high5flyer]

Prechter has always been a gold bug. Read his Conquer the Crash book. Just like Peter Schiff he believes gold is real money. He just doesn't think it is going to go up like Schiff, obviously b/c he is preparing for deflation not massive inflation & trying to make his clients the most money on what he believes. Regardless gold never loses its value. 1 oz today equals just as much as 1 oz. 500 years ago. Don't think in nominal terms but rather in terms of weight (something you can easily measure).