Robert Prechter on Deleveraging Deflation 2010 (3 of 5)

Robert Prechter interviewed by Dominic Frisby on "Bulls and Bears," February 7, 2010, London.

Category:

Education

Tags:

• Robert
• Prechter
• Dominic
• Frisby
• Bulls
• and
• Bears
• deflation
• inflation
• hyperinflation
• Marc
• Faber
• gold
• prices
• precious
• metals
• Jim
• Dines
• central
• banking
• dow
• jones
• depression
• recession
• deleveraging
• Elliot
• Wave

[ExquisiteDoom]

Prechter doesn't seem to understand that if defaults get out of control this debt money is gone, evaporated. Then physical assets become the magnet from this evaporation. Let's say the biggest banks default; you're left with a big pile of worthless paper. Indexes will then default, which metals will suck the value of. Just expect politicians to blame metal owners as the cause of the commodity crisis. lol.

[MarcusCMarcellus]

@ExquisiteDoom

I think your comment is very wise. To see how they end up blaming metal owners, check out the interviews with Jim Sinclair at King World News - and all of Eric King's interviews if you're unfamiliar with them.

[shanks414]

Great discussion and thanks very much for sharing this video!

[waldentree]

excellent discussion

[Melker63]

@ExquisiteDoom: "Prechter doesn't seem to understand that if defaults get out of control this debt money is gone, evaporated."

Gee - I though that wheelbarrows of money was a sure sign of hyperinflation. By your definition, the exact opposite - "evaporation" of this money ALSO translates into hyperinflation. As for run-up signs for "physical assets become the magnet" - well, current reality points in the opposite direction. Google-search "Smartmoney You've Got It. Now, Can You Sell It?".

[pfeiffer101]

@Exposethefrauds - Exactly what I was thinking on the hedge funds buying gold. I would just like to add David Einhorn of Greenlight Capital and also add that foreign central banks are buying gold too. Also when you look at the gold reserves of all the countries you will find that they US has the most! China has 1/8th the amount of gold reserves as the US. Jim Rickards thinks that if inflation runs out of control with the dollar the US's plan B is reversion to gold standard.

[zeusvalentine]

@cvenzke410 until consumers actually have access to that

money, deflation is inevitable...

[ExquisiteDoom]

@dannydarias1 Gotcha. Well my definition simply revolves around the idea that deflation = decrease in money supply. Decrease in credit = Deleverage.

Increase in credit = leverage Increase in money supply = Inflation.

I define them that way because i find it much more accurate and less confusing to deal with.

I just remembered what the debate is about and now i see why i was wrong. I guess it's just a matter of figuring out which institutions are threatenned by this credit.

[ExquisiteDoom]

@dannydarias1 All i was saying is if i am a bank, i loan 50 quadrillion to a homeless person and he just spends it, i'm going to have a huge problem. He won't even get the chance to spend it before i'm broke.

It's still a mental construct, if everyone in society beleives the hobo really does have the skills to reimbourse the loan then it will cause damage to the economy. As it has for the credit bubble. Eh, i sort of forgot what the whole point of this chat we're having is for. lol

[cpgone]

It might test 800

$200 ? Its too bad prechtor makes such stupid calls.I really like him.

If gold goes to 200 .The USA will be in total chaos. People shooting each other in the streets.He quotes Feb. 2001. He forgets around 2005-ish people turned bullish and it went up

[yogiudo]

@ExquisiteDoom who cares who they blame. They won't have anything to pay the police with so finally they'll be finished too.

[yogiudo]

I agree with Precter that gold could goto 200$ the problem is that nobody is going to sell it to him for a 200$. People are finished with fiat currencies.

[dannydarias1]

@ExquisiteDoom USD has gone from 1.30277 to 1.27541 against the Euro. That's a 2.1% gain in a few days. It looks to be going opposite way and contrary to everyone's believe right now. We are about to see masses get shocked.

[cvenzke410]

In order to get an idea where we are at look up these definitions:

M1, M2, M3 money supply and quanitative easing. You'll get a better idea why Prechter is wrong.