Robert Prechter Predicts Deflation, Depression and New Market Lows

Robert Prechter in a note to his Elliott Wave International clients says the market my go higher in the short term, but it is a bear market rally. Prechter said "“Green shoots” and “Glimmer of Hope" are catch phrases used by bullish pundits to convince the public the worst is over for the economy. He says this is typical behavior for the top of a bear market rally. Prechter cites the failure of the NASDAQ to confirm the new highs made by the DOW and the S&P500 as a sign the NASDAQ is running out of upside momentum.

Dow 8,284.41
Nasdaq 1,687.10
S&P500 884.89
Markets at a glance

In an interview with Reuters, Prechter said:

• "Our models are (showing) right now that it is a much bigger bear market than most people realize, something along the lines of 1929-1932,"

• "I think the next leg down will be at least as severe if not more severe than what we just experienced. So you want to stay on the side of safety"

In his 2002 book "Conquer the Crash," Prechter warned of a debt bubble with deflationary depression while recommending US Treasuries. Today he still likes US Treasuries. (See US Treasury Rates at at Glance)

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Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression
(Hardcover w/ Updates for 2009)

by Robert R. Prechter Jr (Author), Robert R Prechter Jr (Editor)

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More Info:

• US Treasury Rates at a Glance
  
  
• May 14, 2009 Reuters interview
  
  
• ~1995 Barron's Interview
  From: da_cheif™ 7/12/2005 9:04:36 PM
  prechter was interviewed by barrons about 10 years ago...when the dow was at 3500.....he sed that if the dow ever went about 4000 it would prove he didnt know what he was talking about and that nobody should pay attention to him again......lolol.....thats why the recognition wave is still ahead.....it will make the 90s look like childs play....snort
  
  
• LIBOR Rates at a Glance