10/1/09 2:52 PMSetting the Record Straight: Answers to Comments on YouTube About D… and the Elliott Wave Principle | http://www.thedeflationtimes.comPage 2 of 6http://www.thedeflationtimes.com/2009/09/30/setting-the-record-strai…ube-about-deflation-robert-prechter-and-the-elliott-wave-principle/
Using the Elliott Wave Principle ('his "waves") he forecasted a long-term reversal lower in gold(February 1980) and a long-term "super bull market underway" in stocks (October 1982). Theseforecasts proved correct—especially for the stock indexes.He won the U.S. Trading Championship in 1984, with a then-record 444% return in a monitored optionstrading account. He was named "Guru of the Decade" by the Financial News Network (now CNBC) forthe 1980s. AND, he forecasted a large-scale bear market, as explained in his book Conquer the Crash(published in 2002), which was his platform to forecast and explain every chapter of today's financialcrisis, years before it happened!!Does that sound flaky to you? So you should listen to what he has to say and follow his lead. Don't listento or follow Bernanke and Congress. It is they who are flaky.
: "I dont think that the deflationist know they are spinning B,S. If we were in a normaleconomy with low debt we would have deflation. However we dont have that. WE have a debt ladeneconomy. So we will have inflation."
: The tide has turned: the exceptional volume of credit, of debt, has reached its limit and thetrend has reversed. Thus, the supply of credit, and therefore the supply of money, has shrunk, which areeffects of deflation.Add to this the deceleration in the U.S. economy which has stressed debtors’ abilities to pay and you'llsee that it is precisely because 'WE have a debt laden economy' that we have deflation and are going intoa deflationary spiral toward depression.What's scary is that it is just getting started and deflation will continue for years to come. So it is not B.Sand there is no spin.
: "Dr. Marc Faber - Sept 12, 2009 - I think the deflationists are wrong for the simplereason...the Federal Reserve can print money...you can electronically print money & so the quantity of money goes up. You can transfer any asset from the private sector into the govt...so many mortgageshave been transferred to the govt. They will have continuous huge losses. So, I think that deflation ispretty much out of the picture. Deflation would manifest itself in a strong dollar. The dollar is weak."
: The Fed's primary function, for more than 90 years, has been to foster the expansion of creditand credit is another matter entirely. Credit is not money and Faber is confusing credit creation withmoney creation.U.S. bonds are the reserves of the Fed and U.S. bonds are the source of its power. Therefore, the U.S.government does not want its bonds to attain (official) junk status, because its borrowing power is one of the only two powers over money that it has, the other being taxation.By flooding the market with money, the Fed would cause a panic among U.S. bond-holders, and theirselling would depress the value of the Fed's own reserves. So the ivory-tower theory of unlimited cashcreation to combat credit implosion would meet cold, harsh reality resulting in the Fed committingsuicide by doing just that.As Ludwig von Mises said in Human Action (p.572), "There is NO MEANS of avoiding the finalcollapse of a boom brought about by credit expansion."ShareThisPosted by Mary Filed inSocial Change,The Economy|EditCreated: September 30th, 2009