By Elliott Wave International
In June of 2002, the notorious dot.com bust was making way for a powerful housing boom, the European Union was growing, and American involvement in the Middle East promised a "quick and easy victory."
Yet when EWI President Robert Prechter’s first edition of Conquer the Crash published ten years ago on this date, he wrote:
- "Home equity loans are brewing a terrible disaster."
- "What screams bubble — giant historic bubble — in real estate is the system-wide extension of massive amount of credit."
- "The Middle East should be a complete disaster."
- "Look for nations and states to split and shrink."
Today, 10 years later, the U.S. housing market still hasn’t overcome its worst downturn since the Great Depression; the eurozone is in crisis, and the expected quick victory in Iraq became a drawn-out mess.
Prechter’s analysis — based on the Elliott Wave Principle and socionomics, the study of how social mood motivates social actions — enabled him to foresee these changes in the economic, social, and political landscape.
What other eye-opening forecasts do the pages of the Conquer the Crash reveal? How about:
Banks: "Banks are not just lent to the hilt, they’re past it. In a fearful market, liquidity even on these so called ‘securities’ [corporate, municipal, and mortgage-backed bonds] will dry up." (Remember the 2007-2009 "liquidity crisis"?)
Bonds: "The unprecedented mass of vulnerable bonds extant today is on the verge of a waterfall of downgrading." (Remember the 2011 downgrade of the U.S. Treasury bonds?)
Credit: Credit expansion schemes — the primary role of the U.S. Federal Reserve Bank — "have always ended in a bust." (Again, think back to the "credit crunch.")
And — "Like the discomfort of drug addiction withdrawal, the discomfort of credit addiction withdrawal cannot be avoided." (You could say that again.)
Anticipating "shocks" to the global system is a remarkable and true, decade-long achievement of Prechter’s Conquer the Crash. And on the 10th anniversary of its publication, we’d like to offer you 42 pages of excerpted material to commemorate Prechter’s work.
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This article was syndicated by Elliott Wave International and was originally published under the headline 10 Years Ago Today: Prechter’s Conquer the Crash Is Published. Read 8 Chapters Free Now. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.