Friday, December 25, 2009

Total economic collapse?

Or at least a Dow that will crash to well below it's recent worst back in March of this year. This, according to Robert Prechter, who bases his predictions on mathematical formulas which he developed from studying Ralph Nelson Elliot, an accountant and market forecaster from the 1930's.

Apparently his predictions are accurate — the changes in the market that he predicts do tend to happen — but they are generally off by several years.

I'm certainly no economist, and I don't have much to base this guess on other than instinct and what seems to me as common sense, but I have been convinced that the economic collapse we saw at the end of 2008 to the first quarter of 2009 was merely a hiccup. While it was framed as at the edge of a total global economic collapse, I don't really believe it was. Instead, I have believed that this is what would follow if we continued doing what we have been doing — (including, but not limited to) running huge trade deficits, exporting more manufacturing jobs than we're creating, relying heavily on a consumer-based economy, not significantly increasing our agrarian production, and allowing banks to operate largely unregulated.

One year later and nothing has really changed, except unemployment is a lot higher, millions of Americans have had their homes foreclosed, the nation is a lot farther in debt, and while we were told that many banks had simply become "too big to fail" (they were too big to exist, without question), they're even bigger now! Or as Andrew Ross Sorkin refers to it, they are "too big to fail²".

Our solution seems to be to get back to massive, needless consumerism. Oh, and to inflate the next unsustainable bubble until it, too, pops. This is, of course, no sustainable solution at all. And so, we didn't just avoid economic Armageddon last year — economic Armageddon is still yet to come. And if it does it will be due not just to extreme greed, recklessness and corruption, it will also be due to the lack of competence and conviction of our political leaders and representatives.

Check out this article at TIME.

I also highly recommend checking out Charlie Rose's interview with Andrew Ross Sorkin from October 19 of this year. No direct link is available at the website, but you can find the interview at the website under the "Recent Shows" tab.

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