-- Posted Wednesday, 25 October 2006 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, October 25, 2006
“Phenomenally accurate forecasts”
There may be some forecasters who think the Dow eventually will surpass the 13045 target I’ve been touting here for the last month, but certainly none who are more bearish on the economy than I. Not even Bob Prechter, who recently lobbed a 13000 target of his own into the firmament of bullish mind-benders. There would appear to be two schools of thought on this: 1) that when permabears like Bob Prechter and I turn bullish, there are no more pessimists left to sell stocks, hence the market is vulnerable to a crash; or, 2) we naysayers are not the least bit bullish, but we sure as hell know how to read a chart.
Take your pick. But for what it’s worth, the Elliott Wave guys are the only technicians I know of who regularly come up with targets precisely coincident with my own. In that sense they are kindred souls, even if I tend to shrug off all of that Grand Supercycle stuff that would have us ponder charts going back to the 1700s. Concerning Prechter, more than a kindred soul, he is a mentor who has blazed a trail on the topic of deflation. The fact that he can see no other outcome for our terminally shaky world economy than deflation tells me that he “gets it.” He is going to be right, for reasons argued at length, and brilliantly, in several of his books. In my opinion, anyone who thinks inflation is going to undo us has no fundamental understanding of the problem. Less charitably, I would say that they are all fools, even a been-around-the-block-kinda-guy-who-really-should-know-better like Gary North.
Where Bob Prechter and I have diverged in our thinking is about gold. His long-term forecast for the metal has been famously bearish, while mine, much less famously, has been quite bullish: “The no-brainer investment of our lifetime”. After all, I’ve long reasoned, how could the impending collapse of a global financial system drowning in bogus money not be bullish for gold over the long haul? In fact, there is an answer to that question that I find increasingly compelling, even if I continue to hold mining shares in my sons’ college portfolios. I still consider precious-metal stocks a good long-term investment, since I am convinced bullion will retain its purchasing power no matter what happens to the economy. But I’m no longer so sure that it’s a complete no-brainer for investors to eschew all other classes of assets in favor of precious metals alone.
Where Bob Prechter and I somewhat agree, I would surmise, concerns the question of whether a world cast into absolute penury by deflation would possess sufficient savings to bid gold to the astronomical heights some are predicting. Prechter seems rather certain this will be the case, and although I find it persuasive, I am unwilling to write off the terminally inflationary logic of our funny-money financial system. One thing I am quite certain of, and which flouts the popular wisdom, is that neither manufactured goods nor energy will come to be priced in gold or gold-backed currency. For if the day comes when consumers around the world have to start paying for real stuff with “hard” money, we will have a deflation that’s going to make the 1930s seem like a hay ride in June.
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Free Hidden Pivot Calculator
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Wednesday, 25 October 2006 | Digg This Article | Source: GoldSeek.com
