Robert Prechter Says, “We Are On Schedule for a Very, Very Long Bear Market.”

MoneyBob NEW YORK (AP) — The Dow Jones industrials plunged below 10,000 Tuesday after traders dumped stocks on worries about the global economy and tensions between North and South Korea. The Dow fell about 190 points in late morning trading. It has fallen 1,346 points, or more than 12 percent, from its recent high of 11,205, reached April 26. The Dow and broader stock indexes all fell about 2 percent. Investors also exited the euro and commodities including oil and again sought safety in Treasury securities. Look out below!

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Deflation is Coming

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Robert Prechter sees “The Biggest Bubble in History”

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Bob Prechter “Quite Sure” Next Wave Down Will Be Bigger and March Lows Will Break

Yes, the late 2007-early 2009 market debacle was just a warm-up to what Prechter believes will be the bear market’s main attraction. In this regard, he says the current cycle will echo past post-bubble periods such as America in the 1930s and England in the 1720s, after the bursting of the South Sea bubble.The 2000 market peak market a “major trend change” for the market from a very long-term cycle perspective, and the downside is going to continue to be painful well into the next decade, Prechter says. “The extreme overvaluation, the manic buying and bubbles in the late 1990s [and] mid-2000s are for the history books – they’re very large,” he says. “The bear market is going to have balance that out with some sort of significant retrenchment.”

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Robert Prechter Says Dollar’s Hit a “Major Bottom”

Forget all the talk about the dollar being in terminal decline. The recent rally in the greenback is for real, says Robert Prechter, president of Elliott Wave International. The man who correctly predicted the 1987 crash and last year’s peak in oil prices now says we’re “going to be up for a year or two in the dollar.”Reuters and other mainstream news outlets attribute the recent uptick in the dollar versus other major currencies to an improving economy signaled by Friday’s “stronger-than-expected U.S. jobs numbers.” Prechter, ever the contrarian, says the U.S. dollar has put in a major bottom but not for the reasons everyone else is pointing to.

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Inflation Not a Problem “Deflationary Depression” in Our Future

Elliott Wave International founder, Bob Prechter thinks Krugman and Bernanke are premature in declaring victory over the credit crunch. Prechter, who famously predicted the 1987 stock market crash, tells Tech Ticker “the march towards depression, which is being fueled by deflationary trend, is pretty well intact.”So forget all you’ve heard about recovery and inflation, “we’ve only seen the first phase,” of the downturn according to Prechter. Next to come, is “a credit implosion” that will once again destroy the value of stocks, commodities and especially real estate. “The biggest area of overvaluation because of credit extension is the real estate area,” he says. “And if you’ll notice that’s the area that’s had the weakest of any kind of attempt at a recovery.”When this next phase of “deflationary depression” happens the only investment advice he can give is: safety first. “Make sure as an individual you’re in the safest possible investments so you can ride this out.” And as discussed in a previous segment, that means investing in dollars or dollar equivalent assets.

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Obama and Geithner Are Bigger Scammers than Madoff

If the goal of Tim Geithner and other regulators was “to rip off the American taxpayer for the benefit of the least-deserving wealthiest people you can imagine, well – mission accomplished,” Black says. While much of the focus is on the stress tests and banks’ efforts to raise cash, the real story is Geithner’s Public-Private Investment Program (PPIP), says William Black, an Associate Professor of Economics and Law at the University of Missouri – Kansas City.The PPIP is the “greatest boondoggle in the history of the world,” says Black, a former bank regulator who was counsel to the Federal Home Loan Bank Board during the S&L crisis. As occurred during the S&L era, Black says the PPIP will allow banks to exchange “trash for cash” and turn “real losses into faulty gains.”

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