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To: Knighty Tin who wrote (198786)	10/20/2002 1:52:17 PM
From: Tommaso	Respond to of 436258

Yesterday I bought that crash book by Prechter. I think that it's an extraordinary piece of pure lunacy. Have you read it? If we were on a gold standard he would be perfectly correct in some respects. Someone said it was the #1 seller on Amazon but when I checked it was #30. That's still a lot of sales. So what I am trying to figure out is who is buying the book and what this tells us about how people are thinking. The people who are buying (and believing) Prechter think that what's coming is essentially a replay of 1929-1932, with a crash taking the Dow back to where it was at the start of the 1982 bull market, just as the Dow went back to below the 1921 level by 1932. I think that what lies ahead is going to involve a good bit of inflation; actually there already has been huge inflation in health costs, education costs, housing prices in many areas, and the prices some people are willing to pay for some automobiles (as compared to a good many years ago). And other isolated things: for example, it now seems normal to pay $20 or more for a necktie. But official measures of inflation look at things like hamburgers, gasoline, milk, rent, non-luxury clothing--I really don't know exactly what goes into the government's CPI that stays so low. I am looking for the dollar to decline in value, making imported goods more expensive; for crude oil and natural gas to rise steadily; and for farmers in the U. S. to be either forced into bankruptcy or forced to raise prices. Not only are there lots of US dollars circulating all over the globe, but now the US gov is going deeper into deficit every day and also out trade gap is worse than ever. In one place Prechter even makes the ultimately lunatic statement that the deflation he foresees may be accompanied by a decline in the value of the dollar. Where both inflationary and deflationary scenarios do seem to coincide, however, is in the belief that precious metals are a safe hedge, and in the belief in the damage that will be done to the stock market. So I think Prechter is right in some ways about the markets but quite deluded as to the reasons. He is so full of that Elliott Wave mysticism, and so committed to a 1929-32 replay, that the appearance of this book might best be read as having presaged the bear market rally that we are in. That is, I would think that most mutual fund managers who read it would agree with me that Prechter is out of his mind, but unlike me, would conclude that the markets were therefore fundamentally in good shape and that stocks were a buy. Just some Sunday afternoon ruminations. I guess I did get my $22.50 (discounted price) out of the book. Anybody see anything good in Barron's? I'll check now and see.