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von Mary-Anne de Lany milkybanan@hotmail.com:

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Post from Bear Forum:
Back on May 15, 2000, smsc posted a chart which I told my private group was the best chart I've ever seen. For those interested in revisiting this chart, you will find it at the link below.

What makes this chart so great? For starters, it is perhaps the best short-hand view I've ever seen of the current Grand Supercycle wave count. As the Dow/Gold Ratio rises when paper wealth is issued in such abundance that"paper" begins to chase"paper" until"paper" is bid up far in excess of real money (as measured by gold), the peaks on this chart (1929, 1966 and late 1999/early 2000) signify when paper wealth has strayed far from real wealth, i.e., those periods when there is the least amount of substance backing the high level of the Dow Jones Industrial Average. The higher the peak, the greater the"straying." As a fifth wave, by definition, tends to exceed the price level of a third wave but tends to do so at a time of much weaker fundamentals (indicating the up trend is coming to an end), we would expect to find higher peaks on this chart as the Dow gets closer to its final"fifth of a fifth." Indeed, that is exactly what we find. The 1929 peak, while a fifth wave, is the fifth wave of a Supercycle Wave III. The 1966 peak, while a third wave, is the third wave of a much weaker Supercycle Wave V. Because fundamentals were weaker in 1966 than in 1929 (i.e., the U.S. was much further down the long road of credit expansion), it took a heck of a lot more paper to sustain extremely high levels in the price of the Dow. Therefore, the 1966 peak on this chart is much higher than the 1929 peak.

By the same token, the peak in late 1999/early 2000, being the fifth wave of a Supercycle Wave V, has required a"never-before-seen-in-the-history-of-the-world" level of paper creation to sustain the all time high in the Dow reached early this year. As the peak in early 2000 is well in excess of the 1966 peak, this chart confirms that the advance into the recent high was a fifth wave. And because that early 2000 peak is much higher than the 1929 peak, this chart also confirms, in my opinion, that this recent advance is ending a move at least one degree higher than the move which ended in 1929 (i.e., when comparing one"fifth" wave to another).

That means the next move down (which I believe we've already begun) will CLEARLY be of Grand Supercycle degree, the purpose of which is to correct the excesses built up since 1784. That means the United States will soon suffer an economic depression that will exceed the devastation of that inflicted by the Great Depression of the 1930's.

It is my view that not even 2% of the BEARS are prepared for what's up ahead. We all need to ask ourselves, if unemployment quickly rises to 33%, would I still be employed? If residential real estate loses 90% of its value in the next ten years, would I lose just a small portion of my overall wealth or a very large portion? If long term interest rates suddenly rise to 27%, would I benefit from such a rise by having cash to lend at such high rates or would I suffer from such a rise because I carry credit card debt or adjustable mortgage debt or presently hold a large position in long term bonds? If crowds of homeless people, desperate for food, decide that perhaps there may be some in that neighborhood over there, would they be talking about my neighborhood? In other words, if you're simply focused on whether the major stock indexes go up or down, you may be taken out by some other consequences of what may be coming up.

I don't mean to sound like a prophet of doom but that chart posted by smsc is conclusive evidence of an upcoming ELE (i.e., an extinction level event). Time to stock up on some canned goods. Anybody know where I can buy a pickup truck with tinted windows? Would a rifle come standard with that or will I have to buy one separately? I have a funny feeling that my jet black Lexus SC400 is not politically correct in a depression. And there is absolutely no room in it for a gun rack. I better forget about that vanity plate"Bear Mkt". Don't want to piss off those angry homeless bulls.

Tommy Bear
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