{"id":28515,"date":"2012-03-29T10:09:22","date_gmt":"2012-03-29T14:09:22","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=28515"},"modified":"2012-03-29T10:09:22","modified_gmt":"2012-03-29T14:09:22","slug":"what-all-major-depressions-have-in-common","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2012\/03\/29\/what-all-major-depressions-have-in-common\/","title":{"rendered":"What All Major Depressions Have in Common"},"content":{"rendered":"<h3><span style=\"font-size: small;\">Signs of deflation are visible but the public will be fooled <\/span><span style=\"font-size: small;\"><br \/>\n<\/span><\/h3>\n<h3><span style=\"font-size: small;\">By Elliott Wave International<\/span><\/h3>\n<blockquote><p>Deflation requires a precondition: a major societal buildup in the extension of credit (and its flip side, the assumption of debt).<br \/>\n&#8212; <em>Conquer the Crash<\/em>, 2nd edition (p. 88)<\/p><\/blockquote>\n<p>Has the United States met that precondition?<\/p>\n<p>Well, consider that total credit market debt as a percent of U.S. gross domestic product was<\/p>\n<ul>\n<li>280 percent in 1929 at the start of the Great Depression<\/li>\n<li><strong>380 percent<\/strong> in 2008<\/li>\n<\/ul>\n<p>The current build-up of credit goes far beyond major &#8212; it&#8217;s <strong>unprecedented<\/strong>.<\/p>\n<p>It&#8217;s been rising steadily for 60 years. The slope literally looks like the side of a steep mountain.<\/p>\n<p>Bank credit and Elliott wave expert Hamilton Bolton studied every major depression in the U.S. In 1957, he made this observation:<\/p>\n<blockquote><p>All were set off by a deflation of excess credit. This was the one factor in common&#8230;the signs were visible many months, and in some cases years, in advance. None was ever quite like the last, so that the public was always fooled thereby.<\/p><\/blockquote>\n<p>Let&#8217;s read again from the second edition of <em>Conquer the Crash<\/em> (p.92):<\/p>\n<blockquote><p>A deflationary crash is characterized in part by a persistent, sustained, deep, general decline in people&#8217;s desire and ability to lend and borrow&#8230;<\/p>\n<p>The U.S. has experienced two major deflationary depressions, which lasted from 1835 to 1842 and from 1929 to 1932 respectively. Each one followed a period of substantial credit expansion. Credit expansion schemes have always ended in bust. The credit expansion scheme fostered by worldwide central banking&#8230;is the greatest ever&#8230;If my outlook is correct, the deflationary crash that lies ahead will be even bigger than the two largest such episodes of the past 200 years.<\/p><\/blockquote>\n<p>Is there evidence <strong>now<\/strong> that a deflationary trend is underway? Dear reader, the evidence is abundant and growing by the day.<\/p>\n<p>To begin with, just a casual observation of our national economic life reveals a deep general decline in people&#8217;s desire and ability to lend and borrow.<\/p>\n<p>But there are many <strong>specific signs<\/strong> pointing to bankruptcy, default and a deflationary spiral.<\/p>\n<p>Yet they&#8217;re not grabbing the headlines. The &#8220;good&#8221; economic reports and levitating stock market are. The public will likely be fooled again. But make no mistake, the signs <strong>are<\/strong> there.<\/p>\n<p>&nbsp;<\/p>\n<table width=\"100%\">\n<tbody>\n<tr>\n<td width=\"142\"><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa258&amp;dy=aa032312&amp;url=http:\/\/www.elliottwave.com\/club\/deflation-ebook\/default.aspx?code=45279%26articleid=2987\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.elliottwave.com\/images\/club\/web_ads\/3116-CG-ebook-THE.jpg\" alt=\"\" width=\"125\" height=\"150\" align=\"left\" border=\"0\" hspace=\"5\" \/><\/a><\/td>\n<td width=\"921\"><strong>Learn Why Deflation Is the Biggest Threat to Your Money Right Now <\/strong>Discover Robert Prechter&#8217;s views on the unfolding deflationary trend by reading the 90-page report, <strong>The Guide to Understanding Deflation<\/strong>. This guide will help you survive a major deflationary trend, and even equip you to prosper.<\/p>\n<h4>Plan and prepare for your financial future.<\/h4>\n<h4><span style=\"text-decoration: underline;\"><strong><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa258&amp;dy=aa032312&amp;url=http:\/\/www.elliottwave.com\/club\/deflation-ebook\/default.aspx?code=45279%26articleid=2987\">Download Your Free 90-Page Deflation Survival Guide eBook.<\/a><\/strong><\/span><\/h4>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div>\n<p><em>This article was syndicated by Elliott Wave International and was originally published under the headline <a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa258&amp;dy=aa032312&amp;url=http:\/\/www.elliottwave.com\/freeupdates\/archives\/2012\/03\/16\/What-All-Major-Depressions-Have-in-Common.aspx%26articleid=2987\"><strong>What All Major Depressions Have in Common<\/strong><\/a>. EWI is the world&#8217;s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.<\/em><\/p>\n<p>&nbsp;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Signs of deflation are visible but the public will be fooled By Elliott Wave International Deflation requires a precondition: a major societal buildup in the extension of credit (and its flip side, the assumption of debt). &#8212; Conquer the Crash, 2nd edition (p. 88) Has the United States met that precondition? Well, consider that total &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/fx\/2012\/03\/29\/what-all-major-depressions-have-in-common\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;What All Major Depressions Have in Common&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-28515","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/28515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=28515"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/28515\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=28515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=28515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=28515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}