“In a deflationary environment, the last thing you want is to own any financial asset. If you stay out of stocks, real estate, gold and other commodities, which will all come down together, then you can preserve your purchasing power [in cash] for the next great buying opportunity.”
— Robert Prechter (via DR)
Am I losing my mind or did Prechter just say that real estate and stocks were financial assets and cash wasn’t?
Huh?
Pretcher’s brain is obviously experiencing a meltdown, nothing new.
Robert Prechter has this blind spot for Gold as money, or as some would think of it, as the ultimate form of cash. His comments concerning real estate, stocks, bonds, etc. may well pan out as the debt bubble unwinds. If in fact, one in seven US homes are either in delinquency or foreclosure, then I would have to assume that in California, and the other debt infested markets in the US, the situation is much worse. Here, in the once Golden State, the number is more like one in five, with even large numbers for those that are underwater, or going to go through the nightmare of reset in the very near future. The banks have put the default process on hold in order not to wreck what is left of the market. Additionally, they have stopped revealing the true extent of their current dilemma. Consequently, they are leaving large numbers of effectively bankrupt people living in their houses, who are making no payments at all. Even in multi-million dollar properties, right here where I live.
In the meantime, the Plunge Protection Team (aka President’s Working Group on the Financial Markets) is busy using their friends on Wall Street and elsewhere to keep the stock market above the S&P benchmark of 1026, and the DJI above 9860. The Fed is buying hundreds of billions of bonds.
This begs the question: When is distribution time?
When is distribution time?
Maybe there isn’t one and it’s just like cash for clunkers.
Bob Chapman and a few others think distribution time is now…
The dollar collapse begins now..
I`m not into E-Waves and no “Prechterite”, but stocks and in part real estate are financial assets nowadays, as they are financed with credit to a much larger extent than in the past.
Think 2008. Where is the point in investing your individual cash in “hard assets” when leveraged hedgefunds do the same with credit denominated in federeal reserve notes and not in the “hard asset” you bought? When they delever, they scramble for “paper”.
That being said, I do not know what he means by “cash”, as there is no such thing anymore, besides physical notes and coins. “Cash” in the investment world is short term debt, government or commercial (think money market funds).
Last but not least: Prechter thinks Gold is the ultimate money, as far as I know. He just thinks it`s overleveraged with hot money, as was oil in the summer of 2008 (when I thought people where beginning to save in commodities and flee out of “paper”, just to learn the lesson of my life a couple of weeks later….).