The Coming 100-Year Bear Market with Robert Prechter - Doug Casey's Take [ep.#283]

Doug Casey's Take

Robert Prechter's Newsletter and Book: https://www.elliottwave.com/Doug

In this episode, financial forecaster Robert Prechter joins Doug Casey to discuss the current state of the financial market, predicting a significant crash risk.

Robert uses the Elliott Wave Principle to analyze market trends, noting that the market is historically overvalued and calls it "Our South Sea Bubble". He advises diversification into safe options.

The conversation also covers potential political and societal changes, including the rise of third-party candidates and the influence of left ideologies in education. Prechter expresses concern about the future and emphasizes the importance of preparedness.

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Chapters: 00:00 Intro

The overvaluation of the stock market [00:00:40] Robert Prechter discusses how the stock market was historically overvalued in 2021, with extreme multiples compared to previous years.

Mania and extreme indicators in the market [00:02:38] Prechter highlights the ridiculous multiples and extreme investment behavior seen in 2021, including a multiple of 60 in bullish funds and 80 times more money in leveraged long funds compared to leveraged short funds.

The correlation between social mood and market trends [00:11:24] Prechter explains his theory of waves of social mood driving market trends, where social mood peaks before the stock market and influences various aspects of society, such as fashion trends.

The unrest in the Middle East after major stock tops [00:13:42] Discussion on the pattern of unrest breaking out in the Middle East 6 to 18 months after major stock tops.

The Elliott wave model and predicting oil prices [00:14:56] Explanation of how the Elliott wave model is used to predict oil prices and the lack of correlation between supply and demand and oil prices.

The risk of a deflationary episode and the impact of modern monetary theory [00:16:39] Discussion on the risk of a deflationary episode and the impact of modern monetary theory on the markets and the business cycle.

The first decline and the financial crash [00:26:17] Robert Prechter discusses historical patterns of financial crashes and wars breaking out after the first decline in stock prices.

The risk of World War Three and the timing of the next big drop [00:27:21] Prechter suggests that the risk of World War Three will be present during the decline, but it is more likely to break out after the second big drop.

The over financialization of the world and the potential consequences [00:29:31] Prechter and the host discuss how the world has become more over financialized, with more people involved in the markets, and the potential risks and consequences of this.

The rise of third party candidates [00:39:59] Discussion on the historical occurrence of third party candidates during bear market periods and recessions.

The left's influence in education [00:42:17] Concerns about the left's control of the educational establishment and its potential impact on the future.

Mass migration [00:43:40] Discussion on the risks associated with mass migration from third world countries