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Did You Ever Think A Financial Crisis Would Feel Like This?
The credit crunch has already been more damaging than any of the financial crises of the past two decades.
Pictures and video footage I've seen from the Great Depression almost always show unmistakable signs of a real economic tragedy: people lined up in the street, waiting for help; homeless sleeping on a park bench; families living in tents; and everywhere – misery, desolation and despair.
Looking around now, I see none of those things. Granted, I don't live in one of the areas hit the hardest by the housing slump – but still. If anything, I see the opposite: people going shopping and eating out, driving nice cars and even flying overseas on vacations.
But it's amazing how fast the seeming normalcy of our present situation disappears once you scratch the surface. Just try typing "great depression" into Google News. Then, you get:
"Slowdown echoes Great Depression, says Bank's deputy chief."
"S&P on track for 4th-most volatile year since Great Depression."
"...the US housing market currently suffering the worst downturn since the Great Depression."
And these are just the most recent news reports. On top of that, take a look at this chart The Economist published in its May 15 article, "Paradise lost":
It's a real eye-opener, isn't it: The credit crunch had already lasted longer, and is on track to cause more monetary harm than any of the notable financial crises of the past two decades, including the proverbial stock market crash of 1987 and the dotcom bubble!
One estimate for the damage from the ongoing liquidity crisis says that, "The global financial crisis could lead to losses of 1,600 billion dollars for financial institutes." (SonntagsZeitung)
And yet, things appear normal.
Except, when I recently visited Savannah, GA – one of my favorite weekend vacation spots – its bars and streets looked empty. And, waiters across the nation report that customers order cheaper menu items, and overall restaurant receipts are down. Is that our twenty-first century version of the Great Depression – scaling back on restaurant orders?
Or is this just the beginning of a full-blown crisis, and the real pain is still ahead?
There are many opinions about that in the media. We at Elliott Wave International have one, too – except ours is not based on the conventional economics. We study stock market patterns and make our forecasts based on those. We've looked at these patterns going all the way back to before the Tulip Mania. And by our account, this is not over.
If you want to see some of the evidence first hand, watch the special video issue of our July Elliott Wave Theorist. Also, read the 28 eye-opening Q&As with Robert Prechter, EWI's founder and CEO, in the August issue of the Theorist. Both Theorists are online now.
Don't miss EWI's latest forecasts in the new, September issue The Elliott Wave Financial Forecast, part of the same package.