As the greater social mood turns more negative, the financial markets reflect that mood with the deepening bearish trend we see now. That's the crux of socionomics, the study of human behavior based on the Wave Principle, as introduced by Bob Prechter. Positive social mood engenders peace, love, understanding and bullish stock markets. Negative social mood engenders war, hatred, miscommunication and bearish stock markets.
Being ever hopeful and optimistic, most Americans figure that something will happen to fix our economy and financial system before they deteriorate any further. Perhaps a new Administration will solve the problems, we tend to think, particularly since we are in the final two months of the campaign to select a new U.S. president. But Prechter says, be wary of such thinking. When the overall social mood changes to negative, no one person – no matter how powerful – can change it. Here's an excerpt from his latest Elliott Wave Theorist that lays out his reasoning.
Be Prepared for the Fallout from the Financial Crisis. The mainstream media and government have tried to fool you for too long.
The Elliott Wave Financial Forecast and Bob Prechter’s
Elliott Wave Theorist forecast the housing bubble and the ensuing financial crisis years before it occurred, so subscribers could position themselves to weather the storm. What else do you need to know that they're trying to fool you about? Find out in Bob Prechter’s August
Elliott Wave Theorist.
Learn more here.
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What if something happens in the political realm to change the bearish trend?
On the contrary, events on the political front are right in line with our socionomic expectations. As social mood has trended further toward the negative, social conflict has been rapidly increasing. [In mid-August], Russia attacked Georgia, and President Bush delivered yet another stunningly belligerent statement to a foreign government, this time to Russia: “The United States [government] … insists that the sovereignty and territorial integrity of Georgia be respected.” (AP 8/14/08) This statement continues a string of Bush administration ultimatums and threats previously delivered to Iraq, Iran, Afghanistan, Pakistan, Syria, Libya, Turkey, Ukraine, North Korea, Venezuela and China.
[Then] the administration upped the ante by pledging anti-missile technology to Poland, incensing the Russians further. Not since 1940, in the last Supercycle bear market, has a U.S. administration been so hell-bent on going to war. Of course, a great number of U.S. citizens are vehemently of the same mind, which is why Bush’s popularity rating soared to 91 percent when he ordered the invasion of Iraq. This mood is exactly what socionomics predicts for bear markets.
Putin is in the same chest-puffing league as Bush, not to mention potential successor McCain, who has demanded—despite his utter lack of authority—that Russia “unconditionally cease its military operations and withdraw all forces” from Georgia. He added, “In the 21st century, nations don’t invade other nations,” forgetting that the U.S. government invaded Iraq, fostering death and havoc in the Middle East for five years. If Obama gets elected, he is not likely to avoid confrontation, either, because McCain has tagged him as weak, so he will strive to prove otherwise.
Today’s politicians, at our peril, ignore the Founding Fathers’ admonition to avoid foreign entanglements. So, whatever your proclivities, get ready for far more war risk in your personal life.
Be Prepared for the Fallout from the Financial Crisis. The mainstream media and government have tried to fool you for too long.
The Elliott Wave Financial Forecast and Bob Prechter’s
Elliott Wave Theorist forecast the housing bubble and the ensuing financial crisis years before it occurred, so subscribers could position themselves to weather the storm. What else do you need to know that they're trying to fool you about? Find out in Bob Prechter’s August
Elliott Wave Theorist.
Learn more here.