As U.S. stock indexes become more volatile, you could be wondering:
"Are we headed toward another 2008 or even worse?"
"Can someone in Washington D.C. keep us financially safe?"
Realize this:
"Government does not have magic powers. In fact, the opposite is true; it is the least effective agency invented by man. To believe that the Fed or the government can stop the stock market from falling is to believe that Congress can relieve poverty, improve medical care or anything else."
Elliott Wave Theorist Special Report, September 2005
Note that Bob Prechter made this comment two years before the financial crisis started. Indeed, the government did not prevent the stock market from losing half its value in the 2007-2009 decline. Instead of preventing the crisis, Washington D.C. merely "reacted."
"Not long ago the U.S. government announced that it will fully back the debt of the mortgage companies it created (Fannie Mae, Freddie Mac); it pledged to use taxpayers' money and borrow unlimited amounts to fund banks that it deems "too big to fail," while pledging that the FDIC will fund shortfalls at all other banks. At the same time, the world's top central banks offered unlimited credit at near-zero interest rates, in other words, free money. All of these policies remain in effect....According to the exogenous-cause model, these historic pledges and bailouts should have had immediate results."
Elliott Wave Theorist, March 2010
The graph below shows what followed immediately after these government actions.
The evidence speaks for itself: investors cannot depend on the government to influence stock market prices.
"Governments that have borrowed to the hilt were running deficits even in the booming 1990s, so the risk of default in a depression is huge. If the issuers of your tax-exempt bonds default, you will have the ultimate tax haven: being broke."
Conquer the Crash (2nd ed., p. 255)
Federal, state, and local officials can't even keep their own "financial houses" in order -- massive deficits at every level of governments are run of the mill news these days. How can you expect them to help your finances?
At Elliott Wave International, we believe that you must take the initiative to secure your own financial future. Where do you start?
Start by seeing the big financial picture. That is where you discover the "less traveled trail," which leads to safety and even prosperity -- for those who choose wisely.