Here's What a Financial Top Tastes Like
Eating gold -- we've been here before
by Bob Stokes
Updated: May 25, 2018
The pattern of extravagance -- followed by a crash -- has repeated itself throughout financial history.
Here's what Charles Mackay had to say about the tulip bulb mania of the 1630s in his famous book, "Extraordinary Popular Delusions and the Madness of Crowds":
Houses and lands, horses and carriages, and luxuries of every sort, rose in value, and for some months Holland seemed the very antechamber of Plutus.
As you may know, Plutus was the god of wealth in ancient Greek mythology.
But you don't have to go as far back as the 1600s to see how extravagance preceded a big financial collapse.
Back in 1988, The Elliot Wave Theorist made this observation about Japan:
Stories have been reported of rich folks sprinkling flakes of gold on their sushi in Tokyo.
Now, that's what you call over-the-top living.
As it turned out, the big top in Japan's stock market was just around the corner, as this chart shows:
The Nikkei hit a closing high of 38,916 on Dec. 29, 1989 and then proceeded to surrender around 15,000 points in the next 12 months.
Now, we have this May 20 news item from The New Yorker:
Twenty-Four-Karat Chicken Wings and the Allure of Eating Gold
The magazine shows this image with the caption underneath:
Gold-coated chicken wings, served at the Ainsworth. The eating of gold dates back to ancient times, but the megaphone of social media has made it a new kind of conspicuous consumption.
Well, it may be "new" to some people, but as we've already discussed, 30 years ago, the Japanese were doing the same thing, only with a different kind of food.
Does this new round of gold eating in the financial capital of the U.S. mean that a financial top is approaching for U.S. stocks?
Well, notable displays of "conspicuous consumption" certainly provide food for thought.
Yet, also know that an array of technical market indicators are also sending an important message. Now is the time to see what our Elliott wave experts see.
Why There's No Such Thing as "Safety in Numbers" in the Stock Market
Financial history shows that the investing "crowd" is almost always on the wrong side of the market at historic turns.
In truth, an investor must think and act INDEPENDENTLY from the crowd.
Elliott wave analysis is ruthlessly OBJECTIVE -- and helps you to make market decisions that are indeed independent of the crowd.
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