The Worst Mistake You Can Make

Let's be clear -- most investors DO NOT believe that "the bear market has only just begun." Instead, a recent survey by John Hancock Financial Services showed that the public expects stocks to earn about 16% a year for the next 20 years!

This suggests that the average investor thinks popping the dot-com bubble is all it took to end the bear market. Bob Prechter's book shows that this is the worst financial mistake you can make. Earlier we saw that the public did NOT see the Nasdaq bubble for what it was. The shock and anger will be many times greater when the rest of the stock market and the U.S. economy itself follow the same path downward. And at this point, it's best to let Bob Prechter speak for himself, via the following chart and quotation from Conquer the Crash.

"If you study Figure 2-1 you will see that the largest stock market collapses appear not after lengthy periods of market deterioration indicating a slow process of long-term change, but quite suddenly, after long periods of rising stock prices and economic expansion. A depression begins, then, with the seemingly unpredictable reversal of a persistently, indeed often rapidly, rising stock market. The abrupt change from increasing optimism to increasing pessimism initiates the economic contraction.... You might be interested to know that almost every smaller stock market decline observable in Figure 2-1 also led to an economic contraction. The severity of each contraction is related to the size of the associated stock market decline."

The bear market in stocks and the coming economic depression both have the same cause: A long-term change in social mood, from optimism to pessimism. Naturally, a psychological reversal this large will stand many cherished assumptions on their heads. And no assumption is dearer to economists than the permanence of inflation.

Seventy years of inflation, fiat money, and central bank mischief have created a debt load too massive to address here. Conquer the Crash explains the problem in full, with Bob Prechter's unique candor. The debt will implode and deflation will follow. The Federal Reserve will try and fail to stop the trend. Here's another quote from Conquer the Crash:

"In contrast to the assumptions of conventional macroeconomic models, people are not machines. They get emotional. People become depressed, fearful, cautious and angry during depressions; that's essentially what causes them. A change in the population's mental state from a desire to expand to a desire to conserve is key to understanding why central bank machinations cannot avert deflation."

Note especially the last part of the quote. It's one more forecast that flies in the face of "conventional wisdom." Nearly everyone thinks the Federal Reserve is all-powerful, but Conquer the Crash is saying that the Fed will fail to avert a major economic crisis.

Is it wise to underestimate the Fed?

Maybe. Wall Street and the media told stock market investors not to underestimate the central bank in early 2001, by endlessly repeating the phrase "Don't Fight the Fed!" That was the conventional wisdom then, even though you don't hear it anymore now. The Fed did not stop the stock market from falling.

What If?
What if certain Japanese investors in 1989 had a book that prepared them for the economic DEFLATION and 12-year bear market? Likewise, what if certain American investors in 1929 had a book that prepared them for the stock market CRASH and Great Depression?

They would have used the forecast to avoid the crisis, of course -- perhaps even to come out ahead. Conquer the Crash can prepare YOU for a financial crisis at least as deep as Japan in the 1990s or the U.S. in the 1930s -- a deflationary depression that will wipe out the portfolios of most stock market investors.

Even if you don't embrace the book's entire scenario, I'm sure that you know that there are times when an investor has to part ways with the herd. That's why the second part of Conquer the Crash is practical -- virtually each of the 21 chapter titles explains "How To," "What To," and "Should You." Gold plays a strategic role in the solutions Bob Prechter considers for individual investors.

You may already have known something about Bob Prechter's long-term forecast for the economy and stock market. Maybe you've assumed that the long-term would remain a safe distance away.

That assumption has become dangerous. Events that were in the "long term" are unfolding now. At least a few people are catching on -- Conquer the Crash was at or near the top of Amazon's best-seller list for the two weeks preceding its actual publication on June 14. We hope you will be one of the wise few, both now and after the events described in the book have unfolded.