The biggest bubble of all, bigger than the dot.com or global property bubble, was the feeling of optimism held by investors. That bubble of optimism has popped.

Martin Armstrong called the top of the Japanese Nikkei in 1989. He also called February 2007 to the day when another turn in the markets would occur. Armstrong’s work, like the Elliott Wave Theory, is based on shifts in investor psychology, shifts between investor optimism and investor pessimism.

It is clear that until 2007 the world was caught up in a wave of blind optimism regarding financial markets. That is no longer true. But what investors still don’t realize is the depth of the current downturn, their pessimism is still too optimistic.

This is not your father’s (or mother’s) recession. Your father or mother never experienced what is about to happen—unless, of course, they lived through the Great Depression.

Dr. Phillip Tetlock from Columbia University wrote a book called Expert Political Judgment and he devised a test predicting predictive accuracy. At a meeting of the Positive Deviant Network, Marshall Thurber had the PDN take the test. I scored a zero deviation, the highest score possible for predictive accuracy.

It is my belief that we are headed into waters far deeper and far more treacherous than can even be imagined. But that’s just my prediction.

Darryl Robert Schoon
www.survivethecrisis.com

www.drschoon.com