Tuesday, January 27, 2009
The Telegraph's lead economic writer, Ambrose Evans-Pritchard, has an interesting article arguing that we are in 1931-like conditions:
- A big crash has already happened
- Things are very gloomy
- But we haven't been hit by the biggest crash, the "second leg down" which didn't end for a couple of years
Well, look at this chart:
(click here to see full image).
As you can see, the 1929 crash was actually very small compared to the "second leg down" crash which didn't end until 1932 or 1933.
According to Elliot Wave and other chartists, a second - bigger - crash is on its way, just like Evans-Pritchard is warning.