You could throw darts at a YES/NO board and do better with Gold than Prechter and Elliott Wave. This company has destroyed the finances of more traders than any other company in history as far as I can tell, yet, people still give them ink to print their horrible advice.

Here’s how Prechter’s trading advice has done from 1/1/85 through 5/31/09 versus the broad U.S. stock market average (Wilshire 5000 index) according to Hulbert’s analysis:

Annualized Return:

Wilshire 5000 Index + 9.7 percent
Prechter’s Trading Advice -15.4 percent

Total Return:

Wilshire 5000 Index + 857.1 percent
Prechter’s Trading Advice – 98.3 percent

The underperformance of Prechter’s newsletter is nothing short of astonishing and stunning! On an annualized basis, Prechter has underperformed the broad U.S. stock market Wilshire 5000 index by a whopping 25 percent per year! Here’s what Hulbert’s analysis shows would have happened to $100,000 invested according to Prechter’s investing trading advice versus the Wilshire 5000 U.S. stock market index:

$100,000 Invested (1/1/85-5/31/09):

Wilshire 5000 Index $957,100
Prechter’s Trading Advice $1,700

So Gold Bulls, take heart, Elliott Wave is almost always wrong. In fact, my studies on them indicate to me that it is almost impossible to be so consistently wrong about the markets, so one has to wonder if they aren’t paid by the the banking oligarch to herd the cattle to slaughter—-never know. One thing is for sure, however, and that is the performance numbers don’t lie.

And for those of you that will say, but prechter got it right on the 2008 downturn, save it, he had been predicting that downturn since 1987—-even a stopped clock is right once or twice a day!

TPC, I don’t understand how you believe there was no inflation since 2000. Oil skyrocketed from 2000-2008 along with food and other commodity prices. This was a result of ever increasing liquidity hence inflation. In the mean time, the dollar has been in continuous decline. It was not as much due to demand. If you measure many commodity prices/oil in gold (which by the way, prechter himself calls “real money”), they were almost flat from 2000. This shows their price rise has more to do with the eroding value of fiat currency, more than actual demand.

I will never use prechter as a guide on gold. He has got it wrong right from the very beginning of the bull market in 2000, when he said that gold had peaked at $300 and was on its way down to $200. Ever since, he has maintained a bearish view while gold continues to rise and the dollar falls.

The price of oil and most other commodities increased in 2001-2008 due to real demand. Not inflation. Yes, there was more paper in the syetem, but not to the extent that it was causing high inflation. In fact, inflation has been and remains very benign.

So it gets to the heart of the debate. Are you buying gold because you (incorrectly in my opinion) believe it is a viable dollar alternative? Or are you buying it because the supply/demand mechanics appear favorable?

That is the important notion here. Gold has no purpose in this world as an inflation hedge because it has no link to fiat money in a non-convertible exchange rate system. With no real inflation currently you have to ask yourself if the supply demand mechanics appear favorable and that’s it.

Just my opinion.

and their only manufacturing sector left of any importance (housing) lay in shambles for decades?

near and middle range deflation a good time to buy more gold.

money printing parties always produce inflation at a point.

any way how else are they going to get home prices up to what their mortgage is?

i’m a big history buff, but things do change…..and this time is different.

this is not the dotcom bubble.

Your data seems to support this hypothesis.
In the 1970s, gold produced a positive return. Inflation was high.

From 2001 to 2008 the return was also positive. This was also a period of high inflation. Although the CPI did not show high inflation, during this period houses, food and commodities all increased in price.