In what pattern will the stock markets decline now? How will the stealth deflation guide the route?
Sam Adelton
Feb. 27, 2007

Ask a question in 1929, New York – ‘how will the Dow fall from its high?’ The answer in the Park Avenue was simple – do not joke! Nothing will happen. The apartments in Park Avenue four years later were sold one-sixth the price!

In what pattern will the stock markets decline now? How will the stealth deflation guide the route?

Deflation does not allow for crash. There will be some sort of crash as the entire hedge funds rush to sell in panic. But do not expect a 1929-33-style route. For example the Dow declined 400+ points today. I pointed out in India Daily that the stock market topped out silently. Analytics based on historical data suggests, the complacency is high and so is liquidity. As a result, Dow will fall slowly and steadily over many decades to come.

A model even suggests Dow may hover 10,000 till 2008. As Baby boomers retire, they are leaving the stock market for good. That will create the damper. The demographic shift suggests a fall of approximately 6% a year on an average for the next 20 years. Do not worry if you do the math right, it is not above 100%. In 2027, the market will way lower but still worth something.

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In what pattern will the stock markets decline now? How will the stealth deflation guide the route?
Sam Adelton
As Baby boomers retire, they are leaving the stock market for good. That will create the damper. The demographic shift suggests a fall of approximately 6% a year on an average for the next 20 years.
READ MORE>>

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