Prechter was recently on Financial Sense arguing for his big wave depression/deflation, lasting until 2016. When asked about Faber’s and others belief that QE will collapse the currency, he said the voting population will not tolerate much more spending from govt. This, I believe is the real issue going forward, Will govt spend to prop up the economy or be forced to let it fall?
One thing I dont think Prechter was accounting for is the massive number of people in the electorate that benefit both directly and indirectly from the spenging. Meredith has a great point about 2M jobs at the state and local govt level that hang in the balance. If the Feds let them fall, were in a depression. I think the remainder of this year is going to be a real show.
