In 1999, 11 European countries surrendered their currencies for the euro and a shared monetary authority. But as the world applauded, EWI forecast that those countries had also sealed a shared fate: to eventually collapse together in a liquidity-driven deflationary spiral.
At that time, the Great Bull Market was at the peak of its inclusionary strength. Robert Prechter published The Wave Principle of Human Social Behavior to describe the mood that drives major trends in financial asset prices and society generally. Of the then-newly formed EU, Prechter wrote:
“[The] European Union was consummated following 1,500 years of repeated conflict in the region. … This multi-year pageant of apology, concession and agreement and the concurrent wonderful atmosphere of international peace and cooperation are consistent with my Elliott wave case that an uptrend of Grand Supercycle degree is ending.”
Barely a decade later, the once-celebrated EU and its currency are facing collapse. The new Elliott Wave Financial Forecast observes that its “pageant of concession and agreement focuses (now) on rescue and preservation rather than expansion.”
In a special three-page section that leads the just-published November Financial Forecast, editors Steve Hochberg and Peter Kendall again break new ground in forecasting the future of the EU. They update Prechter’s late 1990s forecast, which saw the multi-national conglomerate known as the EU as doomed from the start. And they share the charts and analysis you need to see now to understand exactly what’s going on across the pond, and how it relates to U.S. markets.
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