For the record, Prechter is calling for a collapse in everything, including gold below $250 and silver below $3.50. He then believes that inflation may take over.

I want to quote from his most recent newsletter, and ask for opinions on WHAT THE HELL he is talking about in this specific part (underline mine for emphasis):

"Possible Timing for the Next Inflationary Trend

If stocks and gold bottom in 2014, and if 2016 is to mark a lower low in inflation-adjusted stock prices, is must mean that, after joint lows in nominal prices for stocks and gold in 2014, gold would rise faster than stocks. This may include a political decision, to be made at that time, to force inflation through currency printing. Such a decision could well be a reaction to the widespread social fear that should be present in 2014-2015, which in turn will have caused runs on banks and thousands of bank closings, the kind of environment in which politicians would be prone to justifying currency inflation."

I have heard Prechter interviewed 2-3 times in the last few months on various podcasts, and each time, I am acutely aware of the moment in his interview when he claims something to the effect of, "the Fed is not printing any money." I had once thought that he meant the money the Fed is printing is being more than offset by the destruction of other forms of money and credit, but here is final proof that this is not what he means. Rather, he literally does not believe that the Fed prints money. None, whatsoever.

I simply do not understand how someone who is so intelligent and understands the vast majority of problems facing the world economy does not understand the one fact that THE FED DOES AND IS PRINTING MONEY OUT OF THIN AIR. Has he not studied the process of creation of Federal Reserve Notes? Has he not read "The Creature from Jekyll Island," or seen Chris Martenson's Crash Course, or ever listened to any of Bernanke's speaches, or ever bothered to research where the Fed got the money to buy $300 billion in US bonds last March in the infamous QE announcement, or in the $ Trillions in MBS they have subsequently purchased?

Sure, the man on the street doesn't understand money printing, but I would have expected Prechter to be smarter than that. I guess I was wrong.

Hysteria