This is a fascinating exchange between Richard McClendon, who has been doing the excellent comparisons of the 1929 and 1987 market crashes with what is happening today, and a well informed reader.

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From the Reader -- whose name is also Richard

Subject: To Crash or Not to Crash
Date: Wed, 4 Apr 2001 03:54:29 -0400
From: "Richard D
To: "Richard McClendon Jr" <rhmjr@flash.net>

To: Richard M—

No question about it, your site, dealing with the economy, is among the best on the Web. It’s one of the first sites I go to at this time of day for an update on unfolding economic events.
The question still remains:

Will the Fed allow the market to go in the tank after the fashion of 1929? Or will the governing elite, with Greenspan as economic point man, stick to “the plan,” easing the American middle class down and out, Japanese style?

As of now, I still believe a classic crash of the kind you project will not be allowed to happen. The machinery to control and prevent such an event is in place and fully functional.

“Stability” is essential. The global implications of instability are simply too grave. The current problem with China is the latest reason why a crash at this time is virtually out of the question.

In days gone by, a major war would now be inevitable. It would be down the road a bit. But it would be where our elite would be taking us.

But a full-scale war today? I don’t think so. I think U.S. policy-makers are still committed to the idea that a “real war,” because of the nature of modern nuclear and biological weapons, is unthinkable. The reason is easy enough to understand: There would be no winner.

Of course I could be wrong. We will soon see.

Keep up the good work. Your analysis is a real treat.

--Richard D

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Reply from Richard McClendon of the McClendon Financial Report

Hello Richard,

Thanks for the compliment.

On the issue of the Fed or govt allowing the market to crash
versus letting it down more slowly a la Japan. I only have one
problem with the issue of market manipulation, that is that the
price pattern obeys Elliott Wave theory AND resembles the
pattern from prior crashes like 1929.

The 55 day patterm from high to crash is there in 1929, 1987 and other more minor corrections. At the 40-41st day there is a flat top rally failure.

Does this mean the govt were manipulating 1929, 1987 and
now? Or, perhaps, does this mean that they just stood aside
and let 1929, 1987 and now happen on its own?

This off of the market which is more MY specialty, but, from
things I have seen, DON'T rule out a war at this time.

Understand, from what you said, no crash (at this time) and no war (etc). So, if you are wrong about a crash, and one happens on or about April 16th, then I suggest you RETHINK the issue about a war.

Trust me when I say, IF this crash comes off as I've forecast,
there will be MUCH money lost, we WILL be in for another
depression (tons of money destroyed=depression), possible civil
unrest, martial law, potential invasion (of our country) AND war in the mid-east.

You can see from this that I believe that much misery is on its way.

I hope that I am wrong and that YOU are right. I might ask you
what would happen in your economic life if MY forecast came true?

Would your preparations save you?

Richard M