"The greatest extreme in positive social mood in centuries has led to the greatest expansion of credit in history. The level of outstanding debt is unsustainable and will be unserviceable and unpayable in the deepest depression in 300 years. The trend toward negative social mood that has been in progress since 2000 and which is about to accelerate will continue to curtail lending and lead to a tidal wave of defaults and a terrific deflation. The amount of outstanding credit today is so large that systemwide defaults could lead to as much as an 80-90% decline in the volume of dollar-denominated credits worldwide. Prices of everything, including corporate shares, would fall to reflect this change in the total supply of credit. In such an environment, surviving dollars and dollar credits, representing the denominator of the DJIA, will rise in value, and the Dow-along with everything else not used as money - will fall in dollar price."
Robert Prechter, Elliott Wave Theorist - May 2010