Date: Wed, 21 Jan 1998
From: cpriest@juno.com (Curt Priest)
Subject: CITS Debt Watch
tpr-ne@mitvma.mit.edu, pub-adv@s1.net, fastnet@igc.apc.org,
X-Cc: komoski@aurora.liunet.edu, Yeswecan@aol.com, pfoldes@INTERHELP.COM,
think@ix.netcom.com, servant@upn20email.com, gorbyjs@hotmail.com,
We have high respect for Dr. Batra's fine books and
wish to call your attention to this new one:
W. Curtiss Priest
Editor
CITS Debt Watch
January 15, 1998 News Release The first global stock market crash of the
year will come in February or March, says the just released book, Stock
Market Crashes of 1998 and 1999: The Asian Crisis and Your Future by Dr.
Ravi Batra, a professor of economics at Southern Methodist University,
Dallas, and author of five international bestsellers. The crash could come
as early as the last week of January. Batra, claiming a forecasting
accuracy of better than 85%, argues that what happened in the Tokyo stock
exchange in 1990 is likely to be repeated in the United States and
elsewhere in 1998. The new book demonstrates that many recent events have
followed the patterns that Batra first foresaw in the mid-1970s. In his
1996 work, The Great American Deception, Batra predicted a global stock
market crash at the end of 1997. In October of that year, share prices
indeed crashed in Asia, Latin America and Eastern Europe, while the Dow
Jones Index plunged 554 points on October 27th. The Dow suffered the
largest single-day point drop in history.
In his best-selling work, The Great Depression of 1990, Batra foresaw
the market-meltdown of 1987, and then another crash in 1990. The experts
now blame the current currency crisis in Asia on the share price collapse
that began in Japan on the first trading day in 1990. In another
best-selling book, The Downfall of Capitalism and Communism, which was
written in 1978, Batra prophesied the collapse of both systems by the year
2,000. Farfetched as it was, Soviet communism disintegrated as the world
watched in astonishment. Next is the turn of capitalism, which Batra
defines as the rule of money in society. In other words, the reign of
money in politics is about to end.
How it will end is described in the new book. Batra argues that the
recent market crashes originated in Japan in 1990, gradually found their
way into the economies of the Asian Tigers, Mexico and Latin America, and
will culminate in North America and Europe in 1998 and 1999. America is
at the center of its business empire, and like every empire in history
this one will also fall. However, the peripheries always fall first, and
the center the last. That is why the United States seems to be immune to
the Asian crisis. But trouble is fast coming from the peripheries to the
center.
The bullish case for American shares, in spite of the current turmoil,
comes mostly from Wall Street brokers. They ask us to look at the current
fundamentals such as low inflation, interest rates and unemployment. But
they overlook 1929, when such sound fundamentals were even lower, and yet
did not prevent the market collapse and the Great Depression.
Unemployment in 1929 was just 3%.
The only fundamental that counts is the force of supply and demand.
Supply springs from production or labor productivity, and demand from
wages. Since 1990, wages have lagged behind productivity all over the
world. If productivity rises but wages stagnate, supply grows faster than
demand and an imbalance develops. For a while the demand gap can be
plugged by bank loans and consumer demand can be artificially lifted to
match the rising supply. In the meanwhile profits rise sharply as wages
fail to grow, thereby creating a hefty rise in stock prices. But there
comes a critical point when banks stop lending or debt-burdened consumers
reduce their borrowing. Then the supply-demand gap surfaces. This
critical point arrived in South East Asia in July 1997, when banks in
Thailand sharply curtailed their lending. Until the supply-demand gap
vanishes, share prices will remain under pressure.
Batra foresees a constant stream of market crashes around the world in
1998, and the beginning of the fall of the American business empire in
1999. The only prudent investment under these circumstances will be
government bonds or bank CDs. Batra also offers some market-based
reforms. He argues that the main problem facing the world today is the
lack of consumer demand, and the best medicine for this illness is the
expansion of the housing industry through tax credits and incentives. The
book also explores the likely behavior of the dollar, interest rates,
inflation or deflation, gold, real estate among others in the near future.
How to Order the book? To order a copy, send a check for $21.00 for a
softcover or $27.00 for a hardcover version of the book to Liberty Press,
3016 Rosedale Ave., Dallas, TX. 75205, or call 1-800-888-9999. The price
includes postage and handling.
ISBN: 0-939352-78-8 Praise for Professor Ravi Batra
"When it comes to the bottom line so beloved of economists, one can learn
a lot about events by thinking about them in cyclical regularities, of
which Batra gives a novel and brilliant exposition."
Lester C. Thurow, MIT
"Ravi Batra has made an outstanding reputation in the United States as an
international economic theorists in the best Western tradition."
Leonard Silk, New York Times
"The forecasting record of this widely respected Southern Methodist
University economist has won glowing praise from many investment masters.
Tom Peters, Chicago Tribune
"Dr. Batra writes about his subject as clearly as if he were telling
bedtime stories."
Christopher Lehmann Haupt, New York Times
"Scary, provocative. The good professor has a formidable academic
reputation and, from what I know, his forecasting record is impressive."
Barton Biggs, Morgan Stanley & Company
"Batra [is] a scholar who has earned a considerable reputation as an
expert on trade.
Albert Crenshaw, Washington Post
"His predictions in the early 1980s of low inflation, falling oil prices
and a wave of mergers mocked for years have proved close to the mark."
Thomas C. Hayes, New York Times
"Ravi Batra was used to making tumultuous global forecasts and having
nobody listen then predictions started to come true."
Chip Brown, The Associated Press
"What separates Batra from most of the worriers and makes him worth
reading or listening to is his broad and fundamentally cultural
perspective.
Scott Burns, Dallas Morning News
"So far Batra is close to five for five. Pray he doesn't go six for six."
Eric Leven, People
[Batra] is one of the most gifted and serious economists around today.
His views on several national and global socioeconomic issues and problems
are in demand around the world.
World Business Review
About the Author Dr. Ravi Batra, a professor of economics at Southern
Methodist University, Dallas, is the author of five international
bestsellers. He was the chairman of his department from 1977 to 1980.
Batra was ranked third in a group of 46 superstar economists selected from
all the American and Canadian universities by the learned journal Economic
Inquiry. In 1990, the Italian prime minister awarded him a Medal of the
Italian Senate for correctly predicting the downfall of Soviet communism.
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