Press Release from Ravi Batra
January 2, 2001
In my new book, The Crash of the Millennium: Surviving the Coming Inflationary Depression, published in September 1999
by Harmony Books, Random House, I predicted that US financial markets would start to unravel by mid-2000 and then crash
in the course of the new millennium, with much of the damage occurring in 2000 and 2001. With the Nasdaq index crashing
in April 2000 and then again at the end of that year, it is clear that one of the major pillars of American asset
markets and wealth has collapsed. In fact the pace of the collapse accelerated on the first trading day of the new year,
as the Nasdaq index sank another 7%.
Unfortunately, the pain to the investor has just begun. More will follow soon after the presidential inauguration of
George Bush on January 20th. Call it the exploding imbalance between production and consumption, the apex of bursting
speculative bubbles, the wrath of a blistery winter, or just the revenge of the gods against Bush's election
machinations. Call it what you will, the real pain in US financial markets is yet to come. The Dow itself is likely to
crash soon after January 20th.
The premise of my new book is as simple and powerful as the law of supply and demand. Wages are the main source of
demand and productivity the main source of supply. When wages lag behind productivity for any reason, demand trails
supply, so that debt must be created to maintain a balance between production and consumption. A day comes when the debt
is so large that it cannot rise any more; then demand trails supply, and the over-inflated financial markets crash one
by one. Hence economic policy should aim at preserving a balance between real wages and productivity.
When the speculative bubble bursts, the country faces a deflationary recession or depression if its trade is in balance
or surplus. But if it has a trade deficit, then its currency collapses and the end result is an inflationary recession
or depression. With the trade deficit mushrooming in the United States for more than two decades, I foresee a collapse
of the dollar and an inflationary depression in America unfolding in the next two years.
The Crash of the Millennium describes how individuals, businesses, and governments can prepare for the hardships that
lie ahead. But the long term future of the world is very bright, for we are now evolving toward the first global golden
age.
Author Biography DR. RAVI BATRA, a professor of economics at Southern Methodist University in Dallas, is the author of
five international best-sellers. Chairman of the department from 1977 to 1980, Batra was ranked third among forty-six
"superstars" selected from all-American universities by the learned journal Economic Inquiry. In 1990, the prime
minister of Italy awarded him a Medal of the Italian Senate for correctly predicting the downfall of Soviet communism,
15 years before it occurred.
Batra is known for successfully predicting:
the stock market crash of 1987 the fall 1998 U.S. stock market slump the current market turmoil in the United States the
market turmoil in Asia and Latin America the collapse of Soviet communism the revolution in Iran in 1979 In his no. 1
best-selling book, The Great Depression of 1990, published in 1987, Batra predicted a depression for both the United
States and Japan. While the United States suffered only a recession in 1990, Japan indeed suffered a crippling stock
market crash and mounting economic troubles all through the 1990s.
ENDS