SOS Robert Prechter said Cash is King

Cash is King.

Since August 2008 to Dec 2009

1. Investors cash out of mutual funds USD56bil

2. Investors cash in bond funds USD198bil

Other Issues

Bonds actually is the biggest bubble, according to Prechter.

The safest place is Cash (in a safe bank), period.

Stimulus - CPI still slow, gaining the upper hand.

Print, print, print, but Fed is actually getting worthless mortgages actually i.e. toxic assets

Why good for dollars, debtors cannot paid its IOUs, the debt will worth zero, amount equivalent of debt evaporated.

MyView

His argument actually is very simple, the money created since 2002 to 2008 is turning into TOXIC ASSETS i.e. debt that are not repayable. The printing on money by Fed is used to buy toxic assets, which eventually evaporate. Hence, there will be a lot of less USD circulating in the market when the Debt turns BAD.