THE GREAT CRASH

Living based upon greed and a faith in an invisible hand is a dangerous mistake. This may end up being the moral of the story, so to speak, of what is going to happen next.

Following a mid-October, Spiral Calendar anniversary top in stock prices, a sharp drop below Dow 8000 has occurred. (This top was predicted years in advance by Chris Carolan, who developed the Spiral Calendar and is currently headquartered at Elliott Wave International ). The DJIA is now poised to fall below the critical 7600 mark and thereby trigger a Dow Theory sell signal. This means a panic sell-off, possibly the Great Crash of '97, is about to occur. As is the typical seasonal pattern for mass panics, the crash is coming around the end of October, when the 1987 and 1929 stock market crashes occurred. (There is even a possibility that tomorrow will be some kind of "Black Monday" given that the Dow may break below 7600).

If, as the Elliott Wave Principle indicates, we have just passed a Grand Supercycle peak in stock prices, then the crash about to occur could be of literally biblical proportions. What do I mean by this? One might think of the recent stock top as a peak in man's misled confidence in himself. This confidence is misled because man is actually bringing about a world war and self-destruction rather than world peace and collective success like is anticipated now. But rather than getting into the obvious particulars of the false peace that currently prevails and the catastrophic war that will result, let me just point out that the self-destructive course of society can be undone only if people learn to place their faith in God rather than themselves and/or worldly things.

In the meantime, there's Saddam Hussein to deal with...

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               "Iraq Acts Against U.N. Inspectors"

                          By Waiel Faleh 
                     Associated Press Writer 
             Sunday, October 26, 1997; 6:33 p.m. EST 

 BAGHDAD,  Iraq (AP) -- The Iraqi Parliament  recommended  Sunday 
 that  contacts  with  U.N.  weapons  inspectors  be  frozen -- a 
 response provoked by a U.N.  Security Council threat of  further 
 sanctions against Baghdad.  
                        
 During  Sunday's  televised  session,  Iraq's  National Assembly 
 called on the government to suspend its  cooperation  with  U.N.  
 inspectors  trying  to  verify  whether  Iraq has eliminated its 
 weapons of mass destruction.  
                        
 The National Assembly sent its recommendations to the Revolution 
 Command Council,  Iraq's main decision-making  body,  the  Iraqi 
 News Agency reported, giving no further details.  
                        
 However,  assembly  members  speaking  on condition of anonymity 
 said the 250-member body,  which debated for two days,  proposed 
 that  Iraq  halt all contacts with the inspectors ``until Iraq's 
 cooperation is recognized.'' 
                        
 Assembly Speaker Saadoun Hamadi conveyed the  recommendation  to 
 President Saddam Hussein, the deputies said. Saddam had referred 
 the U.N. resolution to the largely rubber-stamp Parliament for a 
 recommendation.  
                        
 The  arms  inspections  date  to  the end of Persian Gulf War in 
 1991,  when the council ordered Iraq to destroy  its  long-range 
 missiles and chemical, biological and nuclear weapons.  
                        
 Until Iraq adheres to the order, the council will not lift stern 
 economic  sanctions  imposed  after  Saddam sent his forces into 
 Kuwait in 1990.  
                        
 Last June,  the council warned Iraq that  it  would  consider  a 
 travel  ban  unless  the  U.N.  inspectors' October report found 
 Baghdad in compliance.  The report concluded, however, that Iraq 
 was withholding information and impeding the investigation.  

 In  response,  the  U.N.  Security  Council  passed a resolution 
 Thursday warning Baghdad  that  the  council  will  ban  foreign 
 travel by some Iraqi officials if the country does not cooperate 
 with inspectors.  

 Deputy  Iftikhar  Ahmad  Ayoob said during Sunday's session that 
 she endorses the recommendation to freeze ties  until  there  is 
 recognition  that  Iraq  has  made  efforts  to comply with U.N.  
 orders.  

 ``They made us feel like we have not done anything.  It  is  all 
 because  of  the  blind hatred of the American administration,'' 
 she said.  
                        
 Saad Qassem Hamoudi, another deputy, said Iraq had fulfilled its 
 duties toward the inspectors.  
                        
 ``It is time that the world ...  give Iraq its rights because it 
 has  implemented  most  of  the  resolutions,'' Hamoudi told the 
 session.  
                        
 Saddam repeatedly has threatened to end  cooperation  with  U.N. 
 inspectors,  believing  that  the United States and Britain will 
 never agree to lift sanctions.  

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                   Global Economy Faces Trouble 

                       By Charles J. Hanley 
                     AP Special Correspondent 
             Sunday, October 26, 1997; 1:26 p.m. EST 
                        
 The talk these prosperous days, from Wall Street to Wuhan, is of 
 boundless economic horizons.  But just over the horizon  lies  a 
 familiar patch of troubled waters, a blue-green whirlpool called 
 the Persian Gulf.  
                        
 As  the  global  economy sped ahead in 1997,  navigating through 
 market  dips  and  Asian  currency   scares,   optimists   began 
 speculating about a ``repeal'' of the laws of boom and bust. But 
 they'd better repeal the laws of internal combustion first.  

 A  check of America's gas tank tells you why:  The United States 
 is importing more than half the oil it burns.  And Persian  Gulf 
 petroleum is even more important elsewhere in the world economy, 
 especially  in  parts  of  Asia  where  the  optimism already is 
 tempered by currency crises and stockmarket slumps.  
                        
 It's been a generation since the industrial world first  learned 
 what an oil crisis could mean.  
                        
 At that time,  in 1973,  an Arab embargo led to a quadrupling of 
 oil prices and a world recession.  A  few  years  later,  Iran's 
 revolution  produced  another  global  oil  squeeze and economic 
 slump.  

 In those years,  the United States  relied  on  imports  for  as 
 little as one-third of its oil.  
                        
 The  new  heavy  dependence  on  foreign  oil  troubles  some in 
 Washington.  Hazel O'Leary,  the former energy  secretary,  said 
 earlier  this  year  that ``we need a wake-up call'' that only a 
 new oil price shock might provide.  
                        
 Oil traders,  of course,  don't need reminders.  When  the  U.S.  
 aircraft  carrier  Nimitz rushed to the Persian Gulf this month, 
 amid heightening tensions there,  crude oil prices jumped almost 
 $2 a barrel, to more than $23.  
                        
 That  ``crisis  of the month'' may be subsiding,  but the twists 
 and turns of the Gulf whirlpool remain unpredictable: 
                        
 --In the Gulf's tight quarters,  crowded with American,  Iranian 
 and other naval vessels,  miscalculations and mishaps easily can 
 escalate into confrontation.  

 --Iran and Iraq might clash  over  Iraq's  sheltering  of  anti-
 Iranian guerrillas, a flashpoint for tensions in recent weeks.  

 --Iraq  might draw U.S.  or broader international retaliation if 
 it  violates  ``no-fly''   zones   or   rejects   U.N.   weapons 
 inspections.  

 --Terrorists  might  again attack American forces in the region. 
 If an Iranian link is uncovered,  a major  Gulf  showdown  could 
 result.  

 Crises like these would each affect the flow of oil in different 
 ways.  For  one  thing,  long-distance pipelines make the region 
 less dependent on Gulf shipping than it once was.  But any  Gulf 
 conflict  inevitably  would  drive  oil  prices  up  sharply and 
 quickly.  And the waves and ripples from such an emergency, even 
 if short-lived, would reach everywhere.  
                        
 America's oil imports have been climbing since the mid-1980s, as 
 domestic oil production declined by more than  25  percent.  The 
 U.S.  appetite grew in the '90s with the booming economy and the 
 popularity of sport utilities and other gas-hungry vehicles.  So 
 far this year,  imports have supplied 55 percent of consumption, 
 one-fifth of that coming from the Persian Gulf.  
                        
 In Asia, the heavier dependence grew even more quickly.  
                        
 China,  an oil producer,  became an oil importer in 1993  as  it 
 modernized  industry  from  coastal  Shanghai  to  inland Wuhan.  
 Expanding automobile ownership across East Asia may  help  boost 
 global consumption from today's 73 million barrels a day to over 
 90 million by 2010, energy analysts say.  

 Already  operating  at  more  than  90  percent  capacity,   oil 
 producers will scramble to keep up.  The  big  energy  companies 
 have  big plans for the Caucasus and Central Asia,  but the flow 
 from many of those fields lies years over the horizon.  

 Until then,  the  Gulf,  with  its  oil  and  its  crises,  lies 
 comfortably  --and uncomfortably -- closer at hand.  It's a fact 
 of life sometimes forgotten as stock indexes have risen on  Wall 
 Street, but never forgotten in the whirlpool itself.  

 ``My  job  is  stability,''  a  U.S.  destroyer  captain  told a 
 reporter in the Gulf earlier this year.  ``Because if this  neck 
 of  the  world  blew  up,  what would really suffer is the world 
 economy. That's what it all comes back to -- economics.'' 

 EDITOR'S NOTE -- Charles J. Hanley has reported on international 
 affairs for The Associated Press since 1976.  

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