Elliot Wave's Pokhlebkin on Euroland's Social Mood: Speed Limit? In Germany?!

Speed Limit? In Germany?!

by Vadim Pokhlebkin

Yes, you heard right. The world famous, bullet-fast, no-speed-limit German Autobahns may soon become just like every other highway -- boring.

According to a recent poll, "the majority of German citizens would welcome the introduction of a sweeping speed limit on Germany's notoriously fast highways," reports the Deutsche Welle.

The proposed new speed limit is 130 kmh. This may seem "fast enough" for most people, but come on... For every speed fanatic, or even for your average, law-abiding car enthusiast who's ever dreamed of someday "opening it up" on the German Autobahn, this is the end of an era. (And dare I say, an abomination.)

Yet for those of us who understand Elliott waves, this news is hardly shocking. Germany has been leading the current bear market in Europe. Now, a vote to slow down the nation’s highways would be a logical consequence of a major social mood downturn that began in Germany back in 2000. This is the “right time” to cap the highway speed in Germany: Speed limits usually get introduced during bear markets and repealed when bullish times return.

For example, in 1974, after the DJIA had been on a losing streak for several years, the U.S. introduced a 55-mph nationwide speed limit -- a move that “institutionalized the nation's depressed pace,” as we put it later. The federal speed limit was only lifted in 1995, after two decades of a rising social mood, stock market, and economy. By the way, Montana was the only state that went to the opposite extreme in 1995 and set no speed limit at all. But as the collective mood in the U.S. began to peak a few years later, in 1999 Montana joined the suit and capped its highway speed at 75 mph.

Another example is Australia. Until 2002, its Northern Territory remained the only place in the world -- besides Germany -- that had no official speed limit. However, in 2002, as the Australian ASX200 continued to fall, the Territory's government made the first step towards speed restrictions and slowed down one of its major highways to 110 kmh.

But let’s get back to Germany. How long will the country stay this sluggish? When will the German stocks wake up from their slumber? When will “Europe’s main economic engine” start revving up again?