When everyone is telling you that this credit crisis could not have been predicted, you can point to one man who boldly -- and incredibly accurately -- told you exactly what was going to happen. His name is Bert Dohmen, for the past 30 years the publisher of the Wellington Letter, one of my all-time favorite newsletters.

I interviewed Dohmen in March following the publication of his book,

Prelude to Meltdown

. His predictions, below, were frightening. But his forecast today is even more shocking.

Bert Dohmen in March 2008

"When the Dow Jones Industrial Average made its first close above 14,000, Dohmen sent out a warning."'The world has seen the greatest credit bubble ever seen by man. ... The enormity of this problem is beyond anything we have ever seen in financial history. "'The size of the leverage and the financial instruments that are outstanding, and now defaulting, are beyond the ability of any central bank, or all of the central banks combined, to bail out. We've never had a situation where the central banks were not big enough to bail out a situation -- but we have it now.""He warns about further problems in the banking industry: 'My forecast is that the next big crisis will be the credit default swaps -- a 45 trillion-dollar, highly leveraged market. These are basically insurance policies that buyers of mortgage securities (CDOs) bought against a mortgage default. Banks and hedge funds 'wrote' this insurance. ... Now that the mortgages are defaulting, the sellers are saying they don't have the capital to make good on the insurance. 'The key word over the next year is counter-party risk, because these were unregulated side deals. ... The regulators were totally asleep.' "Dohmen's not worried about inflation. Instead he sees a deflationary collapse and recommends U.S. Treasury securities."

What Bert Dohmen Says Now

Seven months later, and it's clear that Dohmen absolutely nailed it with his predictions. I spoke with Dohmen over the weekend to find out what he's forecasting for the market now. I started by asking him about Warren Buffett's very public decision -- in a

New York Times op-ed piece

-- to support the markets by buying stocks.

Dohmen says it is a "patriotic" move on Buffett's part to advocate buying stocks now but it's not necessarily a smart move, based on history, he says. Dohmen points out that markets are mathematical, and 50% bounces in a bear market are typical. But often that's not the end of the big decline:

"Most bear markets, after a major bubble has burst, decline 80%-90%, going back to where the bubble started. In the United States, that's what happened after the 1929 Crash. During the 1973-74 bear market, the broad ValueLine Index was down over 80%. In 2000-02, the Nasdaq Composite was down over 80%. So until a major index is down over 80%, I will not even start looking for a bottom!"

Dohmen notes that since this latest crisis was caused by the bursting of a financial bubble, the most significant decline is likely to occur in an index of financial-sector stocks, such as the

Financial Select Sector SPDR

(XLF) - Get Report

, an exchange-traded fund that tracks many of these companies. "So far it is down from around $38 in 2007 to $13 now

a 65% decline, which means there's a ways to go on the downside for financial companies."

One year ago, in October 2007, Dohmen's newsletter was headlined "Top of the Rally" -- characterizing that rise from midsummer 2007 a "fake-out rally."

Now he's predicting another fake-out, saying: "Shorter term, we're due for an oversold rally. People will bargain hunt thinking they're getting buying opportunities of a lifetime, and they'll all be trapped at the top of this rally."

When is that likely to happen? Here's Dohmen's response:

"We'll tell our subscribers. But I can say the worst is still ahead over the next several years for stock market investors. "We are seeing the greatest deleveraging in the history of mankind, because it was the greatest financial bubble we've ever seen. This is a flight to cash, because no one has cash. Cash is the rarest commodity that you will find in any household. And it could take 17 years from the 2000 top in the stock market to reach the next good buy point for long-term investors. "In the meantime, it will be a great environment for traders, with plenty of tradable rallies and declines. But forget buy and hold. It will be the road to financial ruin in this environment."

Isn't there something optimistic to say, I wondered. He reminded me that false optimism doesn't help and is not an obligation of the media, or me. His final words: "Use any rally to sell."

Well, I checked in with Dohmen late Tuesday after the

Dow soared nearly 900 points

. He wasn't impressed. "It takes more than one day to make a rally," he said, telling me that a 38% to 50% retracement was certainly a possibility. That would bring the Dow back to between 9860 and 10,400 for, in his words, "a very tradeable rally." But it would take a "decisive close above 9300" to convince him a rally has that potential.

This wouldn't be worth printing if I hadn't followed Dohmen's advice for 30 years, and seen for myself how accurate, though not perfect, his assessments have been. And that's The Savage Truth.

Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated. She was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. Savage currently serves as a director of the Chicago Mercantile Exchange Corp.