  We propose that the pseudogap state observed in the transition metal oxides
can be explained by a three-dimensional flux state, which exhibits
spontaneously generated currents in its ground state due to electron-electron
correlations. We compare the energy of the flux state to other classes of mean
field states, and find that it is stabilized over a wide range of $t$ and
$\delta$. The signature of the state will be peaks in the neutron diffraction
spectra, the location and intensity of which are presented. The dependence of
the pseudogap in the optical conductivity is calculated based on the parameters
in the model.
