This page has been archived and commenting is disabled.

If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Devastating For The US

Tyler Durden's picture




 

Submitted by Michael Snyder of The Economic Collapse blog,

Does the economy move in predictable waves, cycles or patterns?  There are many economists that believe that it does, and if their projections are correct, the rest of this decade is going to be pure hell for the United States.  Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades.  Of course none of the theories discussed below is perfect, but it is very interesting to note that all of them seem to indicate that the U.S. economy is about to enter a major downturn.  So will the period of 2015 to 2020 turn out to be pure hell for the United States?  We will just have to wait and see.

One of the most prominent economic cycle theories is known as "the Kondratieff wave".  It was developed by a Russian economist named Nikolai Kondratiev, and as Wikipedia has noted, his economic theories got him into so much trouble with the Russian government that he was eventually executed because of them...

The Soviet economist Nikolai Kondratiev (also written Kondratieff) was the first to bring these observations to international attention in his book The Major Economic Cycles (1925) alongside other works written in the same decade. Two Dutch economists, Jacob van Gelderen and Samuel de Wolff, had previously argued for the existence of 50 to 60 year cycles in 1913. However, the work of de Wolff and van Gelderen has only recently been translated from Dutch to reach a wider audience.

 

Kondratiev's ideas were not supported by the Soviet government. Subsequently he was sent to the gulag and was executed in 1938.

 

In 1939, Joseph Schumpeter suggested naming the cycles "Kondratieff waves" in his honor.

In recent years, there has been a resurgence of interest in the Kondratieff wave.  The following is an excerpt from an article by Christopher Quigley that discussed how this theory works...

Kondratiev's analysis described how international capitalism had gone through many such "great depressions" and as such were a normal part of the international mercantile credit system. The long term business cycles that he identified through meticulous research are now called "Kondratieff" cycles or "K" waves.

 

The K wave is a 60 year cycle (+/- a year or so) with internal phases that are sometimes characterized as seasons: spring, summer, autumn and winter:

  • Spring phase: a new factor of production, good economic times, rising inflation
  • Summer: hubristic 'peak' war followed by societal doubts and double digit inflation
  • Autumn: the financial fix of inflation leads to a credit boom which creates a false plateau of prosperity that ends in a speculative bubble
  • Winter: excess capacity worked off by massive debt repudiation, commodity deflation & economic depression. A 'trough' war breaks psychology of doom.

Increasingly economic academia has come to realize the brilliant insight of Nikolai Kondratiev and accordingly there have been many reports, articles, theses and books written on the subject of this "cyclical" phenomenon. An influential essay, written by Professor W. Thompson of Indiana University, has indicated that K waves have influenced world technological development since the 900's. His thesis states that "modern" economic development commenced in 930AD in the Sung province of China and he propounds that since this date there have been 18 K waves lasting on average 60 years.

So what does the Kondratieff wave theory suggest is coming next for us?

Well, according to work done by Professor W. Thompson of Indiana University, we are heading into an economic depression that should last until about the year 2020...

Based on Professor Thompson's analysis long K cycles have nearly a thousand years of supporting evidence. If we accept the fact that most winters in K cycles last 20 years (as outlined in the chart above) this would indicate that we are about halfway through the Kondratieff winter that commenced in the year 2000. Thus in all probability we will be moving from a "recession" to a "depression" phase in the cycle about the year 2013 and it should last until approximately 2017-2020.

But of course the Kondratieff wave is far from the only economic cycle theory that indicates that we are heading for an economic depression.

The economic cycle theories of author Harry Dent also predict that we are on the verge of massive economic problems.  He mainly focuses on demographics, and the fact that our population is rapidly getting older is a major issue for him.  The following is an excerpt from a Business Insider article that summarizes the major points that Dent makes in his new book...

  • Young people cause inflation because they "cost everything and produce nothing." But young people eventually "begin to pay off when they enter the workforce and become productive new workers (supply) and higher-spending consumers (demand)."
  • Unfortunately, the U.S. reached its demographic "peak spending" from 2003-2007 and is headed for the "demographic cliff." Germany, England, Switzerland are all headed there too. Then China will be the first emerging market to fall off the cliff, albeit in a few decades. The world is getting older.
  • The U.S. stock market will crash. "Our best long-term and intermediate cycles suggest another slowdown and stock crash accelerating between very early 2014 and early 2015, and possibly lasting well into 2015 or even 2016. The worst economic trends due to demographics will hit between 2014 and 2019. The U.S. economy is likely to suffer a minor or major crash by early 2015 and another between late 2017 and late 2019 or early 2020 at the latest."
  • "The everyday consumer never came out of the last recession." The rich are the ones feeling great and spending money, as asset prices (not wages) are aided by monetary stimulus.
  • The U.S. and Europe are headed in the same direction as Japan, a country still in a "coma economy precisely because it never let its debt bubble deleverage," Dent argues. "The only way we will not follow in Japan's footsteps is if the Federal Reserve stops printing new money."
  • "The reality is stark, when dyers start to outweigh buyers, the market changes." It all comes down to an aging population, Dent writes. "Fewer spenders, borrowers, and investors will be around to participate in the next boom."
  • The U.S. has a crazy amount of debt and "economists and politicians have acted like we can just wave a magic wand of endless monetary injections and bailouts and get over what they see as a short-term crisis." But the problem, Dent says, is long-term and structural — demographics.
  • Businesses can "dominate the years to come" by focusing on cash and cash flow, being "lean and mean," deferring major capital expenditures, selling nonstrategic real estate, and firing weak employees now.
  • The big four challenges in the years ahead will be 1) private and public debt 2) health care and retirement entitlements 3) authoritarian governance around the globe and 4) environmental pollution that threatens the global economy.

According to Dent, "You need to prepare for that crisis, which will occur between 2014 and 2023, with the worst likely starting in 2014 and continuing off and on into late 2019."

So just like the Kondratieff wave, Dent's work indicates that we are going to experience a major economic crisis by the end of this decade.

Another economic cycle theory that people are paying more attention to these days is the relationship between sun spot cycles and the stock market.  It turns out that market peaks often line up very closely with peaks in sun spot activity.  This is a theory that was first popularized by an English economist named William Stanley Jevons.

Sun spot activity appears to have peaked in early 2014 and is projected to decline for the rest of the decade.  If historical trends hold up, that is a very troubling sign for the stock market.

And of course there are many, many other economic cycle theories that seem to indicate that trouble is ahead for the United States as well.  The following is a summary of some of them from an article by GE Christenson and Taki Tsaklanos...

Charles Nenner Research (source)
Stocks should peak in mid-2013 and fall until about 2020. Similarly, bonds should peak in the summer of 2013 and fall thereafter for 20 years. He bases his conclusions entirely on cycle research. He expects the Dow to fall to around 5,000 by 2018 – 2020.

 

Kress Cycles (Clif Droke) (source)
The major 120 year cycle plus all minor cycles trend down into late 2014. The stock market should decline hard into late 2014.

 

Elliott Wave (Robert Prechter) (source)
He believes that the stock market has peaked and has entered a generational bear-market. He anticipates a crash low in the market around 2016 – 2017.

 

Market Energy Waves (source)
He sees a 36 year cycle in stock markets that is peaking in mid-2013 and will cycle down for 2013 – 2016. “… the controlling energy wave is scheduled to flip back to negative on July 19 of this year.” Equity markets should drop 25 – 50%.

 

Armstrong Economics (source)
His economic confidence model projects a peak in confidence in August 2013, a bottom in September 2014, and another peak in October 2015. The decline into January 2020 should be severe. He expects a world-wide crash and contraction in economies from 2015 – 2020.

 

Cycles per Charles Hugh Smith (source)
He discusses four long-term cycles that bottom in the 2010 – 2020 period. They are: Credit expansion/contraction cycle, Price inflation/wage cycle, Generational cycle, and Peak oil extraction cycle.

So does history repeat itself?

Well, it should be disconcerting to a lot of people that 2014 is turning out to be eerily similar to 2007.  But we never learned the lessons that we should have learned from the last major economic crisis, and most Americans are way too apathetic to notice that we are making many of the very same mistakes all over again.

And in recent months there have been a whole host of indications that the next major economic downturn is just around the corner.  For example, just this week we learned that manufacturing job openings have declined for four months in a row.  For many more indicators like this, please see my previous article entitled "17 Facts To Show To Anyone That Believes That The U.S. Economy Is Just Fine".

Let's hope that all of the economic cycle theories discussed above are wrong this time, but we would be quite foolish to ignore their warnings.

Everything indicates that a great economic storm is rapidly approaching, and we should use this time of relative calm to get prepared while we still can.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 05/13/2014 - 20:08 | 4757127 Fidel Sarcastro
Fidel Sarcastro's picture

Elliot Wave & Prechter?  Gimme a f*cking break!

Tue, 05/13/2014 - 20:13 | 4757151 localsavage
localsavage's picture

Wait...we can't just keep printing our way to sucess?

Tue, 05/13/2014 - 20:44 | 4757250 chumbawamba
chumbawamba's picture

Predictable in the broadest sense, yes (it will go up and then go down, rinse, repeat).  Cyclical?  Of course.  All is cyclical.  That is Reality 101.

I am Chumbawamba.

Tue, 05/13/2014 - 20:54 | 4757283 chumbawamba
chumbawamba's picture

Follow the 70 year cycle of international bankruptcy:

1789 Ratification of U.S. Constitution + 70 =

1859 Beginning of U.S. War Between the States + 70 =

1929 Beginning of U.S. Great Depression + 70 =

1999 Beginning of U.S. Dollar Destruction

= Cyclical by Design.

I am Chumbawamba.

Tue, 05/13/2014 - 20:58 | 4757295 chumbawamba
chumbawamba's picture

It's silly to believe there is but one cycle upon which the economy rides, when in fact there are multiple and numerous cycles, and of course cycles within cycles, which all combine to make those squiggly lines you see on the charts.

What ISN'T cyclical around you?  Day & night, awake and asleep, inhale and exhale, etc.

ALL is CYCLICAL.

I am CHUMBAWAMBA.

Tue, 05/13/2014 - 21:05 | 4757324 centerline
centerline's picture

+1

Tue, 05/13/2014 - 21:22 | 4757373 NoDebt
NoDebt's picture

"If we accept the fact that most winters in K cycles last 20 years (as outlined in the chart above) this would indicate that we are about halfway through the Kondratieff winter that commenced in the year 2000."

Wait, so this is the "depression"?  Shit, this ain't so bad.  Markets keep going up, poor people still doing.... whatever it is that poor people do.

Hell, I thought this was as good as it gets, all downhill from here.  So you mean it gets BETTER than this?  SIGN ME THE FUCK UP!  I am totally buying this guy's newsletter or whatever he's hawking.  I need a quarterly pep talk.



Tue, 05/13/2014 - 22:00 | 4757492 Mistress Raindrop
Mistress Raindrop's picture

Sometimes I feel like Linus in the pumpking patch.  When will the big ball drop?

Tue, 05/13/2014 - 22:06 | 4757505 centerline
centerline's picture

lol.  Sort of feels the same as the Elliot Wave folks claim the "big one" was upon us... the mother of all primary waves down into the abyss.  Oops...

Timing is motherfucker.

Wed, 05/14/2014 - 01:36 | 4757940 New Ordnance
New Ordnance's picture

The Bard reminds:

“There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.”

 

Tue, 05/13/2014 - 21:06 | 4757328 knukles
knukles's picture

The greatest cyclical transition has been from "It's Bush's fault" to "It's Weather's fault"
Now how fucked does that tell us we are?

Tue, 05/13/2014 - 23:33 | 4757527 Dick Buttkiss
Dick Buttkiss's picture

"ALL is CYCLICAL."

The universe doesn't seem to be — http://en.wikipedia.org/wiki/Metric_expansion_of_space — and instead seems to have expanded exponentially for nearly 14 billion years now, with no end in sight.

As for the so-called "business cycle," there is no such thing.  Rather, there is simply a boom-bust cycle due to relentless state intervention in a would-be free market.

The universe and the free market are expansionary, in other words, because they are natural processes.  

The state is not.

It can therefore kiss my oh-so-natural ass.

 

Wed, 05/14/2014 - 01:53 | 4757964 James_Cole
James_Cole's picture

The universe and the free market are expansionary, in other words, because they are natural processes.  

Fun fact, the universe we exist in is the product of the mother of all inflations. 

Wed, 05/14/2014 - 08:29 | 4758295 Dick Buttkiss
Dick Buttkiss's picture

Yes, and while it was created out of nothing, the result is the very definition of reality, as opposed to the flight from it that the state's creation of money out of nothing represents.

Tue, 05/13/2014 - 22:24 | 4757557 FutureShock
FutureShock's picture

Very true however now we have much larger structural problems that time was supposed to help fix but clearly is not.  When the structure and foundation is a bad as it is and getting worse cycles will not matter so much. Case in point Japan. 

Wed, 05/14/2014 - 06:02 | 4758108 Geronimo66
Geronimo66's picture

Money is the ultimate designer drug:P

I am not cyclical cynical...

http://en.wikipedia.org/wiki/Designer_drug

Wed, 05/14/2014 - 07:05 | 4758156 sidiji
sidiji's picture

ZH late to party as usual..2015-2020 already happened, it was called 2007-2014

Tue, 05/13/2014 - 23:08 | 4757702 drendebe10
drendebe10's picture

It's Bush's fault.

Wed, 05/14/2014 - 00:44 | 4757874 Colonel Klink
Colonel Klink's picture

If at first you don't succeed, keep on sucking until you do suck seed.

Tue, 05/13/2014 - 23:02 | 4757684 Fox Moulder
Fox Moulder's picture

Elliot Wave & Prechter?  Gimme a f*cking break!

 

Hasn't he predicted 12 of the last two market crashes?

Wed, 05/14/2014 - 07:27 | 4758193 jenniewadeguy
jenniewadeguy's picture

Amen, brother.  Prechter is beyond laughingstock by now.  And, Dent has yet to be accurate.  Harry keeps pushing out his dates, and has been for years.  Let's call him on it.  "Hey, Harry, what gives with these constantly rolling range predictions of yours?"

Tue, 05/13/2014 - 20:09 | 4757128 Slave
Slave's picture

Yep, this is bullish.

Tue, 05/13/2014 - 20:17 | 4757140 OC Sure
OC Sure's picture

 

 

 

"There are many economists that believe that..."

We understand in order to believe, not vice versa. 

 

"...all of them seem to indicate that the U.S. economy is about to enter a major downturn."

This is no surprise since tyranny is rapidly accelerating.

As tyranny increases economic production decreases.

Wed, 05/14/2014 - 07:12 | 4758165 blindfaith
blindfaith's picture

People get used to 'things' and adapt without realizing it.

Like traffic on the freeway, you get used to it until a truck hits you because you were texting and not paying attention to what is around you.

Wed, 05/14/2014 - 08:20 | 4758264 OC Sure
OC Sure's picture

If by things you mean the lies they are harrangued with daily which grow louder and louder, then yes they do get used to them however their acceptance is more submission than adaptation.

When facts change, rational people change to adjust themselves to the facts and do not expect the facts ever to adjust to them. When innocent people who are rational too but lack the perspicacity to identify what is true and what is false are lied to they obey their "authorities" and submit unwittingly. They are duped, hoodwinked, bamboozled, etc.

This lying that we see everyday has the sole purpose of being verbal sedation as the means to make the mind numb and the body succumb. I call the verbal sedation Terms of Tyranny. The conscientious observer should detect them and reject them. Here are just a few with the lie as the subject and the truth as the predicate.

Terms of Tyranny:

It is not a Democracy but a Tyranny.

It is not Inflation but theft.

It is not Deflation but replenishment.

It is not  a lack of Labor Particiption but unemployment.

 

 By accepting Tyranny's terms they control or bodies by confusing our minds.

Tue, 05/13/2014 - 20:12 | 4757145 CaptainSpaulding
CaptainSpaulding's picture

Thank god i will be going away.

Tue, 05/13/2014 - 20:15 | 4757156 djsmps
djsmps's picture

After years of watching this site, I know that the catastrophe will always happen next year.

Tue, 05/13/2014 - 20:23 | 4757182 Seasmoke
Seasmoke's picture

The sign on the wall says. FREE BEER TOMORROW.

Wed, 05/14/2014 - 07:32 | 4758199 jenniewadeguy
jenniewadeguy's picture

Free Beer was the name of a college band at Ohio University in the mid eighties.  They advertised their participation in college gigs on posted signs simply as "Free Beer".  And, damn, they really packed the events with people!

Tue, 05/13/2014 - 20:24 | 4757187 GoldieOne
GoldieOne's picture

Agreed. Armageddon is coming next quarter!

Tue, 05/13/2014 - 20:46 | 4757258 willwork4food
willwork4food's picture

wait..did someone say free beer tomorrow?

Tue, 05/13/2014 - 21:00 | 4757306 knukles
knukles's picture

My doctor told me to tell myself every day that tomorrow I'll go to they gym and work out.

Tue, 05/13/2014 - 21:13 | 4757346 centerline
centerline's picture

end of the world happens when the beer runs out.

Tue, 05/13/2014 - 20:30 | 4757203 Oldwood
Oldwood's picture

My dad was born in 1919. After watching our government in action for his entire life, he never thought it would last. He saw nothing but corruption and collusion and massive fraud and rightly believed it would collapse. He just didn't know when...and we still don't. But you can believe it will go on forever as that is EXACTLY what they are depending on.

Tue, 05/13/2014 - 21:01 | 4757307 CrazyCooter
CrazyCooter's picture

When anyone with an ounce of gumption looks down the line 200 years, it's hard to not be long plow mules, outdooor shitters, and perseverance.

Unless population gets real small, real smart, and stays that way.

Regards,

Cooter

Tue, 05/13/2014 - 21:37 | 4757417 homiegot
homiegot's picture

Long smallpox.

Tue, 05/13/2014 - 22:43 | 4757615 Freedumb
Freedumb's picture

With a real small and real smart population we're just going to end up living like the people in "Zardoz"

http://www.youtube.com/watch?v=kbGVIdA3dx0

Tue, 05/13/2014 - 21:08 | 4757333 RaceToTheBottom
RaceToTheBottom's picture

So basically waiting a lifetime for it to fail is data that it will fail?

But I have to say that they are some extremely lucky magicians to have kept this POS together this long.

Bullish on Duct Tape.

Tue, 05/13/2014 - 21:10 | 4757335 centerline
centerline's picture

Like Chumba points out above, the timelines for significant change are very long.  I would wager the one we are watching peak right now is much, much longer than even 70 years.  Centuries perhaps for a convergence of numerous cycles (perfect storm sort of thing).  Shit, even ice ages are cyclical (something like 10,000 years or so if I recall correctly).

Sounds like your Dad was a smart man.

Tue, 05/13/2014 - 21:31 | 4757395 Oldwood
Oldwood's picture

He was a rational man who never made more than $7/hr and had a seventh grade education....but he could see reality. He watched as FDR shat money at worthless projects paying people to do little or nothing productive. He saw the growth in government and the corruption that surrounded it. It has always been obvious to anyone who wanted to see it. He didn't need the internet or Drudge. He could see it on the streets and the local paper. From his prospective it did not take a genius or economist to understand that wealth and prosperity only come from productivity. Banks and stock markets and government do not produce, they eat. They skim off the top and as the game became more corrupt, more and more have crowded into this skimming operation. Its eating more and more and will not go on forever.

He had a corny joke about a farmer who pursued a profitable plan of feeding his cattle sawdust as a cheaper alternative to corn. He continued to up the percentage of sawdust mixed into the feed, amazed that he was noticing hardly any negative effects. Until one day he goes out to check on his cattle only to discover them all dead and instantly goes into a rant as he just can't understand why, just when he gets them on 100% sawdust, they up and die. This is our world. they continue to layer more and more theft and tyranny upon our backs and we continue on. They believe that there are those ignorant and flawed individuals who suffer the illness of greed so deeply that they will continue to struggle to profit even when taxed 100% while enduring every law and regulation imaginable. They will not be satisfied with simply taking their wealth and liberties, but will also demean and insult them. At some point we cattle will simply lie down and there will be no one more shocked and surprised than those who have sought to oppress the productive class of the world.

They will never see it coming...but it is coming.

Tue, 05/13/2014 - 22:01 | 4757493 centerline
centerline's picture

Funny thing is that as I get older, the more I see the "basics" asserting themselves.  What appears wrong is usually wrong.  What is not sustainable does not get sustained.  And so forth.  On that note, just from a rational perspective, we are no doubt on a trajectory for a catestrophic event.  And the parasites who are trying to hold onto power and wealth will start operating on shorter and shorter timeframes as they get more and more desperate to keep the proverbial ship from sinking.  Seems to me history is pretty clear about all this.  And I too don't think one needs a Harvard education or silver spoon in one's mouth to read those tea leaves.

 

Tue, 05/13/2014 - 23:53 | 4757785 Yohimbo
Yohimbo's picture

ok so in order for it all to end all the sheep have to die. 

 

yep that figures. 

Wed, 05/14/2014 - 00:14 | 4757822 Thorny Xi
Thorny Xi's picture

My old man was born in 1901 in Germany.  Got his PhD in economics at Heidelberg after lving through WW1, came to the US in 1923 during the Weimar inflation. Lived through the depression here, and WW2, through the 70's oil crunches.  Always said things ended up right where we are now, the power and ease of inflation was too attractive to central bankers.  Next?  War.  The only way credit is cleared on these scales.

Tue, 05/13/2014 - 21:30 | 4757393 djsmps
djsmps's picture

My dad was born two years earlier. He was a career, decorated Naval,officer. I think he started questioning it in the 1960's.

Wed, 05/14/2014 - 03:35 | 4758037 August
August's picture

Well, my Grand-Dad was born in 1889, moved to the USA in 1912; and said that each and every year life in the USA got a little bit worse....  Silly old man.

Thu, 05/15/2014 - 14:35 | 4761230 Radical Marijuana
Radical Marijuana's picture

It depends who you are and where you live, djsmps. For many people catastrophe has already happened.

Tue, 05/13/2014 - 20:24 | 4757176 daveO
daveO's picture

It's coming between now and 2020?! Where were they 5 years ago? The best part of the article is this:

  • The U.S. and Europe are headed in the same direction as Japan, a country still in a "coma economy precisely because it never let its debt bubble deleverage," Dent argues. "The only way we will not follow in Japan's footsteps is if the Federal Reserve stops printing new money.

The crash won't happen on Wall Street thanks to the FED. 

Tue, 05/13/2014 - 20:44 | 4757252 Relentless101
Relentless101's picture

Haha. S&P hits 10,000 today as the unemployment rate also reaches an all time high. We have Mike Hunt here who is managing director of Anal Rape Capital Management and he is going to tell us why this is bullish for stocks.

Tue, 05/13/2014 - 21:04 | 4757322 CrazyCooter
CrazyCooter's picture

Presupposition: nominal == real.

Learn2PriceInGold.

Regards,

Cooter

Tue, 05/13/2014 - 21:17 | 4757357 centerline
centerline's picture

It probably won't actually.  Everything around it will fail first.  The giant sucking sound as capital flees Wall Street is probably one of the last things to occur as the US as we know it goes nipples up (taking all the pensions, savings, SNAP system, you name it, with it).

Tue, 05/13/2014 - 20:23 | 4757178 J S Bach
J S Bach's picture

All these theories are fun thought experiments.  But, does anyone ever ask the fundamental questions about economies founded on debt-based money systems as opposed to non-debt-based ones?  No.  

Why doesn't the world agree to an unique and unprecedented experiment of debt-free money and see what happens?

Of course, the answer is that prosperity would explode upon the earth.  Imagine banks with full reserves for lending (as opposed to 10% fractional)... and any small amount of interest being recycled back into the communities as opposed to usurious and avaricious private hands.

This Spring, Summer, Autumn, Winter B.S. only happens because the debt-based Ponzi schemes always impode.  It is inevitable under such a flawed scam system... just like the changing seasons.

Tue, 05/13/2014 - 20:25 | 4757191 daveO
daveO's picture

Seasons = Credit Cycles.

Tue, 05/13/2014 - 20:33 | 4757218 OC Sure
OC Sure's picture

I heard somewhere that there is some truth to this in that stocks would sell off in the autumn as farmers repatriated funds to facilitate the harvest. It sounds reasonable but I didn't research it to verify. Anyone know?

Tue, 05/13/2014 - 21:09 | 4757337 CrazyCooter
CrazyCooter's picture

You forgot to put a date on when you think the "economy" became based on debt based money and then contrast that to the original article or specific cycle theories.

Regards,

Cooter

Tue, 05/13/2014 - 20:28 | 4757199 asa-vet52
asa-vet52's picture

The sky is falling... the sky is falling!!!

Tue, 05/13/2014 - 20:31 | 4757210 Oldwood
Oldwood's picture

It already has. You might be seeing dead people.

Wed, 05/14/2014 - 09:52 | 4758632 Vendetta
Vendetta's picture

No, that's just fog

Tue, 05/13/2014 - 20:30 | 4757205 Freebird
Freebird's picture

A 20 year "winter" which started in 2000...its going to get real cold bitchez...

Tue, 05/13/2014 - 20:47 | 4757208 Atomizer
Atomizer's picture

Goldman just admitted 2015 is the year to merge everything into Global Dow.

 

Edit: All predicated on new QE printing models under EU review.

Tue, 05/13/2014 - 20:34 | 4757213 B2u
B2u's picture

Fourth Turning - based on approximate 80 year cycles.  Revolutionary War, Civil War, WWII....and today...

http://www.fourthturning.com/

Tue, 05/13/2014 - 20:37 | 4757228 saints51
saints51's picture

I trust ZH'rs comments not these ass hats. Why you may ask? Simple, ZH'ers are tuned in to real world issues. That is all.

Tue, 05/13/2014 - 20:42 | 4757241 jesse livermoore
jesse livermoore's picture

We are in a fourth turning it started in 2005 and should conclude by 2025

Tue, 05/13/2014 - 20:43 | 4757245 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

I hear exhuberance for the 'recoverying ecomony' but like the article talks about, people are zombies and have no, no idea about how it works. I would have no idea either had I not found fight club. ThxZh

Tue, 05/13/2014 - 20:44 | 4757251 Midnight Rider
Midnight Rider's picture

I think we need to see what Chance the Gardner has to say.

Tue, 05/13/2014 - 21:00 | 4757254 RaceToTheBottom
RaceToTheBottom's picture

DOOMFEST!!!!!

Makes as much sense as anything else

Tue, 05/13/2014 - 20:54 | 4757281 yogibear
yogibear's picture

Unless the rest of the world gangs on on the US and indicates the gigs up this Federal Reserve printing Ponzi scheme continues.

One huge Bankster financial circle-jerk. The US buys Euro debt Japanese debt, Japan buys US and Euro debt, and Europe buys Japanese and US debt. 

Tue, 05/13/2014 - 21:16 | 4757353 BigJim
BigJim's picture

What can go wrong?

Tue, 05/13/2014 - 20:54 | 4757282 slightlyskeptical
slightlyskeptical's picture

ZIRP makes them all wrong

Tue, 05/13/2014 - 20:59 | 4757302 SilverIsMoney
SilverIsMoney's picture

It's coming boys... I'm just hoping my prediction of 2015 holds true... I'm not ready yet... not totally prepped... I just need another year. We've worked in 7 year collapse cycles for a while now that puts the next one in 2015. We're setting the stage here in 2014... it's obvious.

 

Just one more year manipulators... please...

Tue, 05/13/2014 - 21:03 | 4757312 enloe creek
enloe creek's picture

normalcy bias is not a substitute for thoughtful examination of the facts. there seems to be alot of comments that say it has not happened yet therefor it won't happen. but these theories fit current facts reasonably well. The article should have had strauss and howe at the top of the list. but regardless the future has many problems and the debt is one huge issue that will act as an intensifier when the time comes, as all solutions seem to require a big government program to be launched. maybe they will decide farms are a national resource and too valuable to let private parties run them so farmland should be given to some qualified corporation to insure efficient production of food supply Probably because with the collapse of the dollar all the food will be sold to some country with large gold reserves and a large population.I can imagine a world where the production of the U S is owned by a chinese company. of course the city folk using ent cards might not be happy or any number of small business owners who rely on consumers

Tue, 05/13/2014 - 21:03 | 4757316 ptoemmes
ptoemmes's picture

Bottom of the ninth, down 3, bases loaded, two out, count is 0-2.

Ball is on your 1 - 99 yards to the promised land, two minutes left in the game, down 6, no time outs remaining.

Down 2 with 3 seconds left inbounding the ball under your basket with no time outs.

Tue, 05/13/2014 - 21:56 | 4757422 RaceToTheBottom
RaceToTheBottom's picture

Would your interpretation of which inning we are in change if you think that every Central Bank in the world is acting in the same fashion? 

Some people think that since the Russian and Chinese central banks are buying gold, that they will act differently that the other Central Banks RaceToTheBottom.

OK, why?  Chinese have printed 3X to the US.  Who knows what the Russian have done?  I am not a Putin ManCrush team member.  Why would they both and others not continue if not accelerate the Central Banksterism?

They could be selling and buying Gold between their Central Bankstering cohorts, all the while shorting Gold down for free.  When you print money, this is a viable strategy.

Not that I want this, but realistically, Could we be in the first, second, or third inning?

Tue, 05/13/2014 - 22:53 | 4757658 Freedumb
Freedumb's picture

The Fed is going to re-print the yard lines to be 1/1000th of their normal length, and then all their friends will be given a chance to bet money on the Fed winning while odds are 40000:1 1 minute before the Fed unveils its play and wins the game

Wed, 05/14/2014 - 06:53 | 4758139 Wahooo
Wahooo's picture

Exactly. Anyone who thinks there are unyielding rules governing an "Economy" in all of this is kidding themselves.  Economic Cycle? What cycle? Hell, what Economy?

Tue, 05/13/2014 - 21:04 | 4757319 knukles
knukles's picture

Weather v green shoots.
Who you gonna believe?

Tue, 05/13/2014 - 21:12 | 4757344 financialrealist
financialrealist's picture

I was actually interested until I saw it was Snyder

Tue, 05/13/2014 - 21:17 | 4757358 directaction
directaction's picture

There will be limitless investment opportunities during the coming economic catastrophe. 

Wed, 05/14/2014 - 09:57 | 4758656 Vendetta
Vendetta's picture

assisted suicide services might be a strong growth industry, special services available for bankers with innovative methods at competitive pricing.

Tue, 05/13/2014 - 21:28 | 4757385 gdpetti
gdpetti's picture

And that cycle theory matches up with many cosmic cycles... such as the next ice age, as interglacials only last so long, and like this economic cycle, it has run its course.

Tue, 05/13/2014 - 21:45 | 4757448 EggSlayer
EggSlayer's picture

the kuznets curve? lol

Tue, 05/13/2014 - 21:51 | 4757466 Seychelles
Seychelles's picture

Crisis = opportunity

unless we all die of radiation poisoning or MERS

mass extinctions always give rise to new and ?better worlds

think positive but watch your backside

and don't forget your daily dose of ZH happy talk

Tue, 05/13/2014 - 22:12 | 4757521 Ghostdog
Ghostdog's picture

Market has corrected at least 25% every 6.5 to 7 years over the last 50 years with the exception of 1993 because of Al Gore inventing the Internet......

Years Year Peak Valley Dif Drop
7? 2007 14198 6469 7729 54%
7 2000 11749 7197 4552 39%
7 1993 4002 3520 482 12%
6 1987 2746 1616 1130 41%
7 1980 1030 769 261 25%
7 1973 1067 570 497 47%
7 1966 994 627 367 37%
7 1959 741 524 217 29%

Tue, 05/13/2014 - 22:18 | 4757537 DOGGONE
DOGGONE's picture

http://www.showrealhist.com/yTRIAL.html
Folks are severely fooled. "F___ the folks."

Tue, 05/13/2014 - 23:18 | 4757726 AdvancingTime
AdvancingTime's picture

Modern Monetary Theory often referred to as MMT to its many believers removes much of the risk ahead and guarantees that we will always be able to muddle forward. MMT also known as neochartalism is a economic theory that details the procedures and consequences of using government-issued tokens and our current units of fiat money.  Newly acquired tools like derivatives and currency swaps  allow us to print and  manipulate away problems.

While reading an article about the growth of debt in China's non-financial sector I was forced to reflect on how debt is effected by the interest rates. In Europe the ECB had to step in to halt the economic collapse of Spain, Italy and several other countries that were on the brink. What you pay in interest on debt does matter accept in the manipulated land of MMT. Have we been lulled into complacency by the extraordinary actions taken by central banks and governments over the last six years? This is a key question we must face. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/01/have-we-been-lulled-into-complace...

Tue, 05/13/2014 - 23:34 | 4757755 Spungo
Spungo's picture

Harry Dent is big on cycles. That's the #1 reason I think they're probably bullshit.

Tue, 05/13/2014 - 23:42 | 4757772 Bemused Observer
Bemused Observer's picture

Well, at some point all of us who think "The End Is Near!" feel like disappointed Jehovah's Witnesses. But, I've never gone for the 'this year, that year' predictions. I DO know that the current system is unstable, and will not last too much longer unless someone DOES something. And the unwind is going to be epic, because the unstable structure is epic. It's simple math, common sense, there is no way the equations work. And everything is so inter-connected now.

You can't get all crazy over this though. Just do what you can, what makes you feel like you are 'prepping'. For me, it's gold. For others, it's lead...:-) But you have to live every day, so enjoy what you can.

Those who still want to 'invest' in this thing, just be careful. You've GOT to realize that something is really, REALLY off with this economy, it's not healthy looking at ALL...

Wed, 05/14/2014 - 01:03 | 4757903 cocoablini
cocoablini's picture

The economic cycles work in waves, though the waves depend on the memory of the human race. Since we all remember how the markets crashed and were so corrupted in 2008, we all expect it to crash again. Part of the bargain was that the banks buy and hold equities as part of the bailout. Drive up the markets, deflate deflation and call Obama a hero. He knew in 2009 the FED had algos that could drive the DJIA up. He 100% knew. He said,"Now is a good time to buy stocks" to assist the bots.

We all expect the market to correct so of course the banks are driving their assets to 20k Dow. When all the suckers are back in- that's when Goldman pulls The Fed off the throttle. 

Wed, 05/14/2014 - 02:11 | 4757985 Incubus
Incubus's picture

Markets arent some kind of fucking transcendent human force.

 

for fucks sake, they're us.

 

my god the stupidity of people within any society is mind boggling.

Wed, 05/14/2014 - 10:04 | 4758701 Vendetta
Vendetta's picture

my derivative ponzi is doing just fine, I don't know what all the hubub is about.

Wed, 05/14/2014 - 10:37 | 4758866 DOGGONE
DOGGONE's picture

Lots of truth in what you wrote, I guess. Here is clear evidence for the "stupidity of people" you cite:
The Public Be Suckered
http://patrick.net/forum/?p=1230886

Wed, 05/14/2014 - 02:19 | 4757986 Son of Loki
Son of Loki's picture

Real Estate usually moves in cycles also an dlast time in the 1980s the Bust was cured by allowing the foreclosures to proceed, bankers went to jail (over720 of them) and house prices corrected down [alot] and after about 5 years recovered with greater stability.

This time is different and propped up by all sots of contortions and distortions and corruption of the system. The next correction will be massive, long and very serious imo, and it's just beginning:

 

7 places where home prices are falling

 

http://www.marketwatch.com/story/7-places-where-property-prices-are-fall...

Wed, 05/14/2014 - 02:58 | 4758017 giggler321
giggler321's picture

Energy crisis.  Sun spots, more of them often mean heat waves, fewer; the cold we get and as that happens we consume more energy which is expensive and causes consumption of other real products to fall and dips in the general economy.  Time that right, say in the middle of QE, low rates, LTRO and a bloated with corruption banking system would seem to be a recipe for a tail of unfortunate events.  I actually feel looking at the recent past, if K cycles are real, autumn start in 2000 and winter about 5years ago.

Wed, 05/14/2014 - 03:22 | 4758025 CHX
CHX's picture

Nikolai's cycle ended 1938. :-(

Wed, 05/14/2014 - 08:30 | 4758296 migra
migra's picture

Nobody has a clue on when something is going to happen in the market, unless, you are the type of somebody, that makes shit happen. Everybody else is throwing darts in the dark.

Wed, 05/14/2014 - 09:02 | 4758372 curbyourrisk
curbyourrisk's picture

Martin armstrong been saying 2017 as the worst times for some time.

 

THis is also highly correlated with the book, "The Fourth Turning"

 

 

Wed, 05/14/2014 - 09:10 | 4758402 andyupnorth
andyupnorth's picture

Canada, and more notably Montreal, will see a significant house price correction for the next few years... THAT's the wave I am expecting from 2015 to 2020.

Wed, 05/14/2014 - 09:22 | 4758460 Duude
Duude's picture

I expect the after-effects of the enactment of Obamacare will be most felt during this period of time as all the political delays expire. Business will be forced to deal with the congressionally-designed crisis, and with that, the population will suffer as well.

Wed, 05/14/2014 - 09:44 | 4758582 Shizzmoney
Shizzmoney's picture

This coincides with my "Presidental Turnover Economic Downturn" theory.  

It starts in 2015, right around the summer (that's when the debt ceiling debate gets going again, as they signed something 3 months ago putting it off until 08/2015 - just in time for the elections!).  Unlike in previous downturns, which were private sector bubbles (housing in 2008, dot.com in 2000, silver in 1980, oil/MEMA markets in the 1970s), this one will be about bonds, specifically government bonds...but also some corporate ones, too (like Caesar's Entertainment for example, who has over 18 billion in debt tied to corporate bonds).

The downturns near "turnover" presidental elections (where the POTUS is going to be new), IMO, happen for two reasons: 

A) Cyclical.  Ordinary people and business owners are genuinely worried about their tax rates.  1992's recession, brought on by war (and the taxes Bush I raised, that had to go up to pay for it) along with the S&L crisis, resulted in Clinton winning the presidency.

B) The oligarchs and corporate raiders love it because they use the turmoil to manipulate the masses into doing what they want (see: TARP and the Bunny Ransom).  Markets crash, panic/frustration ensues, the elites are pleaded to "do something", and 80% of us get a red+white+blue dildo jammed up our asses.

Wed, 05/14/2014 - 09:56 | 4758650 Republi-Ken
Republi-Ken's picture

HORSESHIT...!!!

That pre-destined neat and orderly fateful events happen is

pure liberatrian zoroastrianism crappola.

Wed, 05/14/2014 - 10:55 | 4758966 Ariadne
Ariadne's picture

Economic Cycle theorists, formerly wailing AGW doomers... led by big fat gay Al? 

Wed, 05/14/2014 - 10:56 | 4758974 teslaberry
teslaberry's picture

 

if I see more SHIT LIKE THIS I WILL STOP RECCOMENNDING ZEROHEDGE TO EVERYONE. 

 

THIS ARTICLE COULD  BE FOUND ON SEEKING ALPHA OR ANY OTHER DUMB ASS WALL STREET WEB SEWER. 

 

Wed, 05/14/2014 - 12:20 | 4759365 moneybots
moneybots's picture

"But we never learned the lessons that we should have learned from the last major economic crisis, and most Americans are way too apathetic to notice that we are making many of the very same mistakes all over again."

 

The lessons were learned in the 1930's and are still very well known today.  The problem is not having leaned the lessons of 1930 and 2008, the problem is that the insiders are taking full advantage of the lessons, to their benefit.  To the insiders, it wasn't a mistake that Glass Steagall was dismantled.  They profited handsomely from it.  They have profited handsomely from from TARP and QE, while massive financial fraud continues unabated.

 

 

Wed, 05/14/2014 - 12:30 | 4759423 moneybots
moneybots's picture

"The K wave is a 60 year cycle"

 

  "If we accept the fact that most winters in K cycles last 20 years (as outlined in the chart above)"

60 years divided by 4 seasons, would make winter about 12 years.

It is also 84 years since 1930.  On a 60 year cycle, it seems we should already be in the next cycle.

Wed, 05/14/2014 - 22:39 | 4761301 Radical Marijuana
Radical Marijuana's picture

As long as the rest of the natural environment was relatively big, compared to human beings, then human beings could drive cycles, like through their generations, by their own attitudes. However, we are reaching a new turning point where the strip-mining of planet Earth is reaching real limits, which were never reached before, except in much more localized and limited ways.

It is impossible to imagine how the current systems can avoid developing some different human and industrial ecologies, like the natural ecologies developed, in order to cope over the longer term. However, at present, all the entrenched, established systems are based on deliberately ignoring all of those factors and ideas, and so far, have been able to get away with that, due to having a fresh planet to strip-mine, with newly developed technologies.

The USA, and the industrialized world general, is NEVER going back to being able to strip-mine the natural resources of a fresh planet, in order to sustain exponential growth. There are theoretically possible alternatives, however, the obstacles in the way are that the actual murder/money systems are based on the history of maximum possible frauds and deceits, enabling the maximum possible attitude of evil deliberate ignorance, and criminal insanities, with respect to the longer term consequences of the short-term strategies. How we go through the process of running into the limits of the natural environment to be able to strip-mine is yet to be seen. I assume that first we will go through times of Peak Insanities, as we go through Peak Everything Else.

I believe that there are surely repeating patterns and cycles, but there are also spirals out into new events too. The problem is that REAL human ecology was based on murder systems that operated through the maximum possible deceits, which makes rational public debate about them practically impossible. The same problem applied to the financial system, which is operating on the maximum possible frauds. Any new human and industrial ecology is going to be based on new systems of death controls, and debt controls. How we get from here to there is extremely problematic, since how we do those things now is through the maximum bullshit promoted by the ruling classes to those they rule over, while some future, when people will not be so deliberately ignorant, dishonest and vicious, seems preposterous to imagine! The problems therefore are BIGGER than ever, since running into the limits of the planet's resources to be able to economically strip-mine has never happened before. Developing better ecologies to cope with that is theoretically possible, BUT, in practice, the current human ecology and political economy work through the maximum lies, backed by violence, within the human world, about what they are doing, and how they are doing that.

While I tend to find all of those listed theories of cycles presented in the article above interesting to think about, I believe we are entering a new spiral of events which is quite unprecedented. We DO have technologies which have become trillions of times more powerful and capable, but absolutely no sane social ways to cope with those coherently. The current systems of legalized lies, backed by legalized lies, are DOUBLE WHAMMY MADNESS, that are not merely driving social polarization, they are also driving destruction of the natural world, and are enabling awesome levels of deliberate ignorance towards the existence of real limits, to allow the consequences of that to pile up.

The paradoxical ways that we developed a civilization controlled by lies, backed by violence, makes coming to terms with real limits to the natural environment practically impossible to be done in any remotely rational way. I can not see how America, nor the rest of world, can keep doing anything like it used to be able to do. In theory we should change in radical ways, however, I expect that to actually happen only through continued deliberate ignorance, resulting in psychotic breakdowns of the established systems, which MIGHT open up opportunities for alternatives to emerge. As far as I can tell, it is absolutely impossible for human beings to rationally discuss the most important issue, which is how they are going to operate a human/industrial ecology, which lives within limits, and saves enough of the natural ecologies, rather than continues to grow exponentially, in ways which end up being extremely destructive! So far, we seem set to go through extreme overshoot, followed by catastrophic collapse, and then, probably will continue to be too collectively stupid to stop doing that again, several more times in the future.

I like to day dream about a series of political miracles whereby enough people started to be able to rationally discuss how to develop a better human ecology and industrial ecology, which could be integrated into the natural ecologies. However, since the ways that we actually run the human ecology and industrial ecology NOW are based on the maximum possible deceits and frauds, it is practically impossible to imagine how that could be done. Therefore, my basic expectation for the future is that we are primarily headed into times of Peak Insanities, as the ways that we will actually respond to Peak Everything Else, as the real limits of diminishing returns from strip-mining the planet's resources are reached. Therefore, I see us starting into a new cycle of future events, which have nothing to compare to within the previously known human history.

Do NOT follow this link or you will be banned from the site!