Of Generational Cycles, Kondratieff Waves, And Credit Expansion

Tyler Durden's picture


While cycle or wave analysis is often dismissed for its tough-to-utilize-going-forward nature, Charles Hugh-Smith and Gordon T. Long expertly and thoroughly discuss a myriad of critical processes that the world (and endogenously or exogenously human beings and markets) transitions through in this clip. The intersection of Hugh-Smith's four critical trends (generational (or Fourth Turning), wage-inflation/stagnation, credit expansion/contraction, and energy extraction/depletion) is where we find ourselves as he notes directly that the generational cycle (of four twenty-year cycles culminating in massive geopolitical upheaval) is due to climax in the not-too-distant future. This presentation, which builds on the idea of behavioral changes and the generational knowledge transfer that for instance is now missing from the last great depression (do we need to learn the lesson of "excess credit is bad" once again?), is akin to 'everything you wanted to know about long-waves in social, political, and economic cycles but were afraid to ask'.

Again and again throughout human history, we fall victim to excesses of credit creation as we lose the experiential wisdom to just-say-no. Other topics in this extensive but brief discussion include S-Curve tipping points in the life-cycle of financialization, the wedge of uncertainty in US stocks and how it ties into the coordinated easing of global central banks, the USD as last to fail (least worst) of the major currencies (and the criticality of EURJPY as a carry-trade cross unwind), how BoJ intervention trickles down into buying US Treasuries, and why interest rates will never be allowed to rise again due to the leverage and collateral contagion.

  • Introduction to around 5:00
  • Around 5:55 (to around 10:20) Charles Hugh-Smith discusses the intersection of four long-term cycles.
  • Energy dependency is briefly discussed from 10:20 and transitions into Martin Armstrong's economic confidence model - where critically the idea of the third generation (i.e. you learning from your grand-parents) as the tipping point in human experience.
  • At around 12:15 Charles and Gordon discuss the S-curve - in this case applied to the life-cycle of financialization and how debt has flipped from a positive to a negative now as we have crossed the saturation or tipping point.
  • Around 14:00 the two chaps discuss Coppock Curves and go on to the wedge of uncertainty that exists in the US equity markets.
  • At 16:20 Long ties in the coordinated easing from global central banks to this rising wedge formation in stocks and goes on at around 18:10 to note how he sees the USD as the last of the major currencies to fail
  • At 20:30 they begin to discuss the collateral contagion effects should interest rates ever be allowed to rise in the US (or Japan)
  • From 22:00 Long discusses his Gann analysis of the S&P 500 and the long-term dramatic downside he expects in nominal values for this index.


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Tue, 05/01/2012 - 23:17 | 2390147 LetThemEatRand
LetThemEatRand's picture

Only Ayn Rand could be more idiotic and self-deluded than this.

Tue, 05/01/2012 - 23:19 | 2390154 Dasa Slooofoot
Dasa Slooofoot's picture

Thanks for the review of a video that was posted 2 minutes ago and is 27 minutes long

Tue, 05/01/2012 - 23:25 | 2390171 LetThemEatRand
LetThemEatRand's picture

So I should ignore the detailed synopsis?  Read much slow guy?

Tue, 05/01/2012 - 23:33 | 2390199 The Big Ching-aso
The Big Ching-aso's picture



TBC Cliff Note Synopsis.....

If the economy got a Heimlich Maneuver it would cough up a giant hairball encased in pink slime.   Either way it doesn't look good.

Wed, 05/02/2012 - 01:47 | 2390349 Poor Grogman
Poor Grogman's picture



Ha the objectionable objector to objectivity strikes again with some more childish babble.

So boring, and yet so snarky.. at least Trav made sense occasionally.



Wed, 05/02/2012 - 03:37 | 2390422 A Nanny Moose
A Nanny Moose's picture

Trav seems to work an agenda developed by Trav. This particular tr0// just regurgitates the latest talking points it's been handed.

Wed, 05/02/2012 - 07:41 | 2390599 Nukular Freedum
Nukular Freedum's picture

He's got a point about objectivity/objectivism though. Notably how can one have these things in a Godelian/Heisenbergian universe such as ours is known to be?
Rand took her philosophy from long out of date classical philosophers (notably the discredited logic of Aristotle) with a sprinkling of Nietzsche and Adam Smith thrown in for spice and to give the whole thing the appearance of novelty. But really the whole system was grossly out of date before she ever posited it. But many fools have followed it all the same, notably Alan Greenspan of course.
That said Rand is a good writer who makes many great and thoughtful observations and the Fountainhead is even a great if flawed novel. But the system, Lord how it sucks.

Now the sheepsies among you I want you to listen carefully to what I have to say next: please click on the red (not the green the red) arrow on the screen to your left. There, now that was easy wasnt it?

Wed, 05/02/2012 - 08:18 | 2390685 mtomato2
mtomato2's picture

Your post was sort of good until the end, then it sucked.  You discredited any points you may have accidentally stumbled upon then regurgutated.

Put your thumb back in your mouth and shut up.

Wed, 05/02/2012 - 09:05 | 2390807 Nukular Freedum
Nukular Freedum's picture

Yes but its working though mt!
How to ward off the red arrows. Youve know idea the amount of time and money that went into that project. ;-)

Wed, 05/02/2012 - 09:09 | 2390829 mtomato2
mtomato2's picture

Just know I didn't red you.  I do try.

Wed, 05/02/2012 - 08:53 | 2390773 GMadScientist
GMadScientist's picture

Definitely the 'Deepak Chopra' (philic?) of her time.

Glad to see someone on ZH that doesn't think they're "J. Galt" because they have their own lawnmower.


Wed, 05/02/2012 - 09:07 | 2390819 Nukular Freedum
Nukular Freedum's picture

Made me laugh gms (as ever!)

Wed, 05/02/2012 - 13:30 | 2391622 Poor Grogman
Poor Grogman's picture


Objectivity/objectivism sure beats the lame MSM talking points posing as wisdom, that we see daily.

The ability to make rational decisions and gather knowledge is as usefull today as it has ever been.

Its simple really, why not give it a try sometime?


Wed, 05/02/2012 - 06:14 | 2390500 ihedgemyhedges
ihedgemyhedges's picture

Let me guess: you read the Obamacare plan too.  THE WHOLE THING, right?  How long that take, 15 minutes or so?????????

Wed, 05/02/2012 - 09:01 | 2390797 GeezerGeek
GeezerGeek's picture

He probably read the executive summary:

1) Obama has saved you all by providing free healthcare for everyone

2) It will cost you nothing, because employers will foot the bill

3) Overall healthcare spending will be lower thanks to Obama


i) don't bother to read the details, there's nothing important there

ii) if you're on Medicare, please report to your assigned death panel

iii) all your privacy, not to mention your bodies, belongs to the government

Wed, 05/02/2012 - 08:15 | 2390681 mtomato2
mtomato2's picture

LTER, as I have personally demonstrated in the past to be chock full -'o- nuts, is just another iteration of Harry Wanger/RoboTrader/Million Dollar Bogus.  Bonus.  Sorry.

When he (she? it?) begins to contribute meaning and direction, then it will be appropriate to respond to its posts.  Until then, remember what your mom told you:  ignore it and it will go away.

Wed, 05/02/2012 - 08:29 | 2390709 BigJim
BigJim's picture

 So I should ignore the detailed synopsis?  Read much slow guy?

Give it up, you intellectually dishonest motherfucker. You got totally pwned.

Tue, 05/01/2012 - 23:24 | 2390173 CURWAR2012
CURWAR2012's picture

ignorance is bliss and a bitch, please educate yourself

Tue, 05/01/2012 - 23:26 | 2390177 LetThemEatRand
LetThemEatRand's picture

Are you bitch or bliss?

Wed, 05/02/2012 - 03:44 | 2390424 A Nanny Moose
A Nanny Moose's picture

Mommy and daddy letting you use the Interwebz again?

That's two posts we'll never get back.

Tue, 05/01/2012 - 23:26 | 2390179 Dan The Man
Dan The Man's picture

stunning denial

Tue, 05/01/2012 - 23:27 | 2390185 lordbyroniv
lordbyroniv's picture

Lotta CIA spooks on ZH of late.

Wed, 05/02/2012 - 00:52 | 2390314 Fish Gone Bad
Fish Gone Bad's picture

There are probably a lot of all kinds, including banking interns.

Wed, 05/02/2012 - 02:50 | 2390380 Equites
Equites's picture

How very true - yet not just interns...

Tue, 05/01/2012 - 23:25 | 2390167 Irwin Fletcher
Irwin Fletcher's picture

Re: WTf?:: "endogenously or exogenously human beings and markets"

I believe Charles High Smith is asserting that corporations are people too, and we will all fall victim when they climax. 

Tue, 05/01/2012 - 23:25 | 2390174 chump666
chump666's picture

wow excellent analysis!  Japan and UK printing to buy UST's!!!

Pure insanity.

Tue, 05/01/2012 - 23:26 | 2390176 SAT 800
SAT 800's picture

Bought one Sept. CME Silver contract this evening at 30.955. And yes, that is my comment./

Wed, 05/02/2012 - 03:30 | 2390416 Transformer
Transformer's picture

And then, there's the "Corzine effect" to worry about.

Wed, 05/02/2012 - 07:00 | 2390554 MajorWoody
MajorWoody's picture

pick up or delivery?

Wed, 05/02/2012 - 16:34 | 2390578 New World Chaos
New World Chaos's picture

You would only pay a ~3% premium (before shipping) to get 5000 nice Bartertown-friendly silver buffalos right now.  3% is less than the probability of the whole system blowing up by September.  It is less than the lawyer fees you will pay to pry your five unspendable 1000oz bars out of the COMEX if it is still functional.  It is less than what the taxman will pry from you at some point if you go through the system.  And please tell me you're immune to the paper beat-down/margin hike one-two suckerpunch... 

Tue, 05/01/2012 - 23:30 | 2390186 rosiescenario
rosiescenario's picture

One thing we know is a certainty and that is it will be some totally unpredicted event or series of them that craters the market.


For example, no one predicted 911 yet it is resposible for a massive increase in the Federal government's exercising control over our lives today and it has us embroiled in ME wars that we have absolutely no business being in except that they are saleable today to the public due to 911 and they serve the interest of several very powerful special interest groups.


My bet is that, while we are scurrying around in fear of the next terrorist plot we experience a natural disaster of a mega variety for which no one has given a thought. Very much akin to what happened in Japan.

Tue, 05/01/2012 - 23:31 | 2390194 Milton Waddams
Milton Waddams's picture

To be fair, Project for a New American Century sort-of predicted 9/11.  Perhaps promised instead of predicted, but no need to split hairs...

Tue, 05/01/2012 - 23:50 | 2390234 Fish Gone Bad
Fish Gone Bad's picture

Believe it or not, a lot of things happen and are planned without discussing it with the general public.  Wars happen because wealth needs to be redistributed. 


Wed, 05/02/2012 - 07:19 | 2390572 nick howdy
nick howdy's picture

PNAC neo-conservatives who became part of Bush's administration made sure our guard was down on 9/11 . Everything was set up to assure plausible deniability...

Look who benefited from 9/11...It was not the American people..Just MIC and the Oligarchs.

Wed, 05/02/2012 - 04:30 | 2390450 MeelionDollerBogus
MeelionDollerBogus's picture

Totally predicted on this show from Chris Carter:

http://youtu.be/z3WW6eoLcLI Lone Gunmen

Wed, 05/02/2012 - 07:40 | 2390595 New World Chaos
New World Chaos's picture

I saw that episode when it first aired in spring 2001.  The conspiracy geeks foiled a plot to fly a passenger jet into the WTC by remote control.   No wonder the show was cancelled by FOX.

Tue, 05/01/2012 - 23:57 | 2390242 Freebird
Freebird's picture

Can we get a gag order on this Rand guy - he's been spewing shite for days now

Wed, 05/02/2012 - 00:46 | 2390310 CH1
CH1's picture

He serves his masters well.

Wed, 05/02/2012 - 08:08 | 2390655 smb12321
smb12321's picture

NO, don't gag anyone.  One of the problems with sites like this is that posters, over time, become even more wedded to their ideas because all they hear are reinforcing comments. You need the other side although I have yet to figure out what anti-Rand guy is up to.  Does he want socialism, more massive debt or what?  The only sure thing is that he is definittely for control, planning and centralized authority and against libertarianism (though he never says why).  Listen to others and learn.

Wed, 05/02/2012 - 08:26 | 2390701 BigJim
BigJim's picture

From what I can make out, he wants lots of wealth distribution in the form of government handouts for the poor, but also wants to end the Fed.

He doesn't seem to understand that the Fed is the great enabler of all the existing handouts, and attempting to reason with him just results in your getting called a Randian, babycorpse-eating tool of the Oligarchs.

Tue, 05/01/2012 - 23:59 | 2390247 pashley1411
pashley1411's picture

Inchoherent babble.

Wed, 05/02/2012 - 00:14 | 2390273 q99x2
q99x2's picture

You can count the crooks on wall street and come to the same conclusion. Bankster terrorists need to be rounded up and thrown into prison before they start WWIII.

Give me a current condition and I'll sell you a book filled with what caused it. Perfectly logical. Hey that's a good idea.

Wed, 05/02/2012 - 00:34 | 2390291 chestnut13
chestnut13's picture

Is it just me or can anyone else hear the response commentary by Hughes-Smith .... I can't hear it.

Wed, 05/02/2012 - 09:17 | 2390848 mtomato2
mtomato2's picture

You need a right channel feed from you digital device.  It was annoyingly recorded with one commentor on the left channel and the other on the right.  Not sure why.  Neither voice will show up in my center channel, my speaker of chioce.  I would love it if they didn't do that.  It makes the production sound like a Jr. High media class put it together.

Wed, 05/02/2012 - 00:39 | 2390295 mcguire
mcguire's picture

we are reaching the singularity... it will either be skynet, the 4th reich, or the second coming.  any other christians out there?  i couldn't help but think of the olivet discourse when listening to this.. 

Wed, 05/02/2012 - 09:08 | 2390827 GMadScientist
GMadScientist's picture

All Three: "Seig Heil Compu-Christ!"

Mark 13:32

Wed, 05/02/2012 - 09:19 | 2390854 mtomato2
mtomato2's picture

I am.  And aside from RFID chips being injected under the skin on the back of my hand or my forehead, I can't for the life of me figure out what comes next.  At least based on the missives of John.

Wed, 05/02/2012 - 00:49 | 2390312 chestnut13
chestnut13's picture

wtf .... can anyone hear the hughes-smith commentary???? Even on the website I can't hear it.

Wed, 05/02/2012 - 03:12 | 2390390 FullFaithAndCretin
FullFaithAndCretin's picture

Its the mixing. They have panned each voice 100% left or right so you need to hear both stereo channels to hear both voices.

Wed, 05/02/2012 - 01:58 | 2390358 skepticCarl
skepticCarl's picture

It's just 4 cycles converging?  What about the illuminati, the Bilderbergs, the Rothschilds, the MOSSAD, those spooks who killed Kennedy and perpetrated 9-11, the boomers, sunspots, global climate change, JPM silver manipulation, and Astrology?  Those guys have yet to scratch the surface.

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