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Thread: Other Cycles (Reference)







Post#1 at 08-31-2012 01:08 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Other Cycles (Reference)

In this thread I will store posts dealing with other cycles that I believe to be aligned with the saeculum. It's for reference to my comments on other posts in other threads







Post#2 at 08-31-2012 01:11 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Stock Cycle
The first cycle is the Stock Cycle which I track with my valuation tool price to (business) resources (P/R). I published a book about the Stock Cycle in 2000. It was subtitled “why stocks won’t beat money markets for twenty years”, which was the central prediction made by the book. This argument was that after 18 years of good stock returns (a secular bull market) we were poised for a period of similar length during which stock returns would be poor. That the turning point was imminent was indicated by the value of P/R. This prediction was correct.

In fall 2002 I used P/R to predict that the stock market had declined enough that a new bull market could develop (which would still be within the larger secular bear market). In that article I compared P/R with two similar measures, Shiller’s P/E and Tobin’s Q. The latter two measures had predicted the end of the secular bull market for 1997 compared to the prediction of 1999 by P/R. The actual end was 2000; P/R had done the best job of the three at that time. In fall 2002, these two measures were saying that the market had much further to drop, whereas P/R was saying it had dropped enough. We now know that a bull market started in fall 2002 and ran for five years. P/R made the right call, P/E and Q did not.
With two successes, on 20 November 2008 I put all my cash into the S&P500 index because P/R had reached a “BUY” level as it had in 2002. Other than sixteen days in March 2009, the index has been at or above my buy level in the nearly four years since then and is currently 85% above that level. I consider this a third successful prediction made by P/R. With three successful “experimental tests” plus the supporting theoretical evidence presented in my books and articles, I consider the Stock Cycle and P/R as an empirically validated cycle and valuation tool. That is, I believe there is enough proof to say that the cycle is real.







Post#3 at 08-31-2012 01:17 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Kondratiev Cycle
The second cycle is the economic long wave, also known as the Kondratiev cycle (K-cycle). The initial case for the long wave was made by ND Kondratiev in the 1920’s. Kondratiev noted a aligned fifty year cycle in commodity price indices for a number of countries. For the US, prices rose from about 1790 to 1814, fell to a trough around 1843, rose to 1864, fell to 1896 and rose to a 3rd peak in 1920, and were again falling at the time of Kondratiev’s writings. Kondratiev also noted that interest rates showed an analogous cycle closely aligned with the price cycle. Based on his cycle Kondratiev predicted a major depression would occur from which the capitalist economies would eventually emerge renewed.

Kondratiev’s successful prediction and the empirical reality of past cycles, gave rise to considerable interest in long cycles. However, since the 1920’s the neat price cycles have not happened, since the 1930’s we have experienced a nearly monotonic rising price trend. Interest rates did continue to cycle, showing a trough in 1946 and peak in 1981.

I developed a tool I call reduced price, which detrends price data allowing any underlying cycle to be visualized. When applied to post-1790 price data it showed the same peaks and troughs shown by the raw price index up through the 1920’s. After the 1920’s it revealed a trough in 1946 and peak in 1981 (see Figure 2 in in this article). That is, the post-1930 reduced price cycle corresponded exactly with the interest rate cycle. Having made a plausible argument, it was now necessary to obtain some experimental proof. That is, I needed to make an empirically verifiable prediction and then see if it came true or not. In the latter case this would falsify the hypothesis. This point is important because falsifiable hypotheses is what makes an inquiry scientific, as opposed to philosophical, ideological or theological.

The choice I made was the prediction of a fall from plateau event, which marks the divider between the early down wave (period of falling prices/interest rates) and the late down wave. The early and late portions of the long waves are often given seasonal names, Spring and Summer for the up wave, Fall and Winter for the down wave. Following the 1981 peak we then entered a Fall period which would end when the fall from plateau even occurred. By 2002 I was expecting this to happen very soon, based on the established Stock Cycle peak in 2000, and 911 in 2001, which I (like many here) considered an obvious marker for the 3T/4T divider. When it failed to materialize I didn’t know whether the long wave was no longer functional, whether the fall has occurred and was simply masked as the price cycle has been since the 1930’s, or that it simply hadn’t happened yet. Then the Federal Reserve stopped publishing M3 data and I couldn’t calculate reduced price anymore so I stopped following it.

Then came 2008 and we had an old-fashioned Panic, the sort of thing just about everyone(including me) believed was a relic of the past. Previous fall from plateau events had been accompanied with Panics, could we have fallen off? So I dug up M3 estimates from the Shadow statistics website and extended the reduced price up through 2008 and into 2009. Sure enough, we clearly fell off the plateau in 2008, the plot looks just like the previous ones in 1873 and 1929:

So the experiment was a success. The next cycle marker is the Kondratiev trough which is still about a decade away, so there will be no more experimental evidence forthcoming for a while.

I now note than the validated Stock Cycle appears to be a binary sub-harmonic of the long wave. The turning point of both cycles correspond to each other in a statistically significant fashion:
Stock Cycle K-cycle Difference
1843 1842 1
1861 1864 3
1881 1873 8
1896 1896 0
1921 1920 1
1929 1929 0
1949 1946 3
1982 1981 1
2000 2008 8
Average -- 3

The K-cycle alignment with interest rates and the validated Stock Cycle, the regularity of the cycle over more than two centuries, and the single experimental verification, collectively provide a strong argument in favor of the conclusion that the long wave is a real cycle.







Post#4 at 08-31-2012 01:23 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Political Cycle
Another cycle is the political cycle proposed by Arthur Schlesinger Sr. in the 1940’s. The figures from the referenced article are missing, I was able to find another copy of Figure 1 here.

In the referenced article and book on the topic I made use of a technique I call event density analysis that is designed to identify eventful eras of history in an effort to look for noneconomic historical cycles. After discussions with John Xenakis at this site around 2004-5 I reexamined this methodology using a more rigorously constructed data set and found that the 99.9+ significant cycle correlations I had previously found fell to around 90% significance. Furthermore adding more data for analysis failed to improve the significance. This finding makes event density analysis less solid that I had previously thought. A problem with the figure is that liberal eras are not only associated with a higher ratio of liberal to conservative events, but they feature more events (they are activist times). When you are selecting events from the remote past using timelines constructed by historians, you tend to sample only events seen as significant from the perspective of the future. When one is selecting events from the present it obviously cannot reflect the effects of a future significance filter, since the future is still in the future. The result is likely an oversampling of events from recent periods making them look more like liberal eras than perhaps they will eventually appear to a future observer doing the same analysis using a historical timeline covering the present. In other words, it is likely that this method does not work for near real-time analysis.

This means there is no empirical analysis for the political cycle. My inclination would be to not bother with political issues because they are so intractable for analysis. But the theoretical explanation for why the near-validated economic cycles described in the previous posts happen makes heavy use of the political cycle. If the theory is valid, then politics is relevant, and needs to be considered even if it is hard to study.

There is one empirical test that can be applied. Loosely associated with the political cycle as defined by Schlesinger is the concept of critical elections. There are certain highly significant elections that feature a shift in who holds political power and a significant change in policy direction. Dates for previous critical elections are usually given as 1800, 1828, 1860, 1896, 1932, and 1980 (some say 1968). A critical election can be identified by several properties of the election itself, high turnout, “wave nature”, and a change in the policy mix reflecting a shift in political ideology.

The first candidate for a critical election I considered was 2004. In 2002, Republicans gained a 4 year period when they were in control during which they launched a war of choice, cut taxes on investment incomes dramatically and pass a massive new entitlement program, all without any mechanism for payment. This is a pretty ambitious agenda and reflects some substantial shifts in direction from what previous Republican administrations chose to pursue. The 2004 election confirmed this arrangement, and by doing so it fit the change in policy mix criterion. On the other hand, the 2004 election did not feature high turnout, nor was it a wave election. Nevertheless, had the 2004 election led to a lengthy period of Republican dominance, I would consider it a critical election. This did not happen, Republicans lost Congress in 2006 and the Presidency in 2008, ruling out 2004 as a candidate.

The 2008 election and the next two years has all the characteristics of a critical election. The fly in the ointment is the 2010 election which was a counter wave election that neutered Democratic control of Congress and stopping any further shifts in policy mix. Should Romney win this fall this eliminates 2008 as a candidate, and 2012 becomes the next candidate for consideration.
If Obama wins then we have to wait until 2016 for verification or elimination of 2008 as a candidate. Democratic victory in 2016 will give three Democratic terms in a row, something not seen in 64 years, which I would establish 2008 as a critical election. If Democrats lose, then 2016 would become the next candidate. At this point the whole idea of an aligned political cycle will probably be no longer tenable.







Post#5 at 08-31-2012 01:26 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Generational saeculum
The final cycle I use is the Strauss and Howe saeculum, with which you all are familiar. There are no empirical markers for this cycle to my knowledge. I have come up with no valid experimental test/prediction that I can use to establish cycle location. All I have been able to do is use the assumption that the saeculum is presently aligned with the three cycles described above. This approach gives different results depending on whether one uses the Stock Cycle or the K-cycle. Using the former, I forecast in August 2000 that the 4T would start soon. And when 911 went down, I felt this made a great case for the start of the 4T in 2001. This date was also consistent with the 18-year turning fixed turning length I favored at this time. All that was required for confirmation was a fall from plateau event in the near future, which I believed in early 2002 was already underway.

The fall from plateau did not happen then, reduced prices turned around and went right back onto the plateau. Years went by and no fall from plateau materialized. Furthermore, the supposed 4T was not developing at all like what one might expect a 4T to look like and more and more people at the site were talking about a phony 4T, and that the post-2001 era was simply an extension of the 3T. I strove to find more support, trying to interpret the 2004 election as a critical election, which I eventually had to abandon. As time went on the 18-year model looked more and more untenable, and I looked for a mechanism. Around 2005 I found one, the paradigm model, which allowed a prediction of 2006 to be made for the 3T/4T boundary. This date made the 2005 forecast Strauss and Howe made in 1997 look pretty good, should it pan out. Then in 2008 we finally got the fall from plateau and so now I had two validated markers, 2000 and 2008. Each had its own theory which supported it, the 18-year turning for the former and the paradigm model for the latter. The elimination of 2004 as a critical election cast a vote against the 2001 date. Should 2008 be identified as a critical election, this would put two indicators on 2008 and one on 2001, with an explanatory theory backing 2008.

For the purposes of discussion I will simply assume a 2008 start of the 4T as conclusive evidence is not currently available.







Post#6 at 12-23-2012 11:35 AM by Xav [at Montréal, Québec - Canada joined Dec 2012 #posts 3]
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Quote Originally Posted by Mikebert View Post
Kondratiev Cycle
The next cycle marker is the Kondratiev trough which is still about a decade away, so there will be no more experimental evidence forthcoming for a while.
Mike,
Do you still locate the Vortex in reduced prices in 2009 as per your graph? What about reaching a DG-Peak prior to the K-Trough?







Post#7 at 12-23-2012 03:57 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Quote Originally Posted by Xav View Post
Mike,
Do you still locate the Vortex in reduced prices in 2009 as per your graph? What about reaching a DG-Peak prior to the K-Trough?
The DG peak concept reflected that the previous three downwaves had featured a boom after the fall from plateau depression. The end of that boom was the DG peak. If the pattern persists there will be a DG peak this time too, but because of the tepid nature of this recovery I doubt it will be recognizable in anything close to real time. One we are in the next upwave, it will be a simple matter to plot out reduced price and see the DG peak and trough. THe only reason why I think the trough might be a little easier to recognize is I'll have help from the Stock Cycle, it should be associated wiuth a veyr low P/R of abouit 0.25. Also it should be close to the 4T/1T boundary and by then hopefully we folks here might be better at picking these things up. But the DG peak has no other supporting cycle markers and so it will be hard. I'll be looking of course, but I don't expect to know when it is here for sure.

As it is I screwed by the 3T/4T boundary calling it in 2001 instead of 2008.







Post#8 at 12-23-2012 04:15 PM by JonLaw [at Hurricane Alley joined Oct 2010 #posts 186]
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I'm glad to see that your are consolidating your data.

Of course the stock cycle is real.

I think that the last major credit bubble is what pushed the 3T/4T boundary.

It's my opinion that the entire system is directly related to credit, although I'm much more interested in 2T's than anything else, because they provide the spiritual awakenings, which are caused by the austerity/high turning.

What occurred after the 2000 P/R peak was the transfer of credit expansion away from the stock market and into the housing market. This blow off credit bubble extended the psychological effects of the 3T into 2007.

So the stock market is no longer directly aligned to the turnings as it was during the last 3T/4T transition because the credit continued to expand.

I think that you need to look at The Total Credit Market Debt as a percent of GDP to call the turning.

http://www.economagic.com/em-cgi/dat...otalcreditdebt

We will know when the 4T ends when we reach a trough in Total Private Credit Market Debt as a percent of GDP.

Thoughts?
The future always casts a shadow on the present.







Post#9 at 12-23-2012 05:03 PM by Xav [at Montréal, Québec - Canada joined Dec 2012 #posts 3]
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Quote Originally Posted by Mikebert View Post
The DG peak concept reflected that the previous three downwaves had featured a boom after the fall from plateau depression. The end of that boom was the DG peak. If the pattern persists there will be a DG peak this time too, but because of the tepid nature of this recovery I doubt it will be recognizable in anything close to real time. One we are in the next upwave, it will be a simple matter to plot out reduced price and see the DG peak and trough. THe only reason why I think the trough might be a little easier to recognize is I'll have help from the Stock Cycle, it should be associated wiuth a veyr low P/R of abouit 0.25. Also it should be close to the 4T/1T boundary and by then hopefully we folks here might be better at picking these things up. But the DG peak has no other supporting cycle markers and so it will be hard. I'll be looking of course, but I don't expect to know when it is here for sure.

As it is I screwed by the 3T/4T boundary calling it in 2001 instead of 2008.
Thanks. Well, since 2000 it would be difficult to deny that things are unfolding as you expected. And this is probably a gross understatement.

To help spot the K trough in terms of the stockmarket cycle -- If we locate the last three ordinary 3rd tops in June 1911, October 1939, January 1973 and their corresponding K troughs in December 1920, June 1949, August 1982 (if I am not mistaken), the time difference is respectively 114, 116 and 115 months. Not wanting to be too much obsessed with constants, especially as the K is lengthening as you well explained -- but the regularity of the second half of the last three secular bears is impressive.
Speaking of which -- As regards the current 45-month old ordinary bull towards this Winter's 3rd top with I understand a P/R stalling below 0.8, what is your view?







Post#10 at 12-23-2012 05:06 PM by JohnMc82 [at Back in Jax joined Jan 2011 #posts 1,962]
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Does the DJIA represent anything meaningful anymore? A few times in the last years, the average has received a boost from companies being swapped off and on the list.

This was an interesting overlap display:



"This shows the Dow from 1924 to 1939 [blue] and the Nasdaq from 1995 to September 2008 [red]"


In another context, we can compare equities against gold to see a long cycle:



This shows predictable 14 year periods where gold outperforms stocks, and since the last one started in 1999 we might expect the trend to reverse again in 2013. (TBTF Bull Market, or just a gold crash?) This particular approach has the advantage of ignoring noise caused by currency fluctuations.
Those words, "temperate and moderate", are words either of political cowardice, or of cunning, or seduction. A thing, moderately good, is not so good as it ought to be. Moderation in temper, is always a virtue; but moderation in principle, is a species of vice.

'82 - Once & always independent







Post#11 at 12-23-2012 05:34 PM by Chas'88 [at In between Pennsylvania & Pennsyltucky joined Nov 2008 #posts 9,432]
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Religious Cycle

http://www.pbs.org/godinamerica/view/

~Chas'88
"There have always been people who say: "The war will be over someday." I say there's no guarantee the war will ever be over. Naturally a brief intermission is conceivable. Maybe the war needs a breather, a war can even break its neck, so to speak. But the kings and emperors, not to mention the pope, will always come to its help in adversity. ON the whole, I'd say this war has very little to worry about, it'll live to a ripe old age."







Post#12 at 12-23-2012 06:04 PM by The Grey Badger [at Albuquerque, NM joined Sep 2001 #posts 8,876]
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Quote Originally Posted by Chas'88 View Post
Religious Cycle

http://www.pbs.org/godinamerica/view/

~Chas'88
Chas - I don't want to sit here in front of the computer and watch an entire PBS miniseries, but it's my guess this series was tracking America's four Great Awakenings. Right?
How to spot a shill, by John Michael Greer: "What you watch for is (a) a brand new commenter who (b) has nothing to say about the topic under discussion but (c) trots out a smoothly written opinion piece that (d) hits all the standard talking points currently being used by a specific political or corporate interest, while (e) avoiding any other points anyone else has made on that subject."

"If the shoe fits..." The Grey Badger.







Post#13 at 12-23-2012 07:07 PM by Chas'88 [at In between Pennsylvania & Pennsyltucky joined Nov 2008 #posts 9,432]
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Quote Originally Posted by The Grey Badger View Post
Chas - I don't want to sit here in front of the computer and watch an entire PBS miniseries, but it's my guess this series was tracking America's four Great Awakenings. Right?
Correct. It does. I'm going to elaborate later, but I'm in the middle of making dinner. Sort of reserving my "spot" so to speak.

~Chas'88
"There have always been people who say: "The war will be over someday." I say there's no guarantee the war will ever be over. Naturally a brief intermission is conceivable. Maybe the war needs a breather, a war can even break its neck, so to speak. But the kings and emperors, not to mention the pope, will always come to its help in adversity. ON the whole, I'd say this war has very little to worry about, it'll live to a ripe old age."







Post#14 at 12-23-2012 09:34 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Quote Originally Posted by JonLaw View Post
What occurred after the 2000 P/R peak was the transfer of credit expansion away from the stock market and into the housing market. This blow off credit bubble extended the psychological effects of the 3T into 2007.
This is true enough.

So the stock market is no longer directly aligned to the turnings as it was during the last 3T/4T transition because the credit continued to expand.

I think that you need to look at The Total Credit Market Debt as a percent of GDP to call the turning.
Debt used to be linked to the K-cycle, peaking at the K-peak and bottoming at the K-trough. It helped drive the cycle from the late seventeenth century (when central banking developed) until the end of WW I. Debt is now uncoupled.

The stock cycle and the K-cycle are only loosely coupled. Although a secular bull market peak and K-fall to winter change happened in the same year in 1929, in the previous cycle they were spaced 8 years apart, the season changed in 1873 and the bull market peak in 1881. So the 2000/2008 split is not unprecedented.

The apparent alignment between turnings and K-seasons/secular market trends is of very recent vintage and may be an artifact. So far the alignment since 1929 is still pretty good considering the entire record:

Saec K-cycle Stock
1435 1435
1459 1464
1487 1490
1517 1519
1542 1554
1569 1581
1594 1598
1621 1625
1649 1657
alignment shift
1727 1715
1746 1738
1773 1770
1794 1787
1822 1813
1844 1842
1860 1863
alignment shift
1929 1929 1929
1946 1946 1949
1964 xxxx 1966
1984 1981 1982
2008 2008 2000

On average the discepancy is about 15-20% of a turning length and can exceed 40% of a turning length. Usuing more cycles improves precision, which is one reason why I began to work with the political cycle.







Post#15 at 01-12-2013 10:14 PM by JonLaw [at Hurricane Alley joined Oct 2010 #posts 186]
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Here's another gem for you, Mike, regarding the four-year cycle.

The Fed's got the liquidity spigot open to full, so this could go on longer.

"Calculating from the Four-Year Cycle low in 2009, the next cycle low is due in two months, but unless there is a major crash, that projection will not be realized. In fact, we can't even say that there has been a cycle crest yet, although, given the proximity of current prices to the tops in 2000 and 2007, it is likely that a long-term top will be put in soon.Obviously, the Four-Year Cycle does not repeat at exact intervals -- the last one lasted almost six years from trough to trough -- and it appears that the current cycle is going to be extra long. A "normal" downside for the cycle is about 18 months, so an educated guess as to when the price low might hit is about mid-to-late-2014.

To summarize, the ten-year trading range of the S&P 500 Index suggests that a major price top should be arriving sometime in the first half of 2013, maybe within three months. After that the Four-Year Cycle low (price low) projection would be for the last half of 2014, unless the decline is exceptionally accelerated."

http://blogs.decisionpoint.com/chart_spotlight/2013/01/20130104cs.html
The future always casts a shadow on the present.







Post#16 at 01-13-2013 02:13 AM by Eric the Green [at San Jose CA joined Jul 2001 #posts 22,504]
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Astrological cycles:

Cycle of Civilization (Neptune-Pluto mutual cycle) 493 years
Pluto solar revolution (around the zodiac) 248 years; return significant; 1/2 of civilization cycle
Neptune solar revolution 165 years, the zeitgeist indicator by sign; double rhythm of saeculum
Cycle of Revolution (Uranus-Pluto mutual cycle) variable; average 127 years
Uranus solar revolution 84 years = 1 saeculum, returning great crisis for the USA
Saturn solar revolution 29 1/2 years - political cycles
Jupiter-Saturn mutual cycle almost 20 years - the establishment's agenda; changes in rulership; decade themes
Jupiter solar cycle almost 12 years - important for US foreign policy; related to solar sun spot cycle
"I close my eyes, and I can see a better day" -- Justin Bieber

Keep the spirit alive,

Eric A. Meece







Post#17 at 01-13-2013 12:10 PM by JonLaw [at Hurricane Alley joined Oct 2010 #posts 186]
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Quote Originally Posted by Eric the Green View Post
Astrological cycles:

Cycle of Civilization (Neptune-Pluto mutual cycle) 493 years
Pluto solar revolution (around the zodiac) 248 years; return significant; 1/2 of civilization cycle
Neptune solar revolution 165 years, the zeitgeist indicator by sign; double rhythm of saeculum
Cycle of Revolution (Uranus-Pluto mutual cycle) variable; average 127 years
Uranus solar revolution 84 years = 1 saeculum, returning great crisis for the USA
Saturn solar revolution 29 1/2 years - political cycles
Jupiter-Saturn mutual cycle almost 20 years - the establishment's agenda; changes in rulership; decade themes
Jupiter solar cycle almost 12 years - important for US foreign policy; related to solar sun spot cycle
Yeah.

I'll go with Mike Alexander since he's a chemical engineer who knows how to use data and actually knows what he's talking about.
The future always casts a shadow on the present.







Post#18 at 01-13-2013 09:38 PM by Eric the Green [at San Jose CA joined Jul 2001 #posts 22,504]
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Quote Originally Posted by JonLaw View Post
Yeah.

I'll go with Mike Alexander since he's a chemical engineer who knows how to use data and actually knows what he's talking about.
I'm sure the majority here agree. But for those who actually look at the data, there's no doubt about the meaning of these cycles; and that they are far more regular and reliable.
"I close my eyes, and I can see a better day" -- Justin Bieber

Keep the spirit alive,

Eric A. Meece







Post#19 at 01-18-2013 03:42 AM by Kepi [at Northern, VA joined Nov 2012 #posts 3,664]
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I wouldn't be surprised if the credit cycle ends in either this saeculum or the next with the renewed interest in the applied Chicago Plan, which was developed in 1939 following the recession in 1937-8. I think, had WWII not interupted the US's crisis with a truly global concern, the US would have adopted this course of action before the 1T.

As it stands a 100% Reserve System, standardized cost of living/standardized monitary value would be extremely beneficial to the US and would help afford our aging population, especially when it comes to the increasing demands on the healthcare system which are emminent.







Post#20 at 01-18-2013 11:19 AM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Quote Originally Posted by Kepi View Post
I wouldn't be surprised if the credit cycle ends in either this saeculum.
To what cycle are you referring? I am not aware of any actual cycle in credit. I've seen the term used, but never an actual demonstration of its existence. These is an interest rate cycle, but this is not the same thing as a cycle in debt or normalized debt.

Government debt used to show cycles with peaks associated with wars, in effect a war cycle. The peaks in war-related debt coincided with Kondratiev peaks. This cycle was operative between the Thirty Years War and WW I. Since WW I the war cycle has not been operative and after 1929 government debt stopped showing regular cycles. By this time government debt was no longer dominant, private debt was and total debt has more or less shown a trend rather than a cycle since then. So I don't think a concept of a credit cycle is useful for understanding the modern world.

Cycle drivers come and go. The mechanism I believe was operative in Medieval and early Modern times, cycles of Mathusian feast and famine, ceased being dominant in the 17th century (when the war cycle became the dominant factor) and stopped having any influence at all by the 19th century. Today I believe the driver is the paradigm as it affects politics in the US leading to policy that impacts not only America, but the rest of the world through America's role as hegemon. It has been operative since WW I, when it took over from the war cycle, and will probably cease being so after America's hegemonic power has subsided.







Post#21 at 01-19-2013 01:12 AM by Kepi [at Northern, VA joined Nov 2012 #posts 3,664]
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I'm pretty sure the interest rate cycle is another term for the credit cycle. Sure, it'd be more accurate to call it the price of credit cycle, but whenever someone has used the term "credit cycle" I assumed it was reference interest rates, and I never ran into confusion with what I was reading.







Post#22 at 01-19-2013 12:10 PM by JonLaw [at Hurricane Alley joined Oct 2010 #posts 186]
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01-19-2013, 12:10 PM #22
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Quote Originally Posted by Mikebert View Post
By this time government debt was no longer dominant, private debt was and total debt has more or less shown a trend rather than a cycle since then. So I don't think a concept of a credit cycle is useful for understanding the modern world.
Private sector debt as a percentage of GDP is the current relevant credit cycle that seems to be related to social mood because private credit expansion = decreasing social stress while private credit contraction = increasing social stress.

It fell through the Great Depression - WWII and is falling again now peaking with the credit bubble.

Total private credit can continue to grow while the overall ratio contracts.
The future always casts a shadow on the present.







Post#23 at 01-19-2013 03:48 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,501]
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Quote Originally Posted by JonLaw View Post
Private sector debt as a percentage of GDP is the current relevant credit cycle that seems to be related to social mood because private credit expansion = decreasing social stress while private credit contraction = increasing social stress.

It fell through the Great Depression - WWII and is falling again now peaking with the credit bubble.

Total private credit can continue to grow while the overall ratio contracts.
Could you provide an url for a data series or plot that covers a century or two? I've seen plots showing essentially a rising trend since WW II (iirc) that is called a cycle, but without enough time to see the series go through a couple of up and downtrends, how does one conclude it is a cycle?







Post#24 at 01-21-2013 11:30 AM by JonLaw [at Hurricane Alley joined Oct 2010 #posts 186]
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Quote Originally Posted by Mikebert View Post
Could you provide an url for a data series or plot that covers a century or two? I've seen plots showing essentially a rising trend since WW II (iirc) that is called a cycle, but without enough time to see the series go through a couple of up and downtrends, how does one conclude it is a cycle?
I'll see if I can find the actual source of the data series (hopefully it's real data).
The future always casts a shadow on the present.







Post#25 at 01-24-2013 11:29 AM by JonLaw [at Hurricane Alley joined Oct 2010 #posts 186]
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Quote Originally Posted by JonLaw View Post
I'll see if I can find the actual source of the data series (hopefully it's real data).
I haven't forgotten about this, I'm waiting for a response from a guy who's gone AWOL for the moment on another board.

Is there any kind of (sane) longwaves forum still in existence anywhere of the sort where a Bob Bronson type would post?
The future always casts a shadow on the present.
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