The 8.6 Year Cycle and the Forces of Nature

Posted by Martin Armstrong - Former President of Princeton Economics

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“We are standing on the precipice of a new era in global-social-economics. How we enter this new age is of critical importance. Government is incapable to doing anything for any reform of its own abuse of power is not up for negotiation. We must weather the storm, and to do so we need to understand its nature. Just as the 1930s Great Depression set in motion profound changes that were even manifest in geopolitical confrontations, we have now reached such a crossroads. A debt crisis has its tentacles deeply embedded into-every sector right into government. This is the distinction from a mere stock market crash that never alters the economy long-term. We are seriously still over-leveraged and some banks are still trying to be hedge funds and have to speculate to make a profit. That is a key warning sign that the worse is yet to come.

The 8.6 Year Cycle and the Forces of Nature:

imagesSan Andreas Fault

My discovery came in two parts. FIRST I like Darwan and Adam Smith, “observed” what was a “contagion” that seemed to spread from one market to another as if it were a disease. This is what I began with, not the vision of cycles. However, because I began to work in. a gold bullion/rare coin store when I was about 13, I was exposed to the collapse of the Bretton Woods accord and had a front row seat to the collapse of the fixed ratecurrency system and the cherished gold standard. Thus, I knew what things were in value in the 1960s. So when my history teacher put on in class one day an old film in black & white named – Toast of the Town about the attempt to corner the market on gold in 1869 that led to a Panic and the dragging of bankers out to the streets and hangingthem, they were forced to send in the troops. That is what “Black Friday” had truly meant -death on Wall Street.

Therefore, the SEOOMD phase was now understanding that gold was $35 and watching that movie with Carry Grant quoting gold to James Fisk from the ticker tape saying $162, this hit me that prices were not linear progressions of always stepping higher as if they were ascending a staircase. Combining this realization with the observation of the “contagion” is what led me to the field of cycles.

These realizations merged with my love of history. I then explored the rise and fall of civilization and tried to under- stand what was going on. This exposed me to understand that natural events also played a role. Where perhaps others did not think about their study from CyCiical views, I at least accepted the possibility.

Looking at history, I saw waves of trends and dark ages like those between the Greek Heroic period where there was the battle of Troy, and the second period in which Homer lived to write about the first age. This was the period of Athens & Sparta wars, the age of Alexander the Great – the Hellenistic age. What happened between the two? This was a dark age that seems to have been created by natural events of weather. It appears this was a decline in the energy output of the sun that wiped out agriculture and their economy. This was the driving force behind migrations.
~
Go to Belize, formerly British Honduras, and you will discover cities intact, that were just abandoned. There is no sign of war or even an earthquake. There is only the curious explanation that if the weather changed and crops failed, they too may have just picked up
and migrated.

Instead of being a flat model, we were dealing with a multitude of variables that combine to create the Economic Confidence Model. What we have today was set in motion by the 1906 San Francisco Earthquake that led to the 1907 Panic. Insurance companies were on the east coast and the claims were on the west. The capital flowed west arid banks failed because there was a shortage of cash in the east.

The Congressional hearings that began to investigate the causes, led them to understand the cash flow problem. That gave birth to die Federal Reserve in 1913. Our monetary system today was set in motion by the earthquake in San Francisco in 1906. We cannot extract that event from the data. It is part of us today.

….to read more go HERE. (Ed Note: it is a pdf so you an enlarge the document if you find it hard to read)

 

ACKNOWLEDGEMENTS

I would like to thank the many people who have been writing from around the world. It is encouraging to know that there are so many people who are interested in uncovering the truth. I have also special thanks for so many providing valuable insight into trends around the world from China, Soviet Republics, South Africa, Brazil, Australian, and India. I believe we can survive the folly of governments even if they refuse to listen.

The key is understanding the nature of events, and that allows us to correctly make the decision to be on the opposite side. I would like to also thank all my old friend and former clients for their support and to know that they have continued to gather information that serves us all in times of crisis.

We are standing on the precipice of a new era in global-social-economics. How we enter this new age is of critical importance. Government is incapable to doing anything for any reform of its own abuse of power is not up for negotiation. We must weather the storm, and to do so we need to understand its nature. Just as the 1930s Great Depression set in motion profound changes that were even manifest in geopolitical confrontations, we have now reached such a crossroads. A debt crisis has its tentacles deeply embedded into-every sector right into government. This is the distinction from a mere stock market crash that never alters the economy long-term. We are seriously still over-leveraged and some banks are still trying to be hedge funds and have to speculate to make a profit. That is a key warning sign that the worse is yet to come.