muses of the moment

December 25, 2009

Investing cycles

Investment Cycles

Investing and business cycles are very interesting. I have graphed several different cycles. (A little crude, I know, I did this a while ago). These cycles are general business cycles, not for a specific investment. You will notice that they all bottom in 2014-2015. These are not Martin Armstrong’s cycles or his Confidence Model, But Martin expects the beginning of a severe leg down around 2015 as well.

This will be the tough time. This is the time to prepare for. This is the time to buy assets cheap.

Martin’s Confidence Model or the sentiment of investing is different from if it’s a good time to invest looking at the numbers. That’s one reason why Martin Armstrong is right all of the time, his cycles take in to consideration investor confidence or “feelings”.

Groovygirl believes that the general conditions will be so bad in 2014-2015 that it will affect investor confidence for years after. However, that is probably the best time to purchase assets cheap. Investors will need cash, and so they will sell. Debt will be scarce, so capital (or gold) will be king. Baby boomers will sell their assets at any price to live. I believe this process will continue until 2018-2030. This will not be a deflationary depression, but a hyperinflationary depression. Prices so high that economic investment and true growth stops.

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