muses of the moment

August 20, 2012

Kondratieff Long Wave Cycle

Excellent video, very important!

H/T to SW:

Speaking of cycles, Lauren Lyster just interviewed Peter Baxter, author of Excerpts:

“Kondratieff Winters historically feature high volatility, slow to negative growth, de-levering (by consumers, corporations, and governments,) hoarding of cash by banks, asset deflation, and economic depressions due to bursting of unsustainable credit bubbles.”

(~8min) The transition to winter occurred in early 2000. Each Kondratieff cycle lasts between 15 and 17 years. The bottoming out of this winter cycle should occur in 2016 or 2017. Very difficult times are directly ahead of us.

Peter mentions that excesses from winter have to be removed before spring arrives. This means that the debt that has built up during this winter cycle (both private and sovereign debt) has to be removed. Peter believes that 20-30% of the debt will be defaulted on which will cause capital markets to collapse.

(~11:30) This Kondratieff cycle has gone on longer than previous cycles for two reasons. One reason is because of the increased life spans of individuals. The second reason is because of the decisions by governments and central banks to try and prevent the collapse. This has added 6-10 years to the cycle.

Click here for an excellent video (about 27 min), the interview with Mr. Baxter. Also see my Kontratieff page.

Side musing: groovygirl completely agrees with the Kontratieff Cycle. This is a long-term cycle. It is not a short-term or technical cycle.

Interesting that his time line is close to Martin’s main turning point of 2015 in his Economic Confidence Model. Other Kontratieff wave theorists put the winter cycle at 20 years, not 15, therefore this winter cycle could last until 2020. or the official bottom could be in 2015-2016, but the following cycle is a slow growth, so there would seem to be no growth until 2020.

Also remember that the stocks in inflation-adjusted dollars is still contracting or in a down trend.

Click here for best investments in each “season”. These are long-term investments (10-20 years).

1 Comment »

  1. We found the broadcast very enlightening – it would suggest to us that by the end of this winter in 4-5 years time when things are at rock bottom precious metals are most likely to have gone parabolic. Now is the time to start accumulating PMs before the bubble phase. Ag to $100+ easily and Au to $5000+ and that is being conservative.

    By the way you’re doing a great job – a diary format really works when following economic history such as we are seeing during these increasingly dark times.

    We like to educate the populous and open peoples’ minds up as to how they are being robbed through government action by money printing, to the lack of free market capitalism and damaging affects of socialist policies on the individual..

    Come and drop by our site !

    Comment by wesayukdotcom (@wesayukcom) — August 22, 2012 @ 8:29 pm

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