 |
As Martin showed you in his Monday column, the world is a mess, a sorry state of affairs that is getting worse by the day.
This was all foretold by the cycles of war that I have been writing about for over two years now … cycles that show the world splintering apart, cycles that will not even come close to ebbing for another five years.
It’s the result of several different cycles coming together in time and space, and in a way that hasn’t been seen in at least 150 years. Since the 1860s, according to my research.
You have first, the Kondratieff Wave, a super economic cycle that peaked on cue in 2007/2008, a cycle that has been sped up by the impact of technology on the world — and a cycle which will not reach a bottom until 2025.
Symptoms: Slower business formation, debts going bad, plunging velocity or turnover of money and credit, and deflation, with a capital D.
You can see my graph of the K-wave here.
You have the Juglar Cycle, a cycle that tracks fixed investment by business, a cycle that also peaked with the real estate crisis and now points down into roughly 2025.
Symptoms: Slower business investment, a “risk-off” mentality by businesses, leading to slower job formation, slower spending and more.
You can see my chart of the Juglar Cycle here:
You have the Kitchen Cycle, discovered in the 1920s by Joseph Kitchen, a shorter cycle of 40-months, but also related to the inventory cycle of commercial businesses. It also peaked during the real estate crisis, then plunged, then rallied into last year … and is now pointing down into 2016, followed by a bounce, then another decline into 2025.
You can see the chart here:
Symptoms: Like the Juglar Cycle, slower business formation, slower inventory turnover, lackluster employment growth, and more.
You have the Armstrong Economic Confidence Cycle, pointing to a major turning point this October. Marty Armstrong, a close friend of mine and to a very major degree, my mentor in cycles, says it will be a doozy, the beginning of a “Sovereign Debt Big Bang” — where the patently unplayable debts and IOUs of Europe, Japan and the United States all begin to crumble, right before our eyes.
Symptoms: Collapsing bond markets in Europe, the United States and Japan; soaring interest rates, and more.
You have the Kuznets Cycle, discovered by Simon Kuznets, an approximate 18-year cycle that vacillates between periods of low and high income inequality.
It bottomed in 2013, showing that despite government efforts to redistribute wealth, income inequality, not just in the United States but almost everywhere, will get much worse in the years ahead and not reach a climax until 2025.
Symptoms: Rising social discontent, class warfare, rising attacks on the rich, rise of third-party neo-Nazi groups, and more.
You can see my chart of the Kuznets Cycle here:
The thing is, income inequality normally declines during recessions and rises during booms.
Yet during this turn of the cycle, we’re seeing the opposite: Income inequality is rising during a period of slow global economic growth. So if you think income inequality is bad now, fasten your seatbelts. According to the Kuznets Cycle, it’s going to get worse: The rich are going to get richer in the years ahead, and the poor, poorer.
So the question then becomes “Why?” Why is income inequality worsening, despite slow global economic growth and despite government efforts to redistribute wealth?
It has to do with what I call the “granddaddy of all cycles,” the major war cycle of 53.5 years in duration, a cycle that has pinpointed every major war since the beginning of time.
You can see my chart of this major war cycle here. It’s pointing up into 2020, the earliest date it can peak.
Make no mistake: It is this war cycle that is now driving — consciously or unconsciously — nearly every government decision that is being made.
It is why we are seeing attacks on the rich in Europe and the United States, not to mention China.
It is why we are seeing governments in Europe and the United States tax the rich, to allegedly redistribute wealth, but in reality, is backfiring, sending the rich fleeing, causing income inequality to worsen, and killing business formation.
It is why we are seeing battles between religions, between civilizations, between groups within nations and between nations.
It is why we are seeing rampant cyber espionage, between nations as well as governments spying on their own people.
It is why we are now seeing the world in such a mess that even Pope Francis has recognized that the world is already in World War III, an acknowledgement he made last September at a speech in Italy.
Make no mistake: The world is indeed a mess, but it’s also about to get a whole lot worse.
Markets will continue to gyrate wildly. Europe will go down the tubes. Japan will default as well in the years ahead, and the biggest of them all, our own government, will also succumb to the forces I describe above.
You will see gold plunge on further deflation, then suddenly turn around and soar to over $5,000 an ounce.
You will see the U.S. stock markets similarly plunge, but then soar like an eagle as they become the last bastion of capitalism, as frightened money from all over the place, including sovereign bond markets, pours into equities like never before.
You will see bond markets lose 30 percent, 40 percent, even 60 percent on the dollar, wiping out pensions and untold millions of unsuspecting investors.
You will see the value of the dollar soar, as investors from other areas of the world, run for cover … and then, when the process is complete and everyone realizes the Emperors of Washington also have no clothes …
You will see the dollar crash and burn, forcing the world’s leaders to convene a new Bretton Woods, a new monetary system, a new reserve currency.
Mark my words: All of the above, and more, is coming. You must do everything you can to protect and grow your wealth.
Stay safe, stay protected, and be open to mega profits …
Best wishes,
Larry
P.S. For more than 35 years, I’ve made studying the Great Depression of the 1930s and economic cycles — and trading the financial markets based on my knowledge of both — my passions in life. What’s more, my work has been hugely profitable for my Real Wealth Report readers. To learn how you can get onboard in time for my next issue and receive five valuable investment guides, absolutely FREE, click here.
Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader.
Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.
{ 22 comments }
LARRY YOU CALLED THIS GOLD MARKET SPOT ON OVER THE LAST10 YEARS.I TRY TO BUY ON DOWN DAYS AND A SELL ON UP DAYS KEEPING MY CORE GOLD FUNDS.YOU CALLED THIS DOWN MARKET 21/2 YEARS AGO TO THE TEE.THERE IS A SITE I GO TO EVERY DAY INVESTMENT RESEARCH DYNAMICS DAVE’S A VERY BRIGHT MAN LEARNED ALOT FROM HIM CHECK IT OUT.BY THE WAY 2 1/2 YEARS AGO VERY LONG THE MINERS I LOOKED AT YOUR PAST CALLS AND TOOK ALOT OF THE TABLE AND TRADED WITH SOME AND HELD A CORE AMOUNT .THE BOTTOM LINE IS YOU SAVED ME ALOT OF MONEY NOW I HAVE ALOT OF DRY POWER TO RELOAD.
so pray enlighten us TOM,. apart from your core gold funds,. ((gold funds??) you gotta be joking right?)) are you currently a buyer or seller of gold?
I HOLD A CORE IN THE XAU AND TRADE IN AND OUT ALWAYS ADDING AND HOLD SOME JR’S .IF YOU WHAT LARRY TO HOLD YOUR HAND NOT GOING TO HAPPEN BUT TIME LINES ARE VERY HARD TO GET RIGHT SHORT TERM BUT HE CALLED THE MINERS DROP SPOT ON.
The question that is foremost on my mind is that if Larry is so tuned in to the study of cycles, why does he make such massively bad calls? Larry is constantly on the wrong side of the cycle.
Lol. Oooooh Larry! Keep tap dancing between the rain drops
clearly wasted 35 years,.
Following way too many cycles.Can’t believe anyone could come to a conclusion,trusting that many cycles.
Of course someone can come to a conclusion. It’s easy. Just follow the rabbinical Shermittah. It’s God’s cycle. The one that gave Egypt seven fat years followed by seven lean. Everything comes in cycle. Just like vibrations. They cycle. Equally, Au 79 has seven lean followed by seven fat. The seven lean are coming to a close, as soon as Larry says so.
This reminds me of Tom Holt back in the 70’s ,a very nice guy but couldn’t time the markets.
Gee! Larry shortens the ‘K’ wave frequency, because of the effect of the quickened pace of technology, yet his “War” cycle theory remains untouched?
You would think if anything war would be effected by technology changes, quicker than any other wave theory? After all we’ve come a long way Baby, since the muzzle loader!
Larry;s mumbo jumbo is just as effective as me “casting” my African chicken bones!
Larry, thanks for the graphics this time!
I spent enough years as a working scientist, never to trust a graph that looks too perfect.
Kondratayev waves that are sawtooth-shaped and Kuznets waves with double bumps look realistic. Summing all those waves together gives a noisy mess of peaks pushing the valleys up, and valleys pulling peaks down. The convergence of multiple waves is what makes big peaks and big valleys. And apparently, the art of finding wave patterns is similar to Elliott Wave analysis. . .we see what we
Although your timing has not been the best, I think you are right-on on these cycles. We intentionally dumb down our students so they forget history and we continue to make the same mistakes. “There is nothing new under the sun.” People continue to elect pathological liars who promise something for nothing and class warfare. We are in the apathy to dependence stage moving to the bondage stage. If I was independently wealthy, I’d be gone
I expected “Bloody Wednesday”, FED increasing the rates… Many warnings on this site…
Well, anyway, timing is different. Not this Wednesday :-)
this may be the most ridiculous article ive ever met of his. i think he is pulling these “wave names” outta martin weiss ass i mean where does he come up w this crap. guy has been saying end of the world for 10 years.
moron
Actually, Larry might be on to something here. The world runs on cycles / seasons. Always has, always will. Look at the war cycle, after 50 or so years, we poor humans forget the horror of it all and get right back on that horse. Look at the economic cycles, same thing. In real estate, there is an 8 to 12 year on average boom bust cycle. Look at the 4 seasons of the year, the sleep cycle, etc, etc, etc.
I think every thinking person can tell we are heading into “something? BIG in the next few years, just not sure how to play it but better be prepared because its coming whether you like it or not.
How come you warn about buying gold now while at the same time another analyst of Weiss
Research strongly advocates buying gold now?
There appears to be no label on the verticle axis of the charts. Without some label the charts are unreadable and worthless.
I would like to know more about thses cycles but these charts don’t hack it for me.
This is some bear market in gold Larry. Wrong again.
Why is gold going down but silver holding or going up?
Crude has had a huge rally. Have you changed your views re the low?
The problem with some people and scientists looking at these charts and data fail to see the parameters of change that are not published and that lack of understanding produces some bitter resentment. Larry, You need to show the modified data sets. Example: why deflation in the midst of unprecedented money printing and bank leverage. The printing of money has stopped having the affect that was intended by Keynesians. The reason for this is that the money is not being earned in the public anymore. It is going directly up to the hegemonic rich. The so called priming the pump has almost become a syphon. That chart of money printing in other newsletters is correct on facts and wrong in affect. That will shift us later to Austrian economics but for now Deflation has hit because the 1% rich earn exactly that ratio of affect. One dollar used to produce 5 dollars in economic growth when banks leveraged it 10 to one and 6 went to the public and 4 to the top 5% rich in the 50s. Now 1 dollar produces ten cents in growth even with 37 and possibly 57 from my studies in illegal bank derivative leverage running rampant. That reflects the ratio of hegemonic power the ultra rich have at this time. The government will step in and raise taxes on the rich not from fairness but from survival just as soon as the middle class is decimated enough that the politicians start losing elections, election after election and not a day sooner. So in a basic nutshell I found that both Austrian and Keynesian economics work fine until the underlying economic strategies are discovered and abused without oversight. Without understanding these kind of data above don’t have the same meaning. The results without the modifications of affect make the overlays appear like gibberish. Big data in the IT world is beginning to see this. If IT does not get intercepted by the ultra rich we will have a economic renaissance. The IT folks unfortunately are not economists so when they look and say “xyz” is happening the old economic minds blow them off so as to not lose face. This advisory newsletter needs to update ( the affect into the charts ) because no matter how accurate your empirical data is, if it does not show the modifications for the affects you will lose credibility no matter how true your numbers are.
LARRY IS PROBABLY ON TO SOMETHING, WHAT I KNOW ABOUT MONEY MANAGEMENT ARE CURRENT COURSE IS UNSTAINABLE , WHERE IS LARRYS ADVICE ABOUT WHAT TO DO ABOUT IT ? I ABSOLUTLY CAN,T STAND IT WHEN I HAVE NO CONTROL OVER OUR SO CALLED ELECTED MORONS, I HAVE ALWAYS SAID CREED HAS BUILT THIS COUNTRY AND CREED IS GOING TO TAKE IT OUT.