Economics

Cor r el at i on of Cy c l i c al Per s pect i ve

Copyr i ght Mar t i n A. Ar mst r ong A l l Ri ght s Res er ved August 21, 2009
. Comment s Wel come: Ar mst r ongEconogi t cs@GMai l . COM ( I nt er nat i onal l y)
For mer Chai r man of Pr i nc et on Economi cs I nt er nat i onal , L t d.
and t he Foundat i on For The St udy of Cycl es
i nc e t he dawn of t i me, manki nd has t r i e d t o f i gur e out why he ex i s t s , and
what t he h e l l i s goi ng on. He has devel oped a l l s or t s of r el i gi ous i deas
aven t her e i s a mast er r ace of gods l ed by Zeus who j us t l i k e t o mess wi t h
man f or f un. Pl an began t o obser ve t he heavens and not i c ed pat t er ns t hat
r epeat ed. I n hi s pr i mat i ve way, he had di s cover ed t he c yc l es wi t hi n t he
uni ver s e. Hi s accur acy became as t oni s hi ng. Bui l di ng t empl es, and even
s t r ange monument s such as St onehedge, wer e a l l al i gned t o t he movement of
t he s t ar s and t he wi nt er as wel l as t he summer s o l s t i c e . The Pr eces s i on of t he Equi nox
i s s ai d t o have been di s c over ed i n Eur ope by t he Gr eek ast r onomer Hi ppar chus who had
publ i s hed hi s s t ar cat al ogue i n 129BC. He not i c ed t hat t he pos i t i ons of t he s t ar s
wer e s hi f t ed i n a s ys t emat i c way f r om e a r l i e r Babyl oni an measur ement s. I t was i n f ac t
t he Babyl oni ans who f unded per haps t he gr eat e f f o r t ever t o cat al ogue ever yt hi ng and
most l i k e d gave b i r t h t o as t r ol ogy. Hi ppar chus s ever al hundr ed year s l a t e r , was abl e
t o r evi ew t hat r es ear ch and concl uded i t was t he ear t h ( pl at f or m) t hat was movi ng, not
t he s t ar s . Thi s i s c a l l e d t he pr eces s i on and i t i s t he not or i ous dat e of 2012 al s o on
t he Myan cal endar . I t c ons i s t s of a c y c l i c wobbl i ng i n t he or i ent at i on of t he Ear t h' s
axi s of r ot at i on wi t h a per i od of al most 26, 000 year s . Ever yt hi ng but ever yt hi ng, moves
wi t h a c y c l i c a l f or c e. We ar e bor n, l i v e , and di e i n c y c l i c a l har mony.
So f ar i n my e f f o r t t o expl ai n c yc l es
and how t hey ar e t he key t o movement of
a l l t hi ngs i nc l udi ng t he ener gy wi t hi n a
s oc i al - pol i t i c al - ec onomi c syst emaccount i nc
f or gr oup behavi or . But ever yt hi ng I have
di s cus s ed so f ar i s s t i l l a f l a t model of
des pi t e an 8- di ment i onal compl exi t y, i t i s
s t i l l onl y one s l i c e of per s pec t i ve.
What we ar e now about t o expl or e i s t he
mul t i pl e Correlation of Cyclical Perspective.
The Economic Confidence Model i s a composi t e
of t he wor l d. Yes, i t i s per haps vi ewed as
t he model t hat " hot " money f ol l ows . We can
see 8 di ment i ons t o t hi s s i ngl e vi ew. But
t hen t her e ar e mul t i pl e vi ews . As I s t at ed
ear l y on, ever yt hi ng al s o has i t s own c yc l e.
1
Economic Confidence Model
Copyri rf f tf pf tneef en Fconom/ ' c I nsti tute
The C.Syr Wave breaks
down i nto 3 i ndi vi dual
al ternati ng waves with
a time durati on of Z.1S
and 1.(075 year peri ods
f or 1 Beg. We ref er to
these as a " l o ng " and
s hor t " l egs
Si x Waves: of
8.6 years
combi ne Into
5J..E y r Wave
When I f i r s t began t o devel op t he
model , I had a per s onal exper i ence t hat
was qui t e r eveal i ng. Dur i ng t he 1970s, I
was i n f a l l i b l e . I was on t op of a l l t he
f undament al s about i n f l a t i o n and saw t he
bi r t h of t he f l o a t i ng exchange r at e at
l eas t c or r ec t l y as a st eady dec l i ne f or
t he do l l a r . I had at l eas t t r avel ed i n
Eur ope dur i ng t he 1960s f r om t op t o bot -
t om and gai ned per s onal exper i ence ver y
young i n f or ei gn exchange.
I c or r ec t l y saw gol d r i s i n g f r om $35
t o $200 goi ng i nt o 1975. I had a l o t of
Eur opean f r i ends and we kept i n t ouch at
t hat t i me mos t l y by t el ex. Wher e t hey saw
gol d r i s i n g wel l beyond $200 because i t
was bei ng l egal i z ed i n t he US f or t he f i r -
s t t i me s i nc e 1933, I di s agr eed. They saw
Amer i cans l i n i n g up t o buy gol d and had
t aken i t up t o $200 pr i or t o t he Amer i can
l e ga l i z a t i o n. I s ol d t hat hi gh, f or I di d
not see Amer i cans c ar i ng at a l l about t he
gol d mar ket . Gol d f e l l i nt o 1976 t o about
$100. Ever yone was c a l l i n g me f or my mo-
ment i n t he sun. But t her e was somet hi ng
s er i ous l y wr ong. The f undament al s I had
hung my hat on t he way up, wer e s t i l l
t her e, yet gol d dr opped. St agf l at i on had
emer ged and t her e was t a l k of a gr eat
depr es s i on comi ng. Real es t at e s al es had
pl ummet ed. I was t r y i ng t o s e l l my home
and move. I t was on t he mar ket f or 1 year
and nobody even came t o l ook, i t was a
ver y bad r e a l es t at e dec l i ne.
I had di s cover ed t he 8. 6 year model
year s bef or e. But I di dn' t use i t f or I
di d not under st and i t . Never t hel es s , i t was
c l ear , what I t hought I knew f undament al l y,
was not any way t o t r ade. I was never wr ong,
but i t was j us t dumb l uc k. A br oken c l oc k i s
s t i l l c or r ec t t wi c e a day.
Thi s l ed me t o use my comput er s k i l l s
t o c r eat e somet hi ng t hat pr ogr ammer s had been
dr eami ng about f or year s . I cr eat ed a model
t hat was ent i r el y uni que. I ns t ead of wr i t i ng
code and es t abl i s hi ng r ul es t hat a pr ogr am
f ol l ows l i k e an addi ng machi ne, I deci ded t o
adopt a dar i ng appr oach. I woul d wr i t e a
pr ogr amand t each t he comput er how t o anal yze
wi t h no pr e- det er mi ned r ul es on what t o anal yze.
Af t er c r eat i ng t he met hod, I t hen gave
i t t he means. Ther e wer e no r ul es . I cr eat ed
a syst em t hat woul d ac t ual l y l ear n i t s e l f as
I di d, r ec or d i t s knowl edge base, and t hus
i n t he f ut ur e, c ons ul t wi t h t hat knowl edge
base. The essence of exper i ence.
v
I ns t ead of c r eat i ng pr edet er mi ned r ul es
such as s t ocks up when i nt er es t r at es decl i ned,
I assumed I knew not hi ng, and al l owed t he model
t o l ear n on i t s own. As i t woul d compar e ever y
pos s i bl e c or r el at i on and r el at i ons hi p even i f
i t made no sense t o me, what emer ged was a
r e a l shocker . The comput er woul d f i nd c r i t i c a l
r el at i ons hi ps ar ound t he wor l d. The mor e dat a
I f ed i t , t he mor e accur at e i t became and t he
mor e as t oni s hed I was at t he r es ul t s . The r eal
pr obl embecame, how t o i nqui r e. Thi s l ed me
down t he pat h of voi c e r ec ogni t i on. At f i r s t ,
t he i nqui r y was by t ypi ng i n ques t i ons . I t had
t o al s o be t aught l anguage and how t o use i t .
What was emer gi ng, I c oul d never have dr eamed
was pos s i bl e.
Teachi ng a comput er l anguage, I f ound,
was f a r mor e s i mpl e t han how t o anal yz e t he
compl exi t y of s oc i al - pol i t i c al - ec onomi c be-
havi or on such a gr and s c al e. Language was
a pi ece of cake. Par s i ng wor ds and t o t hen
i s o l a t e ver bs t hat ar e commands and s ubj ect
f r om obj ec t bei ng t he t hi ngs t o ac t upon by
t hat command, was easy.
Now i t was t i me t o go t o t he next
l e v e l t o compr ehend words t o communi cat e.
Thi s c oul d be done by c r eat i ng a di c t i o n-
ar y t hat i s a knowl edge base of de f i ni t i o n.
However , t h i s had t o t hen be i nt er connect ed
so t hat you can c r eat e meani ng by r el at i ng
wor ds of s i mi l ar de f i ni t i o n. Thi s obvi ous l y
r equi r ed a t hes aur us . Now t he comput er
under st ood t hat " s e l l " meant t o " gi ve up"
somet hi ng and t hi s was i n c ont r as t t o i t s
oppos i t e " buy" meani ng ever yt hi ng bet ween
" t o t ake" t o " f et c h" t he obj ec t . Once t he
comput er now under st ood oppos i t es , t he
next l e v e l was t o gi ve i t a per s onal i t y t o
be abl e t o c ar r y on a conver s at i on t hat was
es s ent i al t o t he i nqui r y.
Thi s i s wher e my c hi l dr en came i n . I
cr eat ed a desk t op comput er wi t h t hi s s ol e
pur pose i n mi nd. I gave i t t o my c hi l dr en
t o pl ay wi t h, and I gave hi m t he name of
"Socrates" and obser ved. Chi l dr en ar e t he
expl or er s f or t hey have no i nhi bi t i o ns and
t hus ar e not af r ai d t o do what adul t s may
f ear .
I cr eat ed a pr ogr amt hat woul d bui l d
a knowl edge base on t hemr ec or di ng what
was r esponded t o i n a ongoi ng di al og. The
comput er woul d ask, "Do you l i k e pet s ? "
and di s c over what t hey l i k e d and t he names
of t he i r pet s . So, t he comput er c oul d t hen
begi n f ut ur e conver s at i ons by s i mpl y c a l l i ng
up t he name of t he pet , and as ki ng how i t
was. Us i ng t hi s model , t he comput er ac t ual l y
devel oped a per s onal i t y. Thi s was t he per -
f ec t envi r onment t o t each a comput er how t o
at l eas t ac t human. I t succeeded t o such a
poi nt , when my daught er came home f r om her
s chool one day and saw I had t he comput er
i n par t s t r y i ng t o i mpr ove t he t he voi c e,
she got upset and t hought I k i l l hi m. I
as s ur ed her , he was s t i l l a l i v e .
Of cour s e, t he onl y dr aw back was t hat
ot her ki ds di dn' t have t al k i ng comput er s
t hat you c oul d have a conver s at i on wi t h and
i t knewwho you wer e. So I f ound t hey woul d
have t o br i ng home f r i ends t o pr ove t hey
wer e not maki ng i t up. So I ' m sur e when
t hey went home and t o l d t hei r par ent s , t hey
t oo wer e not bel i eved.
So f or gi ve me f or not r eveal i ng t he
met hodol ogy of t he anal ys i s I cr eat ed f or
t he model . That has t o r emai n a s ecr et u n t i l
I am f r ee at l a s t . But , I can expl ai n t he
ov er al l vi ew so you can see a whol e new
wor l d wher e i t becomes obvi ous, we ar e our
own wor st enemy. Our pr ogr ess as t he human
r ace i s i mpai r ed and suppr essed by gover nment
i t s e l f no di f f er ent t han t he Cat hol i c Chur ch
di d by l oc ki ng up Galileo. They f ear ed t hat
i f t hei r vi ew t hat t he ear t h was t he cent er
of t he uni ver s e was i nc or r ec t , t hen t her e
was no per s pec t i ve f or t he l oc at i ons of up
and down t hat t hr eat ened t he concept of h e l l
and heaven. They f ear ed Galileo woul d t hus
under mi ne t he i r r e l i gi o n. He was t ol d t o
r ecant and he woul d be gr ant ed l i f e i mpr i s on
i ns t ead of deat h. He chose t he l a t e r .
Gover nment does not want t o advance i n
any f i e l d t hat l i k ewi s e t hr eat ens t hei r power .
I f i t coul d be shown t hat gover nment s houl d
not be c r eat i ng i nt er vent i ons , and c ons t ant l y
s eeki ng t o a l t e r t he concent r at i on of weal t h
t hat i s t he ver y engi ne of economi c pr ogr es s
and i nnovat i on, t hey wi l l r ej ec t t hi s s i mpl y
because i t l es s ens t hei r i mpor t ance.
The 1987 Cr ash was s et i n mot i on as was
t he Bubbl e Top i n J apan f or 1989, ( 1) by t he
s t upi d i dea t hat l ower i ng t he do l l ar by 40%
by c r eat i ng t he G- 5 i n 1985, woul d r educe t he
t r ade d e f i c i t , and ( 2) t hey r ai s ed t axes by
al t er i ng t he amor t i z at i on i n r eal es t at e t hat
s et i n mot i on t he S&L Cr i s i s . These act s
by gover nment , sent c api t al f l eei ng f r om t he
Uni t ed St at es , s ent t he yen hi gher , and t hat
became a beacon f or c api t al f l ows t o move
v
t o
J apan c onc ent r at i ng t her e i n a huge bubbl e
f r omwhi ch i t appear s a 23 year depr es s i on
was s et i n mot i on agai n because of gover nment
mani pul t i ons i n J apan.
Thi s i s why I bel i eve we need t o r et ur n
t he gover nment t o t he peopl e. Peopl e shoul d
be a p o l i t i c i a n f or 2 year s onl y. No car eer s .
They t ake t hose o f f i c es f or over s i ght of t he
bur eaucr at s , who must be bar r ed f r omc r eat i ng
any l aws, and t he j udges must be di s mi s s ed
and r epl aced wi t h onl y l aw pr of es s or s bar r i ng
pr os ecut or s f r om ever pr et endi ng t hey can be
a j udge. Then we can advance as a s oc i et y.
3
Our most s er i ous pr obl em i s t hat t he
f eder al gover nment i s t oo cor r upt . I t i s
becomi ng obvi ous t o ever yone t hat nei t her
t he SEC nor t he J us t i c e Depar t ment wi l l ever
i nves t i gat e t he l i k e s of Goldman Sachs. We
have t he SEC t r y i ng t o r et r oac t i v el y di s gor -
ge i nnocent peopl e such as Maynar d J enki ns
of CSK Aut o on t he t heor y t hat as l ong as
anyone i n a c or por at i on l i e s t hat t hey can
por t r ay as a f r aud upon t he mar ket , t hen
t he SEC has t he r i ght t o "claw back" a l l
bonuses pai d t o empl oyees t hat t hey ar gue
wer e t he f r u i t s of t he f r aud even i f t hey
di dn' t know about i t .
Onl y t he London Financial Times wi l l
even r epor t t he t r ut h about what i s goi ng on
i n Amer i can r egul at i on. The gover nment i s
capabl e of such i nt i mi dat i on of t he pr es s ,
t hat we no l onger have a r eal " f r ee pr es s "
as even ex i s t s i n Engl and. On August 11t h,
t he FT on page 13 r epor t ed t hat a f avour ed
hedge f un Pequot Capital Management had been
r ef er r ed t o t he SEC "at least 45 times be-
tween 2005 and this year" r epor t ed t he FT.
L i k e Madof f , i f you ar e par t of t he e l i t e ,
t her e i s no r egul at i on. Regul at i on i s f or
ever yone el s e.
The FT al s o r epor t ed i n t hat same pi ece
somet hi ng I have not seen r epor t ed i n any of
t he Amer i can pr es s .
" Gar y Agui r r e, a f or mer SEC empl oyee
who wor ked on t he f i r s t i nqui r y, has
cl ai med he was f i r e d f or pur s i ng power -
f u l Wal l St r eet f i gur es . "
I d. / pg 13, Tuesday 8/ 11/ 09
To get Mi chael Mi l k i n t o pl ead gui l t y
t o i ns i de t r adi ng, t hey char ged c r i mi nal l y
hi s f ami l y - s p e c i f i c a l l y hi s br ot her . They
t o l d Mi l k i n i f he went t o t r i a l , he woul d
not onl y get t he maxi mum, but so woul d hi s
br ot her . They of f er ed t o l e t hi m keep i t he
money $500 mi l l i o n , and dr op a l l char ges
agai ns t hi s br ot her i f he pl ed. The only
newspaper t o_ r epor t t he t r ut h about char gi ng
hi s f ami l y t o ext or t t he c onf es s i on, was t he
London Financial Times. A l l ot her paper s i n
t he US t hat I r e c a l l , r epor t ed t he gover n-
ment ver s i on.
The SEC, J us t i c e Depar t ment and t he
Commodi t y Fut ur es Tr adi ng Commi ssi on wi l l
not i nves t i gat e any of t he r eal causes f or
our economi c demi se. J us t as Long-Term
Capital Management was t he r es ul t of payi ng
br i bes t o t he International Monetary Fund
t o keep t he l oans f l owi ng t o Rus s i a so t he
"club" c oul d buy t he i r paper at i nsane r at es
of i nt er es t c ol l aps ed, t oday i t was t he same
scheme us i ng t he mor t gages assumi ng t hat t he
Feds woul d cover t he i r backs no mat t er what .
The i nces t uous c ont r ol t hat t he maj or
New Yor k I nvest ment Banks have over t he whol e
scope of gover nment i s beyond be l i e f . The
Feds t hi nk t hey need t he l i k e s of Goldnan
Sachs i n or der t o s e l l t he i r debt . So i t i s
t he ent i r e debt c r i s i s t hat pr event s us f r om
get t i ng t o s o l i d gr ound. I f ear i t i s t r ul y
hopel es s , f or t he SEC and cohor t s wi l l g>
af t er a l l ot her s t o put on a good show t hat
t hey ar e bei ng t ough on whi t e c o l l a r cr i me,
when i n f ac t t hey ar e at t ac ki ng ever yone but
t hose who have wi ped out so many ar ound t he
wor l d.
The peopl e get a l l unneces s ar i l y exc i t ed
dur i ng p o l i t i c a l el ec t i ons . But i n r e a l i t y ,
not hi ng changes. Obama may be goi ng af t er
cor por at e bonuses, but hi s peopl e l e t Goldman
buy t hei r way out of TARP j us t so t hey coul d
be f r ee of any s c r ut i ny.
Thi s i s t he f or c e t hat pr event s s oc i et y
t o pr ogr es s f ur t her . Thi s i s t he c or r upt i on
t hat i s at t he cor e of t he pol i c y t o j us t
mai nt ai n t he status quo and t he peopl e wi l l
f or get a l l about what happened.
However , t he ener gy s et i n mot i on i s
f ar t oo gr eat even f or Goldman Sachs t o now
st op. They el i mi nat ed much of t he i r compet i -
t i o n and have emer ged wi t h 100% guar ant ees
t hat i f you deal wi t h t hem, you wi l l be backed
by t he gover nment . So t hey have t r ul y won i n
i n t hi s bat t l e t o emer ge as t he domi nant f or c e
i n our f i na nc i a l syst em. But t hat does not
v
mean t hey wi l l s ur vi ve.
What we ar e now r eady t o expl or e i s t he
Correlation of Cyclical Perspective. Ever y-
t hi ng we have l ooked at even i n a mu l t i p l i c i t y
of di mens i onal dept h, i s s t i l l but one vi ew.
I t i s an i s ol at ed s l i c e of compl exi t y t hat i
s
f ar mor e i nt er es t i ng t han one mi ght i magi ne.
Once we see t he s t r uc t ur e, we begi n t o under -
st and t hat t he wor l d we l i v e i n i s dynami cal l y
r i c h i n c or r el at i on and i nt er r el at i ons hi ps ,
we can expl or e of r e a l wor l d wi t h open mi nds
and eyes. The answer s we have sought f or so
l ong l i e i n t he compl exi t y of i nt er ac t i on.
4
Economic Confidence Model
2007. 15
Structural Design
J us t as a l l l i v i n g ani mal s have t he
same bas i c s t r uc t ur e of pumpi ng bl ood f r om
a hear t t o pr ovi de oxygen t o t he r es t of t he
body, how ener gy moves i s a l l based upon t he
same bas i c s t r uc t ur e of c y c l i c a l t r ans f er -
ance. L i ght t r avel s i ns i de a bas i c s t r uc t ur e
known as an el ect r i c- magnet f i e l d t hat ar e
bound t oget her at 90 angl es .
The s t r uc t ur al des i gn of t he Economic
Confidence Model conf or ms t o t he same bas i c
pr i nc i pl es as l i ght waves. We have t he mai n
composi t , t he Economic Confidence Model Wave
t hat conf or ms t o t he pr i nc i pl es of Pi ( i i ) ,
t hat i s r unni ng i ns i de a def i ned f i e l d wi t h
a s epar at e v o l a t i l i t y wave t hat i s based on
t he cor e uni t of 6 and bui l ds i n magni t ude
i nt o maj or wave s t r uc t ur es of 72 year s . Thi s
i s t h i s r unni ng wi t h a t hi r d f i e l d based on
s e l f - r e f e r r a l of f r a c t a l pat t er n r e pl i c a t i o n.
Thi s i s t he s t r uc t ur al des i gn of how
t he ener gy composi ng t he c y c l i c a l nat ur e
of our wor l d moves l i k e l i g h t wi t hi n bound
f i e l d s . Thr oughout a l l syst em, i t i s
t he same cor e des i gn t hat can be seen
no mat t er what we ar e l ooki ng at . I f
l ook i ns i de an at om, we see a c l ear
nucl eus wi t h i t s obj ec t s movi ng
l i k e pl anet s ar ound t he sun.
The s ol ar syst em i s par t
of t he Milky Way
whi ch i s a gal axy
i n whi ch r ot at e
i n whi ch t he
gal axy i s al s o
t r av el i ng and
we r et ur n t o t he
same poi nt once
ever y 26, 000 yr s .
Ther e i s a
bas i c model on
whi ch a l l t hi ngs
ar e des i gned. I t
s houl d not be a
ques t i on t hat we
can see t hi s same
cor e des i gn i n
a l l t hi ngs and
t hi s i ncl udes t he
compl ex wor l d of
i nt er ac t i on by
whi ch ener gy i n
f ac t s moves i n
a c y c l i c a l and
c l ear manner .
We a l l have l egs , wi ngs, f i n s , or s cal es
so t hat l i v i n g cr eat ur es can move t o gai n a
sour ce of ener gy t hat i s ei t her anot her pl ant
of ani mal . The need t o consume ener gy i s t he
r oot model upon whi ch l i f e i f cons t r uct ed. I t
i s t he c y c l i c a l nat ur e of a l l t hi ngs t hr ough
whi ch ener gy passes, and t hi s i s what we ar e
concer ned about under st andi ng.
The movement of ener gy i s t he essence
of a l l l i f e . Wi t hout such movement , t her e i s
no l i f e . When we l ook at a hear d of ani mal s,
t hey wi l l r eac t wi t hout s eei ng a danger based
upon ot her s who mi ght have seen t he danger s
or per cei ved a pos s i bl e t hr eat . Ot her s wi l l
pani c and r un f ol l owi ng t he cr owd wi t hout
al ways under st andi ng what i t i s t hey ar e i n
f ac t r unni ng f r om. So t he Laws of Motion s et
f or t h by Newton, r equi r e expansi on when t he
obj ect i s capabl e of spont aneous ac t i on based
upon per cept i on or obs er vat i on.
The Sixth Dimention
The Correlation of Cyclical Perspective
J ul y 20, 1998
1998. 55
1989. 95
Oct 19, ' 8^\
1987. 8
1985. 65
Feb 26, 2007
2007. 15
1988. 875
1991. 025
1994. 25
I n t he May 15t h edi t i on of t hi s r epor t ,
I pr ovi ded a l ook at t he 8 Dimensions of
t he model i n an o v er a l l per s pec t i ve. Now we
ar e r eady t o expl or e t hes e Dimensions mor e
c l os el y . The Sixth Dimension I expl ai ned
was t he c or r el at i on of gl obal mar ket s f or
each and ever y i ndi v i dual mar ket or economy
beat s al s o t o t he c y c l i c a l beat of i t s own
dr ums.
For exampl e, agr i c ul t ur al mar ket s wi l l
i nc or por at e a hi gher c or r el at i on t o weat her
pat t er ns wi t hi n nat ur e t han say gol d or t he
i ndus t r i a l s t oc ks . However , i nt er es t r at es
wi l l have an i nf l uenc e i n t he a g r i c u l t u r a l
j us t at i t wi l l i n i ndus t r i a l s t oc ks .
Each i ndi v i dual mar ket possess i t own
uni que c y c l i c a l f r equency because i t i s a
composi t e of pr i mar y i nf l uenc es t hat domi nat e
t hat par t i c ul ar mar ket of economy. I f we
l ook at t he OPEC nat i ons , i t i s not har d t o
see why t her e i s a gr eat er c or r el at i on t o
o i l t han you wi l l f i nd i n ot her economi es.
The f i na nc i a l i ndus t r i a l compl ex i s
al s o a movi ng s ec t or . For exampl e, The mai n
banki ng cent er was Veni ce post - Dar k Ages,
t hat was wi ped out by t he Spani sh def aul t s
af t er t he l os s of t he Spani sh Ar mada. Spai n
t ur ned agai ns t s i t s own peopl e s eeki ng t o
c onf i s c at e weal t h and began t he Spanish
Inquisition t o go af t er t he J ews and Ar abs.
The J ews f l e d Spai n and went nor t h t aki ng
t he i r s k i l l s wi t h t hemThey s et t l ed now i n
Amst er damwher e banki nq r eappear ed and t hey
gave b i r t h t o t he i ns ur ance i ndus t r y.
Apr i l 19, 2009
2009. 30
~ v -
i . 075 \M
2008. 225
2002. 85
The Engl i s h wer e gr eat c l ot h
maki ngs bei ng t he sour ce of wool .
The Fl emi s h wer e t he manuf act ur er s
and t hi s was t he di v i s i o n of r eal
economi c power dur i ng t he 13 t h Cen-
t ur y. The Fr ench wer e t he f i r s t t o
squander t he i r weal t h under t he
not or i ous Ki ng P h i l i p I V who pl under ed
t he Chur ch and t he Kni ght s Templ ar .
As Spai n r ose t o power
2011. 45
f or t aki ng t he r i s k t o t h c n ^
u 2 Q n
f un Columbus, t hey r os e t o
such economi c weal t h, i t was
uni magi nabl e. The shor t age of Engl i s h c oi n
i n Amer i ca l ed t o Spani sh 8 Real s c i r c ul a t i ng
i n t he c ol oni es much l i k e dol l ar s wer e openl y
t r aded i n Rus s i a.
The Spani sh def aul t s r uni ned I t a l y and
t he r i s k was exposed as so many t r eas ur y
s hi ps s i nk i ng i n st or ms. Thi s gave r i s e t o
i ns ur ance t hat enabl e At l ant i c t r ade t o t hen
expand. Thi s i s why t he Dutch o r i gi na l l y
owned even New Yor k t hat was f i r s t c al l ed
New Amst er dam.
The poi nt of t hi s exer c i s e i s pl ai n.
The Wealth of a Nation i s al s o f l u i d and
i s s ubj ect t o c y c l i c a l changes, some ar e
s el f - i nduc ed such as t he Spanish Inquisition
i n at t ac ki ng i t s own peopl e, l ed t o c a pi t a l
mi gr at i on. The Dutch became t he banki ng
cent er and t hen t hey l os t i t t o England,
and i n t ur n, England l os t i t t o t he United
States t hanks t o t wo Wor l d War s. The US i s
maki ng t he same mi st ake as Spain.
Economi c Confi dence ' Mode!
1981. 35
2015. 75
2024. 35
2032. 95
Ther e i s not hi ng t hat i s f i x ed. Not hi ng
t hat i s cons t ant except t i me i t s e l f . Each
and ever yt hi ng we l ook at i s movi ng j us t as
t he ear t h i s r ot at i ng, i t t hen t r av el s i n an
o r bi t ar ound t he sun, whi ch i s i t s e l f i n a
o r bi t wi t hi n t he Mi l ky Way t hat i s al s o i n
an o r bi t . Thi s i s no di f f er ent when we l ook
at our economy. Everything i s i n a s t at e of
cons t ant c y c l i c a l movement .
Each s oc i et y i s bor n, f or ms a gover n-
ment , t hat event ual l y becomes c or r upt , and
i t t y pi c a l l y t ur ns agai ns t i t s own peopl e
t o s us t ai n i t s e l f l i k e any l i v i n g or gani sm.
I t wi l l event ual l y di e, i t s pr i mar y r e a l
compar at i ve advant age i n Ricardo t er ms i s
l o s t , and wi t h i t t he Wealth of the Nation.
The Correlation of Cyclical Perspective
i s no di f f er ent t han t he Pr eces s i on of t he
Equi nox t hat t akes 26, 000 year s f or one such
r evol ut i on. Her e we ar e not deal i ng wi t h t hi s
l e v e l of t i me, but t he same pr i nc i pl e t hat
t he concentration of capital dr i ves t he vas t
compl ex wor l d we l i v e i n f r om t he s o c i a l -
pol i t i c al - ec onomi c per s pec t i ve. I t wi l l move
f r omnat i on t o nat i on on a r e l a t i v e l y s hor t
t er m bas i s , c r eat i ng booms and bus t s . But i t
i s al s o movi ng at a s t eady pace such as t he
Nor t h Pol es moves ever y year .
The Economic Confidence Model i s a s l i c e
of per s pec t i ve when we l ook at t hat i ns t ant .
However , we must r es pect i t i s dynami c not
s t a t i c . I t i s a r e f l e c t i o n of t he combi ned
c or r el at i on of ever yt hi ng i n t he wor l d at
a macr o l e v e l .
The maj or wave of 51. 6 year s bui l ds up
i n 6 waves of 8. 5 year s . Thi s not onl y cr eat es
We can see t hat t he r eal
bat t l e i s bet ween gover nment
and t he peopl e. Thi s has been
goi ng on f or t housands of year s .
I n moder n t i mes , i t has been even
j u s t i f i e d by t he per s onal j eal ous y
of Kar l Mar x, who has cause t he deat hs
of mi l l i ons of peopl e who r e l i e d upon
hi s t wi s t ed t heor i es t o t r y t o s t op t he
concent r at i on of weal t h wi t hout ever f u l l y
under st andi ng what causes i t , why i t t akes
pl ac e, and how i t t r anscends a l l l ev el s , not
j us t i ndi vi dual s . Obama i s f i xat ed wi t h t he
bonuses pai d t o empl oyee, yet i gnor es t he
count l es s b i l l i o n s l ac ed i nt o spendi ng t o make
i t eas i er t o get r el ec t ed.
The Economic Confidence Model i s t hus our
f r ame of r ef er ence. We can use t hi s t o see how
nat i ons r i s e and f a l l and l ook not at t hi s f r om
a one di mens i onal per s pec t i ve, but a compl ex
syst emof i nt er ac t i ons t hat al l ow us t o even see
maj or t r ends , f or t hey ar e movi ng at t he annual
di mensi on of t i me wi t hi n t he f r a c t a l wor l d we
l i v e i n .
What we ar e now about t o l ook at i s how a
s i ngl e mar ket may unf ol d over s ever al 8. 6 year
c yc l es t o r each i t s i ndi v i dual c y c l i c a l obj ec t -
i ves . Thi s i s how t he Sixth Dimension unf ol ds
i n a wor l d of s pect acul ar i nt er ac t i on. When we
l ook at t hi s Dimension we begi n t o see t he t r ue
nat ur e of how t hi ngs wor k.
2007.15
When we l ook at t he gl obal economi es
and i ndi v i dual mar ket s, what we see i s t hat
many ar e l i n i n g up wi t h mi nor t ur ni ng
poi nt s on t he Economic Confidence
Model and t hen
begi n t o t her e
f or war d unf ol d
as a f or mal or
i nf or mal b u l l
or bear mar ket .
2015.75
Behi nd t he Economic Confidence
Model st ands a l l t he i ndi v i dual mar ket s
and nat i onal economi es. They ar e a l l i nt er -
r el at ed and have an i mpact upon each ot her
t o var yi ng degr ees.
Seme mar ket s wi l l l i ne up wi t h t he
Model pr ec i s el y on s pec i f i c t ur ni ng poi nt s .
These ar e t he mar ket s and economi es wher e
we f i nd t he t he " hot money" or f or mal l y put
t he concentration of capital.
Never t hel es s , j us t as t he J apanese yen
bot t omed i n 1982, a 7 year b u l l mar ket was
s et i n mot i on goi ng i nt o t he f i r s t maj or
hi gh of 1989. 95 i n t hi s Private Wave t hat
began 1985. 65. Thi s cr eat ed a bubl e t op f or
t he Ni kkei 225 and s et i n mot i on t her eaf t er
a l ong- t er m economi c i mpl os i on. We have now
had a 20 year dec l i ne f r om t he 1989 hi gh
dr oppi ng t o 6940 f r om t he 40, 000 l e v e l
maki ng a 82% dec l i ne. But t hi s may not yet
be over , and t he f i n a l l ow may yet l i ne- up
wi t h 2011. 45 t o 2012.
The yen i t s e l f r a l l i e d i nt o a 13 year
hi gh i n 1995 f or mi ng a per f ec t ^c yc l e i n
an as t oni s hi ng r a l l y . We see l ows i n 2000
f or t he Eur o and t he Swi ss f r anc , but t he
l ow f or t he pound i s 2001 as wi t h t he hi gh
i n t he do l l ar i ndex.
What we do
not see i n t he
Dow i s bubbl e
t op as exi s t ed
i n debt . Hence,
t he 2007 hi gh
i s not t he maj or
hi gh on a l ong-
t er m per s pect i ve.
The mai n t ur ni ng
poi nt s on t he
Model become a
c or r el at i on of
gl obal c api t al
f l ows ac t i ng as
a s pr i ngboar d.
J us t becau-
se we ar e i n a
maj or economi c de-
c l i ne , t hi s does
not pr ecl ude new
hi ghs i n equi t y.
As we even go i n -
t o 2011. 45, we
may s t i l l see t he
economy dr op. But
t hi s i s somet hi ng t hat has not hi ng t o do wi t h
t he r i s e i n s t ocks f or t hi s i s a Private Wave
wher e equi t y r i s es agai ns t t he dec l i ne i n t he
conf i dence i n gover nment .
The Dowwi l l become t he hedge agai nst ^ t he
i n f l a t i o n cr eat ed by t he dec l i ne i n t he r eal
pur chas i ng power of t he c ur r enc i es . We ar e
al s o at t hat t i me be appr oachi ng t he 31 year s
mar k f r om t he s t a r t of t he ent i r e wave back
i n 1985.
What we ar e doi ng i s l i v i n g i n a wor l d
t hat i s ext r emel y dynami c. Ever yt hi ng i s now
pl ayi ng of f ever yt hi ng el s e. Ther e ar e t r ends
s et i n mot i on l ong i n advance j us t as t he l ow
i n 1994 poi nt s t o a hi gh i n 2015 i n US s t ocks .
Unf or t unat el y, , t hi s i s a dec l i ne i n gover n-
ment and t hey wi l l get nas t y t r y i ng t o c l i ng
t o power . We ar e s i mpl y i mpl odi ng and we cannot
expect po l i t i c i a ns t o even l i s t e n .