Going Dark! Economic Cycles Point Downward, Stocks Bear Markets
Stock-Markets / Stocks Bear Market Jun 27, 2013 - 04:05 AM GMTBy: DeviantInvestor
Unsustainable trends can survive much longer than most people anticipate, but they do end when their “time is up” – at the culmination of their time cycles. Examples of these trends include deficit spending, exponential debt increases, overpriced bond markets, and unbacked paper currencies, to name a few. For perspective on how and when these trends could change direction, we analyzed more than 20 different cycles. They nearly unanimously point to tectonic shifts in the months and years ahead. We have been warned!
At this point, we have enough confirmation to accept that the precious metals crash – starting in April of 2013 – was the first warning of what is coming globally.
Financial crashes and economic collapses are not inevitable, but they seem more likely in the next few years, starting later this summer. Preparation might appear to be a waste of time and resources, but lack of preparation could result in the loss of wealth, incomes, jobs, and lives. Perhaps our leaders will guide the world economies through some upcoming hard times, but they might also aggravate those hard times by following policies that benefit the political and financial elite at the expense of the middle class and the poorer classes. Look at current trends in government and banking, and decide for yourself!
The remainder of this decade is likely to be quite problematic for most of the world’s population, particularly the poor. People who have the majority of their assets in stocks, bonds, and paper debt may also be hurt as the currencies are inflated and purchasing power declines sharply.
We have presented a summary of cycles for stocks and bonds, war, gold and silver. We show the source of the cyclic information, the relevant timing, and some commentary.
Stocks & Bonds
Charles Nenner Research (source) Stocks should peak in mid-2013 and fall until about 2020. Similarly, bonds should peak in the summer of 2013 and fall thereafter for 20 years. He bases his conclusions entirely on cycle research. He expects the Dow to fall to around 5,000 by 2018 – 2020.
Kress Cycles (Clif Droke) (source) The major 120 year cycle plus all minor cycles trend down into late 2014. The stock market should decline hard into late 2014.
Elliott Wave (Robert Prechter) (source) He believes that the stock market has peaked and has entered a generational bear-market. He anticipates a crash low in the market around 2016 – 2017.
Market Energy Waves (source) He sees a 36 year cycle in stock markets that is peaking in mid-2013 and will cycle down for 2013 – 2016. “… the controlling energy wave is scheduled to flip back to negative on July 19 of this year.” Equity markets should drop 25 – 50%.
Armstrong Economics (source) His economic confidence model projects a peak in confidence in August 2013, a bottom in September 2014, and another peak in October 2015. The decline into January 2020 should be severe. He expects a world-wide crash and contraction in economies from 2015 – 2020.
Cycles per Charles Hugh Smith (source) He discusses four long-term cycles that bottom in the 2010 – 2020 period. They are: Credit expansion/contraction cycle, Price inflation/wage cycle, Generational cycle, and Peak oil extraction cycle.
Harry Dent – Demographics (source) Stock prices should drop, on average, for the balance of this decade, perhaps as low as 3,300 on the Dow Jones Industrial Average. Demographic cycles in the United States (and elsewhere) indicate a contraction in real terms for most of this decade.
Sun Spot Cycles They are due to peak in the summer of 2013 and decline into 2019. Market tops often occur at or near peaks in sun spots. This is an approximate 10 – 13 year cycle. Economic and political upheavals tend to occur at or near the peak of sun spot cycles.
Lucky 13 1987, 2000, and 2013 marked stock market highs, all 13 years apart.
War Cycles
Larry Edelson (source) His research shows that the world-wide tendency to fight major wars rises and falls over time. He currently projects a peak about 2020 with rising war fever from 2013 until 2020. There is no shortage of possible war zones. As conditions worsen during the balance of this decade, nations will be inclined to distract and control their populace via wars, increased government control, and management of the economy.
Long-Term War Cycles 1780, 1860, 1940, 2020? About every 80 years there has been a major war involving the United States.
Gold & Silver
Jim Sinclair (source) He expected a major low in gold price cycles in March or April of 2013; however, June provided an even lower low. He still expects gold to rally much higher from here. “Gold is going to and through $3,500 in the not too distant future.” He has decades of experience in the markets and has successfully understood and traded gold since the 1970s.
Alf Field (source) He uses Elliott Wave theory to analyze gold. His first major target for gold is $4,500, for Intermediate wave III of MAJOR THREE. Wave IV will be a correction and wave V will take gold much higher thereafter.
Charles Nenner Research He expects gold to bottom about now and rally substantially from here. He called the top in gold two years ago. He called for a bottom about now in the $1,300s. He expects a large rally that lasts several years.
Larry Edelson He projects a low for gold in June 2013 followed by a substantial rally until about 2020, possibly to $10,000.
Armstrong Economics Gold is likely to be weak until after October 2015 and then move strongly higher into January 2020. Gold will rise primarily due to the collapse of paper currencies in the period from 2015 – 2020.
Other Cycles
Comet ISON This comet will be visible in October and November 2013 – it is expected to be the brightest comet in years, perhaps many decades. Highly visible comets often indicate sudden changes in leadership, political systems, and financial systems. Possible changes include the failure or redesign of the Euro, a dollar crash, assassination of a major leader, impeachment, derivative implosion, martial law, international war, and a major economic default.
JR Nyquist on global cooling and food production (source) He discusses long-term solar output cycles. He anticipates that an approximately 200 year cycle in solar output will reduce average temperatures, available water, and crop yields. He expects higher food prices and famine during the next decade. The last cold cycle low was around the time Napoleon marched into Russia.
100 year anniversaries 1913 was an important year. It marked the beginning of the Federal Reserve and the income tax in the US. 2013 has already shown that essentially all digital communications and internet activity are tracked and recorded by the government. It has also marked the authorization for military control and martial law in the United States. Further, bank account and brokerage confiscations (bail-ins) have already occurred; and more “bail-ins” are likely. 2013 could mark the beginning of what might evolve into WWIII – starting in the Middle East.
Summary
There are many cycles that suggest a stock market correction or crash is near. That correction/crash will probably be accompanied by a correction in the bond market that reverses much of the bullish action of the past 30 years. (Signs of a bond bear market are already visible.) Gold and silver should rally substantially as their cycles are turning up while money flees the stock and bond markets and attempts to find safety in an increasingly dangerous world. Financially and socially, many cycles have turned downward; and many will not bottom until later in this decade. Much can go badly wrong during the next seven years. Now is NOT the time for complacency or procrastination.
Along with the decline in equities, bonds, and the value of paper money will come – probably – more social unrest, considerably higher consumer prices for food and energy, bankrupt local, state and national governments, more debt defaults, higher unemployment, possible monetary and/or economic collapse, and a likely escalation in regional and global wars.
A gradual cooling (NOT warming) will reduce crop yields and drive already expensive food prices much higher. The world’s poor will suffer. Hungry people are inclined to rebel and threaten governments. Hence governments will become more repressive and will increase their information gathering on all those viewed as potentially threatening to the status quo.
Paul B. Farrell of Market Watch sees Doomsday poll: 87% risk of stock crash by year-end.
Paul Craig Roberts (source) wrote (consistent with cyclic downturns in stocks and bonds):
“In other words, the participants in the stock and bond markets know that the markets are bubbles created by the printing press. There is no real basis for the high stock and bond prices. The prices are an artificial reality created by the printing press. Rational markets would take into account the printing press element and would price stocks and bonds at a much lower level.
Zero interest rates mean that there are no risks. But how can there be no risk in Treasury bonds when the debt is growing faster than the economy?”
Alf Field wrote this in 2011 regarding what is needed to fix our monetary system.
THE BRUTAL TRUTHS (from Alf Field in 2011)
- The slate needs to be wiped clean and a new sound monetary system introduced.
- That will require the elimination of all debt, deficits, unfunded social entitlements, the US Dollar as Reserve currency, and the big one, the $600 trillion of derivatives.
- To eliminate these problems by default and deflation will cause a banking collapse and untold economic pain, leading to riots and political change.
- Politicians are appointed for relatively short terms and opt for the easy solutions.
- While politicians continue to have the ability to create new money at will, they will do so in order to prevent a melt down on their watch.
- Consequently the odds point to governments wiping the slate clean by generating enough new money to eventually destroy their currencies.
- The new international monetary system is likely to involve precious metals. It will have to be money that people trust and that governments cannot create at will.
Preparation is important. You still have a little time remaining before the “window” closes!
GE Christenson
aka Deviant Investor
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