Divide a Juglar or an Armstrong cycle by two and you get what is known as Kitchin cycle, a 4 to 4.5 year cycle, also known as the “presidential cycle”, because it coincides with the electoral clock of the United States, the world’s leading economy and home of the world’s reserve currency. There is no doubt that the interactions between the fiscal and monetary cycles are major factors in monetary aggregates and as such do influence the US dollar and therefore pretty much every asset classes. That said, whether the political cycle is the cause or the result of a wider and more complex socio-economic machine remains a matter of debate. Politicians would be the first to take credit for any economic upswings and blame the downturn on the cycle itself. Like Kondratieff in his times, the purpose of this post is not to explain, but to expose a cycle that effectively corresponds to the bull-bear cycles of most equity markets and therefore, the average length of bull...
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