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Kitchin and presidential cycles
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...
Joseph's biblical 7 year cycle
The book of Genesis made Joseph a superstar amongst forecasters. His seven years of plenty and seven years of famine predictions led the pharaoh of Egypt to collect a tax in order to save/store crops for the bad times. This effectively enabled the kingdom of Egypt to become the superpower of its times. Seven years cycles exist in the commodity space, FX, and stock market. Bear markets were recorded in 1973, 1980, 1987, 1994, 2001, 2008, 2015 (yes it did happen). Worth putting 2021 on your calendar. In FX markets, seven years cycles worked like a clockwork too. So in essence, we can see that there are 7-8 years money flow cycles influencing all asset classes, but the economy too, from industrial production to unemployment.
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