Over the past many years, we have been highlighting one concept that many people fail to understand and utilize – the longer term Generational Cycle. This is important because of two reasons; first, it has been in place and accurate for over 400 years and, second, it identifies events, opportunities and Archetypes that we should be aware of. Are you ready to learn about these massive cycles and how they relate to the markets and how they create massive opportunities?
Where are we currently in this cycle process? What can we learn from the past and what can we do to prepare for the future?
This chart below shows the share of total US income represented by the Top 1% of all earners. As you can see, current levels (as of 2015) are near 22% and are near the highest levels over the past 80+ years. When the Top 1% earn more than 16~17% of all income, there is a disparity in income opportunity across all levels of income and, as history has shown, an economic or social even may be eminent to restore some opportunity to the lower income levels.
The general principle of the Generational Cycle is that 50 to 85 years after a major social, economic or geopolitical event, society (meaning the general populous) has forgotten the lessons learned from that event and is somewhat destined to repeat it (in some form). The last massive social, economic and geopolitical event on record, which is also the last known “Crisis Cycle” was the 1926 to 1949 span that included the end of the Roaring 20s, the Great Depression, Pearl Harbor, World War II, A US Banking Crisis, Atomic Weapons, NATO created. This cycle event is known for the upheaval that is created by a destruction of fundamental pillars of society and economic success found within the previous 50+ years.
The next cycle event that follows the Crisis Cycle is the “Rebirthing Cycle”. Historically, this cycle executed from 1950 to 1972 and was a time where society pulled together from the previous cycle event, developed new foundations and developed opportunities from technology, infrastructure and strengths that were fostered from the Crisis Cycle. As you can probably imagine, the events of the Crisis Cycle had a lasting result for generations to come. The Rebirthing Cycle was a result of the chaos and uncertainty of the previous cycle and the people alive at the time were cautious and calculated in their planning.
The next cycle event is the High Cycle. Historically, this cycle executed from 1972 to 1995 and was a time of accelerated success, prosperity and excess. The High Cycle is when nearly every aspect of the Rebirthing Cycle is firing on all cylinders – the economy is good, housing is good, there is plenty of excess for everyone. Governments feel they can do no wrong and spending is through the roof.. What could go wrong – right? This cycle is like a perpetual high that creates wealth and prosperity while creating massive debt loads for some.
Then comes the Unraveling Cycle. By our estimates, we’ve just completed the Unraveling Cycle between 1996 to 2017~18. The Unraveling Cycle is when the structures, foundations and pillars that society built after the last Crisis Cycle begin to crumble. Financial systems start to collapse with debt (pensions, state and local governments, entitlements, global governments). Unique sectors of the global markets start to appear fragile, debt-laden and mismanaged. Remember, the previous cycle event, the High Cycle, was a period of time when everything was super, one could do not wrong and growth would continue forever…. but now, things seem different.. not so super.. and maybe not keep growing forever. I equate the Unraveling Cycle to your car’s engine starting to fall apart. As long as you keep gassing it (QE and bailouts) with Ether, you can probably keep it running for a while longer – but eventually it will completely die and require a complete rebuild or replacement.
So, now that you have been briefed regarding the massive Generational Cycles, how do you profit from these future events? That answer is simple, prepare yourself and your investments for the potential that we could be entering a time of great upheaval and repositioning. Find partners, like TheTechnicalTraders.com, that can assist you in identifying key market rotations, opportunities and help you stay out of trouble. Remember, just like in the 30s and 40s, the markets continue to move, there are still opportunities to invest and there are still opportunities to profit. One just has to be aware of where the opportunities will be presented and what to watch out for while navigating these tricky waters.
While we are watching the global markets for signs of weakness and further signs of any potential correction, we want you to understand that Technical Traders Ltd., and all of our resources, are here to assist you and help you navigate this once in a lifetime opportunity. We urge you to consider joining www.TheMarketTrendForecast.com or www.ActiveTradingPartners.com as two unique sources that will keep you aware of these cycle events, find opportunities for you and help you understand the markets, trends and provide detailed forecasts of future trends.
Remember, these cycle events are opportunities for you to prepare, plan and execute for success. IN many cases, these are once in a lifetime event that can provide nearly unlimited opportunities for success. Make sure you have the right partners to assist you in executing for profits.
Chris Vermeulen www.TheTechnicalTraders.com
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