Economic boom ahead!
Economic boom ahead!
Economic boom ahead!
The less people are ready to accept a market forecast on the, the better the odds it will come true... And in times full of „end of the world" hysteria as in the past months my prognosis of a coming giant economic boom is rather unconventional, to say the least. In this article I'd like to present some astrological, cyclical and fundamental reasons for this bold call and make further specifications.
The astrological perspective
In the Amanita Investor's Guide 2009 written in late 2008 the boom constellations from mid- to late 2009 were described. Above all, the conjunctions (angle of 0°) of Jupiter and Neptune are decisive, they indicated a business boom almost all of the time in the past. The last Jupiter-Neptune conjunction was in December 1996, in late 1996 through early 1997 US economic growth was on the highest level +/- 1 decade. And the conjunction before in early 1984 even coincided with the highest economic growth of the past 40 years. In September 2009 this boom and inflation signature is visible in the sky again.
A similar boom constellation are the conjunctions of Jupiter and Chiron every 13-20 years. Chiron has a very eccentric orbit, so this cosmic cycle is very irregular. Under this aspect combination we never had an economic contraction in the US. The dates of the heliocentric conjunctions:
Geocentrically, Jupiter, Neptune & Chiron are in a triple conjunction (stellium) from late May through December 2009, which is very positive for the economy. On the other hand, Jupiter 0° Uranus has no special implications for business cycles, and Jupiter 0° Pluto is the often mentioned depression cycle. This is the 2009 geocentric chart:
And below please find the geocentric mundane constellations 2009, with the triple conjunction triggered first from late May through July and then again in December.
My highly respected colleague Bill Meridian has performed interesting statistical studies and found out that the Jupiter cycle is by far the most important to forecast the economy (duration: 11.86 years). Since the 1980s the Jupiter cycle alone has nailed highs and lows in the business cycle very well. This is not really a surprise as Jupiter = growth, and a compound interest system requires growth to function.
Business activity highs with Jupiter in Taurus and Capricorn (also late Cancer/ early Leo):
At the business activity high in late 2007 and 2008 Jupiter went through Capricorn, at the top 2000 Jupiter was in Taurus. The previous passage through Taurus in 1988 was a boom with 3-4% growth. And the highest growth of the recent decades in 1984 was also timed by Jupiter in Capricorn.
Business activity lows with Jupiter in Virgo and in Aquarius (also early Scorpio)
The depression of the 1930s ended with Jupiter in Virgo as well as the latest 2 recessions in 1991 & 2003. Jupiter was around early Scorpio when the major economic crisis of the 70s and early 80s was over. The longest depression in US history began after the crash 1873 and lasted 5.5 years until 1879 when Jupiter entered the sign Aquarius. Currently Jupiter is again in Aquarius, the ideal GDP bottom is with Jupiter in the 3rd third of Aquarius, which is right now (April/ May 2009). Jupiter in the zodiac signs Aquarius through Taurus (2009-12) is the by far the most expansive part of the Jupiter cycle, ideally topping out in spring 2012, although other factors suggest a delay. From late 2012 the business cycle is heading down into 2015 (Virgo) or even 2021 (Aquarius).
The cyclic perspective
Since 2006 I have been writing of the amazing 76.6 year cycle, suggesting that world events in general and in the markets are repeating after about 76.6 years (37 x 108 weeks). The numbers 108 and 37 are very special:
- In the Hindu and Buddhist tradition the 108 is considered the most holy of all numbers, one could also call it the number of astrology: the distance earth-moon is about 108 times the diameter of the moon, the diameter of the sun is about 108 times the diameter of earth and the distance sun-moon is 108 the diameter of the sun.
- The 37 is a unique number (link)
- The primary anchor is dating back to 1623, the inflation high during the "Tipper and See-Saw Time " period, the first major inflation since the fall of the Roman empire.
- 2 cycles later the key year 1776: birth year of the United States, of the current capitalistic system („Wealth of Nations" published by Adam Smith) and the illuminati.
- One cycle later in early 1853 one of the 3 key stock market highs of the 19th century occurred.
- Add another cycle and you arrive at late 1929, an often quoted reference year for the current situation.
- The latest hit 2006-7 marked a bubble top (biggest real estate bubble in history) and an economic high, too.
Between mid-1932 and early 1933 the great depression ended in the major countries as the chart below (real GDP per capita 1927-1938) suggests.
The most amazing fact is that for the stock markets the 76.6-cycle works like a clockwork nailing turns almost to the day: major reversals usually either come in the days after the date due or precisely one moon cycle (27-30 days) later. E.g. the low in March 2009 was exactly 37 x 108 weeks plus 1 moon cycle after the Dow Jones bear market low of July 1932, a reason why I wrote in an update for the Amanita premium subscribers on March 11th that 2 days before a low ‘epic magnitude' should have been set - hallelujah! The benchmark index S&P 500 bottomed out at 666 points (the Sign of the Beast and of the New World Order) and has gained a whopping +30% in just over a month, with other major indices in a similar rocket mood.
The fundamental perspective
Empirical investigations tell us that the average housewife can forecast the future business activity better than business professors in their fancy ivory towers, who among those with the least understanding of the business world. Those funny folks usually project the most recent development into the future, and because business was so bad the past 6-12 months, they assume that trend will continue into the future. As a carpenter said some 2,000 years ago, "Father, forgive them, for they do not know what they are doing." And also, "You will know the truth and the truth will set you free."
Useful leading economic indicators are suggesting, of course, just the opposite of the mainstream media touting end-of-the-world horror scenarios. E.g. the KID indicator by Thomas Spörer has turned up (link).
Even more convincing is the analysis of the US economy: in the past half year much more was consumed than produced. This means that the macro-economic inventory was reduced dramatically, as only once before since WW2: at the end of the recession of the 1970s (annual growth rates of 6-7% followed). In other words: corporations are hypnotized by the terrible sentiment so they produced much less than demand would suggest. Reducing stocks does only work so long, until a backlash sets in where much more has to be produced then consumed. It's like stretching a rubber band into one direction, what happens if you let go? The chart below is from Tim Bond (Barclays) and based on the official, i.e. massaged data. However, since both production and consumption are most likely given too high, the difference should still mean something.
In late 2008, China as the leading industrial nation on the planet announced a stimulus package of an incredible 60% of the GDP, and added again in 2009. No wonder that Chinese credit expansion is exploding (hardly less than +20%), the Chinese workbenches will soon rotate (chart from the "Smart Investor"). On the one hand, China has to promote growth as much as possible to stabilize the system, and on the other hand the solid Chinese budget management means that the country has still a wide scope to increase debt.
Bottom line: Catastrophe boom = boom before the catastrophe
We are approaching the top of a 5,000 year civilization uptrend. Martin Armstrong recently showed a nice chart with the 2 ideal patterns for highs resp. turning points: spike or waterfall.
The spike is the norm, the waterfall is the rare exception: almost always in the final stage of a move you can see a massive acceleration, which could be labeled as euphoria before death, with advances of 50-200% within months. In my opinion the coming high in the Galactic 26,000-year cycle should stick to that pattern, too.
After the ideal economic low in the 2nd quarter 2009 a fast recovery can be expected, however, at a cosmically quite clear point in the not too distant future (more in the premium area) this should lead to another threat of total break-down. This leads to more money being printed within weeks or months than in the entire history of mankind before, leading to huge inflation, of course. The 3/18/09 decision to buy large quantities US government bonds is another milestone to align the world economy with the renowned Zimbabwe School of Economics. In late 2008 Zimbabwe officially congratulated the US to have opted for the Zimbabwe way... in early 2009 you could pay with 100 trillion dollar notes in Zimbabwe...
Government debt is almost the same as inflation. The exploding government deficits and the hyperinflation following after some time are paradoxically triggered the final catastrophe or crack-up boom in the terminology of the Austrian School of Economics. The crack-up boom emerges when more and more citizens recognize that the formal bank guarantees of most governments are worth nothing in reality: first because the beginning hyperinflation is starting to crush the real worth of all paper assets, and second because the states themselves start to totter. In earlier times the smart money was early enough transferred abroad (e.g. into the Swiss franc) which is not possible this time as all fiat currencies are approaching their inner value (zero). So people will take out the money from the banks, first little by little and finally in panic, and buy real assets for it:
- Precious metals will no longer be available in significant amounts after the first major run (or only at a tremendous premium to the spot price)
- Stocks as the historically best inflation protection will profit a little bit, but the crowd doesn't trade stocks
- Consumer goods remain the only exit for the crowd. Most people will come to the following conclusion: before my money has vaporized totally and I can throw it into the waste paper, I'd rather buy a new car, a nice apartment (real estate is first and foremost a consumer good, and only secondarily an investment good), or at least a new washing machine, and enjoy the long desired vacation. That's why consumer durables and high-priced consumer goods will profit most (people won't eat so much more pizza). This could trigger the biggest boom in the history of capitalism (spike effect) dwarfing anything seen before in history...
Also around 76.6 years ago the "Miracle of Wörgl (Austria)" occurred, when an astonishing local boom could be produced by issuing its own "Freigeld" currency. A great many local currencies have been formed all over the world lately. A factor for the success Wörgl was that the new currency lost value over time, thus preventing hoarding. In some way a hyperinflation is resembling this type of "Schwundgeld", but with many adverse side-effects. Nevertheless, money velocity is increased substantially. During this crack-up boom the illuminated high finance banksters will - unnoticed by the mainstream - steal almost everything from the middle class and totally impoverish the world in order to create the New World Order...
"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered. [...] I believe that banking institutions are more dangerous to our liberties than standing armies" (Thomas Jefferson, US president and principal author of the US Declaration of Independence)