The main thing is that, deflation or inflation, we see a long history of a flight out of the dollar and into assets with intrinsic value... like gold and silver. -Bruce
Are We In For A Long Winter?
December 20, 2007
Bruce Collins
To everything there is a season, and a time to every purpose under the heaven -Ecclesiastes
Professor Nickolai Kondratieff was an economist in Russia during the Stalin years. In 1926, he published “Long Waves in Economic Life” which was viewed as a Stalin directed ‘smackdown’ because it seemed to criticize certain policies. Eventually, Kondratieff was imprisoned and, later, executed.
One surviving piece of Kondratieff’s economic conclusions was that Capitalist societies go through booms lasting 50-60 years. These booms are followed by inevitable busts. Kondratieff’s work was documented in the 1920’s and was, seemingly, proven with the 1930’s depression less than 10 years later. The good news is that his research concluded that Capitalist societies tend to ultimately survive these natural economic occurrences.
There are four seasons, or phases, in the Kondratieff cycle. These are: Spring (inflation), Summer (stagflation), Autumn (deflationary growth), and Winter (depression).
Many economists argue that the validity of the K-Wave cycle is non-existent now due to the great manipulation that goes on today with Central Banks. However, the real question, in my mind, is: do Central Banks avert crashes or prolong them (and make them worse)?
So, the difficulty then becomes the understanding of where we are in the cycle. One of the ways to determine this is how bad the credit collapse is and how much worse it can get. The Kondratieff wave is, among other things, a study of debt collection.
http://www.americanchronicle.com/articles/view/46684
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