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End Of Grand Super Cycle in Sight (Mid-November 2013?)

October 4, 2013

There is a rising probability that the problems facing the world’s central banks will come to a head by mid-November 2013. Below is some background and explanation.

Since the days of Alan Greenspan, there has been a rising tide of fear that we are facing a growing threat of hyperinflation. Now, against a backdrop of $47 trillion (and growing) global sovereign debt and a seemingly paranoid fixation by central banks on inflating their way out of the debt problem, the anti-inflationists have been arguing for a return to the gold standard or some variation thereof. By contrast, this author has been arguing that whilst gold is certainly a valuable commodity, a return to the gold standard will not address the more deep seated problems that humanity is facing.

These problems range from an almost tripling of the world’s population since the end of World War II, to a dangerous fraying of the ethical fabric of society flowing from a disproportionate focus on “human rights” and the accompanying demise of the Rule of Law. Patently, the corrosive culture of entitlement that has washed across the developed world can no longer be sustained. To some, the Neanderthal legacies of ego and testosterone have led us to the edge of what seems to many to be the edge of a precipice from which most ordinary humans will leap, lemming-like, into the void beyond. Personally, I have a higher opinion general human intelligence than that.

There are some who, ignoring the basic law of physics that matter cannot be destroyed – merely converted to something else – are arguing that the world will soon run out of resources. From their perspective, a leap from this precipice will lead to a bottomless pit of …. undefined nothingness. Again, I don’t agree. My view is far more optimistic.

From another perspective, there has also been a building hysteria in some circles regarding the supposed conspiracies amongst the privileged elite to consciously arrange for a culling the human population and to assume an iron-fisted control over the survivors. These supposed geniuses (the privileged elite) apparently have the power to control the weather and to achieve other nefarious outcomes from which they themselves will be somehow miraculously immune. Once again, I cannot bring myself to agree because the reality seems much more prosaic. The “geniuses” are not noticeably more intelligent than many other competent humans who occupy less lofty stations of life. Where they differ is that they have a predisposition to be both arrogant and amoral and, in unreasonably seeking personal power over others, they have been allowed to acquire this power in exchange for promises of un-fundable freebies and undeliverable benefits (in the longer term) to those who vote for them or appoint them to office in the short term.

Of course, anyone who has any common sense will understand that there is no such thing as either a magic pudding or a free lunch and that everything of value has a cost, visible or hidden. And, arising out of this realisation, two questions emerge:

When will a society-wide understanding finally dawn that the manner in which humanity has organised its affairs to date is no longer sustainable?

What will emerge to take its place?

Some will argue, with compelling logic, that the end of the current epoch of human existence is not only in sight, it is imminent. Indeed, there is at least one mathematical model that is predicting that a “top” of the current equity up-cycle will manifest in mid-November 2013 – that’s around 4-5 weeks time. I doubt if the originator of this model will agree with my view that, if his model is correct, the “top” will be an extraordinarily important milestone in human affairs that has no comparable benchmark in recorded history. It is my view that to compare what is coming down the turnpike with the 1930s “Depression” is facile. The economic, social and ecological environments are not comparable. As my novels attempt to demonstrate, the news is not all bad. Once a problem is understood and defined, it can be addressed. We have both the technological expertise and strength of character to address our problems. The challenge revolves around organisation and in rearranging our hierarchy of values.

Of higher immediate priority, the target date of mid-November needs to be understood.

Applying Sornette’s technique to the S&P500, the US equity market is being anticipated (by some) to peak in mid-November 2013 – see chart below, which was recently published by Casey Research: