Wednesday, April 6, 2011

Modern Civilization Period

We are now in the position to flesh out the rest of Grand Supercycle wave [IV], and for that matter, the rest of Millennium wave ((1)).  The "Great Deflation" is associated with Supercycle wave (a). We know that Grand Supercycle wave [IV] will trace out a flat, triangle, or a double-three to satisfy the guideline of alternation since Grand Supercycle wave [II] is a zigzag. Given that Grand Supercycle wave [IV] must remain within the parallel trend channels associated with Millennium wave ((1)) with perhaps an under-throw at the end of the correction, I lean heavily towards a flat.

Fibonacci convergence patterns are again helpful in looking for significant events. After 2021, the next two years of significance are 2042 and 2055.

2042 -- is 21 years after the proposed low point of the "Great Deflation" in 2021
            is 34 years after the top of Cycle wave b of Supercycle wave (a)
            (off by 3 months)
            is 55 years after the Black Monday crash of 1987
            is 89 years after an Intermediate degree low point in 1953

2055 -- is 34 years after the proposed low point of the "Great Deflation" in 2021
            is 55 years after the peak of Grand Supercycle wave [III] in 2000
            is 89 years after the peak of Cycle wave III in 1966

The year 2055 is also special because it is a low point in the Kondratiev cycle, which is primarily a cycle involving liquidity, which is reflected in the rate of change in prices. The average duration is 54 years, but it can vary from one cycle to the next. The last low points occurred in 1830, 1890, 1949, and 2003. The next low point should therefore occur in 2055. This strengthens the case for a flat in Grand Supercycle wave [IV] with the bear market ending in 2055.

Here's the chart showing the predicted wave path for Grand Supercycle wave [IV].

DJIA, 1995 - 2055

We will get a strong bounce following the end of the "Great Deflation". The bounce should be strong enough to take the US economy to new highs in terms of nominal GDP (although not in terms of real money). Supercycle wave (b) represents a long reprieve period within the larger bear market.

Just as fifth waves have weaker fundamentals than third waves, B waves have weaker fundamentals than fifth waves. This case will be no different. Economic fundamentals for Supercycle wave (b) are expected to be on par with Cycle wave b (of Supercycle wave (a)). In other words, 2021 - 2042 will be a lot like 2003 - 2007. Economic fundamentals will be strong enough to support emerging industries, which in this case, an industry built on green technology (i.e. solar, wind, geothermal, carbon capture technology). Supercycle wave (b) would therefore be identified as the "Green Technology Age".

A second decline, Supercycle wave (c), will follow. In many ways, the period 2042 - 2055 will be akin to 1770 - 1784. We all remember what happened during 1770 - 1784. War, uprisings, large scale religious persecution, authoritarianism, and revolutions took place, engulfing the entire planet. The American and French Revolutions are the best known parts of the period, but the entire planet was affected. 1770 - 1784 was a period of tribulation in human civilization, which is identified as Supercycle wave (c) of Grand Supercycle wave [II].

There is reason to believe that 2042 - 2055 will be worse than 1770 - 1784. There are two things that human civilization will have to contend with in 2042 - 2055 that were not an issue in the 1700's: Global warming and the fear of an asteroid impact. Global warming will cause a lot of havoc on its own. An asteroid, named 2007 VK 184, found in the Catalina Sky Survey, has a 0.04% chance of hitting Earth in 2048, which happens to be the center of Supercycle wave (c). There is no need for an actual impact to occur. Just the fear of an impact would be enough to cause mass panic. It is for that reason that Supercycle wave (c) would be identified as "The Great Tribulation". As we get to the end of the period, the fear of a dark age will become pervasive in media and politics.

After Grand Supercycle wave [IV] is completed, we can look forward to a new bull market, Grand Supercycle wave [V], with new achievements, new industries emerging, and a period of renewed growth for human civilization. There is already work underway in biotechnology and nanotechnology which will help propel human civilization to new heights in the next bull market.

Here's the chart for the Modern Civilization period. The wave path of the stock market prior to 1695 is reconstructed based on economic and socionomic data, and the wave path of the stock market in the future is projected.

DJIA-Equivalent, 1400 - 2233

Here's the full picture of the Modern Civilization period:

Ultra Millennium wave ((III))     1400 - 11000+,        Modern and Future Civilization
Super Millennium wave ([1])     1400 - 4400+,          Modern and Future Civilization
Millennium wave ((1))               1400 - 2233,           Modern Civilization

Grand Supercycle wave [I]        1400 - 1720,          Renaissance

Supercycle wave (I)                  1400 - 1470,          Commercial Revolution
Supercycle wave (II)                 1470 - 1484,          Depression
Supercycle wave (III)                1484 - 1637,          Enlightenment Age
Supercycle wave (IV)                1637 - 1648,         Depression
Supercycle wave (V)                 1648 - 1720,         Scientific Revolution

Grand Supercycle wave [II]       1720 - 1784,         Major Depression

Supercycle wave (a)                   1720 - 1722,       South Sea and Mississippi
                                                                            bubbles burst
Supercycle wave (b)                  1722 - 1770,       Temporary reprieve period
Supercycle wave (c)                  1770 - 1784,       "The Tribulation" (American and
                                                                       French Revolutions occurred
                                                                       during this period)

Grand Supercycle wave [III]      1784 - 2000,      Industrial and Technological

Supercycle wave (I)                   1784 - 1835,      Early Industrial Revolution
Supercycle wave (II)                  1835 - 1859,      The Long Depression
Supercycle wave (III)                 1859 - 1929,      Late Industrial Revolution
Supercycle wave (IV)                 1929 - 1932,      The Great Depression
Supercycle wave (V)                  1932 - 2000,       Technological Revolution

Grand Supercycle wave [IV]      2000 - 2055,        Major Depression

Supercycle wave (a)                   2000 - 2021,        "The Great Deflation"
Supercycle wave (b)                   2021 - 2042,        Green Technology Age
Supercycle wave (c)                   2042 - 2055,        "The Great Tribulation"

Grand Supercycle wave [V]       2055 - 2233,         Biotech and Nanotech

Supercycle wave (I)                   2055 - 2084,         Biotech Revolution
Supercycle wave (II)                  2084 - 2092,         Depression
Supercycle wave (III)                 2092 - 2144,         Nanotech Revolution
Supercycle wave (IV)                 2144 - 2152,         Depression
Supercycle wave (V)                  2152 - 2233,        Space Colonization Age 

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