Cycles and the ECM

It’s October 2022, and yesterday, I stumbled upon an article called The Business Cycle and The Future by Martin Armstrong in 1999. I saved this article back in 2015, probably because ECM (Economic Confidence Model) was mentioned in other articles I read back then.

The thesis of the ECM is that markets follow a rhythm (cycle) of 8.6 years in length. At the end of a cycle, one should expect a significant event (e.g., a market crash). These events are significant enough to signal a new cycle. A cycle can be classified into major and minor cycles with longer and shorter intervals.

Each cycle, according to the article, tends to increase in volatility (swings) and intensity. One date caught my eye: March 22, 2022. This was one month into the Russia-Ukraine conflict.

As markets behave cyclically, so does politics. The article warned that tyrants would rise following markets collapsing (similar to Hitler’s rise following the collapse of the Weimar Republic):

Such periods have always brought not merely great booms and busts, but they too hold in the palm of their hand the thunderbolt of war. The economic future of Russia is one of such corruption and decay, that it too will rise as the warlord who seeks to regain what he has lost. China too will eventually beat the drums of war as its economy worsens and its leaders seek to hold the slippery reigns of power. 

The Business Cycle and The Future

See also
The decline and fall of the West (John Mangun)
The 2016 political cycle (John Mangun)

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