A Macro/Micro View: Waves and Cycles
By Bradley Ray Gudgeon
September 16, 2018
That which has been is what will be,
That which is done is what will be done,
And there is nothing new under the sun. Ecclesiastes 1:9 (NKJV)
Much has been written regarding repeating socio-political economic (SPE) cycles. Strauss and Howe wrote about the 20-22 year generational turns, which work in a 4 generation cycle called a Saeculum. Each Saeculum lasts about 80-88 years and includes a repeating pattern of Winter, Spring, Summer and Fall back to Winter again.
R.N. Elliott, A.J. Frost and Robert Prechter (over time) were able to map out an Elliott “Grand Super Cycle” 5 Wave pattern stretching from the founding of the USA into about 1999-2000. W.D. Gann was able to see repeating cycle patterns of 90, 82-84, 60, 45, 30, 20 and 10 years. There are many other cycles like the 4-year presidential cycle lows (2018 and 2022 are next) and Benner’s Cycle, which I will get to in time.
In this section, (Section 1) I’m going to look at the SPE picture starting with the British Financial Panic of 1772 to the present.
The 1772 panic sowed the seeds of the American Revolution and the forming of the United States of America. This is where I see the beginning of the 4 generation cycle as it pertains to America (It is interesting to note in light of the repeating 80-88 [average 84] year cycle, there is also the Uranian/Taurean [U/T] cycle [when the planet Uranus enters into the sign of Taurus for a general 8-9 year period every 83/84 years], which also matches W.D. Gann’s 82-84 year cycle and the Saeculum).
Prechter was able to map out a general 5 wave sequence from the 1780’s until 1999.
(see pages 92-93)
I agree with Prechter that the final 5th wave ended in 1999. If one starts in 1932, Super Cycle Wave I of Grand Super Cycle Wave (V) clearly terminates in 1937, with 1942 being SC II’s terminus. SC Wave III ran from 1942 to 1966 and had a clearly defined 3rd of a 3rd five wave sequence (or 9 waves total), which is common in third waves. Wave IV ended as an expanding flat (Elliott’s Rule of Alternation works here as Waves 2 and 4 are distinctly different: wave 2 was a zig zag and wave 4 was a flat) in late 1974, which launched the final SC Wave V of (V) into 1999. SC Wave III was 24-years long and SC Wave V was 25-years long, which agrees with Elliott’s Equality of Waves principle in which 2 up waves in a 5 wave sequence tend to equal each in other in time, price or both.
The final Cycle Wave 5 of V of (V) should have terminated in 1990, as Cycle Wave 5 (1999), equaled Cycle Wave 1 at that point (1990). The extension began in 1990 at the terminus of Primary Wave 2 in Oct 1990, up into 1998 to Primary Wave 3; Primary Wave 4 into Oct 1998 and the final Primary Wave 5 in 1999 ending both Super Cycle (SC) Wave V (1974-99) and Grand Super Cycle (GSC) Wave [V] (1932-99). This extension was caused no doubt by the Baby Boomer Generation and their spending wave (re: Harry Dent Jr.).
Since the 1980’s, I have been mapping the wave sequences down to the smallest sub-waves and found 5 wave sequences within 5 wave sequences that were clearly and easily identifiable until 1999. Since 1999, the true 5 wave sequences have disappeared altogether! This has startling implications going forward if Elliott’s rule of Double Retracements of 5th wave extensions of 5th waves holds true (more later).
Getting back to the U/T cycle (which is virtually identical to the Saeculum), I understand that this cycle (before the start of the American Revolution of 1775 and the Panic of 1772) began in 1767 and ended in 1775, the exact start of the Revolution in the colonies. This same U/T cycle occurred again from 1850-59. There was a financial panic that began in 1854, ending in 1857 (terminus of Grand Super Cycle (GSC) Wave II, GSC Wave I ended in 1837). The American Civil War started 2 years after the end of the U/T cycle, whereas the American Revolution and WWII began near the exact end of the U/T cycle.
The next U/T Cycle began in 1934 and ended in 1942. WWII began in Dec 1941 almost perfectly at the end of the U/T cycle. The next U/T period is one that we have just entered 2018-2026! To complicate things, Gann’s 90 year cycle top is due around 2019/21 (1837 top to 1929 = 92 years, 1929 +92 = 2021). Gann’s 20 year cycle top is due in 2020.
The Jacksonian politically caused 90-year bust cycle of 1837-42 (caused by the Rothschild bankers, E-Wave notation “a” of GSC II) plus the crash of 1929/32 makes the 90-year cycle due to bottom again as a cycle trough around 2022, 1 year past the ideal Benner’s Cycle low (the last Benner’s Cycle was due in 2011 and came 2 years early) and perfectly aligning with the 4 year presidential cycle low. Benner's Cycle top was due in 2010, but occurred late in 2007. Ideally then, we should have about 1 to 2 years before the top occurs, with an outside chance at 2021.
What made the depression of 1837-42 (“a” of GSC II), and 1929-32 (GSC Wave IV) become equal in severity was the 90 year cycle. The U/T cycle did not enter into the equation again (after the American Revolution) until wave “c” of GSC II ended in 1857. The U/T Cycle ended GSC Wave II (followed by the Civil War) and the other U/T Cycle ended Super Cycle (SC) Wave II of GSC (V) in 1942 (with WWII already raging), each a crisis war for the USA according to Strauss and Howe. The next crisis war is due ideally around 2025/26!
Then, we also have the repeating revolutionary cycle of 250 years suggesting a panic stock market low around 2023 and a crisis war around 2025. The 7-year Shemitah Cycle is due around 2022/23, last seen 2015/16, then 2008/09, then 2001/2002 before that. The Shemitah Cycle typically either arrives in the year (or sometimes 2 years) before the stock market low or on the exact year of the low. 1980-82 saw 2 recessions. 1987 (ca. Dow 2700-1600) was a direct hit (Primary Wave 4 actually ended in mid Nov 1988 at the Bosky low near Dow 2000) and 1994 was a bond debacle and the bottom before the huge rise into year 2000. 1973-74 was the Arab Oil embargo, which ended SC Wave 4 of GSC (V).
Benner’s Cycle doesn’t deviate by more than 2.5 years making early 2024 the latest we should see a stock market low. The gold/silver cycle runs 7-8 years making late 2022 to late 2023 the next likely bottom for precious metals, which should align to near the coming low in the stock market. My best guess is we see a top in 2020 or 2021, and the worst of the drop should occur later in 2022 or 2023.
The 3 U/T cycles run about 251 years and 36 Shemitah cycles run 252 years, which is close to the Revolution Cycle of 250 years. The average generation cycle runs 21 years, and 84 for the Saeculum. 3 Saeculums run about 252 years. Everything points to major low around 2023 +/-.
The problem with identifying the timing of the crash is not as much of a concern to me as the possible severity of the coming crash itself based on both fundamental, cycle and Elliott Wave analysis. What I’m seeing, (based on past cycles, Elliott Wave and fundamental analysis) tells me that we may very well see the worst crash in our history.
Elliott’s Rule of double retracements of 5th wave extensions of 5th waves tells me that the next low should go down to the Oct 1990 low under S&P 500 300 (where the 5th wave extension began). This alone tells me that something like we have never seen before is coming our way!
The 2002 (dot.com low) and 2009 (mortgage crisis low) bottoms failed to do this, instead created a very bullish xyz (abc) flat which launched a "non 5 wave" impulsive wave, which means that it is likely part of an E-Wave bear pattern that follows a GSC (V) Wave sequence (1770’s/80’s to 1999). Higher irregular highs (like we are in right now) can exceed any previous 5 Wave pattern. When they do, the sell-offs are often huge.
This scenario creates a larger bullish XYZ (ABC) pattern, which should be a larger WAVE X (2022/23?), which means a huge wave up to WAVE Y to follow. I can’t imagine what all this implies, but another collapse harder than this one (which I believe we are going to see in the 2020’s) is possibly implied in the 2040’s. With the USA losing its reserve currency status in the world, I conjecture that the next wave up will be caused by HUGE inflation and a commodity boom (Harry Dent agrees). This next inflation wave is due to crest around 2038-42. There are already signs we are going into another mini ice age that will last until around 2051 and in the past, this type of weather condition has caused famines, diseases and more wars.
The coming crash (and the ensuing commodity/inflation boom) could end up being the worst socio/political economic crisis that we’ve ever seen. We are creating unsustainable levels of debt around the world, not just to businesses and government, but consumers as well.
We are having our own domestic pension crisis right now due to low levels of interest paid out (due to QE and virtually zero rates) and pensioners are getting a cut in pay. There simply is not the money there and trying to pay these pensions to increasing levels of Baby Boomer retirees is going to be difficult, if not impossible.
The market meltdown contagion could start in the emerging markets where already there is a currency crisis developing. The rot is already showing up. Our own real estate market is in an unsustainable bubble that is soon meeting a point in 2020 where Baby Boomers will start selling their homes and downsizing even as the Millennials step up their spending ability (note: the last real estate top occurred in 2006, one year prior to the stock market top in 2007) .
Everything points to a R.E top in 2020. When our stock market gets into the frenzy stage where even the taxi driver starts bragging to his customers how much he’s made in the stock market then it’s time to sell. We aren’t there yet.
No doubt, our stock market is overvalued, but like I said we haven’t gotten to the frenzy stage yet (like Bitcoin in 2017). The FED is raising rates into this Trump induced mini boom and that is another danger we need to recognize. People keep calling for a top now in 2018 and it never seems to happen. This just makes things worse, as it causes complacency and the urge to get in on the speculative fever that people have missed causing even more speculative fever. When the next good sized dip occurs, that is when the last of the buy the dip crowd will enter and cause the last buying frenzy to dizzying proportions above 3400-3800 on the S&P 500, maybe more (Sept '18 around 2900).
A few years ago, I mentioned starting a program called Eagles Over America as a preparedness move to, much like preparing for a Cat 5 hurricane. My original work told me to look for a top around 2018 and a low around 2020/21 based on Benner’s Cycle (Princeton Economics Professor Martin Armstrong's original Pi Cycle work also suggested a top in 2018; he is now looking for a top in 2020/21). President Trump has been a wild card in this whole equation as has the FED. Our market continues to go up, but most world markets have been falling.
I realized last year that I was early in my call for a top in 2018 as most are right now. Still, the call to action now to get ready is imperative. I can’t imagine the social implications of a crash like what is coming and how it will affect us here in the United States and even the world. We hardly know our neighbors and families anymore as we have become increasingly isolated due to the technological shift in how we communicate.
Building communities within and around local communities that we can depend on is going to prove to be beneficial in the future, don't you think? We need to educate people on the merits of financial diversification, food storage, and preparedness in general, basically preparing for the worst, but hoping for the best.
My study of cycles and waves suggest all classes of assets will be affected by the coming crash, this includes real estate, the stock market, bond market and yes, precious metals and mining shares (to a lesser extent). Does this mean you need to sell your home and precious metals?
People still need to have a home to live in and owning small denominations of silver and gold may prove to be useful in barter should the banks shut down. Still, there are ways to make a lot of money when the market crashes and this avenue might need to be more prudently investigated. Cash will also be king in a crash: cash kept outside of banks and safety deposit boxes. Food storage, security, water, energy sources, growing your own food may prove to be more valuable than cash and precious metals if things really break down.
Eagles Over America is a membership site where people can come together and try to solve some of the problems we may face and yes, prosper in spite of it. With the financial elite building bomb shelters and buying homes in New Zealand, don’t expect them to help you out. Don’t expect the government or politicians to warn you, as this would be political suicide. Ron Paul is one of the few out there trying to get the message out.
Silver went to under $9 and gold under $700 an ounce. The cycle/waves I study suggest that they too will fall in price when the crash comes back to the 2008 lows. In 2008, the premiums rose on small denominations of PM’s when the 2008 crash happened, but still the prices fell. A diversified approach to the coming crash would seem the best option I would think. Those who are the most liquid at the bottom will be able to pick up massive bargains and be the new movers and shakers in the next phase of the economy.
Eagles Over America is about creating solutions to the coming problems and creating communities. We need to get the word out. We need to be proactive. We need to get out ahead of it.
The shift in wealth is going to be huge in the coming 20 years! The world as we have known it is going to go through some pretty dramatic changes in a few years and even beyond.
Every great crisis creates opportunities for those who see it in advance. Most people are reactive, like buying gold at the top in 1980 or 2011 (30-31 year commodity cycle), or dot.com stocks in 2000, or stocks in general in 1929 (top of the 90 year cycle), or Bitcoin earlier this year.
Eagles Over America is like the need to build a proper crosswalk and "walk light" system near an elementary school before a child gets hurt or killed. This actually happened when I was a kid. I remember grown-ups talking about it, but no one did anything about it until tragedy struck and a young girl was struck by a car and killed. We tend to be reactive instead of proactive. Obviously this is a mistake.
Do you want to be on top of the heap or on the bottom? Do you want to be a victim or a survivor? Ultimately the choice will be yours. Many times in history people have ignored important warnings: e.g., Lister's warnings to doctors to wash their hands after handling cadavers, could have saved countless childbearing women's lives in the mid 1800's and Jesus' warning to Christians about the coming destruction of the Jerusalem and sanctuary in 70 A.D. saved every Christian's life as recorded by Josephus. I'm sure you can think of many other circumstances in history where this has been true. You have read the evidence. I hope you make the right choice for your sake and your family's sake. I know they come first as they should.