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Tuesday, March 17, 2015

The Coming Collapse

"Here is an interesting article I just read. You read it and you be the judge.- Urban Man"

Crash in September?

Very possible say's Bob Rinear. Most people, prepper advisers or financial analysts know that a collapse is coming. Most won't go on record predicting a specific time frame. Well, Mr. Rinear comes as close as I've seen with is article below. But in any event, it's hard to prep and prep hard day by day, week by week and month b month. It is helpful to get "spun up" in a controlled manner to have a date to be finished or at least situated for. This article does that, us until September of this year to be ready.

"Crash in September?"
If you've been reading us for any length of time you know that I've mentioned that we might see some interesting events in the September/October time frame. That has prompted people to ask “why then?” which is a very good question. But the reasons for my observations will cause some people to question my sanity. That’s okay, it’s been done a million times before.

Let me lay out some ground work before we get into some pretty interesting discussion.

Every one of you lives through cycles, and most of them we don’t even pay attention to, they’re just “the way it is”. For instance you know with NO doubt that when you go to bed tonight, that tomorrow the sun will rise. It has for billions of years and will continue to for billions more.
That’s a cycle. You also have no problem declaring that as sure as the sun will rise, your winter will be followed by spring, which is followed by summer and then autumn will appear. That’s a never ending cycle as the earth makes its travels around the sun.

Then there’s the cycle of the zodiac. As the earth circles around the sun, the stars we observe in the night sky change. As the seasons progress it appears as though we’re traveling through the different constellations, again this is a cycle as it looks like the sun passes through the 12 star signs. Then there’s the 26000 year cycle of how the earth (which spins like a top) wobbles on its axis, only to return to where it started.

In economics, there’s many many “cycles” that have been observed, from the typical “boom/bust” to the longer wave theories. Take for instance the “Kondratieff wave”. It was developed by a Russian economist named Nikolai Kondratiev, and as Wikipedia has noted, his economic theories got him into so much trouble with the Russian government that he was eventually executed because of them. 

This is how it works….

Kondratiev’s analysis described how international capitalism had gone through many such “great depressions” and as such were a normal part of the international mercantile credit system. The long term business cycles that he identified through meticulous research are now called “Kondratieff” cycles or “K” waves.

The K wave is a 60 year cycle (+/- a year or so) with internal phases that are sometimes characterized as seasons: spring, summer, autumn and winter:

Spring: a new factor of production, good economic times, rising inflation

Summer: hubristic ‘peak’ war followed by societal doubts and double digit inflation

Autumn: the financial fix of inflation leads to a credit boom which creates a false plateau of prosperity that ends in a speculative bubble

Winter: excess capacity worked off by massive debt repudiation, commodity deflation & economic depression. A ‘trough’ war breaks psychology of doom.

Well according to K wave theorists, we’re in the winter phase, something that should last until about 2020, with a serious depression hitting before then.

Of course there are many other examples of “waves” or cycles, including Elliot waves, Kress cycles, Proprietary cycles, energy wave cycles, etc. But there’s another one that’s making headlines lately and it’s called the “Shemitah” which is based on Biblical interpretation.

The basic idea is this…when God told Moses how things had to work, there was a “rest period” on the 7th year of the cycle. So you’d sow and reap for 6 years then let the ground lay “fallow” or dormant on the 7th year. It also corresponded with the dismissal of debt. Every 7th year on the last day of they cycle month of Tishri, all debts had to be discharged, which tended to lead to economic upheavals. In fact the last day of the cycle has it’s own name called Elul which is the 29th day.

Well, the Shemitah years get a lot of press simply because they’re very interesting. I personally don’t believe in random coincidence, I believe in synchronicity which I can best describe as “coincidence with a purpose”. Well, when you look at the years that correspond with the Shemitah, you do indeed see some incredible correlations. Almost every major economic “shaking” has landed in a Shemitah year cycle, with the bulk of the big events clustered around a 3 week period at the end of a Shemitah cycle year.

So what have we seen happen in Shemitah cycle years? Well the biggest stock market crashes on record happened during them. On September 17th, 2001 (which was Elul 29 on the Jewish calendar), we witnessed the greatest one day stock market crash in U.S. history up to that time.

At the end of the next Shemitah year in 2008, another horrifying stock market crash took place.

On September 29th, 2008 the Dow plummeted 777 points, which still today remains the greatest one day stock market crash of all time. (Barring “flash crashes” of course) Oh and guess what? It landed on Elul 29, the last day of the calendar. But it wasn't just 2001 and 08 that gets interesting. 

The market crash of 30/31, was another “record” time for the period. The recession/market melts of 1973, 1980, 1987, 1994 and 2001 come to mind. All of them were Shemitah years. The mind boggling event of 9/11 was at the last week of a shemitah year in the month of Tishri. That’s quite the coincidence.

I could go on an on about the Shemitah because frankly there’s simply too many events to ignore the fact that because of or in spite of, things tend to happen in those years. For instance this year Elul 29 will fall on September 13th, but that’s a Sunday right? Right. 

However that means the market stops trading on 9/11 ( we've seen a total halt to all trading on 9/11 once before) however the Globex global markets do trade on Sunday evening the 13th. Wait it gets even stranger….On Sept 13th, the Biblical Elul 29 we also get a Solar eclipse. The last time that happened where a solar event landed on Elul 28 at the end of a cycle we got the 1987 “Black Monday” the following days.

So am I saying I think something really wicked could happen this Sept/October because it falls on a Shemitah cycle and Tishri month? Not exactly. When you look at markets you have to have an “assemblage of information” to make your decisions. Just like when we enter a trade we want a stock with 1) a reason it might want to go up 2) a defined level it must cross to prove it wants up and 3) a flat to rising market to help it. Well when looking at the big picture, we also have to line up more than one thing. So consider the following….

This September is indeed the end of the Shemitah cycle and Tishri is the last month of that cycle. Things do tend to happen on or around those dates. We have a Solar eclipse scheduled to happen on that very same day. Interesting. Then we add in the Kondratieff cycle which says we’ll be in the “winter” of the big cycle, often leading to recessions/depressions, etc.

The Kress cycle says that the end of 2014 – the 2017 period, should cause shaking. The Armstrong cycle suggests trouble as it peaks in October of 2015 and leads to massive trouble by 2020. The Elliot wave cycle suggests a period of turmoil.

All these interesting cycles suggest some trouble on the way. While you can’t place 100% confidence in ANY humanistic cycle, when you add up how many of them point to troubles, you should at least take note. But it isn't simply moon cycles or K cycles or Shemitah’s that have me pondering some autumn troubles. We've got global Geo-political issues that are coming front and center too.

The IMF is going to re-balance it’s weightings of the SDR’s this September. We know that China wants in in the worst way. If they get the Yuan included in the basket, it will be one more shot to the stomach of the US dollar, a currency no one seems to want to trade in any more.

The Greeks got an extension of their economic woes put off until June where we’re going to have to endure more back and forth bickering with the European Union. Could that ultimately lead to a Greek exit around September?

I’m on record saying the Fed’s will indeed raise rates this year. While largely symbolic, there will be reaction to it. If it doesn't happen in June, the next likely time slot would be September. Interesting? Maybe. What about Ukraine? There are some who believe that NATO might make a push to get closer to Russia’s borders before the harsh winter season sets in. The month of September has been mentioned a few times. Will Russia sit back and let NATO arms park on their doorstep? Not likely.

Here’s the bottom line folks. We all know this economy is held together with Duct tape, hollow promises, derivatives and printed money. We also know it is going to end one day. We know the world is a very dangerous place with major tensions over Ukraine, Syria and Iran. We know that any number of things could be the “one” that causes a great shaking. From where I sit, the most logical time for something to happen would be the 90 days from August through October. Will it? I have no idea. We could go through the period with nary a hiccup. Or we could see a massive crash. I just find it all worthy of note, and take my guess that we “very well could” see an event in that time period.

Urban Man

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