I want to talk about EMPIRE, state of empire, end of empire, and change within empire. There may be a pulse ,a timing, a rhythm in these matters and I'm going to look into this aspect of empires, im particular the one in which we ourselves live.
Five hundred years ago THE HOLY ROMAN EMPIRE was feared by Kings everywhere. It was both a State And a Religion during a time when religion was important in peoples' minds. So it was the hegemon, the dominant power, of its era, in the territory of Europe plus a bit more around the edges of Europe. There was a lot of people, and great economic production, also military force, under its rule.
It dominated everything around it. It was a world power. It had armies.
Then a guy in Germany, by the name of Martin Luther, came along. Luther looked at the then existing "Pay-For-Play" sale of absolutions/indulgences/diplomatic immunity which had been introduced to pay for a new fancy building in Italy. That building was for the wealthiest man in the world, but it had been decided that money was to be collected from everywhere to pay for its construction. Luther called them out for being a corrupted system based on bribery.
It was a big decision to go whistleblower against such a system. Most others who tried it had ended up tortured and after that, dead.
He took his questions to his superior, the bishop, and got treated like every whistleblower everywhere gets treated by the in-system apparachiks enjoying ill-gotten gains and high priveleges.
So he nailed his complaints up in public. Specificaly Luther nailed them on the door of his church. THIS IS IMPORTANT. Remember that phrase "ecclesiastical law"? Ecclesiastical Law meant Ecclesiastical Courts that passed sentences. So, back in those days THE CHURCH WAS THE LAW. To consider this in modern context, this is tantamount to posting a notice on the door of the supreme court a geographical region covering several countries.
And note this also: the printing press had been invented about 80 years before, so word spread. WORD GOT OUT. This was seriously not a part of the empire's plans Confidence was damaged at the margins. If it had been false, or if it had gotten shutdown right away that would have been the end of it. But this didn't apply and the damage spread.
The state-church empire was harpooned in its guts, and it thrashed around lashing out at enemies real and imagined. Its size and ferocity peaked during the following decades , and then it began to fade the schism gave birth to a smaller fresher churches/ civil state competitors that arose to dominance. Those are presently moving towards their peak corruption during our lifetime, as a consequence of occupying the niche of the original church-empire. Power is corrupting the new states while old church-empire is reforming itself, and gathering strength. Note that a part of this is the abilities of people to speak against it are being reduced by many means, ironically that's enforced by the civil states themselves.
This isn't about the good or bad of belief systems, just an acknowledgment of that people posessed by ideas go to extremes periodically whatever belief system they subscribe to, the leadership can fall to corruption.
So these actions all followed the printing press's introduction, and a passage of time. The system was motivated to resist at first, and later certain corrective measures were taken. However, power was lost due to the schism (splitting) of the client base, the people of the church fragmented somewhat into separate sub groups, newer.
And 500 years passed, and the controlling power, the hegemon, swung away from the Holy Roman Empire, through various hands as time and conflict passed by, to the USA today.
* * *
Skip forwards a big period of time to "the interesting times" we are living in. We could say "Religion is low and civil state is "up"". Because in a way, now is pretty much the reverse of the time 500 years ago. Is that swing 500 or 600 years? Somewhere around that I guess. Note, a cycle is the swing plus the swing back. ie two swings, not one, in duration. So there just possibly might be a thousand to twelve hundred year cycle going on here, but that's another discussion. Go back another two 500-600 years swings if you're interested and check. You will see my point if you do. Birth of the Holy Roman Empire, as a form of Nazarean Judaism, and after that Christianity, was "born" about two thousand years ago, and grew after that beginning. But I must return to my point (today) which leads more towards trends in finance.
Moving on .... the present era .......
The INTERNET WAS BORN during the 1960s.
Did you ever hear of Paul Baran? After joining the RAND Corporation in 1959, Baran took on the task of designing a "survivable" communications system that could maintain communication between end points in the face of damage from nuclear weapons during the Cold War. His first work was published as a RAND report in 1960.
Well now ..... from 1959-60 to now is 61-62 years.
Which coincidentally happened to be the age Martin Luther lived before his death in 1546. On the other hand, Baran lived longer than Luther, to age 84 and he died in 2011 at or about when gold was topping in price.
So Baran invented the internet technology. And Baran's "printing press" - the world wide web - is now all around us, passing information around 24/7. The WWW has matured NOW just like the printing press had matured back when Luther was complaining about corruption and bribery in high places.
Just like the older empire above, the current empire attempts to control this information, and also control everybody who lives by it. Yet information leaks, corruption becomes exposed. Trust erodes. Chaos, which it fears, ie discontinuuiity of its control of EVERYTHING appears to get closer. Measures must be taken. There is no choice for empire which MUST protect itself.
Time passes. Gaps between events are long. Processes of empire are slow most of the time.
So the war of information rages, and this cycle measured in internet time, is two medium size cycles old (2 x 32-34 yrs), and one bigger cycle complete already (60yrs), and is also working towards completion of an even bigger cycle (80-85 yrs).
These massive swings in the economy (to choose one example) might be what Kondratieff called the 54 year cycle, which can be measued as 4 x 13.5 years or 3 x 18 years, depending on stuff too long to talk about here and now. Kondratieff forecased big cycles back when he lived in the communist era, and empire terminated him. So maybe he knew of what he talked, but maybe he would have done better to stay silent.
Moving on. The stock top at 2000 is 21 years behind us, which is close to 18 years, kind of. The 2009 bottom is about 12 years behind us this year, and stocks are observably "up".
Maybe we shouldn't try to use these tools to be overly precise. Rather consider them as a green, red, orange graded system of caution. Adjust our caution accordingly in a broad sense. Then look at other more short term signals.
Speaking of which:
Has anybody looked at leverage in stocks lately? It's another of those things where one says "How high is too high?". Always a tricky problem.
Well, observably leverage can be called "up" at the moment.
When most of the chips have been pushed out onto the table, can the game last much longer?
Q: What was Trump's greatest offence against the ruling class?
A: He, in fighting the Right and Left combined forces, pulled the curtain aside, and displayed for all to see, a giant professional and constant slideshow - an orchestrated pretense of media, controlled talking shops, and information control, designed to present a false worldview to the voters. We are presently in the cognitive dissonance phase following that disclosure, wherein some people are boycotting old institutions and corporations, and other people are in the earlier empirical paradigm blinking and wondering should they wonder about what just happened.
Sentiment takes time to change. Confidence is sentiment of one kind. Money and value are based on confidence .....
.... and that confidence ... is leaking out of the bottom at the same time as freshly printed money and force is filling up the top.
Look at the last 13 years. Thirteen. 2008 to end 2021. Look at the crazy everywhere. What benefit has it brought?
It's plain to see all efforts expended have merely kept empire treading water. Well, every giant eventually gets tires, and runs out of energy. And that is what we can see has been going already for at minimum 13 years. Now consider this: above I specifically mentioned 13 and 18 years. Within six months the 2009 satocks low will be 13+ years in the rear view mirror. PAY ATTENTION TO THAT. So what about 18 years? After the 2000 top, stocls made a major low in 2003. You do the maths. 2003 + 18 ....... = NOW.
By the way, as an aside. Michael J Burry (the genius in the movie, The Big Short), who called the real estate top correctly, has deleted his social media account. His last tweet before he deleted it was a list of observations about Weimar Germany. I understand he got a visit from "regulators" after making his views public.
His post is removed, but anybody can look up what happened back in Weimar Germany. And don't forget the 13+ year and 18+ year cycles.
So what other cycles do I look at when considering the big picture in stocks? There is a 10 and a half I like. it comes in from eg 10 to eg 11.5 years but varies. Last estimate I had is 10 and a half, but who can be sure about such things until afterwards.
Now these are big cycles, and their length is always a guesstimate. So below I enclose three views of the Russell 2000 index for your viewing pleasure and to spark your though processes about the world of finance today.
The first is with the same index 10.5 years ago plotted under the present.
The second picture is today's Russell with itself from 13.8 years ago reproduced under it.
The final picture is Russell 2000 of today with what it was doing 18 years ago reproduced under it.
Are 10, 13 and 18 years right? Should they be a bit this way or a bit that way? Should I have used 13.8 be 14 or 14.5 instead? I don't know! Or do I have it fitted adequately already?
YOU BE YOUR OWN JUDGE, THINK ABOUT WHAT THE MAIN MESSAGE IS, AND ADD YOUR COMMENTS BELOW
So here are the three pictures:
10 - 11 years
Next 13 - 14 years:
And now the view from 18 years ago, reproduced under the view of today:
So you see. Nothing is as clear as we would like. they all have a certain degree of fit, of match. But the third one suggests the entities and institutions in charge can kick the can another time and get until 2025. The other two above it are saying something more like, pay great attention right now and during the coming weeks. I myself will be doing exactly that. And this of course is not "financial advice" but rather a public log my own thoughts about how I want to stay out of trouble when the hurricane arrives.
Methinks the wind is picking up .....
Have a good day!
Rhythm and Price
Also in TFMetalsreport forums: The Setup for The Big Trade