k winter......is the worst yet to come, page-2

As I sit and ponder on Kondratieffs wave I marvel at how precisely it has played out in the US since it was published in 1926. Within 3 years of 1926 the world was plunged into a winter that played out precisely as Kondratieff describes. By 1949 the world moved into spring. It was this prolonged period of expansion that built the US into a superpower. This was a boom built on expansion of their industries. And as Kondratieff described the US moved into summer by the late 60s....puntuated by the Vietnam war. Stagflation was all the rage and we saw Nixon disconnect the USD from gold. But the good times came back in 1982. This time the boom was not built on expansion of industy but rather on consumption of goods and services.....a text book Kondratieff autumn.

And this all brings us to today. The cliched cries of critics like Peter Schiff have become burnt into our brains "We have lost our way. We used to manufacture things. Now we just consume things. America must get back to making things like we used to. We can't keep borrowing money to consume ". In fact what happened in the 80s and 90s was a perfect Kondratieff autumn......

........and after the autumn comes the winter again which starts with a 3 year collapse. I was reading an news article on GM not half and hour ago. A company spokesman states that without a gov't bail out GM will not make Christmas....there is no plan B. The detroit auto industry was the centrepiece of a once great US manufacturing base. If it does collapse we could well be in a whole new ball game. Kondratieff believed such a burning away of the old was necessary to build a base for the next expansion.

For the last 82 years Kondratieff's wave has been spot on. I hope for just once he gets it wrong.