Don't have much time for it myself. Interesting theory when I first came across it but imo doesn't hold up to scrutiny. Murray Rothbard's take The Kondratieff Cycle: Real or Fabricated? http://www.lewrockwell.com/rothbard/rothbard44.html
I just put that there because I have received enquiries from members about the K cycle, since I mention it often. After having spent the last 10 years studying it, all I can say is that The K cycle is my compass for asset allocation. If you understand the Compound Interest Equation and you understand the K cycle, you basically understand the flow of debt. Everything else is noise. Then you have to understand Gold (anti-debt), but that's another story. To deny the K cycle is to deny Austrian economics... "There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved." - Mises
I'd disagree. The key difference is that the Austrians don't in any shape or form claim that there is any periodicity and time predictability to the business cycle and even though the overarching dynamics of the business cycle itself are understandable and predictable. Hence, there is a distinct difference between analysing cause and effect and benefitting and non-benefitting asset classes etc which are all present in the discussion of the cycles and trying to predict precise time periods about when a particular part of the cycle will happen.
well sometimes is just wise to agree to disagree. people really get stuck on the time frame of the cycle, which is for me the least important. that why the seasons analogy is great because a winter can be a long, cold one. or a short, warm one. But as far as the "life and death" cycle of debt, it's bang on. I mean, it's not a philosophical exercise, it's just an observation of financial history.
Since when? 2 totally different subjects as far as I can see. Rothbard is regarded as the the foremost Austrian economist of the late 20th century and he thought it was pseudo-science. OK, so you quoted Mises classic quote but what's that got to do with Kondratieff? Credit cycles and bull and bear markets in various assets classes are well established. And in regards to the K Cycle, which country/s are we talking about? Some had real estate booms, some didn't. In the ones that did, they pretty much all had different start and end points and some didn't overlap at all, eg. Japan. Too much contradictory evidence to take the theory seriously. Especially when other theories fit much better. If you are using the theory to make investment decisions, can you tell me what year the K winter is going to end?
this is not my intention to start debating or give a lecture on the K cycle, sorry. The quote describes a Kondratieff winter in its essence, I would say it's relevant. Both Austrian economics and the K cycle deal with the result of the flow of debt and (mal)investments. They are closely related. They both describe the laws of economics (nature). I use both and over the years they became interchangeable. My take on it is after spending thousands of hours studying it. Rothbard can say what he wants, he's just a third party opinion that I've discarded years ago. I just look at the numbers, not reputations. I'm aware of all the critics, but personally I think it's the best tool to tell us where we are in the big picture, if you use it the right way. For instance, most K cycle analysts mesure the present cycle using nominal dollar values. Which gives the impression that the Fed canceled the K winter (their intention). When you mesure in real money (Gold), we are indeed in a deflationary spiral that is about to accelerate. Yes I sold stocks/RE and bought Gold/silver when I saw we were in winter. And yes I'm glad I did. And I will probably buy stocks and RE again in the next 12 years, but not in Australia. I'm not counting the years to know if it's over. I'm looking at the ratios. It could be the longest winter ever, but IMO they won't be able to stretch it too long and will have to re-value Gold. When that happens winter is over. I hope I answered a few questions. I will leave it at that. Now as the OP, I wanted this to be a quick intro into Kondratieff (in 5 minutes), not a debate. Some people just want to be right no matter what. If you have more resources about the K cycle, please share. If anybody hates it why don't you start a "Why Kondratieff sucks" thread and leave this one alone. Thank you.
No need to get defensive. It's a forum and if someone posts something I don't agree with I will question it. No-one's forcing you to respond, but you don't get to make a thread and then chase people away who's opinions you don't like. Anyway, back to Kondratieff... First of all, saying a winter could be warm or cold reminds me of Climate Change proponents. Are we saying that the 70's were a Summer and the 90's/2000's were Autumn or Winter? How about the fact that there was a ton of inflation in the 2000's how does that fit the theory? Were people confident in the stagflation of the 70's? More so than the 2000's? Why are precious metals a good investment in good times (K summer)? I think the evidence shows that they aren't but the 70's precious metal bull market existed and had to be shoehorned in. It only gets worse when you go before WW2 when no such super-cycles existed. And if I had to guess, there won't be one after this one, because the post-WW2 debt cycle had far more to do with unprecendented government intervention in money, banking and the economy. And I believe that will diminish, but that is obviously just my opinion.. For a theory to be a valid one, it must have predictive value, but all K theory ever does is look backward and then the kindest I can say about the data is that it is vague. And that's the very kindest. Feel free to address my points or not. I won't be making a Kondratieff sucks thread because that's kind of childish. I want to discuss the theory with people who claim to know something about it, because I found it interesting once, it's very alluring as grand unified theories tend to be. Unfortunately, most grand theories end up in the dustbin and that's where Kondratieff belongs.
I suggest you take the time to read this pdf: http://bankstermind.com/kwave.html It will explain to you way better than I could how to use it in today's world of unlimited credit creation.
That report was mindblowing. This is the only plausible explanation for what is going on-the delayed (by QE/money printing) transition from autumn to winter.
ive just read the report its a great read thanks forputing it up more confident than ever about my position i have taken
