Cycles - Anti-Globalization and The End of The Debt Super Cycle

By: Gordon Long | Sun, Dec 4, 2016
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Anti-establishment

All the well followed economic cycles such as Martin Armstrong's "Economic Confidence Model", Harry Dent's 39 Year Generational Cycle - 35 Year Geo-Political Cycle - 10 Year Boom-Bust Cycle or the Kondratieff Cycle all point down through early 2020. As Gordon T Long and Charles Hugh Smith examine in this 30 Minute video it is fundamentally about shifting generation behavioral sentiment and a cyclical change in "mood".

The September 1992 issue of The Elliott Wave Theorist described these cyclical economic oscillations:

Major bear markets are accompanied by a reduction in the size of people's unit of allegiance, the group that they consider to be like themselves. At the peak, there is a perceived brotherhood of men and nations. ... In other words, at a peak, it's all 'we'; everyone is a potential friend. At a bottom it's all 'they'; everyone is a potential enemy. When times are good, tolerance is greater and boundaries weaker. When times are bad, intolerance for differences grows, and people build walls and fences to shut out those perceived to be different.

Historian Peter Turchin adds to this thinking in his new book Ages of Discordwhere he illustrates how historical cycles are about social disintegration and integration. They are about three primary forces all of which we have today and the current economic cycles reflect,

1. An over-supply of labor that suppresses real (inflation-adjusted) wage,

2. An overproduction of essentially parasitic Elites

3. A deterioration in central state finances (over-indebtedness, decline in tax revenues, increase in state dependents, fiscal burdens of war, etc.)

Investors need to understand and prepare for the fact we are only at the beginning of this economic shift downward in the trend of the cycles cited above.  The already failing Debt Super Cycle will end as a consequence.


Brexit - Trump - Italian Referendum -- It's Only Beginning!

Political Instability Events

The Italian Constitutional Referendum on December 4th, 2016 is potentially as impactful as BREXIT and the shock of Trump being elected President of the USA.

Both can be viewed as potential rejections of the status quo and potentially why the Italian Referendum vote could fail, resulting in toppling the Italian government and opening the door for the anti-EU, Anti-establishment 5 Star party led by former comedian and political satirist Beppi Brillo. Brillo and his 5 Star movement is the epitome of the anti-establishment candidate.

There is also a steady sequential set of highly charged political events throughout Europe coming in 2017 which portends of mounting political instability and social unrest.

All of this is about Political Polarization which has exploded since 2000 which is explored in the video. It is about how a Negative Social Mood shift has polarized political positions and how majorities now have deeply negative views of other parties & their views. There is an increasing  breakdown in cooperation and an intolerance of other views.

There is a "Dis-integrative Winter" stage to all of our cycles.


A Reversal in The Globalization Trend

The June 2008 issue of Progress in Socionomics reported:

Scientist predicts a reversal of the trend toward globalization. Dr. John L. Casti's presentation at the Cycles and Patterns in Business and Finance Conference depicted and expanded upon Elliott Wave International's forecast of a reversal in the trend toward globalization.

Globalization over 50-Centuries


The Roadmap Since 2007

Gordon T Long explains how he has viewed this evolution since the GFC (Great Financial Crisis) as we moved from a Financial Crisis to the inevitable Political Crisis as a result of the social contract breaking down.

The Roadmap Since 2007


The Global-Political Space: Anti-Globalization - Anti Status Quo - Anti-Establishment

He also illustrates how financialization and its core products are involved and how they play into this breakdown of the "Global-Political" space with growing Anti-Globalization, Anti-Status Quo, Anti-Establishment populist sentiment.

Anti-Globalization - Anti Status Quo - Anti-Establishment


A Fuse, an Explosive and The Igniting Catalyst

Gordon T Long postulates by summarizing that all of the above leads to and further assists in driving two key long term structural changes now underway:

First, there is now a clear shift in attitude within the electorate of the Developed Economies towards Anti-Globalization. Existing Free Trade Agreements, Tariffs and Protectionism are all now on the table.

Secondly, the Debt Super Cycle is coming to an end. It is the fuse that will ignite this combustible mixture. The explosive mixture is about the Fiat paper reserves underpinning the global economic system which are presently built on failing wealth creation which is  required to maintain the collateral values  supporting the pyramided debt leverage levels through financial "gimmicks" such as rehypothecation. The approximate $600T derivative SWAPs market is the explosive within this mixture.

The catalyst to ignite the fuse will likely be correcting financial markets that are historically highly over-valued, disconnected from fundamentals and can only be described as in the third and final central bank bubble of the new millennium.

Investors need to focus on the two key long term structural changes now underway which are going to ignite destructive global dislocations through early 2020. To better understand why this is going to occur we need to place them in context by first examining the major economic cycles currently underway.

VIEW VIDEO - 30 Minutes

 


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Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

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