Authored by John Mauldin via MauldinEconomics.com,
In 2010, the scientific journal Nature published a collection of opinions looking ahead 10 years, i.e., where we are right now.
Nature then published a short response from zoologist Peter Turchin in its February 2010 issue.
Quantitative historical analysis reveals that complex human societies are affected by recurrent — and predictable — waves of political instability (P. Turchin and S. A. Nefedov Secular Cycles Princeton Univ. Press; 2009). In the United States, we have stagnating or declining real wages, a growing gap between rich and poor, overproduction of young graduates with advanced degrees, and exploding public debt. These seemingly disparate social indicators are actually related to each other dynamically. They all experienced turning points during the 1970s. Historically, such developments have served as leading indicators of looming political instability.
Very long “secular cycles” interact with shorter-term processes. In the United States, 50-year instability spikes occurred around 1870, 1920 and 1970, so another could be due around 2020.
We are also entering a dip in the so-called Kondratiev wave, which traces 40- to 60-year economic-growth cycles. This could mean that future recessions will be severe.
In addition, the next decade will see a rapid growth in the number of people in their 20s, like the youth bulge that accompanied the turbulence of the 1960s and 1970s.
All these cycles look set to peak in the years around 2020.
Again, that was from 2010. Right on schedule, we are experiencing the “instability spike” Turchin says tends to come along every 50 years.
Continue reading “Mauldin: This Was All Predicted 10 Years Ago”
My wife Jo had some CDs mature. If we renewed them at the current .4% rate, she would take an 80% income cut. She remarked, “That’s not enough income to pay the bills. We don’t want to tap into the principal each month to make ends meet.”
