8 economic investment business cycles
There are 8 Economic Cycles In The US History. These are economic, investment or business cycles. Each cycle is unique with time frame ranges that are not the same. The cycles range from 10 to 100 years.
- Economic depression cycle
- Reserve currency cycle
- Fiat currency cycle
- Commodies cycle
- Real estate cycle
- Geopolitical cycle
- Recession cycle
- Age group psychology cycle
Each cycle has unique stages. Let’s look at each stage with the cycle:
1. Economic depression cycle history stages: 100 years
- 1929 To 2020
The stages of the great depression is:
- Slow inflation with multiple recessions
- Deflation with hyperinflation to stagflation
- Recovery 20 to 30 years to prior level
2. Reserve currency cycle history stages: Century rule
- 18th, 19th and 20th century
The stage of the reserve currency is:
- 18th century the Dutch was on a gold standard to currency, controlled trade and then they moved off gold inflating away currency for Britain to rise as reserve.
- 19th century the British was on a gold standard to currency, controlled trade and then they moved off gold inflating away currency for America to rise as reserve.
- 20th century the US was on a gold standard, silver ratio, controlled trade, control oil to inflating away currency with China to rise in this currency reset.
- 21st century the China to rise as reserve with control likely. They are accumulating the most gold reserve.
3. Currency fiat reset cycle stages: 30 to 40 years
- The current notes were first printed in 1913 with the Federal Reserve with Gold (Until 1971) and Silver Certificate (Until 1968), 1944 the US took reserve status and in 1971 peg the notes to oil as a fiat currency. 2020 is likely to experience a reset. Prior to 1933 Gold was money at 20.67 ounce. 1933 it was illegal to own Gold. Government confiscation of Gold to value at 35 ounce to pay off their loans. In 1974 it was legal to own Gold.
The stage of the currency is:
Government can mint legal tender on the coinage act of 1791. The Federal Reserve Act on 1913 took mint of money in the form of certificate for real money in storage as Gold. The money was separate from the certificate in 1971 to create a fiat currency that loses purchasing power through inflation with debasing.
- Government monopolizing money on Gold standard with certificate for confidence.
- Government removes money with over confidence to print fiat currency out of thin air with no inherent value except confidence to spend without limit.
- Government spending is extreme raising limits to pay interest, companies leverage with overvaluation of assets to extremes and consumers over extend with loans cause extreme inflation with no purchasing power left in currency. The currency has less than two cents of it original 100 cents in purchasing power even though the nominal value is one on the currency. It is worthless.
- People lose confidence in the currency to meet necessity with prices inflating 100’s or 1000’s percent in an hour.
- People start to exchange things of value without currency.
- Government comes out with a new form of paper exchange as currency sometimes with Gold or new notes to exchange with new value in currency.
Venezuela, Argentina, Zimbabwe and Turkish lira with hyper inflation right now. If you want to reach trillionaire status go to Zimbabwe. You can get a one trillion note. The problem is that it will not get you anything in the store. I hear people say that I am working for a million to retire. Worth is in relation to the value of the currency in your country. Currency is worthless paper. Assets that pay you every month is the only thing that has worth. It must cover your living expense. If you can get there, then you are wealthy. If you can survive on that without working a job, then you are wealthy. One million in an account can get you nothing in a moment with hyperinflation. Your asset that pays you will inflate. Where currency will loss purchasing power.
4. Commodity cycle stages: 30 years
- 1936 to 1965, 1966 to 1995 or 1996 to 2026
What are the stages:
Commodities can be categorized in four sections. Some move short term and others move long term. There is metals, animals, agriculture or energy. This is the most volitile out of asset allocations. It can act as a form of money. This is futures with contract to sell or to take when it expires.
- Prices are cheap products take off creating demand.
- Production starts for product to expand with price rise.
- There is an over supply on the market with not enough product market for products.
- Production price falls with lower amount of products. Production slows with cost control until next cycle.
5. Real estate cycle stages: 18 years
- 1960 to 1979, 1980 to 1999 or 2000 to 2020
What are the stages:
- Recovery to start to purchase
6. Geopolitical cycle: 36 years of 18 of peace or 18 of conflict
- 2000 to 2018 conflict, 2019 to 2036 peace
The stages are:
- Political conflict with countries with other chaos through period
- Political peace with countries with little chaos through period
7. Recession cycle stages: 7-10 years
- 1978-1980, 1990-1991, 2000-2001 or 2008-2011
The stages are:
- recovery with inflation
- growth in markets, jobs or real estate
- leverage in technology, real estate, markets or government interest on national loan
- contraction in spending, contraction in markets, liquidity or loans
8. Age groups psychology cycle
There is not a year in cycle or stages. There is age groups in the way that they spend through their years. Countries with lower amount of group for expansion and others with expansion from masses. America is contracting with lower amount in age group for expansion. The expansion of countries with age group is Australia. The expansion from there from emerging countries after 2027. There will likely see stagflation in America for next 20 years with money printing for income for America without companies for pay. The psychology of spending, reacting to markets or other economic factors are predictors of actions for investing. These are the tools now to navigate in cycles. Economic Cycles In The US History
There are three ways that people use cycles for portfolio:
1. They limit their risk with proper allocation for every season. There are five things that you can hold in your portfolio for paper assets. Equities, commodities, emerging markets, treasuries or Gold. The all season portfolio will have:
- 40% equities
- 40% treasuries
- 5% emerging markets
- 5% commodities
- 10% gold
Why this allocation? There are seasons of stagflation, inflation/hyperinflation, indeflation or contraction. One of each of the allocations perform well while another may not to keep your portfolio around the same principal with minimal loss. This way your portfolio can continue steady return without loss of recession that coud take 12 to 18 months to return to original principle. Dollar cost averaging to lower cost of allocation in each share when things are cheap for return.
2. They pick an aggressive with 60% equities, moderate with 40% equities or low risk tolerance with 20% equities allocation that is adjusted with age that they pay monthly for 40 years. The fees are usually expensive, prone to loss with recessions and loss purchasing power through inflation with tax payment when you pass 70.
3. They are a sophisticated investor with knowledge, experience or research. They are aggressive in equities mid or small caps in inflation market. They anticipate the contraction. They take their currency position out of equities to get treasuries that strengthen in contraction short term. Once the contraction is ending. They put their currency position in gold while quantitative easing is printed for the markets. Gold strengthens while stocks slowly move over a period of 12 to 18 months. The currency position allocation to stocks at low values. They strengthen over the next 7 years until the next recession. This is the sophisticated.
I am not a licensed professional. This is not advice. This is for informational purposes only. Research and consult licensed professionals. You can lose your currency. You are responsible for your own choices.