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  1. Many people say they know a lot.  The proof of what they know and reality is in the history.  If it has not happened and is not the time to happen, chances are it will not happen.
  2. Things and events don’t occur exactly as in the past, but general key parameters repeat over history from thousands of years, because the nature of people and human (and humans as animals will not likely change in another thousands of years).  The exact situations will not occur but the value proposition will.
  3. Since time ancient times men and women have know this but the application and understanding has been labeled as unscientific and superstitious.  However is a known fact that the greatest scientist such as Isaac Newton, Darwin, Leornardo Da Vinci (yes he was not only an artist but an accomplished scientist and also military strategist) and Kepler not only knew of this fact but their respected it and applied it.

Here is what you need to know that separates facts from fiction.

Since ancient times (time immemorial),people have deep concerns to know their future (foretelling the future is inherit in every human, whether they admit it or resist it or now).  While the exact details of the events may be difficult to forecast unless you are truly an enlighten person, for a person that puts into practice what we talk about will be able to put into practice a quantifiable, verifiable method and system to foretell tendencies and thus align with the future trends.  (I must say here going against the trend is like swimming upstream why do it if can go with the flow – you move easier and faster).

Tendencies is the fact that history repeats.  For example, after major periods of prosperity follow period of adversities.  And these occurs in large scale and small scale but they do occur.  As nothing that has life and energy remains top forever and nothing remains bottom.

There is a right time for everything! We all know that life cycles through these ups and downs.  Planning you events and goals by forecasting avoids getting caught doing the right thing at the wrong time since there is really no wrong thing is just it may not be the right time.

For example, real estate is something of a human necessity.  Everyone needs to have shelter, whether it was a cave or a modern home.  So real estate is certainly one necessary “Thing”.  However if you acquire or go into the business of real estate in 2007 and 2008, which was the peak of real estate, the next few years you’d be in misery since prices drop 50% to 70% after 2008.  So, is not “the think” is the time.

At the macro, countries and social/political environments are driven by mass of human tendencies (which are predictable in cycles).  These major tendencies reach an extreme and then reverses as humans get tired eventually and any needs and emotion gets to a saturation point where more is not enough and too much becomes bad.

Example, when you are poor you envy the rich to the point you may detest them, then you start filling tired of being poor and decide to enrich yourself, then now you are rich and richer, then you find out one day that more does not make you happier, and start thing about the good old days when you were poor but had freedom and no responsibilities.  Then pass it to the next generation that was never poor and the next generation and like the Chinese say and many other cultures, after 3 generation you go back to poverty.  (Consideration: If the family history was never rich, this may not occur to those level of wealth).

Human emotions in the 1970’s were against war because there was extreme wars.  Then from 1980 to 1990 the tendencies for war decreased to the point that the world was a near total peace, eternal love and all that good feeling until 2001.  Earthquakes were very quiet from 1990 until 2000, since then earthquakes are repeating with more intensity and we believe it will accelerate until there will be Decade of total tranquility.

Human emotions will go through periods of tremendous technological innovations where new breakthru technologies makes major life changes in the way we life and think.   In the 1800’s was the steam engine.  Before that was the wheel, and then sometime ago someone discovered spices and that was into fashion.  Then in the 1900’s we have electricity.  Then we have electronics, then came the computer…All these from the discovery of the electricity.  Prior to that was the steam engine.  (can you think here of the Chinese 5 Elements, water (steam), electricity (fire) and also its yin/yang character (steam and electricity are both yang in nature since by definition you cannot touch them but you can see the effect they create).

After roughly 55 years with alternations of 25 years there are tendencies of deflation followed by inflations.  At the extreme of one, the other begins slowly and the tendency changes to the other.

And, most average humans cannot see it or feel it because they are part of what makes it happen.  (If most humans knew, then it would not occur – that is plain and simple).  So, how can you not be part of it and go with it!  You have to be an independent thinker!

An Independent Think is the few not the many! However, you will not be the part of the mass and major society during the times of early changes.  You will be very lonely when everyone else will be saying things you know have passed and the new trend is not reflected into the minds of the mass and is not publicized and you will be the rare one talking about it.  It may be you the only one in a million and looking to find a second person like you and not being able to find that person for a long long time perhaps 5 years.  How lonely you are and feel will determine how independent you are and how you have mastered the forecasting.  Sometimes you may feel you are wrong because honestly after 5 years of other telling you are doing the wrong thing, you may end up believing it.  To make things worst, since at the beginning of your forecasting practice you may be wrong before you get it right, your own believe in yourself has to be strong enough to handle the errors you will make hoping is not a lifetime of wrong errors before you learn.

Nevertheless, this thesis above has been validated and documented both in the western as well as eastern world.  As of recent, (last 200 years), the UK and USA to my knowledge has data which can be used to confirm the above thesis.  I have in my possession at least 200 years at least.

The original concept was brought scientifically to the modern times by a Russian during the communist regime.  The major study was supported by Stanlin as an attempt to find flaws in the capitalistic system and prove that capitalism would fail.  To his surprise, the experiment only proved the contrary, that capitalism has been around and it has come and gone but always comes back (and I must add so are socialistics tendencies).  The socio-economic scientist who work on that famous project became famous but not after being sentence to death by the regime.  Today we know of his work as the Kondratiev (Long Wave) or K-wave.

After that other scientist have discovered subwaves of about 25 years inside these K-Wave (55 years) and called them Kutnets cycles (1/2 of the K-Wave but also half of their force and effect of the K-wave).

The idea is that progress creates socio-economic inequalities.  This disbalance results in adjustment.  Like a rubberband of spring that is pull to one extreme, when you let go, it go past its resting point to the other extreme.  Think of a pendulum.  One side of the swing is one inequality and the other swing past the center is the opposite inequality.

Several ancient books speak of this.  One is Confucius famous books called “The Doctrine of the Mean” (中庸).  Confucious spoke about not taking extreme views and that sounds practical for the average person because it all returns to the means.  And taking the extreme when is at a peak and reverses leaves one like the real estate example investing at the top of prices.  This is one reason why practicing Confucius theory of the mean cannot go wrong but you will mostly be average also.  In other words if you dont want a lot in life and dont want to hazzle learning and cannot handle getting out of the comfort zone (which means more work and taking risk and then have to go fix things because there are always errors that needs fixing, then stay home do very little and just follow the mean).  Again this is another safe approach to life.  And is certainly better than follow the crowd which goes to the extreme at the WRONG time most of the time.  So, the mean theory is still better than the Follow the Crowd method.

The Role of New Technology Thru history new technology created new enterprizes (like the computer industry in the 1990’s) and sometimes the technology is so extraordinary that it has also created new powerful countries like England using steam engine to become a world power.  Also, notice toward the end of their role as world power, there is an exercise of usage of military technology to exercise control of the power position.  However, nothing stops the natural cycle of the universe.  No person in the world can and no country in the world has ever held on to power forever.  It all cycles.  But what is to be know is that new technology has an important part in the creation and progress of countries toward major tendencies, however the new leader is seldom the inventor of the New Technology.  It is typically someone elses and then when new fundamental technology appears is toward the middle of the power cycle for the new economy.  For example, the steam engine did not developed until after England was already establishing itself as a world power.  Another example, China in modern times we can see their rise was using no technology and only as of recent begin buying someone else’s technology.  Same occurred in Japan in the 1970’s.  How technology creates new enterprises and also obsoletes present ones.  Think abut in the 1900’s, the horse industry was a large enterprise.  Establishments produced products for horses, saddles, horse shoes,etc… when was the last time you saw a store for horse equipment.

During the new technology burst of the period, new successfull entrepreneurs, their supporters and their skilled employees benefit while the unskilled ones (old skilled but in the prior technology) suffer.  For example, experts in telegraph code were highly paid in the early 1900’s.  Computer experts are highly paid now.  Perhaps a telegraph code person will be paid highly just because when they need the skill it cannot be found, but how long will that person has to wait to be discovered.  And certainly not paid extraordinary amounts just that skilled.

More on Cycles and How To Work With Them. An interesting property of cycles makes it such that they tend to synchronize at the bottom.  Because of this it is rather easy to find bottom points.  The other property of cycles is that tops tend to be mostly round (the tops takes longer time) while bottoms tend to be sharps (stays at bottom less time) .  One reason for this natural tendency is because what causes the cycles are human tendencies which means human emotions.  The human emotion that acts during the topping part is different than the one going down.

Progress requires positive energy in the form of hope and good feeling and being in high spirits while retractions (no progress or negative progress) occurs with lack of energy, losing hope, bad feelings, and primarily fear.  Think about how people behaves when happy and hopeful and think how they would act in fear.

Fear paralizes and impedes progress.  In a fear striking scenario, you think twice.  If you think twice, well… the world does not stop for you and if nothing else thing about what happens to a rocket that has not fuel to push it higher. .. it falls and it falls a lot faster than it went up, correct?

That is exactly how it works in the cycles.  Progress requires energy, lack of energy creates a backward drop.  That’s why they say if you are not moving forward you are already moving back.

Another property of history and human cycles.  Nothing occurs the same and as a matter of fact, there is an ongoing progress in human evolution.  For example, although every says life was simpler in the old days, nobody would want to go live in a stone age in a cave without a refrigerator and a stove where you can cook a hot meal right away without having to start a fire.

And this progress is cumulative. For example, in modern times, China is not starting from where the USA started.  You did not see the Chinese going to ride horses no matter how nostalgic it may sound to you. They went from bicicles which is what they could afford right into the automobiles the moment they could afford it.  Not a minute less. Then did not start with typewriters then went directly to computers and word processors.  So, the mean tendendy is NOT flat, is always getting progressively more.  Thus going back to the “old ways” has not happened in history.  So, dont try to say that typewriters will come back again.  But you can say that certain fashion and colors will come back again.

There is also an certain pattern in which these waves occurs and it is neither a straight line nor is a sinewave most people think of a wave.

Life cycles are fractal, like the waves in the ocean.  There are big wave and then there is also tiny waves but the tiny waves are contained inside the big wave.  At the peak of a big wave, there are little ripples but the become insignificant because the big wave is extraordinarily cover it. But if there is a calm sea, the little ripples takes the attention.

Thus there are waves inside waves. If you magnify the little waves then look just like the big waves.  So what happens big also happens small.  Example, an atom (smallest complete particle), has a nucleus at the center of which electrons circle around.  The Solar System, has a sun in the middle and the earth and other planets circle around.  The Solar System is a part of the miky way galaxy and the entire Sun and its planet is a fractal that together moves around (circles) the milky way galaxy center.  We also know that the Milky Way Galaxy cicles around the Galactic Center where many more galaxies circles around. (are you dizzy hearing this… is no wonder because we are constantly circling). You would be surprise how fast we are moving.  Do you know although you may be standing still and sitting on the floor, you are relatively moving in the universe in 100 of miles per second.

Aside from knowing there are fractals.  The formation and the growth and fall of the wave is similar to the human course of events.  In the early 1900’s,  R. N. Elliot discovered that not only human affairs occurs in certain steps but also nature does as well.  This led to the concept of Elliot Wave patterns which in essence says that progress occurs in 5 steps, which consists of 3 steps forward and 2 steps back.  Think about you daily life in those days you have made progress.  Take away those you feel you have great progress. Say take 30 consecutive days in a month.  You will see how you have some steps in a day you move the agenda and plan forward and then there were set back.  If you are in a up cycle, there will be progress in the range of at least 5/3 if you are in the downcycle, you will feel you are losing ground also in 5/3 ratio.  3 Steps foward and 2 steps back.

This may happen as follows (say F is Foward and B is backward: F B F B F so you are at the end one “F” ahead.

These patterns and cycles are all verifyable and are the basis of understanding the past in order to foretell future tendencies.

And knowing future tendencies will help you do what will be in fashion at the right time.

You will be painting blue when people want blue and red when people want red.

This is how we predicted that forces of the economy are moving East (and will for the foreseable future) and that’s how we know that interest rates will tend to go up during the next 10-20 years.

Remember that while tendencies can be categorized human characteristics can also be categorized.  example some people talk about Personality of A type and B type etc…  thus you can map those over a long period of time and see how the tend to cycle over time.

Political elections are typical tendencies, the conservatives win then the go out of fashion and the liberals come in.  then the cycle changes and the conservatives are back… so what would happen when you have a candidate that is conservative when the tendency will move toward liberal progress versus restrain.  How can you talk of change when people dont want change.  And how can you win an election when things are not doing well and you have to change but you don’t promise change?

Here are two graphs that shows cyclical tendencies.  You can use these and find out the events during the turning points.

and continuing from 1900 forward.

And here is some long cycles in Bonds as they actually occurred.

Another view in a Multi-Asset view of four (4) Super-long waves.

Look at this very long interest rate chart