What goes up...
Their subsequent collapse heralded a series of depressions. The social unrest that followed resulted in the American War of Independence, the French Revolution and the overthrow of the established order throughout the Western World.
After years of depression and dislocation, the Capitalist economies of the West enjoyed 200 years of sustained economic growth, powered by the revolution in technology, but with a couple of corrections which were followed by "World Wars". Then, from 1982 to the year 2000, the stock markets of Western capitalism advanced without seeing a single year where the low of the year dropped below that of the previous year.
Although the markets topped around March 2000 and formed an intermediate term bottom in March 2003, the subsequent market rally raised the expectations of the herd even further with the highest levels and the longest duration of optimism than at any time in recorded history.
The longest bull market in history and the prevailing optimism that made it happen has encouraged the belief in a "new reality" and in man's ability to control his own destiny akin to his progress on the level of technology. Yet technological progress is external to ourselves. It is universal and cumulative. It spans disciplines, generations and geographical locations. Human psychology, on the other hand, is a constant. The emotions that rule within ourselves rule in each generation and each generation is destined to repeat the mistakes of preceding generations, in patterns that are cyclical and local.
Elliott Wave Theory maintains that human psychology has remained the one constant throughout our history. We may have altered the heavens and changed the earth and our relationship with it but we have been unable to change our innermost selves. Our emotions motivate and blind us. They shape our perception of the world and our actions are consistent with what we assume reality to be.
Thus when the social mood is optimistic it is also productive. The "feel good" factor provided by optimism and a feeling of relative prosperity increases feelings of benevolence and the impetus to extend "equal opportunities" to all individuals in society regardless of intelligence, race, color, creed, disability or sexual preference. All are encouraged to share in the limitless bounty that man's endeavors have produced. Scarcity is no longer considered as being the problem. Inequality is treated as being the fault of inefficiencies in re-distribution that can be solved by the judicious application of new rules, regulations and techniques.
At the peak of this cycle of optimism Man comes to believe that the old forces that have ruled the generations past - those of nature, of the market and of scarcity - no longer apply, or if they do , then they can be shaped and tamed. Life and the human condition have become equated with a virtual reality within which we can attain the outcome that we desire.
A good example of this tendency can be seen in the university entrance examination results in the United Kingdom, where the number applying for a university education smashed the quarter of a million mark for the first time. The percentage of pupils that have managed to pass has risen for the 22nd year in succession (the length of the last bull market) and now constitutes 96 percent of entrants (75 percent 20 years ago). In addition, the percentage having achieved the highest level (Grade A) climbed 0.8 percent to stand at 22.4 percent (7 percent 20 years ago) and 69 percent obtained top passing marks (Grade A to C).
These remarkable results are obviously due to increasing levels of intelligence in generations born after WWII, as the general quality of nutrition and pre-natal care improved - coupled with the superhuman effort by the teachers. And the most popular courses will contribute greatly to continued creation of economic prosperity - as they are law, psychology, pre-clinical medicine, management studies, design studies, business studies, English studies, computer science, training teachers, and history.
Forget the fact that universities are now funded on the basis of how many students they recruit and that all governments have a vested interest in herding as many young people as possible into higher education in order to reduce youth unemployment. In addition to those who enroll in a degree course, one in four will fail to graduate, and those who do will leave with an average debt of L12,000 and only a 50/50 chance of finding a job requiring graduate skills.
Therefore the best of the new generation are handicapped by debt at the beginning of their working life. As a consequence, they are delaying their entrance onto the property ladder and the cycle of procreation at the very time that their contributions to the State Exchequer are of crucial importance to fund the retirement of an exponential explosion of geriatrics.
As Bill Bonner (the founder and editor of The Daily Reckoning and a co-author of the Wall Street Journal best-seller: "Financial Reckoning Day: Surviving the Soft Depression of the 21st Century") is fond of saying - "Every man born is fated to die; every breath inhaled is fated to come out and even the brightest day that dawns is fated to end in a dark night". Natural laws govern life and the activities of men, and what goes up must come down. For months the DJIA has teetered back and forth at 10,000 and the global economy on the edge of a U.S. "recovery". Unfortunately, a real recovery requires the real spending of real money and not just an accumulation of debt and a recirculation of credit. Real money must come from real jobs, jobs that add to the productive capacity of an economy and are not merely a recirculation of services. And since there are not enough of them, real incomes are still going down in the USA and throughout Europe and they will head down for the exceptionally well-educated but financially impoverished generations to come. Cycles repeat.
After years of depression and dislocation, the Capitalist economies of the West enjoyed 200 years of sustained economic growth, powered by the revolution in technology, but with a couple of corrections which were followed by "World Wars". Then, from 1982 to the year 2000, the stock markets of Western capitalism advanced without seeing a single year where the low of the year dropped below that of the previous year.
Although the markets topped around March 2000 and formed an intermediate term bottom in March 2003, the subsequent market rally raised the expectations of the herd even further with the highest levels and the longest duration of optimism than at any time in recorded history.
The longest bull market in history and the prevailing optimism that made it happen has encouraged the belief in a "new reality" and in man's ability to control his own destiny akin to his progress on the level of technology. Yet technological progress is external to ourselves. It is universal and cumulative. It spans disciplines, generations and geographical locations. Human psychology, on the other hand, is a constant. The emotions that rule within ourselves rule in each generation and each generation is destined to repeat the mistakes of preceding generations, in patterns that are cyclical and local.
Elliott Wave Theory maintains that human psychology has remained the one constant throughout our history. We may have altered the heavens and changed the earth and our relationship with it but we have been unable to change our innermost selves. Our emotions motivate and blind us. They shape our perception of the world and our actions are consistent with what we assume reality to be.
Thus when the social mood is optimistic it is also productive. The "feel good" factor provided by optimism and a feeling of relative prosperity increases feelings of benevolence and the impetus to extend "equal opportunities" to all individuals in society regardless of intelligence, race, color, creed, disability or sexual preference. All are encouraged to share in the limitless bounty that man's endeavors have produced. Scarcity is no longer considered as being the problem. Inequality is treated as being the fault of inefficiencies in re-distribution that can be solved by the judicious application of new rules, regulations and techniques.
At the peak of this cycle of optimism Man comes to believe that the old forces that have ruled the generations past - those of nature, of the market and of scarcity - no longer apply, or if they do , then they can be shaped and tamed. Life and the human condition have become equated with a virtual reality within which we can attain the outcome that we desire.
A good example of this tendency can be seen in the university entrance examination results in the United Kingdom, where the number applying for a university education smashed the quarter of a million mark for the first time. The percentage of pupils that have managed to pass has risen for the 22nd year in succession (the length of the last bull market) and now constitutes 96 percent of entrants (75 percent 20 years ago). In addition, the percentage having achieved the highest level (Grade A) climbed 0.8 percent to stand at 22.4 percent (7 percent 20 years ago) and 69 percent obtained top passing marks (Grade A to C).
These remarkable results are obviously due to increasing levels of intelligence in generations born after WWII, as the general quality of nutrition and pre-natal care improved - coupled with the superhuman effort by the teachers. And the most popular courses will contribute greatly to continued creation of economic prosperity - as they are law, psychology, pre-clinical medicine, management studies, design studies, business studies, English studies, computer science, training teachers, and history.
Forget the fact that universities are now funded on the basis of how many students they recruit and that all governments have a vested interest in herding as many young people as possible into higher education in order to reduce youth unemployment. In addition to those who enroll in a degree course, one in four will fail to graduate, and those who do will leave with an average debt of L12,000 and only a 50/50 chance of finding a job requiring graduate skills.
Therefore the best of the new generation are handicapped by debt at the beginning of their working life. As a consequence, they are delaying their entrance onto the property ladder and the cycle of procreation at the very time that their contributions to the State Exchequer are of crucial importance to fund the retirement of an exponential explosion of geriatrics.
As Bill Bonner (the founder and editor of The Daily Reckoning and a co-author of the Wall Street Journal best-seller: "Financial Reckoning Day: Surviving the Soft Depression of the 21st Century") is fond of saying - "Every man born is fated to die; every breath inhaled is fated to come out and even the brightest day that dawns is fated to end in a dark night". Natural laws govern life and the activities of men, and what goes up must come down. For months the DJIA has teetered back and forth at 10,000 and the global economy on the edge of a U.S. "recovery". Unfortunately, a real recovery requires the real spending of real money and not just an accumulation of debt and a recirculation of credit. Real money must come from real jobs, jobs that add to the productive capacity of an economy and are not merely a recirculation of services. And since there are not enough of them, real incomes are still going down in the USA and throughout Europe and they will head down for the exceptionally well-educated but financially impoverished generations to come. Cycles repeat.
