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Thread: Kondratieff Winter

  1. #1

    Default Kondratieff Winter

    I recently started reading about the Russian economist Nikolai Kondratieff.

    He proposed a theory that Western capitalist economies have long term (50 to 60 years) cycles of boom followed by depression. These business cycles are now called "Kondratiev waves" and are sort of organized as "seasons".

    His story is a sad one. He wrote a book on his theory. However it was seen by the Soviet government as criticism of communism - ironic since he was writing about capitalism. He was dismissed from his job, sent to a gulag in Siberia and later received the death penalty under Stalin in 1938.

    Its only much later that his theories/book was translated and the Kondratieff wave named in his honor. His views are not widely accepted by economists today but then economists today don't seem to know jack.

    I've ordered a translation of his book and will do a book report once I've read it. If he's right, we are headed for one hell of a depression lasting at least a decade if not more!

    ---



    The first stage of expansion and growth, the "spring" stage forces a redefinition of work and the role of participants in the society due to new inventions, new products, new participants and other productive forces. The result is a new wave of prosperity led by entrepreneurs bringing about social shifts, upheavals and displacements which lead to possible revolutions and wars. This gives birth to a new social, political and economic order.

    In the next phase, the "Summer", there is a rising mood of prosperity and affluence that changes the general attitude towards work in the society, leading to inefficiencies, rising complacency and decadence.

    After this stage comes the season of deflationary growth, or the plateau period. The popular mood shifts toward stability, normalcy, and isolationism. Unemployment begins to rise.

    Finally, the "Winter" the stage of severe depression in which businesses go under, the rise in unemployment and debt liquidation leads to deflation in assets and prices. Old institutions that have become obsolete and hinder progress may go under during the shake out.

    http://www.financialsense.com/contri...dratieff-cycle

  2. #2

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    I've read about it a little, it seems more of a trend than an immutable economic law. Also everyone says the cycle is about 60 years, but 1837 to 1929 to 2012 are more like 80-90 year gaps. And the depressions of 1873 and 1893 don't fit in cleanly.

  3. #3

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    Quote Originally Posted by solderguy1 View Post
    I've read about it a little, it seems more of a trend than an immutable economic law. Also everyone says the cycle is about 60 years, but 1837 to 1929 to 2012 are more like 80-90 year gaps. And the depressions of 1873 and 1893 don't fit in cleanly.
    Actions of central banks ( unlimited money creation or shrinking of money supply) can and does affect the cycle. The " winter" can be pushed back, prolonged, or deepened, at the behest of the banking class. What bothers me the most is that almost always the " winter" is brought to an end by a world wide war.
    Those who would fight monsters must take great care that they not become one themselves, and must always remember and never forget that when one looks into the abyss, the abyss also looks into you.

    Friedrich Nietzsche

  4. #4

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    An interesting interview from 2002 from a Kondratieff economist. Towards the mid section he starts giving predictions and a lot of his predictions are bang on.

    Admittedly his call was too early in 2002... but still the info is good. Check it out and remember, this was from back in 2002. He talks about gold, gold miners and cash being a good investment during the long Kondratieff winter.

    http://www.netcastdaily.com/1experts/exp072702.mp3

  5. #5

    Default

    A more recent interview of the same Kondrietiff economist. His name is Ian Gordon. The interviewer is Tekoa.

    Feb, 2011 : http://www.contraryinvestorscafe.com...2011gordon.mp3

    July, 2011 : http://www.contraryinvestorscafe.com...2011gordon.mp3

    August, 2011 : http://www.contraryinvestorscafe.com...c_08232010.mp3

  6. #6

    Default

    With fiat currency, scheduled increases and decreases of the money supply can be used to create a trend where none exists.

    Which comes first, the chicken or the egg?

  7. #7

    Default

    It's rather weird seeing 'capitalist' system.
    I see it another way: we start with a fairly free market, where people build up welfare.
    Those that do their work best, become wealthy.
    Some others get jealous, want the same but without having to compete, and there, the first step occurs: they lobby at government to legally get a part of the welfare that those that do they best produce.
    And this gradually grows. Since the real private sector is inventive, they find ways around the legal theft, they overcome the cost by once again improving themselves, and so on.
    But, the 'jealous' / lazy side never stops trying for more of what they produce. They want more influence, and get it by giving them also places in the legally benefitted club. At the same time they add more and more regulation, primary reason as excuse for their absence in the private sector, secondary reason to make it harder to avoid their theft/tax.
    And this way, the viscious circle is round. You could see it as polarisation. Less and less have to produce everything while more and more stop helping them. You end up with a divided population, two large opposed groups.
    Where does it end? Where the real private sector starts to fail to overcome the theft.
    So, the story in short: it's a trend from capitalism to fascism. From free market to heaps regulation and huge government/States, that hang on with big companies, giving them benefits.
    It's weird that this Russian guy seems to have missed this aspect. He should know what communism / fascism is, better than anyone else.
    the void

  8. #8

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    I dont necessarily disagree completely with what the guy wrote above but nevertheless...

    An interview with Ian Gordon, Longwave Group founder (follower of the Kondratieff Winter cycle)

    http://traffic.libsyn.com/twobeerswi...ev_Winter..mp3

    you can download it and listen to it on your mp3 player

  9. #9

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    Lately I'm seeing a lot of references by bloggers [ particularly on ZH ] to the 1997 generational theory works by Strauss-Howe, The Fourth Turning.
    A brilliant book imo but definitely influenced by the work of Kondratieff.
    Overheard - People who want to share their religious views with you almost never want you to share yours with them.

    “If oppression conferred heightened political consciousness there would be a People’s Republic of Mississippi.”

  10. #10

    Default

    yea i've heard of the fourth turning though not read it.

    the term Kondratieff cycle was devised in honor of the man who was executed for his book on the topic so in his memory, all such cycle theories tend to bring up that name.

    i do think there is substance to the theory.

    i've taken the theory one step further. The present centralised contol of the monetary system has made the middle class poorer and less able to afford children. The result has been that birth rates have declined sharply. IMO nature will find a way to reverse that trend either through war or revolution directed at the institutions which have fostered this predicament.

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