I’ve heard it said that history doesn’t exactly repeat itself, but it does tend to echo.  The same could be said about certain cycles which seem to permeate history.  The rise and fall of great empires for instance.  Or the shorter eighty year cycle that seems to punctuate American history.  The book Generations by Strauss and Howe is a fascinating read; it develops this theme quite convincingly.

Cyclical turning points can be marked by significant events.  For instance, the 2009 financial system rupture seems to have led to an ongoing state of uncertainty.  Try as they will, the world’s central banks continue throwing huge buckets of money into the global system in an attempt to stimulate the economy and resurrect growth.  To date these efforts seem to have yielded less than desired.   Nowhere in the developed world have we seen an economy recover to its historic growth trend.

Hoping stimulus would lead to a wealth effect among citizens that would in turn bolster spending and the hoped for recovery has not been successful.  This comes as no surprise to Atlas.  We feel excessive money creation can’t compensate for pernicious demographic trends.  More specifically, since the collapse, most people seem to be saving more relative to such a desired increase in their spending.  In other words, current circumstances seem to scare the heck out of folks for reasons they can’t quite define.

Do you hear an echo?  Back in 1933, incoming president Franklin D. Roosevelt said “the only thing we have to fear is fear itself.”  His words then and our somewhat similar circumstances now fit quite well with the 80 year cycle paradigm Strauss and Howe developed.  Of course, an obvious turning point for the economic dilemma confronting governments today is the banking collapse that culminated in 2009.  Let’s see, what would you get if you subtracted 80 years from 2009?                     (by J R and C. Cox)