2014 War

Dave Cantey 2014 1-28-14

To fully understand economics, we must look more deeply into economic cycles. Previously, we introduced you to the 80-year Credit Cycle, and its dynamics including the accompanying cycle-ending debt bubble. Later perhaps, we will explore the Credit Cycle more fully. Today however, we wish to introduce you to another cycle in human behavior known as the War Cycle. Yes, believe it or not, wars are cyclical. Wars affect the economics of trade, currency translation, regional surplus and scarcity, labor markets, etc. Over the past 5,000 years of human history, wars, large and small, have occurred some 14,000 times. Researchers find that these wars occur in three distinct cycles: an 8.8 year cycle, a 17 year cycle, and a granddaddy cycle of 53.5 year cycle. Moreover, the upswing and peaking of the granddaddy cycle tends to correspond with major wars. These cycles suggest that nations go through periods of emotional upheaval, a kind of a mass hysteria, which leads to war, followed by periods of relative peace. To the right, we see the present forecast by Wheeler Intl of the War Cycle. Notice that a cyclical low was reached during 2013, and we are now on the upswing of war, which is not expected to reach a major peak until 2020. Since the low in 2013, we have indeed begun seeing increases in hostilities and political turmoil. According to Wikipedia, since the low point, there have been: 201 terrorist attacks staged around the world. In the Middle East, there are now eight countries officially at war, involving 163 different militias, separatist and anarchic groups. In the Congo, Mali, Nigeria, Somalia, and the Sudan, there are now 24 countries and 141 different groups involved in war. In Europe, there are eight countries involved in war-like activities involving 65 different groups of militias, guerrillas and separatists. In the Americas, war is taking root as well, where over five different Latin American countries are experiencing war-like conditions involving more than 25 different separatist groups. All told, of the 196 countries in the world today, there are now a record high of 60 countries (30%) involved in war or bloody conflict, involving 512 militias and separatist groups. We are not merely talking here about terrorist attacks and hot fighting, but various forms of social unrest from isolated events like the protests we are seeing in Bangkok (my daughter just recently returned safely from there, thank God), to currency and trade wars. As we move forward into the future, we can expect growing acts of aggression and violence. Perhaps youve seen in the news, the random acts of violence perpetrated against certain ethnic groups in some US cities, simply for the pleasure of it, or because we were bored. This is an indication of the rising warlike tendencies. Why are some humans so warlike? Take Senator John McCain, for example. He spent five years in a brutal prison camp during the Vietnam War. As a result, one might conclude he would be fervently anti-war, but no. The Senator doesnt seem to see any opportunity for war that he doesnt like. Recently, for example, he was all in favor of rushing into Syria, boots on the ground. Whether or not this was a good idea, it was certainly warlike. That these warlike tendencies are cyclical in broad human behavior may seem peculiar, but they occur nonetheless. Look for increasing hostility in the unfolding year, and years.