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Panic Cycles v Waterfall Events
Panic Cycles v Waterfall Events
COMMENT: Hi There,
I suggest you do an article on the terminology you use.For example I noted that on your commentary on centamin Egypt you use the term waterfall pattern. You also you use the term panic cycle.An article on these words and their meaning would be helpful.
Thanks
S
REPLY: We do have terminology is the Glossary on this site. The Waterfall Event is a term I coined to describe what I discovered in the study of the rise and fall of empires, nations, and city-states. This differs from a Panic Cycle which reflects just a short-term increase in volatility, which can exceed the previous session high and penetrate the previous session low or make a big move in one direction. They do not imply the destruction of the system being observed or an individual market.
I have encountered the Waterfall Events such as the collapse of Venice to the 1931 Sovereign DebtCrisis where the foreign government bonds listed on the New York Stock Exchange simple defaulted and went to zero. Thus, the Waterfall is a sharp collapse that will unfold in a market with a decline of generally greater than 50%.
Climate Change is Real – Do Droughts Last 8.6 Years?
It is time to begin to really investigate Climate Change for what our computer is forecasting is like a dramatic rise in volatility or a Panic Cycle to be more accurate. What does that mean? We are going to experience extremes on both sides. You will see record temperature in the summer of 100+ F and in the winter, bitterly cold freezing. The admixture of these types of trends plays hell with crops. We are looking at severe droughts brewing around the world. In Australia, we are looking at drought conditions that match the ‘Federation drought‘ which took place during the late 1880s and early 1890s. This also contributed to the rise in socialism for agriculture was the bulk of employment and droughts also terminated jobs.
The Federation drought was a major drought in the outback areas of New South Wales, Queensland, Victoria and South Australia killed many animals. There was a major loss of vegetative cover that led to erosion and a dust bowl. Many native edible plant species vanished with devastating consequences. Between 1895 and 1903 there was a major drought that impacted most of the country. They came to name it the ‘Federation drought‘ which lasted interestingly 8.6 years. This event of nature is what forced many to seek employment in the Industrial Revolution and abandon farming.
The American Dust Bowl also became known as “the Dirty Thirties” which began in 1930. This too had devasting consequences for agriculture and sparked protectionism which was centered on agriculture – not manufacture. Regular rainfall did not return to the region until the end of 1939, which finally brought the Dust Bowl years to a close. The severe drought hit the Midwest and Southern Great Plains during 1930. This resulted in major dust storms that began the following year in 1931 coinciding with the Sovereign Debt Crisis. By 1934, an estimated 35 million acres of formerly cultivated land had been rendered completely useless for farming. Another 125 million acres was rapidly losing its topsoil. Once again, we have a period of 8.6 years.
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2018 – Panic Cycle Year
QUESTION: Mr. Armsyrong; Thank you for an eye-opening conference. Can’t wait for this year. You said 2018 was a Panic Cycle Year and that it would be unlikely to create an outside reversal in the Dow, but we should expect wild times ahead. Is this panic cycle impacting many other markets as well?
JV
ANSWER: Yes. This is the beginning of the Monetary Crisis Cycle that will go into 2021. That is probably where we will see the dollar rally break the world monetary system. This year, we should expect most markets to test BOTH sides of the game so pay attention to the Global Market Watch and the Reversals. This will tell us when the trends shift. There will be the classic fool who thinks that just because the euro finally exceed last year’s high or gold has rallied that this is it and that means the next four years will be the same.
Panic Cycles are notorious for trapping people on either the long or short side. You always have to trap the majority in order to create the slingshot to the upside of the waterfall to the downside. This is why they remain fools for they rush in based upon a few day’s price action. So far, everything is running its course. We are finally getting closer to the 125 threshold of resistance in the euro and the pound sterling has rallied with many starting to bet that BREXIT will not happen. Buying the Euro because interest rates are expected to rise with the ECB backing off of QE is just not being thought through rationally. QE has FAILED to stimulate the economy after nearly 10 years, and all it has done is subsidize EU member states. Rates will rise when they start to have to sell to real buyers. Then the sentiment will shift mid-year and we will test the opposite side.
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