Joined: 27 Oct 2007
Location: 1 Singapore
|Posted: Fri Jan 07, 2011 10:25 am Post subject: Dow Jones/Gold Relative Ratio, Annual Data from 1896
from the author:
THE AGE OF PETROLEUM IS COMING TO AN END
Does anybody believe in the Grand Supercycle? I think perhaps I do. Such a long cycle (~100 years or more) cannot have its origin in human lifespan, investment cycles, or inventory cycles. No, the Grand Supercycle has its origin in the energy source that the economy uses, and each cycle ends when a new (and better) resource is found to feed and grow the economy.
The Age of Steam ended around the turn of the last century, and the Age of Petroleum started (1910ish). Take a look at this graph of the DJIA in gold terms:
Is it too much of a stretch to imagine that the three peaks you can see there are 1-2,3-4,5-A of an Elliott wave pattern (see Wikipedia) of Kondratiev waves? That places us somewhere in wave A of the corrective pattern. So we have wave B to look forward to, which as I've said before will probably be due to tight gas / difficult oil, but after that it's time for the awful wave C (some time 2030ish I'd say).
Better hope we find a new energy source in the next 20 years, or things really will get dicey after that. It's new nuclear or bust I'd say (and I don't mean old nuclear - not enough U235 for that).