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FSN: Is the Global Economy facing a Kondratieff Winter in the midst of Summer
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
from CapitalAccount
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Welcome to Capital Account. The Federal Reserve hawks are speaking out against the central bank taking more action, according to the Wall Street Journal. Why is so much attention given to the whims of central banks around the world? Is it because perception of central bank power is what matters most to markets? We talk to Peter Baxter, author of KondratieffWinter.com, if power of perception is enough to keep the economy going…and what happens if it runs out.
And even though it is the peak of summer, today we talk about winter, a Kondratieff Winter to be exact. Kondratieff Winters historically feature high volatility, slow to negative growth, de-levering (by consumers, corporations, and governments,) hoarding of cash by banks, asset deflation, and economic depressions due to bursting of unsustainable credit bubbles. Does this sound familiar? Peter Baxter, President of Baxter Capital Advisors, will explain why he thinks we are in a Kondratieff Winter and where the economy is headed based on this theory.
Kondratieff Wave theory details how global and regional capitalist economies experience a recurring cycle pattern of boom and bust of around 60 years that coincides with a peak in credit. We talk to Peter Baxter about the components of each of the four cycle seasons (Winter, Spring, Summer, Fall), and how each season exhibits the same unique characteristics. Once credit has peaked in the cycle, it must be choked off so that the excesses from the previous cycle can be removed. We will talk about how he foresees the Winter cycle playing out, as well as why the mainstream media has largely ignored Kondratieff Wave theory.
Plus, the end of a moratorium on the sale of Facebook shares went into effect today, sending the price down to new lows. Despite disasters like this, the broader trend shows stocks rising and treasury yields declining. These are contradicting signals, and Peter Baxter will tell us what he thinks the bond market knows that equities don’t.
Correction: During the show when describing the ideally-performing asset class during a Kondratieff Winter, Lauren misspoke. They are gold, cash, and bonds (after the credit crunch). Not gold, cash, and stocks.
2012-08-17 19:57:45
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