For 240 years, a battle has raged to control the destiny of the New World… by controlling its ‘purse strings’. This has taken on different forms and involved diverse tactics, but the overall result has been the same – Dollar Decimation. While this may seem like a discussion on cycles, it is actually much bigger than that. It is a discussion on economics, on power, and on principles.
For thousands of years, the 40-Year Cycle has governed humanity. It has repeatedly timed periods of peace & prosperity as well as periods of destitution & servitude… dating back beyond 1,000 BC. But, nowhere has it been more consistent and more revealing than in the brief history of the United States of America… and the history of her currency.
The U.S.A. began with a battle over economic control (taxation) and with a dangerous experiment with fiat currency… in 1775–1781. It was a massive failure and so the pendulum swung in favor of a currency with greater integrity – backed by gold and/or silver (not just empty promises & debt).
At precise 40-Year intervals, a battle raged between those in favor of gold or silver backing the currency and those in favor of politicians or bankers backing the currency. 1896 – the precise midpoint of this 240-year experiment – marked the height of gold’s ‘fortune’, following a gov’t-triggered bubble & crash in silver and the economy – ushering in the worst depression in America (up to that point)…
The ‘Billion Dollar Congress of 1889–1891 (similar to modern times) helped create this bubble – and its ultimate crash – spending lavishly and mandating monthly purchases of silver to appease political interests & lobbies. The Panic of 1893 ensued and ultimately led to the Election of 1896 – centered around gold backing of the currency.
William Jennings Bryan – the candidate opposed to a gold-backed Dollar – made his famous Cross of Gold speech and lost the election. In 1900, the gold Dollar went into effect. But, the battle did not end there. In fact, it intensified with FDR striking a trio of debilitating blows against a gold-backed Dollar in the 1930’s (40 years after the disastrous 1890’s). The stability of the Dollar was sent reeling…
The penultimate blow – against the foundation, integrity & stability of the US Dollar – came in the 1970′s… in 1976, to be exact. The ramifications were quickly felt – from 1976–1980.
The ultimate blow could be seen during the latest phase of the uncanny, 40-Year Cycle… in 2013–2016/2017 (and into 2021)… even as the market-perceived value of the Dollar Index is forecast to accelerate its rebound in2014–2015 before entering a terminal decline after that. 2016/2017 is when the Dollar should begin to reflect the underlying degradation.
So, how did the 1970’s set the stage for this next phase?
40 years ago, in 1973–1976, the Dollar lost its final link to Gold – culminating with the 1976 Jamaica Accord, after the collapse of Bretton Woods (an attempt at global monetary unification) in 1973.
This ushered in a decisive 40 years of testing (an age-old application of the Cycle of 40) – when the Dollar was supported by numerous factors, not the least of which was oil. Primarily, though, the Dollar (AKA Federal Reserve Note) is backed by debt.
1973–1976 was a tumultuous time – the ramifications of which are still playing out. 1973–1980 saw the Dollar collapse against Gold, the best gauge at assessing the Dollar’s real underlying value!
40 years before that, in 1933–1936, the stage was set for that future de-linking when Gold was confiscated and US citizens were banned from holding it.
First, citizens were banned from holding Gold and forced to turn it all in (after which it’s value was immediately increased for international trade). Then, after a 40-year period of testing, Gold was completely removed from any relationship with the Dollar. But, what about previous 40-Year Cycles?
40 years prior to 1933–1936, in 1893–1896, government manipulation led to a bubble & crash and the Panic of 1893 – a run on Gold, a Silver collapse, and the worst depression in America (up to that point; the Great Depression would arrive exactly 40 years later). The Election of 1896 – and the ‘Cross of Gold’ speech – triggered another pivotal shift for the US Dollar.
40 years earlier, the U.S. devalued the Dollar in 1853 by reducing the weight of Silver and ultimately leading to the suspension of Silver payment in 1857 (and Gold payment in 1861) and the Panic of 1857.
40 years before then, the battle for control of the currency was waged in 1813–1816 – led by Thomas Jefferson who fought against (and lost) the chartering of the 2nd Bank of the United States. Three years after Jefferson lost that battle, the Panic of 1819 occurred.
And 40 years before that monetary ‘revolution’, patriots fought against another attempt to devalue the currency via taxation with the 1773 Tea Act… and the 1775 Revolutionary War. During her first years of existence, America experienced the danger of fiat currency as ‘Continentals’ were issued in 1775, lost over 80% of their value by 1778, 97% by 1780… and were worthless after 1781. It created an archetype for the Dollar… for the ensuing two centuries.
Just as in ancient times, the 40-Year Cycle has timed these events with uncanny precision.
Since the best way to accurately assess the value of the Dollar is with related vehicles (often an inverse relationship), a study of Gold’s history is an important approach. (For example, Gold’s 20-fold increase in 1973–1980 is more accurate – though inverse – illustration of what was going on in the Dollar at that time.)
All of this – the action of the past ~240 years and the developments during each successive 40-Year Cycle – have set the stage for 2013–2017 (likely extending into 2021, just as previous phases extended into 1781, 1821, 1861, 1900, 1941 & 1980). And even that is expected to break down into some very diverse moves…
2013–2015/2016 is expected to see upward movement in the price of the US Dollar, even as a corresponding currency like the Euro is projected to drop sharply (particularly after May 2014 – when multiple cycles, including a unique, 3-year cycle between highs – converge and turn back down) – on its way to its ultimate downside price target (published in 2011). During this period, Gold & Silver could see more volatility with cycle lows in late-2013and mid-2015 and an intervening cycle high in 3Q 2014.
2015/2016 is when the REAL fireworks are expected to begin!
Just as the first shot of the Revolutionary War was fired in April 1775 (despite escalating tensions & skirmishes leading into that period), the first/next recognizable shot against the US Dollar could be fired in 2015 (April 2015??) and usher in an all-out battle between the primary combatants, in the years that follow.
2015/2016 is also when Crash Cycles come back into play in Stock Indices… and when cycles related to Russia & China come back to the forefront. (All of these are very consistent and very revealing cycles that are producing a Perfect Storm of economic challenges for 2015–2017.)
Similar to the experience of the Continental – in 1775–1780/1781 – the Dollar could be decimated in 2015–2020/2021 (even though the markets might not immediately reflect what is going on behind the scenes). BUT, there are pivotal landmarks expected – AND NEEDED – along the way!!!
This impending period and the expected ramifications of it have been a topic of articles and newsletters for two decades – all focusing on a period of time beginning in 2011 (and lasting into 2018/2019–2021).
Perhaps the most significant – with respect to this discussion on the 40-Year Cycle – was that which was published during 2011, explaining why Gold should set a Major, multi-year peak in August 2011 – EXACTLY 40 years of testing from when Richard Nixon slammed shut the Gold window in August 1971. (Gold subsequently set its highest monthly close in August 2011… and has not been back to those levels.)
Some of this analysis can be viewed in these ‘Date with Destiny’ documents, published in 2011, projecting a major setback in Gold and a crash in Silver and related investments:
Late-Dec. 2013 ushers in a pivotal time in Gold & Silver when a 1–2 year bottom is expected. That should trigger a rebound into 3Q 2014, when another decline could take hold. And that would lead into some momentous cycles in mid-2015. Overlapping that analysis, the Dollar Index is expected to move higher in 2014–2015, with a decisive cycle low coming into play in May 2014.
All of this should be preparing the markets for the culmination of a momentous synergy of 40-Year Cycles…
2013/2014 sets the stage with Act I.
2015/2016 should intensify the ‘performance’ with Act II.
And 2017–2021 should captivate all audiences with Act III.
There is a LOT more to this analysis – some of which is posted on this website (though much of it is reserved for subscribers only). Be sure to read ALL of it before considering any related decisions! The coming years promise to be full of surprises that perplex unsuspecting or unprepared traders & investors. Don’t be one of them! ©ITTC