Stock-Flation

dreamstime_xl_1551332

Stock Indices are in the process of fulfilling multi-year projections and – more importantly – the culmination of a 40-Year Cycle of inflationary advances.  That’s right, as the result of a declining Dollar (de-linked from Gold in 1976) and the inflating value of most things priced in Dollars – most notably stocks – the stock market has headed progressively higher since late-1974.

Based on the synergistic combination of multiple factors, this advance is expected to peak in 2014!  One of those factors is best described as the ‘Three S’s’ – theSynergy of Stocks & Silver.  This is a combination of stock market swings along with inflationary/deflationary vacillation.  At no time in America’s history has this been more evident than during the 40-year period of 1974–2014!

In previous phases of the 40-Year Cycle, Stock Market crashes coincided with Silver crashes and the depths of deflationary pressures.  The two worst cases coincided with the two worst depressions in America’s history – the 1890’s & 1930’s …at near-perfect, 40-year intervals.

As illustrated in the accompanying diagram, these coincide with the lowest points of the 40-Year Cycle Progression.  That is why it is not surprising that they came in succession, due to their positioning in the Cycle Progression (see Eric Hadik’s Tech Tip Reference Library for complete description & details of Hadik’s Cycle Progression). From that point, the entire sequence begins to build ‘upward’ momentum towards an important transition.

HCP - 2014 Edit

In the ensuing phase – 1974 – the DJIA bottomed, but it was during the onset of an inflationary phase.  When measuring inflation by the price of Gold & Silver (vs. the US Dollar), the early years of that new 40-Year Cycle (1973/1974 into 1980) set the tone for what was to follow – with a massive inflationary surge.

Even though inflation did not head straight up – from 1974 into 2014 – the overall trend was up, particularly when viewed through the lens of inflation-boosted stock prices (and/or looking at the declining value of the U.S. Dollar through that entire period).

The action heading into and out of the 1974 bottom gave classic signs of a Cycle Progression breakout higher – when a cycle that has previously been governing the lows (or, in this case, deflationary troughs) flips/inverts as it breaks through the ‘0’ line, a theoretical equilibrium point, and begins to subsequently govern ensuing highs (or, in this case, inflationary peaks… when valued in stocks).

Since the 1970’s, the Dollar has steadily declined – consequently inflating most things that are priced in Dollars… even stocks.  However, there are times – like in 1980–1982, 1987 & 2007–2009 – when accelerated inflationary pressures are too much for the stock market to bear.

At those times, any inflationary benefits are powerfully outweighed by the looming detriments.  That is what I am trying to describe, in relation to 2014.  It is NOT thatinflation will peak.  It is that an inflationary advance in Stock Indices will peak.

Converging Cycles

There is a LOT more to that 40-Year Cycle discussion, but it is not just the expected inversion of that Progression that has been arguing for a multi-year high in 2014. Instead, it is the synergistic impact of many of the most important multi-year cycles I follow…

I have already described the 7-Year Cycle (2000 peak to 2007 peak to projected 2014 peak) and the overlapping 14-Year Cycle of Crashes (1973–1987–2001–2015?), but there are others.

Another is linked to the 17-Year Cycle that helped pinpoint the Oct. 11, 2007 peak (exactly 17 years from the Oct. 11, 1990 bottom).  However, it is a related 17-Year Cycle that deals with global geopolitical crises and their impact on stock markets.  In many cases, there is a multi-month separation between the two…

[See related 17-Year Cycle publications for details.]

In 2014–2016 – the next phase of both the 17-Year Cycle* and its stronger ‘sister’ – the 34-Year Cycle* – come back into play and are very likely to see the impact of grossly-distorted (low) interest rates begin to play out… another textbook illustration of a Cycle Progression inversion.

[*The 17-Year & 34-Year Cycle helped pinpoint the Oct. 2007 Stock Index peak and can be better understood by reading many of the 17-Year Reports from 2007 & 2008 – still available at www.insiidetrack.com, under IT Reports, and also posted at www.17YearCycle.com.]

There is much, much more to this analysis including the unique and uncanny ‘Silver Lining’ that has presaged so many stock market crashes – often leading by a couple years.  2015–2016 is a key time for Silver & Gold – when a Major bottom and onset of a new advance is expected.  However, the final stages of their decline is when Stock Indices could begin to show signs of developing weakness.

IF stocks begin to drop in mid-2015… and IF Gold & Silver show signs of bottoming in mid-2015… it would powerfully reinforce related analysis & expectations for the precarious period beginning in the second half of 2015 and lasting through 2016.