2020 Inflation Cycle Overlaps 2019 – 2021 Agricultural Cycle Crescendo… all Leading to 2022!
“Outlook 2020/2021 – 80-Year Cycle of Agriculture
09-29-20 – America continues to evolve on a 40-Year Cycle basis. By that, I mean that many social and economic swings have adhered closely to that 40-Year Cycle – the topic of dozens of discussions over the past decade. The primary focus of that analysis has been the period of 2015 – 2021 – when seismic shifts were forecast to occur. When analyzing that, it is always important to remember that history rhymes… it does not repeat.
One current example involves expectations for price inflation in 2020 – possessing some similarities AND some very important distinctions from what took place in 1980… and 1940… and 1900. In the current case, the 2010’s have seen an exponential rise in paper assets – most notably stocks (and bonds) – akin to the rise in commodity prices & hard assets in the 1970’s…
Adding another ‘rhyming’ factor, metals and commodities were forecast to see an inflationary price surge from March 16 – 20, ‘20 into 2Q ‘21 (at the same time Dollar cycles were/are bearish). It is the subsequent period between mid-2021 and late-2022 when things could get a bit more ‘dicey’.
40-Year Cycle of Migration…
And then there are much larger, overriding cycles that might not always have a direct or immediate impact on specific markets… but ultimately do have a significant impact on the broader picture. Since this usually involves a slower process (like reversing the direction of an aircraft carrier instead of a speedboat), it is often overlooked until it is too late.
In 2015, INSIIDE Track began to elaborate on the outlook for the late-2010’s (and early-2020’s) and the potential for dramatic changes. One of the conclusions drawn then (2015) was that challenges in California were about to ratchet up to a new level.
A 40-Year Cycle of drought was transitioning and 2016/17 was threatening to usher in a vulnerable 3 – 5 year period during which a food crisis was expected to unfold (in diverse areas) as California was (expected to be) hit with escalating challenges.
One speculation, described at the time, was that El Nino flooding could hit CA in early-2016 and exacerbate the troubles already brought by years of escalating wildfires. California and its wildfires were ‘rhyming’ with the Dust Bowl events in the Midwest 80 years earlier – in the 1930’s. Along with that, the potential for topsoil erosion in CA was growing.
During the ‘30’s, the evolving dust storms (and massive topsoil erosion) decimated the prairies in the middle of the US and Canada – reaching a crescendo in 1939/1940 and ultimately driving farmers, ranchers and their crop-raising… to California. Something remotely similar could soon repeat… and might already be subtly evolving.
As described in the late-2015 analysis (reprinted on page 2), US agriculture has evolved on an ~80-Year Cycle with the period of 2016 – 2021 representing the culmination of the latest cycle (and related 40-Year Cycle) – during which a developing food crisis was expected to unfold… in or out of California.
2019 – 2021 was the crescendo of that period and the expected time for when the consequences were most likely to manifest themselves to the masses.
The speculation then, and repeated in the intervening years, was that the mass migration West (since the Dust Bowl decade of the 1930’s) – to California – would begin to reverse itself after that time and potentially trigger a decentralizing of agriculture that had become so pronounced in CA.
(Obviously, that is likely to be a slower process since it is in the context of an 80-Year Cycle.)
Sure enough, 2016 brought El Nino flooding that was a likely precursor to the future. In some areas, it demonstrated what happens when normal topsoil protectants are burned away and then flooded.
Also included in that 2015 analysis was conjecture that there would then be another warming spike after El Nino – lasting into 2019/2020 and exacerbating the drought conditions in CA (and in other areas).
Sure enough, global temperatures peaked in early-2016, spiking slightly above the 1998 peak, and then fell back for ~two years. They then entered the latest surge and are likely to set another multi-year peak in 2020/2021.
(Global temperature spike highs have occurred at a similar ~11-Year Cycle as other solar phenomenon – peaking in 1988, 1998/99, 2009/10 and potentially in 2020/21. This is NOT a political climate debate but rather an observation of shorter-term cycles.)
Is it possible that the events of 2014 – 2020 could spur a new migration away from California, similar to how the events of 1934 – 1940 spurred a migration to CA? If so, what does that mean for the 2020’s?
And just to be clear, I spend time in CA every year or two and love what the state has to offer. So this is not any sort of bias or political statement. It is simply an observation of some very intriguing cycles that should not be overlooked. Stay tuned…
Soybeans, Corn & Wheat fulfilled analysis for strong advances in June – Sept., with the second phase expected to be a surge from early-Aug. into mid-to-late-Sept. (after an initial surge into early-July). Soybeans accomplished that… Price action projected a rally above 980.0/S and ideally back to ~1060/S in Sept. ‘20.
They made it up to 1046.75/SX while surging into Sept. 18 – fulfilling these targets (in price and time) while also triggering traders to exit 1/2 of long positions (from ~850.0/SX) at 1045.0/SX.
Wheat has a combination of cycles that forecast an intermediate peak on Sept. 21 – Oct. 2. That remains the case, but an opposing cycle low (~Sept 28) could provide a floor under any future corrections. For now, Wheat remains on track for an advance to xxxx/W as part of a much larger bull market.
1 – 3 month and 3 – 6 month traders could be holding partial long positions in Nov. Soybeans futures from 854 down to 846 – holding 1/2 of these. w/avg. open gains of about $8,500/contract. The other 1/2 should have been exited at 1045.0/SX w/avg. gains of about $9,700/contract. Move the risk on the remaining 1/2 to [reserved for subscribers]… TRADING INVOLVES SUBSTANTIAL RISK”
Grains have entered the crescendo of a 40-Year Cycle of Drought & 80-Year Cycle of Agriculture (leading into 2021). The potential for a Dollar decline – to drive commodity inflation higher (into at least 2021) – corroborates that.
~11-Year, ~40-Year & ~80-Year Cycles converge in 2021/2022 and pinpoint the expected transition of natural, geopolitical and market cycles, at the same time many food/commodity cycles culminate. Inflationary cycles project surging prices in the coming year(s)… providing a parallel to the inflationary surges of the late-1970’s.
On a 1 – 3 year basis, Corn has a corroborating 3-year low (July 2007) – low (Jun 2010) – high (July 2013) – high (June 2016) – high (May/Jun 2019) – high (May/June 2022) Cycle Progression – projecting the next 1 – 2 year peak. Wheat has a ~6-year low (2004) – low (2010) – low (2016) – high (2022) Cycle Progression that is being reinforced by a ~33-month low (3Q 2016) – low (2Q 2019) – high (1Q 2022) Cycle Progression. Soybeans have an ~8-month Cycle Progression that portends future peaks in ~May ’21 & ~Jan ’22.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.