COMMENT: Marty, it is amazing that the world is not focusing on your model. Consumer confidence in the US took a nose dive, which was the largest decline in more than three years. The ECM turns, and central backs began to cut rates within weeks, and you explained that recessions are born when people lose confidence in the future. Well, everything you have taught us is always correct. I do not know what it will take to wake up. The WSJ, FT, and every business publication should be reporting on your forecasts. It appears they are just part of the fake news.
Keep up the fantastic work.
BB
REPLY: I am not entirely sure why the WSJ and the FT, among others, will not discuss the ECM. They only preach the traditional Keynesian Economics that is still taught in universities, maintaining that the business cycle is not definitive. Thus, it is random, so it can be manipulated under Keynes to eliminate recessions and depressions. That was the same storyline I was taught in school back in the ’60s.
Other than Nick Palmgarten at the New Yorker, who called the ECM the Secret Cycle, no major media has ever wanted to discuss that there is a definitive aspect to the business cycle. That goes against all the Ivy League universities. I suppose they do not want to rock the boat. I had a discussion about this model with Paul Volcker back in 1999. Paul agreed the business cycle was about 8 years. He had even put out his book entitled Rediscovery of the Business Cycle.
Anyone who has had real live experience has conceded there is a definitive business cycle. Arthur Burns was Fed Chairman when Bretton Woods collapsed. He, too, concluded that the business cycle always won.
Milton Frieman came to listen to one of my lectures in Chicago. Milton said I was doing what he had only dreamed about. He had written that a floating exchange rate like we have today would emerge back in 1953 – 18 years before it took place in 1971. Milton understood the global interconnections, and that is why he came to listen to me.
I tried the BS random walks theory, which seems to be created by people who cannot predict anything. Even Keynes’ whole theory does not hold up. The market has NEVER peaked with the same level of interest rates twice because it is NOT some stupid one-dimensional relationship. I warned the ECB that going to negative interest rates would fail. If there is NO CONFIDENCE in the future, people will not spend – PERIOD!!!
With the prospect of wars everywhere, Kamala promised to change the filibuster rules so she can get Abortion through to kill unlimited amounts of babies, creating deep divisions and then taxing UNREALIZED gains that our computer warns would result in the biggest 2-year crash of the Great Depression levels, with such uncertainty, we are headed into a recession into 2028.
