From the 2014 movie “The Imitation Game,” millions became familiar with Alan Turing, broadly called “The Inventor of the Modern Computer.” However, as with most individuals who become “celebrities,” his quest for greater knowledge goes far beyond theoretical computer science and artificial intelligence.
Several billion people celebrate their most important religious event based on the cycle of the moon. Hundreds of millions believe that the cyclical progression of the planets influences who they are and their daily lives. In the 1970s Casio Computer Co. marketed the “Biolator” to calculate human “biorhythms” to those convinced that knowing their personal Physical, Emotional, and Intellectual cycles could help improve personal performance.
Yet economics is the only field where cycles are denied.
In 1946, economists Arthur F. Burns and Wesley C. Mitchell provided the now standard definition of business cycles in their book “Measuring Business Cycles.” But the idea that there could be a predictable and time-apparent cycle in an economy and business was so distasteful that most of the experts would only acknowledge that these were “fluctuations” and not cycles.
Burns wrote: “Business cycles are not merely fluctuations in aggregate economic activity.” Economist Milton Friedman said that calling the business cycle a “cycle” was a misnomer, because of its non-cyclical nature. Friedman believed that business declines are more of a monetary occurrence. If it is a monetary—meaning control of the money system—event, then this so-called cycle can be controlled by manipulating money through interest rates and the amount in circulation.
We humans may not hate chaos —“complete disorder and confusion”—but we are desperate to find a pattern in the chaos, which led us to understand how to predict lunar eclipses thousands of years in both the past and future.
Turing had a theory that within all of nature, what appears to be chaos was a mask that hides a natural order. He was the first to think that there might be a mathematical arrangement that defines nature. The ultimate “chaos” is Morphogenesis, how when all the identical cells in an embryo begin to clump together to become different from each other. The mystery was how cells know to form different things such as skin, eyes, or brain.
In 1952 he published his explanation of Morphogenesis. Turing’s formula revealed a hidden cycle within the chaos of Morphogenesis. Cycles are the order constant in all of nature. Yet economics is the only field where cycles are denied.
Hidden cycles are there even if not easily seen in politics, asset prices (metals, commodities, stock markets, currency, bonds, etc.), war, weather, and economics.
Ancient societies pounded drums to scare away the wolf eating the sun. Human sacrifices were made to stop the hidden weather cycles of drought and rain. Maybe “random” events could be pushed away. Except most events are not random and cannot be pushed away with any more success than King Canute trying to stop the tide. Even he admitted, “Let all men know how empty and worthless is the power of kings.” But then central bankers came along.
I wrote in September 2019 that 2020 would be a year of economic chaos. “It’s all Covid’s fault.” No, it was the fault of governments using the virus to try to mitigate the central banks’ economic disaster of trying to solve the Global Debt crisis of 2008 with more debt.
I wrote that 2023 would be the “Year from Hell” because of a confluence of cycles. We barely made it to March 1st before all hell broke loose in the banking sector. “It’s all Putin’s fault.”
No, it is the central banks trying to solve the problem of low/no economic growth caused by the 2008 debt crisis with 5,000-year historically low interest rates by now trying to solve the 2020 “too much debt crisis” by raising interest rates.
Raising interest rates has caused smaller US banks to default, not to mention Credit Suisse, one of the world’s largest multi-national investment banks serving mostly large corporations, institutional investors and governments. What happens when Egypt, Pakistan, Argentina, and half of the “Wakanda” region of Africa follow?
The 2023 cycle: You haven’t seen anything yet.
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