The Global Economy Is Unwinding and the Central Banks are Losing Control
As of October 1st, the MSCI’s All-Country World Index is down 11 percent since June 30, the sharpest slump since 2011, while its Emerging Markets stocks benchmark has fallen 20 percent in the past three months. Global equity markets have lost over $13 trillion and world market capitalization has fallen back below $60 trillion for the first time since February 2014.
It appears the world’s central planners’ print-or-die policy to create economic growth and wealth has failed – and failed dramatically – BIG TIME! And despite endless interest rate cuts and debt balance sheet expansion of the Central Banks around the world, the last 4 months have seen an 18% collapse – the largest since Lehman Crisis in 2008.
The velocity of money (M2) has fallen to an all-time record low. The velocity of money (M2) is a significant measure of economic activity for M2 measures the movement of the nation’s money supply that includes cash and checking deposits that include savings deposits, money market mutual funds and other time deposits.
The velocity of money (M2) normally slows down during a recession. During the Uranus-Pluto Waning Square Alignment from 1929 – 1938 we witnessed a massive downturn in the M2-Velocity of Money. The graph above shows that velocity of money (M2) has continued to slow down in the “post-recession era” and has now dropped lower than at the beginning of the Great Depression.
The current Uranus-Pluto Waxing Square Alignment that began in 2007 continues to constellate its archetypal power on the world stage and augurs that we have entered a deflationary era.
Keep in mind financial downturns since the Uranus-Pluto alignment (1962-1972), have happened every seven years. The following is a summary of how this cycle has played out over the past 50 years…
- It started in 1966 with a 20 percent stock market crash.
- Seven years later, the market lost another 45 percent (1973-74).
- Seven years later was the beginning of the “hard recession” (1980).
- Seven years later was the Black Monday crash of 1987.
- Seven years later was the bond market crash of 1994.
- Seven years later was 9/11 and the 2001 tech bubble collapse.
- Seven years later was the 2008 global financial collapse.
- 2015: ??????
Note: Keep in mind that on September 30, 2008, the Dow rallied 485 points, and then proceeded to plunge 27% in the next eight days!
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