This article is wrong. We would not be seeing new highs in equity markets if we were half way through the typical Kondratiev winter. Kondratiev based his primary assessment of where we are in the cycle based on prices, interest rates and output. The biggest fear central bankers have at the moment is deflation, partially because quantitative easing was supposed to be inflationary but the hard data after several years of unprecedented liquidity is quite the opposite. What we have seen is this liquidity being absorbed by a very narrow spectrum of asset classes without ever trickling down into the real economy. Interest rates as a consequence will at some point start to rise at the same time that we are seeing global GDP numbers disappoint.
If anything we are at the beginning of the Kondratiev winter and not the middle. Now most economists generally don't accept Kondratiev's long wave theory but I think it is safe to say that most main stream economists have been wrong for a considerable part of the last 60 years. It is also naive to think that there is any regularity to this cycle or that the effects of the down cycle will affect all markets equally. Basically we have no idea when it starts or when it ends or what if feels like.
Maybe good for this thread :
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But it seems to me that it is the same as with ANN : thousand theories all logical but none able to explain everything
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Does the economy move in predictable waves, cycles or patterns? There are many economists that believe that it does, and if their projections are correct, the rest of this decade is going to be pure hell for the United States. Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades. Of course none of the theories discussed below is perfect, but it is very interesting to note that all of them seem to indicate that the U.S. economy is about to enter a major downturn. So will the period of 2015 to 2020 turn out to be pure hell for the United States? We will just have to wait and see.
One of the most prominent economic cycle theories is known as "the Kondratieff wave". It was developed by a Russian economist named Nikolai Kondratiev, and as Wikipedia has noted, his economic theories got him into so much trouble with the Russian government that he was eventually executed because of them... In recent years, there has been a resurgence of interest in the Kondratieff wave. The following is an excerpt from an article by Christopher Quigley that discussed how this theory works...So what does the Kondratieff wave theory suggest is coming next for us?
Well, according to work done by Professor W. Thompson of Indiana University, we are heading into an economic depression that should last until about the year 2020...