In every time frame, minutes, days, years, there is a cycle.
http://www.kwaves.com/200210KondraWithCRB4.pdf
The graph in the link shows the long wave or Kondratieff cycle, which is roughly 54 years split in four parts, spring, summer, fall, winter.
Spring and summer parts of the cycle are naturally demand and demograpic driven with natural growth accompanied by rising commodity prices and higher interest rates. Inflationary pressure.
Fall and winter reflect an excess of productive capacity relative to demand, resulting in lower prices, lack of pricing power, inability to service debts, debt defaults, lower prices and defaults forcing excess capacity off the market, until the balance between capacity and demand is restored.
The transition from inflationary pressure to deflationary pressure, summer to fall is on the graph at the year 2000. Particularly, note the correspondence of PPI, producer price idex, and CRB, commodities price index, with the K Wave over time.
We have had 12 years of Kondratieff winter from the year 2000 to 2012. The transition from winter to spring, deflationary to inflationary pressure, is on the graph happening in Q3 2011 (it may have happened already).
Spring and summer are characterized by demand driven higher commodity prices and higher interest rates. The Kondratieff spring will be confirmed with no looking back when interest rates start rising - this is the low in rates. Probably the low in copper.
http://stockcharts.com/h-sc/ui?s=$copper
http://stockcharts.com/h-sc/ui?s=$tnx
Drivers for the cycle are as big as the planet or bigger, sunspots, demographics, revolutionary advances in technology. There should be some advance brought to market in free energy or free money printing technology to allow real demographic and demand driven growth.
When the Kondratieff summer ends, the DOW could be 50,000, copper ? interest rates 12% (banks have to make money), and raised ranches could be $500,000. If higher prices occur naturally or are manufactured is a good question. But I believe at some point, if not now, higher house prices will be used as a tool to limit population growth. People will wait to own a house to have children, with housing made artificially unaffordable, the same way China issue permits to parents for one child, but not more than one.
Borrow your money and buy your building lots now.
If you want to read this, google for Bob Bronson and Martin Armstrong. The WSJ will print full body porno before they will print anything Kondratieff.
