Will the Kondratieff Cycle Revert to the

Jubilee Average?

Daniel Gregg

           In the first article I showed the natural economic cycle of boom and bust discovered by Nikolai Kondratieff.   In that chart, I showed the correlation with the Biblical Jubilee worked out from the chronology of Scripture.   Here is the chart again:

     You will notice that the Jubilee's beginnings come a bit sooner than the Kondratieff cycle lows toward the end of the chart.  The reason is that the Jubilee is the Biblical preventative measure against depression.   If it were observed, then it would preempt the depressions and prevent them.   But when the Jubilee is not observed, the natural economic cycle charted by Nikolai Dmyitriyevich Kondratieff takes over.   This cycle has taken slightly longer than the Jubilee in recent centuries —about 54 years, which is 5 years more than the 49 year Jubilee cycle^[1].   A rough probability calculation for just these five Jubilees Is:

       Even the 1987 Jubilee figures because the markets did try to crash in 1987.   The probability of such a correlation is less than 1 in 282 million.

      The Jubilee is called the 50th year, but since a NEW first year of the next cycle is counted in the 50th year by the inclusive counting principle, the cycle is only 49 years long.  A similar reasoning is applied to the Sabbatical Year, which comes every seven years.  The scripture refers to the sixth, seventh, eighth, and ninth years even though the cycle is only seven years long.   The first year of the new cycle is the same as the eighth year of the old cycle.   The seven year cycle is meant to interrupt the shorter business cycles within the long wave cycle.  That is why debts are forgiven in the seventh year.  However, land reform only comes in the Jubilee, and this is necessary to rid the economy of large monopolies.   The redemption of the land to the original owner meant that companies could not add "house to house"— at least not without a new purchase from the sovereign owner every 50th year.

      We must take technological and resource factors into explaining why the Kondratieff cycles are running ahead of the Jubilee.   But the K-waves do not only run ahead of the Jubilee.  If the Jubilee reform is defied for a number of centuries, it seems that in can viciously force the K-wave back to the mean!   Historical precision on this, of course, requires more research.  However, I can give it in broad outlines.    The discovery of the new world and the technological advances coming out of Europe started the Grand Cycle.  It is probable that the K-waves lengthened during that time, since extra resources and better technology enable the credit cycle to last longer.   Further, this extra advantage shows up on the charts as a less severe dip in the K-cycle.    This may continue for several centuries in a row.

      However, we all know that excessive credit and larger monopolies waste resources.  Eventually this excess has to be restrained.   If the Jubilee is not observed, then the Kondratieff cycle will.   Bob Prechter, At the Crest Of the Tidal Wave, forecasts future cycles using the 54 year average.   However, Bob's view is too rosy.  First prophetic factors show that we are due for God's judgment.   Second resource wastage is reaching a multi century high.    The current crash in the economy, in my opinion, is the end of one of the longest prolongations of the cycle in the history of the world.   The next cycles I predict will be in the context of falling prosperity, and will be shorter.  The Kondratieff cycle will not continue to defy the shorter Jubilee.

        The reason for this is that multi-generational human habits are hard to break.  It will take several generations to relearn what our grandfathers knew coming out of the 1930's depression.  The excessive prosperity of the current cycle has caused overspecialization in industry and the work force.   There is not enough small industry or farms.  This is the result of monopolies spreading in the economy.   The biggest one of all is the oversized financial sector in the West.  This will all have to be dismantled.   However, the powers that be do not want to do it.  In fact, they will not do it unless forced to do it.   Nouriel Roubini became famous for more aggressively predicting the current crash than any other economist.    (I did not know about Roubini when I discovered Prechter).   Roubini is now saying that the only way to fix the problem, basically triage on the economy, is to cancel ALL mortgages!   Wow!  It sounds like Roubini is finally catching up with what God already told us about debt.   Forgive it or be wiped out.

        The Kondratieff cycle tried to return us to the Jubilee mean in 1987.   In 1987 we barely averted a mega crash that under any other circumstances would have crashed the world economy.   There are several reasons it did not.  First Ronald Regan had managed to lower the oil price and set in motion the destruction of the Soviet Union (a.k.a. "evil empire").   Second Alan Green Span managed to further extend the dollar hegemony around the world.   If you can make your reserve currency move into new markets, then the inflationary effect is mitigated.   When the recession hit, the Soviet Empire was collapsing, and the financial hegemony of the West moved in.   Third, the banking system figured out how to offload debt onto unsuspecting investors.  These debts are derivatives, and their parabolic ascent began in the 1990's.   Their "book" value is now hundreds of trillions of dollars.   These maneuvers were unique, unprecedented and extreme in the history of the world.   By these schemes, the west was able to unnaturally defy the Kondratieff cycle in 1987 and 1998.  Finally, Alan Green Span had to flood the American economy with cheap money, and therefore he produced the 2001-2006 real estate bubble.  He "bought" the west 20 years (1987-2007) by his engineering.  But he bought it at a price.  A very, very, very high price that will have to be paid in FULL in the next cycles which will be viciously shorter.

        The goal of the banking system is to enslave the whole human race.  That's what happens when you sell debt, charge interest, and refuse to forgive it when it causes economic dislocations.   Free market capitalism always dies from high taxes, a never ending debt bubble, and unrestrained monopoly.  For this reason the Scripture calls for regulated capitalism.  What needs to be regulated is borrowing, debt levels, and mega-corporations.  The scripture allowed Israel to do these things to foreigners, but not to their own countrymen.   If we do it in our own country, then we will pay the price.   And please understand that I am not calling for revolution.   There is going to be a revolution in any case.  It's just not going to be the right kind of revolution.   However, it is necessary for Christians to understand why we are in the mess we are in.  Further, it is necessary to understand Who has the solution.  When the time comes, God will make his move.  That's when we jump on board with Him.  

        At lot of Christians are going to lose a lot more money.   They already have.  By this time 50% all all the paper wealth in the world has gone to money heaven.  What we don't want to do is to despair, and the best way to avoid despair is to finally learn why your 401k is now a 201k.   It is better to be destitute and know why.  And if you believe in God, it is better to know that He knew all along what would happen.   Christians have a lot more to lose than money.   You can lose your soul too, and like Job, who lost everything, we must resist the temptation to "curse God and die".   The devil asked God to give him permission to ruin Job to test him.   Will we serve God and enjoy the Biblical Jubilee, when Yeshua returns at the "Great Trumpet" or will we resist and become a victim of the devil's Jubilee?   We may become physical victim's.  For sin is corporate matter, but you don't have to become a spiritual casualty. You CAN understand why and continue to trust in Messiah Yeshua (Jesus Christ).

       The devil's Jubilee is the natural economic cycle, which is caused by human nature and human behavior, which is underwritten by SIN.   Particularly, the sin of greed which impels people on a mass scale to borrow more money than they can pay back, and the greed of business which wants to subsume growth under the name of one person who controls all, i.e. monopolies.  So if the natural Kondratieff wave is not intercepted by the Jubilee, which is a repentance of these economic sins, then what is known as Kondratieff "Winter" will set in to correct the problem by force of natural economic law.  What goes up must come down!

      Faith requires knowing the Scripture.  One can study Kondratieff waves.   But how do we know they are connected with the Biblical Jubilee?  For this you have to study Biblical Chronology.   Without knowing that the bible actually predicts theses cycles in 7 and 49 year periods, we would have no idea that God knew about them.   He did, and they did not catch Him him unaware.   You can start by reading the chapters in the Scroll of Biblical Chronology And Prophecy.   In this article, I am expanding on what is in the book, in a lot more detail.   However, the book provides the technical foundation.  It was necessary to develop it first, and obviously I cannot repeat all of that technical foundation here.  Rather, I am using the conclusions of the book to expand the topic.

      There are also shorter business cycles.   One of these was discovered by Martin A. Armstrong^[1].   He did a study of all the major financial "panics" between 1683 and 1907.  He found 26 panics in the 224 year period.   He divided it out:

         Then he found that 8.6 x 6 = 51.6, which then correlated to the Kondratieff lows.   Notice that 8.6 years and 51.6 years both run ahead of the sabbatical cycle and the Jubilee cycle by about two years.   The 8.6 years corresponds to the abundance that God promised Israel for the 8th and 9th years before the crop of the 6th year was used up.   Could it be that this 8.6 year curse is divine?

          1973 ≈ 8th year (severe recession)

          1980 ≈ 8th year (Jimmy Carter thrown out of office over economy)

          1987 ≈  8th year   (stock market panic).

          1994 ≈  8th-9th year (S&P 500 hits low).

          2000 ≈ 8th year  (stock market panic).

          2008 ≈ 8th year (stock market panic).

           The seventh year was meant to interrupt this natural business cycle that lasts 8.6 years.   In the Sabbatical year, debts were forgiven, thus erasing the credit cycle BEFORE it could wreck havoc on the economy.   I don't know how far back the correlation to the sabbatical year goes with the 8.6 year cycle.   Martin Armstrong claims that six such cycles fit into the Kondratieff cycle.    I would assume that since the sabbatical year is not observed that the natural cycle keeps trying to run ahead of it.   If so, then the natural cycle can run a bit ahead of the divine institution designed to cure it.
             The following are some clippings from Armstrong's paper corresponding to Kondratieff bottoms.^[1]   I give the Biblical Jubilee and the deviation between it and the Kondratieff low.

1. Jubilee 271/272  (Bottom at 268 A.D.)  Dev: 3.

2. Jubilee 269/268 B.C. (Dev: 0)

3. Jubilee 1104/1105 A.D. ~ 1099 (Dev: 5)

4. Jubilee 1153/1154 A.D. ~ 1147  (Dev: 6)

         We may not expect 100% agreement all the time, but the correlation is so strong that it is no accident.   Cycles may run ahead or behind schedule, but the historical evidence is that somewhere, somehow, they always revert to the mean.   There are a few more economic downturns that we can plot out, that are associated with lost wars, famines, or military expeditions that went so badly the economy of the aggressor could not recover.

      The point is not that wars or distresses on the economy always come at these times.  The point is that national economies are at lows, and will break under the stress.

       Mainstream economists do not approve of the Kondratieff cycles, mainly for political or ideological reasons that have nothing to do with the validity of the cycles themselves.  A few papers have been written on the internet trying to call it a myth and bad science.  One such article is "The Kondratieff Cycle: Real or Fabricated?" by Murray N. Rothbard, posted on Gary North's website.   Far from it however, this book shows that Kondratieff Cycle Theory is no joke.

       Rothbard's article is basically a hit piece on North's site.  And it fits right in, because North himself denies the need for total debt forgiveness every seven years or total land reform every 49 (Sabbatical and Jubilee Years).   This is because Gary North a major proponent of unregulated free market capitalism.  North does not recognize the need for debt or monopolies to be preemptively washed out of the system, though, he claims to be an expert in Biblical Law on the subject of economics.  It is truly appalling that the fundamentalist Christian community in America has bought into this sort of capitalism.

      But the Kondratieff cycle is merely the outworking of human economic behavior over about 50 years.   Excess always leads to war or financial panics because people are Greedy.  Reality comes and teaches the participants in the economy a hard lesson on their excess, and then it begins again, taking 50 years to unlearn the hard lessons endured at the bottom of the last cycle.  There is an old saying, "Wealth never passes three generations".  A Saudi once said, "My father rode a camel.  I drive a Mercedes.  My son will grow old riding a camel".

Notes:

1.  Martin A. Armstrong calculated the cycle to be 51.6 years, which is even more remarkably close to the Biblical Jubilee period, "It's Just Time" by Martin A. Armstrong, former Chairman of Princeton Economics International, Ltd. © Oct. 10, 2008.   Like Kondratieff, Armstrong was imprisoned for his contribution to economics.   The CIA and the Chinese tried to get a hold of his super-computer model.

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