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Peaks, Cliffs, and Civilization - 2013

As many are aware from previous postings here, and from others who look at the big picture in socioeconomics, cycles, ecosystems, civilizations, etc., our current way of life stands at a crossroads. For years we have watched as peaks in energy production and resources have approached, some passing by, and some peaking around now. This implies that industrial output, and the availability of many of the goods and services we have been privileged to have enjoyed are in the process of peaking now as well. The "fiscal cliff" may not be the only cliff that is approaching.

As the social mood and the markets were nearing extremes in pessimism, the March 2009 issue of our previous publication MoodCompass warned:

"Global stock markets are near a low and the negativity in social mood is nearing a peak. This is not the end of the economic downturn, but it is near the end of increased disintegration for now. When the next long term peak in optimism arrives, that will be the time to look for things to really begin to get bad!"

Are we passing that peak right now? No one can tell for sure if a peak has occurred until it is well passed. There are signs that a peak may be in progress. One example of bizarrely blind optimism, such as would occur at a peak, was apparent in the responses to today's disappointing GDP. There were flat out refutations of an economic contraction (in spite of a negative GDP) because the greatest plunge in 40 years of government spending was not "the economy," it was just "the government."

Because one of the initial manifestations of a socioeconomic downturn (after social mood) is the stock market, it would be good to closely monitor both mood and market for evidence of a peak. Whether the current topping process is the peak, or simply the beginning of a short "correction" before more peaking, will likely be known only after some time has passed.

As was mentioned in a recent post on U.S. Market Health, a negative change in trend appears to be in progress. It was also said that one down week (or even two) doesn't mean that the Great Downturn is here... but it might be.



For more information of the MoodCompass Project, see http://moodcompass.com.

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