The Emerging Shift

More from the interview with Long Wave master, David Knox Barker:


"Human psychology drives the cycles and there are trends in psychology. For instance, if you look at the 1970s to early ‘80s and the force that brought Ronald Reagan into office, it was a seasonal change in the long wave. It was a shift from the Roosevelt era of the 1930s of “The government should go out and save me from the economic forces” to “Let the free market take care of itself.” Then with Obama we saw a shift back to the idea that the government needs to step in and control the markets. A lot of the psychology you see is manifested in political trends. In the 1930s we gave the New Deal a chance. I talked in about that in the 1995 edition of my book, that fact that we’d probably see a global version of the New Deal proposed during the present crisis. And sure enough that’s exactly what was proposed [during the credit crisis of 2008]. The fact that people are even talking about a global New Deal is a sign that the psychology has radically changed. The socialists are excited because they think we’re headed in that direction, but I think they’re in for a major disappointment. I think we’re heading for a shift [in psychology] to a degree larger than the previous shift in political psychology. I sincerely believe the Tea Party movement is an early manifestation of this emerging shift, which I believe will be toward the Great Republic."

Read the entire interview:
http://financialsense.com/editorials/droke/2010/0415.html

The Inflationary Boiling Frog

"The boiling frog story states that a frog can be boiled alive if the water is heated slowly enough — it is said that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will never jump out. The story is generally told in a figurative context, with the upshot being that people should make themselves aware of gradual change lest they suffer a catastrophic loss." Source: Wikipedia

Inflation can sometimes be analagous to the "boiling frog". It gradually creeps in and slowly climbs. The term inflation is often debated. I align with the Austrian economic definition that inflation is the "expansion of credit". Deflation, the opposite, would be the contraction of credit. Traditional economic theory would state that inflation is the rising of prices and deflation would be the opposite. Austrian inflation can definitely lead to the rise in prices.

Our credit expansion since 1982 resulted in a significant rising in prices....homes, cars, food, fuel, stocks.... The Federal Reserve continues to expand credit at record levels. Prices could be heading to a new level, hyperinflation. I just received my medical insurance renewal that included a 20% increase from last year...... Are we that boiling frog!