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The Kondratieff wave is a natural cycle in capitalistic societies that cannot be overcome, just postponed – but overcoming it is exactly what the authorities of modern times are trying to accomplish.  (In communist societies, there is no cycle to begin with because the entire system is highly controlled - but that also means that most people are poor most of the time in such societies.) 

Because the authorities started trying to accomplish overcoming the (current) Kondratieff wave during the plateau phase of the current Kondratieff wave (during the 1980’s – more specifically, immediately in the wake of the stock market crash of 1987), they have managed to extend the plateau phase of the current Kondratieff wave for quite a number of years beyond where it would have ended if no intervention had taken place (as far as I can tell, no intervention had ever taken place in previous Kondratieff waves, i.e., before the 1940’s). 

What actually happened in this case is that because the plateau phase continued on after 1987 all the way to 2000, and the stock market soared in the process and the economy continued in the context of that (although with overall lower real economic growth as time went on, as is consistent with the Kondratieff wave theory), the perception among the people of the economic situation by the end of the 1990’s was so positive (many people at the time were calling it “the best of times”) that sheer momentum kept the situation going right through the stock market downturn of the early 2000’s, which would have been the transition from the plateau phase to the depression phase of the Kondratieff wave at least according to the way the Kondratieff wave nominally gets measured. 

But because of the momentum that had built up in people’s perception of things by the end of the 1990’s, most people kept right on spending during the stock market downturn (seemed to take the attitude of “as long as I am not personally affected, I won’t worry about it”) and so the economy kept right on going.  In fact, it was later determined by the authorities to be the first official recession in U.S. history (it turned into a recession after 9/11) in which consumer spending did not go down. 

And so the economy continued even through the stock market downturn of the early 2000’s and kept right on going when the stock market came back up afterward. 

But that did not change the fact that we were in the depression phase of the Kondratieff wave in the meantime – and, in fact, the economic growth during the 2000’s has been quite low overall and would have been negative except for government deficit spending, which has grown very large as the decade has worn on and is simply not sustainable as a way to keep the economy going.  But without it, we would have been in negative growth as the decade has worn on – probably easily negative enough for quite some time already to be in a depression in the meantime. 

The problem, as noted, is that the government spending that is happening to keep us out of a depression is unsustainable – and the total federal debt has gone past the knee of the exponential in the meantime (see elsewhere on this website for more details about that) and the annual government deficits continue to be very large along the way. 

So we are getting very close to a point where the government keeping us out of a big economic downturn is just not going to be possible anymore – and because there has been so much pushing along the way to keep us out of an economic downturn, and so much in terms of imbalances built up along the way, when we finally hit the brick wall and just can’t keep it up anymore, a whale of an economic downturn is going to result.  In other words, in the end, the depression phase of the Kondratieff wave will not be denied. 

My model works because it takes this government intervention into account relative to the Kondratieff wave – and shows just how we got to where we are now and where it will lead on the basis of my model.  My model has been accurate for many years, both to the upside and to the downside, and I therefore see no reason why it won’t continue to be accurate in the future. 

It is important to note, however, that my own interpretation of my model did not become truly accurate until I found out about the law against recessions in the summer of 2001 and then incorporated that into what I knew already, i.e., what my model was composed of up until that point.  Once I added the law against recessions, my model became very accurate, also with regard to what happened in all the years before I found out about the law against recessions - the law against recessions actually being the context and reason why the authorities are trying to overcome (the last part of) the Kondratieff wave. 

I include Elliott waves in my model because the combination of the Kondratieff wave and the law against recessions results in a situation that is consistent with the projection of Elliott wave analysis that we are in for a Grand Supercycle bear market (stated in Elliott terms) – and, in fact, the Elliott waves continue to play themselves out, as well, just that Elliott waves are far more complicated at the detail level than the Kondratieff wave is and so I have chosen not to get into them in this introduction.  Moreover, I started with the Kondratieff wave many years ago, and the law against recessions is best explained in terms of the Kondratieff wave, not Elliott waves, so I start my explanation on this website with the Kondratieff wave. 

For more details, see the My model link on this website. 

As noted above, the Elliott waves continue to play themselves out.  That is also true at the shorter-term level, and I use Elliott waves for short-term forecasting of the markets (which I often do in my updates), which the Kondratieff wave cannot be used for - just that the law against recessions must be included when forecasting the stock market, although it is also true that eventually the law against recessions won't have an effect anymore, a situation which I will take into account when that happens. 

It should also be noted that if I get specific about an Elliott wave prediction in an update, I will explain it to the extent necessary (usually not much explanation necessary for an individual Elliott wave), but it will usually assume that basic things, such as the difference between an impulse wave (which goes in the direction of the primary trend) and a corrective wave (which goes in the direction opposite to the primary trend), are already understood.