This is my first attempt to show the Supercycle from 1932 to the year 2000. As a member of EWI, this is their count (Prechter) and most all EWI members would agree with it as I do. I am not sure I have the last wave 5 labeled as they do, I threw the subwaves together on the fly and have never really looked at it in detail. The point is that it was an extended 5th wave peak. See how many wave 5′s there are up there?

Pretty much everything above upper purple trendline is borrowed money on borrowed time so-to-speak. The massive credit bubble that was inflated over the past quarter century has allowed a great many millions to live life above and beyond what was normal. The bills are due of course.

The 2003-2007 rally was a b cycle wave rally or an expanded flat (that is the theory).

I posted the same chart in “un-log” scale so you can see that it really got out of hand these past 25 years. Problem is everyone is trained to think this is “normal”. DOW 8000 is good “value”. Oh yeah? What makes you say that? You can also see that an expanded flat in unlog scale with a ending “c” wave drop down to less than 1000 DOW doesn’t look so goofy does it?

Why would all those billions and trillions of little 1′s and 0′s in a computer mean anything? Can they feed your cat? Can your cat eat a computer disk? A fiat currency system is built upon faith and faith alone.

That less than 400 DOW target is EWI’s and not mine. I posted it to show you what they think and they study this stuff for a living. However if you look at the unlogged version of the chart, that retrace back to the previous subwave 4 spot of 1975 is not so out of the question is it?

The orange III (circle) is the top of a Grand Supercycle from approximately 1789 to 2000. Its the “meat” part of a Millennium wave that is estimated to start in about the year 1000 A.D. in the West. This means that mankind will go on a massive sideways correction period that will last well beyond our lifetimes. Basically economic activity has peaked for many many decades even centuries. Mankind’s progress goes sideways. But depending on what year your in, it will go down drastically in Grand Supercycle corrective wave IV (circle).

In that view it kind of makes sense. Mankind in the past 250 years has populated most every part of the planet and exploited every resource. Sure we can make cool new toys but I think a world 250 years from now will not be so “gee whiz” to us as it is if people from 250 years in the past could visit us now.

There are great “plateaus” in the progress of mankind. It makes sense we have reached an apex of sorts and now will tread sideways in a long period of stagnant economic activity. But considering the size of the correction, we can only hope our way of life survives.

But back to the charts: If the cycle from 1982 to 2000 took 18 years to build, then it may take 18 years to un-do. Maybe we get that DOW 500 in 2018 I just don’t know.

A chart of US National debt, indeed total world debt, looks like a parabolic firestorm thrust high into upper cumulus of the stratosphere. It stands that high on faith and faith alone. Faith gets broken in P3.

Stay tuned.