Gold - did you know?

Time and Time Again in Ancient Time Before Us

What profit has a man from all his labor in which he toils under the sun? One generation passes away, and another generation comes; But the earth abides forever. The sun also rises, and the sun goes down, and hastens to the place where it arose. The wind goes toward the south, and turns around to the north; The wind whirls about continually, and comes again on its circuit. All the rivers run into the sea, yet the sea is not full; To the place from which the rivers come, there they return again. All things are full of labor; Man cannot express it. The eye is not satisfied with seeing, nor the ear filled with hearing. That which has been is what will be, that which is done is what will be done, and there is nothing new under the sun. Is there anything of which it may be said, "See, this is new"? It has already been in ancient times before us. There is no remembrance of former things, nor will there be any remembrance of things that are to come by those who will come after.

-King Solomon 931 B.C.

It's interesting to note that King Solomon spoke about ancient times that were before his time, yet to us, he made these comments nearly 3,000 years ago! That is in stark reality with today, where many of our financial advisors in their very myopic analysis are lucky to reflect back five to ten years. Actually, I am being kind; it’s more like six months if you are lucky.


Nikolai Dmitriyevich Kondratiev (in some sources also referred to as Kondratieff), born 4 March 1892, executed 17 September 1938 at age 46, was a Russian economist. He was a proponent of the New Economic Policy in the Soviet Union of the day.

In October 1920 he founded the Institute of Conjuncture in Moscow. As its first director, he developed the institute from just a couple of scientists into a large and respected institution with 51 researchers by 1923. He proposed a theory that Western capitalist economies have long-term 50 to 60 year cycles of boom followed by a bust. These business cycles are now called "Kondratiev Waves."

The Communist Stalin administration was happy to discover that Capitalists’ economies were heading for a major contraction at the time. However, they were not very impressed with the other side of Nikolai's wave proving that capitalists’ economies would eventually recover and begin to expand all over again cyclically. This factual discovery was dangerously destructive to communist economic policies of the day.

This lead to Nikolai being removed from the director-ship of the Institute of Conjuncture in 1928 and arrested in July 1930, accused of being a member of a "Peasants Labor Party" (a non-existent party invented by Stalin's regime). As early as August 1930, General Secretary of the Communist Party of the Soviet Union, Joseph Stalin, wrote a letter to Prime Minister Vyacheslav Molotov asking for the execution of Nikolai. Convicted as a "kulak-professor" (rich Russian peasant professor) and sentenced to eight years in prison, Kondratiev served his sentence from February 1932 onwards at Suzdal near Moscow. Although his health deteriorated under poor conditions, Kondratiev continued his research. Some of his texts were indeed completed and published. On 17 September during Stalin's Great Purge, Nikolai was subjected to a second trial and condemned to ten years without the right to correspond with the outside world. However, he was executed by firing squad on the same day the sentence was issued. Nikolai was 46 at the time of his execution.


Every year the four seasons come and go like clockwork - we accept this as normal. Yet in financial things, most are completely unaware. I obtained this chart by commission back in the late 1990s in my studies as I was discovering this repetitive phenomenon. The chart is widely searchable on the internet today with much literature to go with it.

Nikolai's chart represents historical cyclical trends from 1789, the be-ginning of the Industrial Revolution, right up until today’s markets. This graph shows us that the economy runs through a cyclical series of Expansion and then Contraction. Each cycle is approximately 50 to 60 years in length!


Looking at the chart you can see there are four cycles, and we are currently in the fourth cycle. Each cycle is divided into four sections or what is called the seasons of Spring, Summer, Autumn and Winter. The current cycle we are now in is Winter, like it or not!


If we take a look at the previous cycle and go back to October 1929 (the collapse of Wall Street), this was the start of what history calls the Great Depression. Four years into the Great Depression most people just thought it was a recession. People of the day did not call it a Great Depression the way history and Hollywood paints it. It was called a recession - that Recession went on for 20 years, again indicated by the chart picturing the Winter section of the previous cycle. Nikolai constructed the chart in the early boom times called the ‘roaring twenties’ well before the 1929 market downturn began. Then he went on to forecast the current cycle we are in today well after his death! – Thinking point here.


Again looking at the chart, the same market cycle played out in 1873. That depression went on for 23 years. If you study the chart, the time frames are very coincidentally similar!In my personal studies I went back another 400 years prior to this chart’s range and found the same 50 to 60 year full-cycle lengths as you will notice indicated at the base of the chart.


All things are eventually subject to what are often called the laws of the universe, the laws of nature or the laws of God. I subscribe to the latter.

In nature if there is an overgrowth of flora and fauna, nature has a way of culling the excess back via possibly a bush fire. The same applies if there is an excess of a particular species where nature will introduce maybe a disease to cull the excess back. If there is nothing to cull it back, the species turns into a plague similar to locust, which then consumes every-thing until there is nothing left. This plague will then either starve or begin to turn upon itself until acceptable population levels have returned; hence, by default culling back. Either way, the excess will eventually be purged from nature’s system.


In economies the same law applies during the culling-back process (indicated by Winter on the chart). There are three steps that take place:

1. Excessive debt is purged from the system; we see this with bankruptcies prevailing2. Fraud is also purged from the system; again, corporate fraud comes to the fore3. Legalized fraud starts to be purged in the final stages; this is where the laws of man via government legislation become contrary to the natural, universal or laws of God.


Throughout human history many ancient civilizations have recognized the laws that supersede the laws of men. The ancient Hebrews where one of these civilizations of old who had this natural occurring cycle built into their law. It was recorded in the ancient Mosaic laws written by Moses in the book of Leviticus, Chapter 25, approximately 3,500 years ago.


The law is called The Jubilee and is summarized as follows: “The 50th year, which followed seven Sabbath years (7 years each), was to proclaim liberty to those who were servants because of debt, and to return lands to their former owners.” It was also known as ‘The Year of Liberty’ or ‘The Year of Freedom.’ Part of this law’s intention was to stop excessive lending, also excessive borrowing, and to stop excessive levels of fraud within the Hebrew nation. I have scoured their history for accounts of whether they actually enacted their own law, and I can find none. From this writer’s perspective, they never activated the law. – Thinking point here!


In nature there are certain creatures that prepare for such natural occurring cycles and actually benefit from them. Insects like ants store up for winter; bears hibernate through winter periods; birds fly south from the northern hemisphere. They prepare for seasonal changes by accepting them as normal without any consideration.

The same is true and needs to apply to us in fiscal areas by having savings in precious metals and investing into businesses which benefit from the coming changes. We need to accept these cycles as normal and be prepared instead of reacting to them.

The author of these cycles does not regard what you think is righteous or what you think is unrighteous. The only way to take advantage is to accept them and obediently prepare, for nothing will stop them from coming as sure as nothing will stop the sun from rising every morning.


In today’s world things like inflation of currencies or tampering with other natural occurring laws such as supply and demand will most certainly mask the natural occurring cyclical laws that would normally occur in free markets. Yet masking, trying to stop or ignoring them will not thwart the cycle’s eventual outcomes. At best it will simply postpone the eventual result making it possibly worse.

I find it amazing that even when mankind knowingly or unknowingly ignores the natural occurring law, it still takes place. The Stalin ad-ministration in the 1920s and 1930s tried to suppress the knowledge of Nikolai Kondratieff’s historical cycle. Yet after his death, what he dis-covered still lives on. The same applies to the Hebrew nation. In their history the cycle was legislated into their law, and yet they failed to voluntarily activate the Jubilee. Again as I push my point here, nothing will stop the eventual purging of out-of-balance excess or wealth that has been falsely created within the system.

I trust I have given you something to think about regarding the larger cycles we are all subject to.

Until next time,

Simon Heaps

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