Armstrong Economics Blog/Understanding Cycles
Re-Posted Jan 27, 2020 by Martin Armstrong
For years, it has been a sort of family joke that I view the world around me and see the cycles in everything. I had walked into a casino and noticed there were cycles to the numbers coming out on a roulette wheel, but more fascinating was that the cycles were unique to each dealer. This is why casinos rotate the dealers from table to table. I notice this particular dealer was very cyclical one night so when the casino moved him, I closed and followed him to the next table. This was back around 1971, and I was winning a lot so people began watching me. Some very big player from Texas came and sat beside me and whatever I played he did too. We made so much money they closed the casino. Whenever I would walk into a casino and start to play roulette, within 30 minutes they came to me and asked my name and would always say we recognize you as a player. I would cash out and just leave.
There was a family gathering and my daughter was always fond of horses. The talk was all about the Triple Crown. They said no one had won since 1978. I did the wave math in my head and replied that this year the horse will win. I do not even follow horses. They just looked at me and asked, “You can forecast that too?” I simply looked at the stats and saw the cycles. I said this is the year the horse will win – and American Pharaoh won. What did I see in the stats? The major turning point from 1978 should be 37.33 (8.6 * 4.3) bringing it to 2015. The horse won. I didn’t bet on the race. Like the scene in the movie the Matrix, I just see the cycles to everything around me.
Now there is Jason Padgett, who is 41, and he sees complex mathematical formulas everywhere he looks. He sees the geometry in everything. He said, “I see bits and pieces of the Pythagorean theorem everywhere.” He continued, “Every single little curve, every single spiral, every tree is part of that equation.” He hand draws what he sees and he is a college drop out but understands and sees the fractal nature of everything. As I have tried to explain, everything is connected and there is absolutely nothing void of a cycle. Even when something dies, there is a cycle to the decay as everything turns back to dust as they say.
Padgett can draw a visual representation of the formula pi, which is really an infinite number that begins with 3.14. He explains, “A fractal is a shape that when you take the shape a part into pieces, the pieces are the same or similar to the whole. So say I had 1,000 pictures of you, that were little and I put all those little pictures of you in the right spot to make the exact same picture of you, but bigger.” While Benoit Mandelbrot is credited with discovering Fractal Geometry, he was not someone who could see it in the real world all around him. He was a mathematician and his attempt to apply it to things was not very helpful.
I have tried to explain why cycles exist. Any time I have been wrong, it has simply been my interpretation of the cycle, not that there is no cycle. The reason you can find a cycle that works for a bit and then it suddenly vanishes has been because of the interconnections – not the fact that cycles do not work. For you see, the interconnections are what produce the major overwhelming events, which is why economists are always wrong and have been unable to forecast the future. The Great Depression of the 1930s was a conjunction of many cycles such as technology where the invention of the combustion engine reduced the need for workers in agriculture. Like the internet is replacing local book and camera stores, tractors reduced the agricultural workforce from 40% to 3% causing unemployment to rise. Add to that the Dust Bowl, the Sovereign Debt Crisis in 1931, and the excess capital inflows fleeing Europe, what you ended up with was a bubble economy like Japan into 1989, and then the dramatic decline. Such events and NEVER simply one cause. Nevertheless, every investigation into such events always attempts to reduce it to a single cause and effect which is impossible.
What is most fascinating about Padgett is that this remarkable gift appeared only after he was attacked and suffered some brain damage. Berit Brogaard, who was a neuroscientist at the Center for Neurodynamics at the University of Missouri-St. Louis flew Padgett to Finland to run a series of tests as to why he could suddenly see the fractal world around him. The results revealed that his brain showed the damage from the attack he suffered, but the brain rewired itself and was using particular areas that most people don’t have access to. Padgett had become an acquired savant, which means he was brilliant but in a specific area. His story is quite fascinating. He has acquired talent to see the fractal interconnections and suddenly was able to draw what he sees. Remarkable!