LOOK!!! UP IN THE SKY

I don’t know anything about Martin Armstrong’s model. It is evidently an investment timing model based cycles he has figured out over time. His cycles seem to be in sync with the Fourth Turning cycle. The Fourth Turning regeneration moment has yet to occur. Armstrong’s model predicts a major crash sometime around September 2015 which will begin a dangerous phase that will begin the violent portion of this Fourth Turning. Nothing gets resolved until the 2020’s. Humans never change. The human life cycle never changes. Human faults and strengths never change. The human need to be part of the herd never changes. The fact that the herd is always wrong is always ignored by the majority until it is too late. Humans never learn.

“That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.” – Aldous Huxley

Guest Post by Martin Armstrong

We all have our individual cycles of life. As we grow older we hopefully learn from our mistakes. We will buy the high as we get caught up and see the herd is all buying and that creates confidence to rush in and buy the high. If you are smart, you will then realize that the herd is always wrong. With experience, you will become the person who sells the high when the others rush in to buy the top. We are hard-wired to also act as a herd and some of us will never learn, which is the majority. In 1968, the social psychologists Stanley Milgram, Leonard Bickman, and Lawrence Berkowitz decided to test the herd instinct in humans and put a single person on a street corner and had him look up at an empty sky for sixty seconds. A tiny fraction of the passing pedestrians stopped to see what the guy was looking at, but most just walked past. Next time around, the psychologists put five skyward-looking men on the corner. This time, four times as many people stopped to gaze at the empty sky. When the psychologists put fifteen men on the corner, 45 percent of all passers by stopped, and increasing the cohort of observers yet again made more than 80 per cent of pedestrians tilt their heads and look up.

This Milgram study appears at first glance, to be another demonstration of people’s willingness to conform, however, in fact it illustrated something entirely different. This is the idea of “social proof” whereby people feel they are doing the right thing if that is what the majority are doing. This is at the heart of the boom/bust cycle that not even eliminating paper money will ever eradicate. This is the tendency to assume that if lots of people are doing something or believe something, then there must be a good reason why. This is an entirely different form of conformity from peer pressure or a fear of being punished by authority. People here reveal the herd instinct that is deep within us all. Looking up at the sky as a group is people rationally assuming that lots of people wouldn’t be gazing upward if there wasn’t something taking place.

This is the herd instinct that is hard to fight. That’s why the crowd becomes more influential as it becomes bigger: every additional person is proof that something important is happening. When everyone is buying a given market, then it must be correct. This is the governing assumption that controls the business cycle for it is the trend of the majority, not the individual. There is safety and confirmation in the crowd. That becomes the reasonable assumption. After all, if the group usually knows best, then just following the group is a sensible strategy.

Understanding that the business cycle functions on this herd mentality and cannot be changed is key. It is not you individually that is compelled to follow a cycle, it is the group or herd on a collective basis. The only way to survive this political transformation that seems to come around every 309.6 years or so, is to understand the trend and how this functions so you are not just a follower but a survivor.