Ian A. Gordon wrote in this article:
My deceased friend, Teddy
Butler-Henderson, met Alan
Greenspan in the 1960’s. They
apparently discussed the
Kondratieff Cycle. According to
Teddy, Alan Greenspan confided
that he hoped he could
be Federal Reserve Chairman
at the onset of a Kondratieff
winter, because he felt he
could defeat winter by substantially
increasing the money
supply and reducing interest
rates to near zero. He had his
wish and effected those actions
following the 2000 stock
market peak.
I think it’s a very shocking statement. So the (likely) coming deflationary shock was fully expected by Alan Greenspan 40 years ago and he effectively spent his whole life preparing to battle with deflation. The problem is, of course, that one cannot jump over any phase of the Kondratieff wave. One can only postpone a phase and thus make it more powerful when it finally comes.
No wonder now we have the most notorious scholar of the Great Depression, Ben Bernanke, as the Fed chairman – because the Depression is what he will have to deal with
Incidentally, Mr. Greenspan
told Teddy during that same
conversation that if he failed to
thwart the Kondratieff winter, it
would make what followed
1929 look like a ‘Sunday
school picnic.’
The Theroxylandr in Flame 
December 8, 2007 at 5:07 pm
I must disclose that I do not sign under many parts of this article – there are too many conspiracy theories to my taste and too few charts. But in most parts I agree. I have a separate page on Kondratieff wave here:
December 9, 2007 at 9:35 pm
Kind of what a lot of folks think, that we’re going to live (are living) through a failed experiment to repeal the normal laws of finance.
sarcasm
Move along, nothing to see here…
/sarcasm
December 10, 2007 at 5:10 pm
I like your comments about Bernanke. A lot of people think that he will drop cash out of helicopters because he said that once in a speech, but imho he was only speaking hypothetically. He was basically saying, this is the method in which you COULD defeat a deflation, but I don’t think he was trying to say that the Fed would do this.
Something that’s been on my mind for a while now is the international elements related to the K-Wave. For example, we know that the US is entering K-Winter. I think this is almost beyond dispute at this point. But what about Japan, the world’s 2nd largest economy? Clearly they are exiting the K-Winter, no? Other countries may be at different points in the cycle. So as the world becomes more globalized, should the effects of a K-Winter in one place be offset somewhat by K-Summer or Spring in another? Also, during GD2, it seems as if both the US and Europe entered K-Winter at the same time and my guess (based on your LIBOR and UK posts) is that they will again be entering K-Winter together.
Along the same lines, wouldn’t the globe eventually become totally synchronized so that the entire world experiences the K-Wave more or less at the same time? This could take hundreds of years, no doubt.
December 10, 2007 at 5:44 pm
Darth Toll, what I think about synchronization in K cycles around the world.
It looks like the trend is to extend cycles, the are no more 50 years, but probably over 70 (I think the normal cycles of human life and generations are involved, we live longer)
I think the cycles in various countries will never ever synchronize, because from time to time a revolution or war is completely shuffling the cycles in some parts of the world.
Big industrial countries are actually exporting their cycles and I think that work toward synchronization until it’s broken. We have only 4 players here:
1. US is entering Winter for the second time after 1998-2003
2. Europe is in Autumn
3. Chindia is in Spring
4. Japan is in Winter
Japan is exporting deflation in form of carry trade. China is exporting inflation in form of high commodity prices. Once we will enter the Winter China will have a Summer hangover and Japan will probably start entering Spring. Sooner or later they will drag us out of Winter by exporting inflation.
The worst of the Winter for Japan is already far behind. They already have low unemployment and high life standard. What drags them is aging population that is not consuming and soon will produce less. Hard to predict how this plays out, maybe it’s not that bad.
December 10, 2007 at 6:33 pm
As far as I know Japan never really entered “winter” (reduction of debt). The necessary cleanup never occured (government debt) – anywhere. The groundwork for spring isn’t there yet.
The US is still months away (or maybe even years) from any real reduction of debt. Credit growth is soaring: http://www.federalreserve.gov/releases/z1/Current/z1.pdf
December 10, 2007 at 10:32 pm
MAZ, according to Russ Winter “a large measure of the prior credit base has already been destroyed. Therefore the numbers from the Fed report…are nominal, not actual or real values. It´s a hollowed out shell”
His statement passes the smell test whereas yours does not. MEW has slowed dramatically, banks are restricting credit and tightening standards across the board while tens of billions in fictitious capital is getting destroyed weekly. Proof of this is products like the notorious option arm are no longer available. Likewise 100% LTV is now largely unavailable. This is the definition of contracting credit, not growing credit.
Although your statement about Japan is interesting and I’ll have to do more study on this.
December 11, 2007 at 3:08 am
wouldn’t the globe eventually become totally synchronized so that the entire world experiences the K-Wave more or less at the same time?
Only through world war. This is essentially what happened in WWII, when the consumption of excess was destroyed. This synchronized economies into a spring phase.
December 11, 2007 at 10:53 am
Was it last year when Japan finally privatized the Post Service? I think since then they essentially started to clean-up the Govt budget.
If you put together all the Japan debt – individual, corporate, government – the total mix will be quite healthy. They need to “put the last shoe back”.
December 11, 2007 at 11:19 am
I am not an economist, so I may be wrong. Japan managed to decouple from the rest of the industrialized world back in the 1930s depression – until WW2. Will we see a WW3 resetting all world economies?
One should not forget about the ever growing mountain of derivatives (500+ trillion $)…that is “debt” too, I think.
November 27, 2012 at 1:26 pm
[…] You scandal-monger, you! If we're trafficking conspiracy theories here, my favorite is from the OTHER Ted Butler(-Henderson) : did Greenspan succeed? https://theroxylandr.wordpress.com/20…atieff-winter/ […]
May 24, 2014 at 10:33 am
Yeah it really is humorous how concerns such as this one start looking ridiculously pointless when compared to the world events. Another part of the cold war, the actual genuine war that erupts, Russia-China fuel deal axis… And here we are with your social-media issues, – can we see the earth has altered? Iam not saying what you reveal is unimportant, I’m stating a certain degree of detachment is healthful. Thanks, Sarah @ http://phyto-renew350e.com/