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Nikolai Dmyitriyevich Kondratyev

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  • Nikolai Dmyitriyevich Kondratyev

    There are some pretty good articles on his theories.
    Thoughts anyone?

    From: http://northcoastinvestmentresearch....a%3DN%26um%3D1

    Professor Nickolai Kondratieff (pronounced “Kon-DRA-tee-eff”)

    Shortly after the Russian Revolution of 1917, he helped develop the first Soviet Five-Year Plan, for which he analyzed factors that would stimulate Soviet economic growth. In 1926, Kondratieff published his findings in a report entitled, “Long Waves in Economic Life”. Based upon Kondratieff’s conclusions, his report was viewed as a criticism of Joseph Stalin’s stated intentions for the total collectivization of agriculture. Soon after, he was dismissed from his post as director of the Institute for the Study of Business Activity in 1928. He was arrested in 1930 and sentenced to the Russian Gulag (prison); his sentence was reviewed in 1938, and he received the death penalty, which it is speculated was carried out that same year. Kondratieff’s major premise was that capitalist economies displayed long wave cycles of boom and bust ranging between 40-60 years in duration. Kondratieff’s study covered the period 1789 to 1926 and was centered on prices and interest rates.

    Kondratiev waves — also called Supercycles, surges, long waves or K-waves — are described as regular, sinusoidal cycles in the modern (capitalist) world economy. Averaging fifty and ranging from approximately forty to sixty years in length, the cycles consist of alternating periods between high sectoral growth and periods of slower growth. The Kondratieff wave cycle goes through four distinct phases of beneficial inflation (spring), stagflation (summer), beneficial deflation (autumn), and deflation (winter).

    The phases of Kondratieff’s waves also carry with them social shifts and changes in the public mood. The first stage of expansion and growth, the “Spring” stage, encompasses a social shift in which the wealth, accumulation, and innovation that are present in this first period of the cycle create upheavals and displacements in society. The economic changes result in redefining work and the role of participants in society. In the next phase, the “Summer” stagflation, there is a mood of affluence from the previous growth stage that changes the attitude towards work in society, creating inefficiencies. After this stage comes the season of deflationary growth, or the plateau period. The popular mood changes during this period as well. It shifts toward stability, normalcy, and isolationism after the policies and economics during unpopular excesses of war. Finally, the “Winter” stage, that of severe depression, includes the integration of previous social shifts and changes into the social fabric of society, supported by the shifts in innovation and technology.

    Money matters: Graham Macdonald MBMG International Ltd. Nominated for the Lorenzo Natali Prize
    Kondratieff - Genius or Fraudster? Part 2

    The Kondratieff Wave. Peaks and troughs
    are associated with major political or cultural events.
    Kondratieff’s ideas should be taken in the global perspective. The time of growth is also one of geo-political stability. When things are no longer on the up then old alliances fracture and new friendships are made. When the downside is nearing completion then it is the new that will take things forward. As Ian Gordon (IG) has pointed out, in 1930, America was the largest creditor nation on earth. They are now the biggest debtors. China and Japan are now the largest creditors and could be the unlikely alliance to lead us into Spring. Thus as the USA replaced the UK in the last winter so will the two great Eastern powers replace America.
    This is not the only thing that the US has to worry about. As America replaced Great Britain as the great economic power after the last Kondratieff Winter so the US Dollar replaced the British Pound. IG has an almost apocalyptic concept of what may happen next: “I truly believe that the world monetary system will collapse in the Kondratieff Winter, much as it did in 1932 and 1933 when the world gold standard system collapsed. Britain went off the gold standard system in September 1931 and was followed by several other countries. And eventually, effectively, the U.S. went off too. The system, while it lasted, allowed individuals in the U.S. to exchange paper for gold. We now have a fiat system. Incidentally, it’s the first time, I think, in history that the entire world is being run on a paper money system, which is a U.S. dollar system. I think that that fiat system is going to collapse much as the gold standard system collapsed in 1930. So it really doesn’t bode well for the U.S. dollar if that does happen.”
    Gordon believes that now people have discovered the only way money is valued is against debt then they will demand some sort of stability. Traditionally, until after the last Winter, money was valued against gold. This could well happen again.
    If you take these factors into account then Kondratieff’s ideas still hold good. Maybe a less scientific way of looking at all of this is to say that when the last generation to see a depression is dying off then it is time for a new one to start.
    Although the last sentence is a bit flippant, this still points to the whole point of what Kondratieff was trying to achieve. When things are really down, i.e. Winter, then this is getting towards the worst part. The only question is how long will it be before the cycle bottoms out and things start to get better? This is the season of debt repudiation and commodity price deflation which has been partly brought about by, amongst other things, debt defaults. By seeing what has happened in the past it is possible to envision what should happen in the future.
    Everyone has now accepted that it is physically impossible to maintain the present worldwide debt and that it will take a minor miracle to buy our way out of the situation as it now stands. The present Kondratieff Wave still has life in it, in fact, it has lots of life. In April and May there was an increase in world stock markets and people got excited, saying that the worst was over. This was nothing more than a bubble and things will get worse before they improve. Some speculate that this means the Dow Jones will drop to as low at 1,500 before things get better.
    There is also the problem that even though there is money going out of the economy because of collapsing debt, it will be overcome by the money being forced into it by the central banks. Somewhere out there is tens and tens of trillions of debt which has to be “cleansed” from the economy. On top of that there are the trillions of US Dollars which have been lost from the US stock market alone. These are real losses. As are the ones suffered by those owning real estate. The Federal Reserve’s solution is to print money - and fast. This is also the solution of Gordon Brown. However, they forget that banks have to want to lend it and there will be borrowers who have to want to borrow it. In the present circumstances this will probably not happen. This means that there will not be inflation but deflation.
    The Winter of the K-wave is a dangerous period. But it will be eased for those holding a good, liquid multi-asset class diverse portfolio which should definitely include gold.

    The above data and research was compiled from sources believed to be reliable. However, neither MBMG International Ltd nor its officers can accept any liability for any errors or omissions in the above article nor bear any responsibility for any losses achieved as a result of any actions taken or not taken as a consequence of reading the above article. For more information please contact Graham Macdonald on

  • #2
    Re: Nikolai Dmyitriyevich Kondratyev

    This was followed up by Martin A Armstrong, who dedicated his research to Kondratyev.

    Armstrong agreed and strengthened the Ideas put forward.

    Both however ended up in the "Slammer" for upsetting the apple cart.


    • #3
      Re: Nikolai Dmyitriyevich Kondratyev

      K predicts deflation -- but against hard assets. He did not live in a fiat world.
      In gold terms, there is deflation.

      This graphic has been my guide for some time.

      Attached Files
      It's Economics vs Thermodynamics. Thermodynamics wins.