Astro Economics & The 56 Year

Cycle
by David McMinn

Ed. N.: The 3 papers gathered together here are 3 original articles
concerning the hypothetical value of the 56 Year Cycle in Astro
Economics. David McMinn completed a Bachelor of Science degree from
the University of Melbourne in 1971 and subsequently gained employment
as a Minerals Economist in ANZ Banking Group Ltd. Since leaving this
position in 1982, he has been conducting private research on the business
cycle, the end result being the publication of numerous papers and the
book Financial Crises & The 56 Year Cycle. I thank David for his
participation to C.U.R.A. A background of his theory can be found on his
own web site The 56 Year Cycle

Contents
Financial Crises & The Number 56
The Sun, The Moon & The Number 56
Business Cycles & The Number 56

Financial Crises & The Number 56

"History never repeats itself but it does rhyme" (Mark Twain)

Most theories regard business cycles as occurring in variable waves of

progressive expansion and contraction ad infinitum. Many analysts are
sceptical about using such cycles in their investment decisions, due to their
poor predictability. However, financial crises, which are the most dramatic
phase of the business cycle, tend to occur every 56 years in sequences.
These sequences in turn are interconnected by sub-cycles based on
multiples of 9 years. The financial crises typically involve a period of over
optimism, greed and rampant speculation, followed by crisis, fear and
economic slump. Each crisis is unique and cannot be compared with other
crises in a particular sequence. Even so, the 56 year cycle can assist in
forecasting major turns for the worse in financial trends.
Cycle theorists assume a fairly regular repetition of crises every so many
years. The concept of numerous sub-cycles lasting for several decades and
operating simultaneously is alien to cycle paradigms. Even the 56 year
sequences, which may persist for centuries, should fade out over very long
time frames. Important crisis events may also skip a beat in a particular
sequence, only to reappear 112 years later and the whole cycle must
change progressively never repeating itself exactly. The 56 year panic
cycle only came to the attention of the author after studying the obscure
work of J M Funk, who privately published his findings in 1932.

11 Principal 56 Year Sequences

Funk (1932) was the first to propose three 56 year sequences for the US
economy. For convenience, all sequences in this cycle were numbered
from 01 to 56 with (1761, 1817, 1873, 1929, 1985) being designated
Sequence 01. Hence, Funk's three sequences are denoted as 01, 21 and 41
(see subsequently). The sequence year is taken as commencing on March
1, as this seems to be the year of best fit. No definition exists of what
constituted a 'major' crisis in economic history. Thus Appendix 1 gives a
list by Kindleberger (1996) of what he considered were 'major' financial
crises. This source was chosen given his pre-eminence as an historical
economist and because he presented the most comprehensive listing of
major crises over recent centuries. The list provided an external reference
independent of this cycle study. Years in which these major crises
occurred have been given in BOLD throughout the text.

SEQUENCE 01
• 1761 US downturn. Ending of the French & Indian War.
Also English crisis - June - December.
• 1817 US recession. Resumption of specie payments in February.
(? Listed as an 1817-18 US crisis by Adams (1936). Also French
crisis).
• 1873 US Black Friday (September 19). Jay Cooke & Co failure.
Also German & Austrian panics - May 5/6. Vienna leasing crisis.
• 1929 US Black Tuesday (October 29). After New Era
Prosperity. (World crisis).
• 1985 US$ crisis (September). G-5 meeting. Plaza Accord.
 SEQUENCE 21
• 1781 US deflation. Ending of Revolutionary War.
• 1837 US panic (May). Cotton panic. After Bank Credit Land
Boom.
Also English crisis - December 1836.
• 1893 US panic (May). National Cordage Co failure. Falling gold
reserves.
• 1949 US recession.

SEQUENCE 41
• 1801 US depression. After Carrying Trade Prosperity.
• 1857 US panic (August 24). Ohio Life Insurance & Trust Co
failure.
Also English crisis - October; Continental crises - November.
• 1913 1913-14 US crises. Second Balkans War. Beginning of
World War 1.
Also European crises.
• 1969 1969-70 US recession.
Astonishingly in the 100 years to 1930, Funk's three sequences contained
6 years, in which occurred five of the worst panics in US history (1837,
1857, 1873, 1893 & 1929 - the exception being the crisis of 1913). Given
this highly accurate trend, additional 56 year sequences were postulated to
exist in recent centuries. References on US and Western European
economic history were gleaned for such patterns with the ensuing
sequences being regarded as the most significant.

SEQUENCE 03
• 1763 Amsterdam panic (September). Ending of the Seven Years'
War.
• 1819 US crises (November 1818 - June 1819). English crisis.
• 1875 British crisis. (Kitchin, 1933). Collie failure.
• 1931 Austrian crisis (May). Creditanstalt failure.
German crisis (June). Danatbank troubles.
British crisis (September). Off gold standard.
• 1987 US Black Monday (October 19). Worldwide stock market
panics.

SEQUENCE 05
• 1765 US crisis. Stamp Act passed.
• 1821 No crisis.
• 1877 1877-78 US 'sharp decline' (Sobel, 1965). Banking fears.
Great rail strike.
• 1933 US banking crisis (March 6/9).
• 1989 US Friday 13 near panic (October).
German panic (October 16).

SEQUENCE 09
• 1769 French crisis (February 1770). Repudiation of French
Government debt.
• 1825 English panic (December 17). After South American
speculations.
• 1881 French crisis (January 1882). Union Generale failure.
• 1937 US crisis (Autumn).
• 1993 US bond market collapse (February 4, 1994).

SEQUENCE 12
• 1772 English panic (June 22). Ayr Bank collapse. Amsterdam
panic (January 1773).
• 1828 French crisis (December 1827). Bankruptcies in Alsace.
• 1884 US panic (May 13/16). Railway speculations.
• 1940 US near panic (May). French capitulation.
• 1996 No crisis.

SEQUENCE 32
• 1792 English panic (February 1793). After canal mania.
US panic (March 22/23) (Sobel, 1968).
 • 1848 French panic (March). Year of Revolutions.
• 1904 1903-04 US rich man's panic.
French panic (February 20).
• 1960 No crisis.

SEQUENCE 48
• 1808 1807-08 US Embargo Depression.
• 1864 French panic (January). After cotton speculation.
US panic (April 16/17) (Sobel, 1968). Civil War.
• 1920 USA & UK crises. After inflation.
• 1976 No crisis.

SEQUENCE 50
• 1810 English Great Panic (January 1811).
• 1866 English Black Friday (May 11).
Italian crisis (May 1).
• 1922 No crisis.
• 1978 No crisis.

SEQUENCE 52
• 1812 No crisis.
• 1868 French crisis. Failure of Credit Mobilier (Pereire Brothers).
• 1924 French panic (March). Franc crisis.
• 1980 1979-80 US crises. Farmland (1979), US$ (1979), Oil
(1980). After silver mania (Silver Thursday - March 27). First
Pennsylvania Bank troubles (March).

Within the 56 year sequences, crises often take place in approximately the
same month of the year. The crisis month is given wherever possible in the
text.
• Seq 01 - 1873 (USA - September), 1929 (USA - October), 1985
(US$ - September).
 • Seq 03 - 1763 (Continent - September), 1931 (UK - September),
1987 (World - October). Also 1819 (USA - April/May), 1931
(Austria/Germany - May/June).
• Seq 05 - No trend.
• Seq 09 - 1713 (England - Jan - April 1714), 1769 (France -
February 1770), 1825 (England - December), 1881 (France -
January 1882). 1993 (USA - February 1994)
• Seq 12 - 1716 (England - Jan - March 1717), 1772 (Amsterdam
- January 1773). Also 1772 (England - June), 1884 (USA - May),
1940 (USA - May).
• Seq 21 - 1837 (USA - May), 1893 (USA - May).
• Seq 32 - 1792 (USA - March), 1848 (France - March), 1904
(France - February).
• Seq 41 - 1745 (England - Dec 5), 1857 (England - Oct;
Continent - Nov).
• Seq 48 - Insufficient data.
• Seq 50 - No Trend.
• Seq 52 - 1924 (France - March), 1980 (USA - March).
For some sequences, available data was insufficient to indicate possible
trends.

Forecasting from the 56 Year Cycle

Using the 56 year cycle to forecast likely crisis periods is simple. Look at
US and Western European financial crises occurring 56, 112 or 168 years
previously to indicate the possibility of distress in the current year. In the
latter 20th century, the USA experienced crises in 1979 and 1980 (Seq
52). During the mid 1980's, there was excessive speculation in shares and
takeovers, culminating in the worldwide stock market crash of 1987 (Seq
03). Additionally, several principal sequences experienced minor financial
upheavals in recent decades:
Seq 48 1976 UK: Imposition of tough IMF measures.
Seq 01 1985 US$: Plaza Accord (September).
Seq 05 1989 USA: Friday 13th near panic (October).
Seq 09 1993 USA: Bond market collapse (February 1994).
Extrapolating from Sequence 12, further financial upheavals were most
likely to happen around May 1996, a forecast that was not realised.
Financial distress occurred in the ensuing 1997 and 1998, neither of which
fell in 56 year cycle patterns. The next principal 56 year cycle does not
threaten until 2005 (Seq 21).
Difficulties arise in using the 56 year cycle as a forecasting tool. This
complex cycle must change progressively over time and never repeat itself
exactly. It is not possible to extrapolate numerologically into the future
with great precision. Improved financial prognoses may only be achieved
through better understanding of the Sun - Moon mechanisms precipitating
this cycle. Thus, accurate predictions - the Holy Grail of financial
forecasting - could theoretically be achieved years in advance.

Sub-Cycles in Multiples of 9 Years

36 Year Sub-Cycles. 10 of the 11 principal sequences may be linked in 36
year sub-cycles Series 1 & 2 based on multiples of 9 years (9, 18, 36, 54
years) (see Table 1). These sub-cycles operate for comparatively short
periods, where as the 56 year sequences may persist for several centuries.
Between 1760 and 1940, 34 years appeared in the 36 year sub-cycles
Series 1 & 2, of which 15 were major financial crisis years according to
Kindleberger (1996). This figure does not include the crises of 1828 and
1864 that occurred early (ie: pre March). Using a chi-squared test, the
probability was assessed at p < 10-4 and thus very unlikely to occur by
chance. For the period 1940 to 1987, a number of currency crises were
included in Kindleberger's listing of crisis years from 1958 onwards, none
of which appeared within the 36 year sub-cycles. Even including these
currency speculations, 17 of Kindleberger's 42 crisis years (1760-1987)
fell in the 36 year sub-cycles, which gave p < .001 and was thus still
significant.

TABLE 1 36 YSC & MAJOR FINANCIAL CRISES - 1760 - 1996

Series 1
Sq 05 Sq 41 Sq 03 Sq 21 Sq 01
1761
1763 + 18 1781 + 36 1817
1765 + 36 1801 + 18 1819 + 18 1837 + 36 1873
1821 + 36 1857 + 18 1875 + 18 1893 + 36 1929
1877 + 36 1913 + 18 1931 + 18 1949 + 36 1985
1933 + 36 1969 + 18 1987
1989
Series 2
 Sq 52 Sq 32 Sq 50 Sq 12 Sq 48
1772 + 36 1808
1792 + 18 1810 + 18 1828 + 36 1864
1812 + 36 1848 + 18 1866 + 18 1884 + 36 1920
1868 + 36 1904 + 18 1922 + 18 1940 + 36 1976
1924 + 36 1960 + 18 1978 + 18 1996
1980

Most importantly, Kindleberger's major crises in the 36 year sub-cycles

Series 1 occurred in the 7 months between May and November, with an
emphasis on May and September/October. There were only two
exceptions:
1819 US crisis (Given as a range November 1818 - June 1819). Calomiris
& Gorton (1991) gave April - May 1819 as the "height of panic".
1933 US banking crisis (March).
In Series 2, all the major crises took place in March - June and January -
February of the following year.

Financial crises in other listings also fall with significance in patterns of

the 36 year sub-cycles Series 1 & 2:
* 39 US & Wn European major/minor crises (1796-1937). Union Corp
(1949). After Kitchin (1933) (14 - p < .01).
* 31 US & Wn European crises (1763-1933). Adams (1936) (14 - p <
.001).
Such findings further support a 56 year panic cycle.
During 1760-1940, 15 major crises occurred in the 12 months beginning
March 1 of the years in the 36 ysc Series 1 & 2. This figure represented
half the 30 crises listed by Kindleberger (1996) for the period. The
exceptions were: 1797, 1799, 1815-16, 1825, 1827, 1836, 1838, 1847,
1864, 1881, 1890, 1907, 1921, 1932
The relationship between the additional crises and the 36 year sub-cycles
cannot be deciphered at present.
For the 1940-87 period, only the 1980 and 1987 crises fall in the 36 year
sub-cycles. Many other crises listed by Kindleberger (1996) did not appear
in these sub-cycles:
* Currency crises - 1958, 1962, 1963, 1964, 1968, 1973, 1979.
* Major financial crises - 1974-75, 1982.
The main discrepancy occurs with the currency crises of the post war era.
How well distress in currency markets correlates with the 56 year
sequences is questionable and much more work is required for a proper
assessment. Additional research may show that major financial crises align
more readily with the 56 year cycle than do international currency crises.
Series 1 & 2 in the 36 year sub-cycles are displaced relative to each other
by an factor of 9 years (ie: Series 2 plus 9 years gives Series 1). Thus, 9
year sub-cycles (see Table 2) fall in the central portion of the 36 year sub-
cycles where overlap occurs between Series 1 & 2. In the 1760 - 1940
period, the 9 year sub-cycles contained 20 years, with 11 being regarded
as major crisis years. The expected frequency was only 3.2.

TABLE 2 9 YSC & MAJOR FINANCIAL CRISES

Sq Sq Sq Sq Sq Sq
32 41 50 03 12 21
1763 1772 1781
1792 1801 1810 1819 1828 1837
1848 1857 1866 1875 1884 1893
1904 1913 1922 1931 1940 1949
1960 1969 1978 1987 1996

(Sequences are separated from each other by an interval of 9 years)

Problems arose in assessing the 56 year cycle because there have been
relatively few 'major' financial crises in economic history, resulting in
small sample sizes. Considerable variations were also apparent in the
listings. Some crises appeared in most listings, while others were
represented by only one source. A clear cut definition of what constituted
a 'major' crisis was also unfortunately lacking. Economists used different
evidence in determining their listings of crises and panics and applied
varying definitions of what constituted the crisis phase of the business
cycle. Financial crises are not exact phenomena identifiable by
fluctuations in a financial series, but rather indicate a radical change for
the worse in market perceptions by the main players involved (Hoppitt,
1987). Furthermore, the nature of such crises constantly changes over long
time spans as financial markets evolve and become more sophisticated.
Despite such limitations, it was necessary to rely upon small samples of
financial crises listed by various economists. There was really no other
viable alternative to assess the 56 year cycle properly.
Apparently, the 56 year cycle can only be closely associated with financial
distress in economic history. The timing of peaks and troughs in UK and
US business activity (GDP measures) was examined for the periods since
1786 and 1788 respectively, but they did not fall with significance in
patterns of the 36 year sub-cycles. A similar situation applied to US
equities. No repeatable correlates could be established between the 36 year
sub-cycles and numerous peak/trough listings examined for the S&P 500
and the Dow Jones Industrials (or its equivalent). Crises tend to happen
preferentially in patterns of the 56 year cycle and therefore have
periodicity. The same does not seem to apply to peaks and troughs in share
market or economic activity. The peaks and troughs could be postulated to
be based on some unknown principle, but what and how remain to be
theorised and evaluated.

Artifact Sub-Cycles
In the 56 year panic cycle, the key sub-cycles are based on multiples of 9
years, which can be directly related to the causal principles involved,
namely Sun - Moon cycles. However, numerous other patterns can be
generated from the 9, 18, 36, 54 year sub-cycles and occur on the
diagonals of the patterns in Tables 1 & 2. Because they are derived from
sub-cycles in multiples of 9 years, they have been described as 'artifact'
sub-cycles. The following only discusses the 20 year sub-cycles, which are
the most obvious sub-cycles in economic history and were first
commented upon by Funk (1932).
20 year sub-cycles are to be found between his Sequences 01, 21, 41 on
the diagonals of the 36 year sub-cycles.
36 ysc Series 1
Sq 05 Sq 41 Sq 21 Sq 01
1709 1745 1781 1817
1765 1801 1837 1873
1821 1857 1893 1929
1877 1913 1949 1985
1933 1969
1989
Years underlined give the prime 20 year sub-cycle in US financial patterns
beginning 1873:
Seq 01 1873 US panic (September). German & Austrian panics
(May).
Seq 21 1893 US panic (May).
Seq 41 1913 1913-14 US & European crises.
Seq 05 1933 US banking crisis (March).
1953 US 'disturbance' (March).
1973 US$ crisis. OPEC oil crisis.
1993 US bond market collapse (February 1994).
Another key artifact 20 year sub-cycle from the 36 year sub-cycles Series
2 has been underlined as follows:
36 ysc Series 2
Sq 52 Sq 32 Sq 12 Sq 48
1792 1828 1864
1812 1848 1884 1920
1868 1904 1940 1976
1924 1960
1980

1900 German panic (June).

Seq 48 1920 1920-21 US & UK crises.
Seq 12 1940 US panic (May).
Seq 32 1960 No crisis.
Seq 52 1980 US crises (March).
2000 Crisis???

The Japanese Experience

Japan remained under self imposed isolation from 1639 with external
contact confined to limited trade with the Dutch and Chinese. It was not
until 1853 that Commodore Perry of the US navy implemented gun boat
diplomacy to force Japan to open its economy to the Western world.
During the Meiji period (1868-1912), Japan experienced rapid
restructuring and modernisation of its economy, with a central bank, the
Bank of Japan being established in 1882. Only several post 1900 Japanese
crises can be linked to the 36 year sub-cycles.
Year Sq Crisis
1920 48 Panic & post war depression.
1922 50 Crisis (April).
1929 01 Lifting of gold embargo at old parity (January 1930).
1930-35 03, 05 Showa Depression. Embargo on gold re-imposed Dec
1931.
1949 21 Depression.
1980 52 1979-80 Second oil shock.
1989 05 Share market collapse (January 1990). After Heisei
Boom.
Several other notable crises do not fall in patterns of the 36 year sub-
cycles.
1900-01 28-29 Panic.
1923 51 Crisis. Tokyo earthquake (September).
1927 55 Banking crisis (March/April).
1974 46 First oil shock.
1997-98 13-14 Asian meltdown.
Failure to source comprehensive listings of major Japanese financial crises
was a difficulty, especially as no crises could be referenced for the pre
1900 era, apart from the 1859-60 currency crisis. Obviously the
assessment is deficient and no conclusions can be drawn. The prospect of
a 56 year panic cycle in Japanese history needs to be more fully explored.

Conclusions
What can be stated with a high degree of confidence is that major US and
Western European financial crises happen preferentially in patterns of the
56 year cycle. The 56 year cycle is precise with the crisis month occurring
within the crisis year (ie: March of the sequence year through to the
following February) and often around the same month of the year within a
given sequence. The 56 year cycle is extremely complex as numerous
integral numbers (based on the solar year) may be given significance.
There are the 56 year sequences, the 9 year sub-cycles (9, 18, 36, 54 years)
and many artifact sub-cycles (eg: 20 years). The sub-cycles: 1) are only
relevant for a certain period in financial activity and then fade out. 2)
function simultaneously helping to account for the complexity prevailing
in financial patterns. Even so the most relevant sub-cycles are those in
multiples of 9 years, which may be linked intimately with Sun - Moon
cycles. The sub-cycles last for relatively short periods, where as the 56
year sequences may endure for several centuries.
The obvious question arises as to the mechanism precipitating this very
enduring cycle of financial distress. After much research the 56 year cycle
was found to correlate very closely with cycles of the Sun and Moon, a
finding covered in the ensuing paper The Sun, The Moon and The Number
56. Greater understanding of the relationships between lunisolar cycles
and the timing of financial crises offers the potential to boost the accuracy
of the forecasts derived from the 56 year cycle. At present such forecasts
are totally dependent upon numerological analysis and extrapolations from
historical precedent. Both these approaches are primitive and leave a lot to
be desired in their predictability. Even so, the 56 year cycle has persisted
since at least 1760, despite radical changes in technology, per capita
income and economic sophistication. Remarkably, the 56 year panic cycle
retained predictability into the late 20th century. How well this accuracy is
maintained into the 21st century remains to be seen.

References
 • Adams, A B. Analyses of Business Cycles. McGraw - Hill. 1936.
• Calomiris, C W & Gorton, Gary. The Origin of Banking Panics.
Paper in Financial Markets & Financial Crises. Edited by
Hubbard, R G. The University of Chicago Press. 1991.
• Funk, J M. The 56 Year Cycle in American Business Activity.
Privately published. 1932.
• Glasner, David (ed). Business Cycles & Depressions: An
Encyclopedia. Garland Publishing Inc. 1997.
• Hoppitt, Julian. Risk and Failure in English Business: 1700-1800.
Cambridge University Press. 1987.
• Kindleberger, C P. Manias, Panics & Crashes. John Wiley &
Sons. First published 1978. Updated 1989. Revised 1996.
• Kitchin, J M. Trade Cycles Chart. Published by The Times
Annual Financial & Commercial Review. 1920, 1924, 1930.
Revised chart to 1933 presented in Gold. A reprint of The Special
Number of The Times. June 20, 1933. Times Publishing Co Ltd.
1933.
• McMinn, David. Financial Crises and the 56 Year Cycle. Twin
Palms Publishing. First published 1995. Revised 1996. Revised
1997.
• Mishkin, F S. Asymmetric Information & Financial Crises: A
Historical Perspective. Presented in Financial Markets &
Financial Crises. Edited by Hubbard, R G. The University of
Chicago Press. 1991.
• Sobel, Robert. The Big Board: A History of The New York Stock
Market. Free Press. 1965.
• Sobel, Robert. Panic on Wall Street: A History of America's
Financial Disasters. Macmillan. 1968.
• Union Corp. Trade Cycles Chart. March 1949. Updated the
original work by Kitchin (1933).

APPENDIX 1
MAJOR US & WN EUROPEAN FINANCIAL CRISES POST 1760 -
KINDLEBERGER (Appendix B, 1996).
1763 Amsterdam. SP - January 1763. C - September 1763. End of
Seven Years' War.
1772 England & Amsterdam. SP - June 1772. C - January 1773.
1793 England. SP - November 1792. C - February 1793. After canal
mania.
1797 England. SP - 1796. C - February-June 1797.
1799 Hamburg. SP - 1799. C - August-November 1799.
1810 England. SP - 1809. C - January 1811.
1815-16 England. SP - 1815. C - 1816.
1819 USA. SP - August 1818. C - November 1818-June 1819.
England. SP - December 1818. C - None.
1825 England. SP - Early 1825. C - December 1825.
1828 France. SP - MNG. C - December 1827.
1836 England. SP - April 1836. C - December 1836.
1837 USA. SP - November 1836. C - September (error - May correct
?).
1838 France. SP - November 1836. C - June 1838.
1847 England. SP - January 1847. C - October. After railway mania.
1848 France. SP - March - April 1848. C - March 1848.
1857 USA. SP - Late 1856. C - August 1857.
England. SP - Late 1856. SP - October 1857.
Continent. SP - March 1857. C - November 1857.
1864 France. SP - 1863. C - January 1864.
1866 England/Italy. SP - July 1865. C - May 1866
1873 Germany/Austria. SP - Fall 1872, C - May 1873.
USA. SP - March 1873. C - September 1873.
1882 France. SP - December 1881, C - January 1882. Union Generale
failure.
1890 England. SP - August 1890. C - November 1890. Baring Crisis.
1893 USA. SP - December 1892. C - May 1893.
1907 USA. SP - Early 1907. C - October 1907.
France/Italy. SP - March 1906. C - August 1907.
1920-21 USA/ UK. SP - Summer 1920. C - Spring 1921.
1929 USA. SP - September. C - October 29. Black Tuesday.
1931-33 1931 Austria. C - May. Germany. C - June. UK. C - September.
1933 USA. C - March. Bank holiday.
1950's Currency speculations: France 1958, Canada 1962, Italy 1963,
1960's Britain 1964, France 1968, US$ 1973.
1974-75 Worldwide. SP - 1973. C - 1974.
1979-82 USA crises: SP - 1979. Farmland (C - 1979), US$ (C - 1979),
Oil (C - 1980).
Third world debt (C - 1982).
1982-87 USA crises: US$ (SP - 1985), Real Estate (SP - 1987), Stocks
(SP - 1987, C - October 1987*),
* Crisis given as a range 1987-92. Only the 1987 panic could be regarded
as a major crisis.
Excludes the Japanese crises of December 1931 (Seq 03) and January
1990 (Seq 05), as well as the Australian banking crisis of May 1893 (Seq
21).
Abbreviations: SP- Speculative peak. C- Crisis/Panic. MNG- Month not
given.

The Sun, The Moon & The Number 56

"I do not know whether I understand your meaning when you say
'astrology'. I do not know all the influences, which go from body to body. I
do know that if man is not affected in some way by the planets, Sun and
Moon, he is the only thing on Earth that isn't." (Robert A. Millikan)

A 56 year cycle has been established in trends of US and Western

European financial crises since 1760 (Funk, 1932; McMinn, 1997).
Clearly many major financial crises are precipitated by some mechanism,
as they tend to occur preferentially in patterns of the 56 year cycle and not
as random events. Numerous cosmic factors were examined for some link
with the timing of financial crises. Astrology and sunspots were the initial
areas favoured for assessment but no significance could be realised despite
a gamut of hypotheses being tested. This was hardly surprising, as
rigorous research has offered little support for traditional astrological
theory (Dean & Mather, 1978; Culver & Ianna, 1984). However, the 56
year cycle was found to correlate very closely with cycles of the Sun and
Moon.
Changing mob psychology is hypothesised to form the basis of cycles of
financial crises. Such an opinion is not new. Mill (1867) believed that the
'mental mood of businessmen tends to run in cycles'. The obvious question
arises as to the causal principle precipitating this repetitive cycle of mob
psychology - speculative frenzy, crisis, pessimism. It has persisted
throughout modern economic history, with people learning very little from
the greed and foolishness of the preceding generation. Economic theory
has remained severely deficient in explaining cycles of financial distress.
This impasse has arisen despite a mountain of research and a multitude of
PhDs. Prevailing cycle theory does not recognise the crucial role played
by the Sun and Moon, as well as their associated astronomical planes and
node reference points. Such factors could potentially offer a theory to
explain how the Sun and Moon may affect changing mob psychology and
thus activate the cyclic timing of financial crises.
Some background information needs to be outlined on the approach
adopted in the text. The Earth's orbital plane around the Sun is represented
by the 360 degree ecliptical circle, as viewed from Earth. 0 E° is sited at
the spring equinox point, with the abbreviation E° being used to denote
ecliptic longitudinal degrees. This is to differentiate it from angular
degrees (angle separating two heavenly factors), which is given as A°. The
use of ecliptic degrees was deemed necessary for simplicity. Everybody is
familiar with the 360 degrees of a circle, where as few people know the
zodiacal signs and their succession through the zodiac. Additionally, there
is no scientific evidence to support the concept of 12 zodiacal signs and
their associated symbolism, even though it is one of the most fundamental
paradigms in astrology.
A glossary of technical words has been presented at the end of this paper
to assist the lay person. Most importantly, the term 'node' is used in
astronomy to describe any two points where:
* the orbit of a heavenly body cuts an astronomical plane.
* two astronomical planes intersect.
Another key term is the celestial equator, which is the plane of the Earth's
equator extended out into space onto the sky.

Lunisolar Cycles
The Sun - Moon reference points in financial trends seem to be where the
ecliptic is intersected by:
* the plane of the Earth's equator. These two planes cut at the: spring
(vernal) equinox point - 0 Eo (0 Aries) & and the autumn equinox point -
180 Eo (0 Libra). As viewed from the northern hemisphere, the Sun passes
from below to above the celestial equator at the spring equinox and from
above to below at the autumn equinox.
* the plane of the Moon's orbit around the Earth. (The Moon's orbital
plane is inclined 5 degrees to the ecliptic.) The points where these two
planes intersect are called the Moon's north & south nodes, 180 degrees
apart on the ecliptic circle. The ascending or north node is the point where
the Moon crosses from below to above the ecliptic. The descending or
south node is where the Moon crosses from above to below the ecliptic.
What appears to be so important is the change in orientation of the Sun
and Moon relative to the astronomical planes. However, the terms
above/below depend on viewing from the northern or southern
hemispheres. Therefore it is only reasonable that both points in nodal point
pairs are pertinent in cycles of financial distress. The equinox points move
clockwise (retrograde) against the background of fixed stars, while the
Moon's nodes also move clockwise around the ecliptic circle in the
nutation cycle of 18.6 years. These cyclic phenomena arise from the
gravitational pull of the Sun and Moon on the Earth's equatorial bulge.
The Earth bulges slightly around the equator with the distance between the
centre and equator being 0.3 per cent greater than the distance from the
centre to the poles. The plane of the equatorial bulge is tilted in relation to
the ecliptic by 23.5 degrees (called the obliquity). Both the Sun and Moon
gravitationally pull on the Earth's equatorial bulge. The Moon tugs at this
bulge to ally with the Moon's orbital plane, while the Sun pulls it to align
with the ecliptic. The combined effect is to try to decrease the angle
between the Earth's equatorial plane and the ecliptic, but the Earth resists
such forces as it rotates with angular momentum. These competing forces
result in the Earth's spin axis describing a double conical motion (one each
for the north and south poles) around the perpendicular (90 A°) to the
ecliptic. The overall impact gives rise to two important astronomical
phenomena.
Precession of the Equinoxes. The equinox points rotate retrograde
(clockwise) very slowly against the background of fixed stars completing
a cycle about every 25,800 years. Around 200 BCE, the spring equinox
point (0 E°) was sited in the constellation Aries, but now it is in the early
part of the constellation Aquarius. The orientation of the north pole also
changes very slowly in relation to the background of fixed stars. Currently
the north pole points to Polaris (or Pole Star), but in around 12,000 years
the brilliant star Vega will be the new pole star. The precessional
movement is not perfectly regular because the Sun and Moon
gravitationally pull in different planes and their positions constantly
change in relation to each other and the Earth.
The Nutation Cycle is caused by a very slight elliptical nodding of the
Earth's axis, which is superimposed on the precessional motion due to the
pull of the Moon on the Earth. Thus the double cone described previously
is in fact a corrugated or wavy cone. This nodding shows up as the north
node's retrograde (clockwise) movement around the ecliptic circle, taking
18.6133 tropical years to complete one cycle of the ecliptic circle from
spring equinox to spring equinox.
A number of other Sun - Moon cycles are crucial in financial trends and
arise in the ecliptical and angular circles.

Ecliptical Circle is the basis of three key lunisolar cycles. Positions of the
Sun, Moon and lunar nodes are given as ecliptical longitudinal degrees,
which are equivalent to angles to the spring equinox point (0 E°).
Tropical Year (or Solar Year) equals 365.2422 days and is the time taken
for the Sun to complete one cycle of the ecliptic circle from spring
equinox to spring equinox.
Tropical Month is the time taken for the Moon to complete one 360 degree
cycle of the ecliptic circle from spring equinox to spring equinox and is
equal to 27.3216 days.
Nutation Cycle shows up as the Moon's north node retrograde (clockwise)
movement around the ecliptic circle, taking 18.6133 tropical years to
complete one cycle.

Angular Circle. This gives the respective angles between the Sun, Moon
and Moon's north node - denoted by A°:
Nodical Year (or Eclipse Year) equals 346.6200 days and is the time taken
for the Sun to complete one cycle lunar north node to lunar north node.
Eclipse year is the astronomically correct term for this cycle, but nodical
year has been used in the text because it is more descriptive.
Nodical Month (or Draconic Month) is the time taken for the Moon to
complete one cycle lunar north node to north node and is equal to 27.2122
days.
Synodic Month (or Lunar Month) is the time taken for the Moon to
complete one cycle new Moon to new Moon and equals 29.5306 days. It is
based on the angle between the Sun and Moon as viewed from Earth.

Saros Cycle. Every 223 synodic months (one Saros cycle), the Sun, Moon
and the Moon's nodes align in the same relative angles to each other to
within a fraction of a degree. The Saros (18.0 tropical years) divided by
two gives the Half Saros Cycle. Every 9.0 tropical years, the Moon forms
the same relative angle to the lunar north node, with the Sun 180 degrees
on the opposite side of the ecliptic circle (see Appendix 1).
56 Year Cycle. On the same date every 56 tropical years, the ecliptical
position of the lunar north node moves only 3 E° clockwise (eg as on July
1: 1761 - NN at 48 E°; 1817 - 45 E°; 1873 - 42 E°; 1929 - 39 E°; 1985 -
36 E°). Furthermore, every 56.0 tropical years, the Sun's relative position
forms the same angle to the north lunar with the Moon 180 degrees on the
opposite side of the ecliptic circle. The two cycles of 9.0 (half Saros) and
56.0 tropical years result in alternating solar/lunar eclipses and full/new
moons every 111.5 and 692.5 synodic months respectively (see Appendix
1).
The 9 and 56 year cycles are based on the angles 0 and 180 degrees
between the Sun, Moon and lunar nodes and repeat to within one degree.
Additionally, all lunisolar cycles in Appendix 1 are in integral and half
integral numbers, apart from the solar day.
The very close alignment of Sun - Moon cycles at the Saros and the 56
year cycle could not arise, if the radii of either the Earth - Sun or Earth -
Moon orbits varied slightly from their current mean values. Tidal force is
strongly determined by distance between the bodies involved. This implies
that tidal effects between the Sun, Earth and Moon play a key role in
influencing cycles of financial upheavals.
The reasons for the importance of 0/180 degree angles in the Saros and 56
year cycle remain unresolved, although it would indicate that the 1st and
2nd harmonics are crucial in understanding how the cycle actually
functions.

The Sun, Moon & Lunar Nodes

Nutation Cycle. The ecliptical position of the north node on a particular
date correlated perfectly with the 9/36 year sub-cycles. On July 1 for ALL
years in the 36 year sub-cycles Series 1, the north node was always sited
between 328 and 58 E°, while for ALL years in Series 2, the north node
appeared between 142 and 231 E° (see Diagram 1). For such patterns to
occur by chance would be infinitely small. One would expect an even
ecliptical distribution of the north node, if there was no relationship with
sub-cycles based on multiples of 9 years.
For the 1755-1940 period, the placement of the north node can be strongly
correlated with the timing of Kindleberger's 30 major crises (see Diagram
2).
* 24 crises had the north node in the two quarter segments diagonally
opposite in the ecliptic circle - 0 - 90 E° and 180 - 270 E° (Significant p <
.001).
* 17 crises were located with the north node in two diagonally opposite 45
degree segments - 0 - 45 E° and 180 - 225 E°. (Significant p < .001).
* No crises were evident when the north node was sited between 255 and
335 E°; a segment of 80 degrees (Significant p < .01).
For Kindleberger's 42 major crisis years (1760-1987), significance could
still be repeated for the north node in these ecliptical segments discussed
previously, but at a lower level (down to p < .05). In this analysis, one
would expect an even distribution of the north node on the ecliptic if only
chance factors were operating.
Ecliptical position of mean north node at the time of major crises listed by Kindleberger
(1996) for the period 1755-1940. For years with no given month, the north node is taken
as occurring on July 1. For crises given as multiple months, the north node is timed mid
way between the first and last crisis month given.

The concentration of the north node in the segments 0 - 45 E° & 180 - 225
E° for the timing of major financial crisis is probably linked with the
equinox points 0 E°/180 E°, where the celestial equator intersects the
ecliptic. As the Moon's nodes move retrograde (clockwise) around the
ecliptic, major financial crises are most likely to happen in the few years
prior to the lunar nodes reaching the equinoxes.
Sun's Ecliptical Position is hypothesised to have an impact upon
financial activity. There is evidence to support this proposal. The greatest
one day falls in the Dow Jones Industrial Average (DJIA) and Financial
Times 30 (FT-30) are most likely to be recorded when the Sun was in the
180 - 240 E° segment (ie: after the Sun has passed the 180 E° equinox).
DJIA 50 falls 1915-70 20 in 180 - 240 E° (p < 10-4).
DJIA 50 falls 1943-98 21 in 180 - 240 E° (p < 10-5).
For the DJIA, the biggest one day rises were also most likely to happen
when the Sun was in the crucial 180 - 240 E° segment.
DJIA 50 rises 1915-70 20 in 180 - 240 (p < 10-4).
DJIA 50 rises 1943-98 18 in 180 - 240 E° (p < .001).
October/November are the featured months when both the biggest one day
rises and falls are most likely to be experienced. No seasonal factors are
known which could account for this very persistent correlation.
The September Effect. The average return on shares around the world
during September is negative, even after dividends are reinvested (The
Economist, 1995). (During September the Sun moves through the 158 to
186 E° segment or in other words around the 180 E° equinox point.) This
finding was made in a study by Professor Siegel of the University of
Pennsylvania. In the 105 years to 1994, Investors would have done best by
selling their shares at the end of August and reinvesting the proceeds at the
beginning of October. The DJIA fell in 63 of the 104 Septembers for the
period 1890 to 1994 (1914 September data was unavailable due to the
beginning of WW 1). Had investors fled each September since 1890, a
dollar invested in that year would have grown to US$ 410 by October 1,
1994, compared with about US$ 100 had their money remained invested
all year round. Even though biggest one day declines tend to be recorded
in October, it would have proved more sensible to stay in the market
throughout October rather than September over the past century. The
September effect appears to be global. For the 1970-94 period, 20 of the
world's biggest stock markets yielded negative average returns for
September, even after dividends had been reinvested. It is also applicable
to the southern hemisphere. The September effect probably is not a result
of seasonal factors, given it seems to apply globally. Thus it could arise
from the ecliptical placement of the Sun as it crosses the celestial equator
from south to north.
Seasonality & Financial Crises. Before 1914, seasonality in financial
crises was strongly evident, according to Kemmerer (1910). He found that
major/minor US crises in the 1873-1907 period were far more likely to
occur in March, April, May, as well as September and December (p<
.001). A similar situation was found to apply to European crises (1720-
1907) listed by Kindleberger (1978), which were also more likely to
happen in Spring and Autumn (p < .001) rather than take place over the
whole year (Glasner, 1997). This seasonality of crises was originally
attributed to asset demands, which were highly variable due to the
agricultural cycle. In spring and autumn, there was increased demand for
loans to finance planting, harvesting, transporting and storing crops. Thus,
the reserve deposit ratio of banks would usually decline in the spring and
autumn, making the financial system more prone to shocks during these
seasons. However, Autumn crashes are still common (1987, 1989, 1997,
1998) even though the agricultural sector is now a much smaller
proportion of a post-industrial nation's economy than was apparent in the
19th century. The bias for crises to occur in spring and autumn may have
something to do with the Sun being sited near the spring and autumn
equinox points rather than agricultural cycles.
Perigee. Proximity of the Moon to the Earth could be postulated to have a
bearing on financial trends. If tidal effects played a key role in the 56 year
cycle, this may be expected as tidal forces vary according to the distance
between two given objects. Perigee is the point in the Moon's orbit which
is closest to the Earth, where as apogee is the point furthermost from the
Earth. The perigee - apogee axis (apsides) rotates counter-clockwise
around the ecliptical circle, completing one cycle every 8.85 tropical
years. The author must confess that no serious attempt was made to assess
the role played by perigee in the 56 year cycle or the timing of major
financial crises. This was largely due to a failure to find an astrological
program giving the precise ecliptical placement of perigee. Research is
required to evaluate the relevance of this point in financial patterns. If it
was found to be significant, perigee would need to be included in any
lunisolar appraisals of financial trends.
Lunisolar Angles: A Key
Given the alignment (based on 0 and 180 degree angles) of several
lunisolar cycles at 9 and 56 tropical years, the Moon was expected to play
a key role in the 56 year cycle. In Series 1 & 2 of the 36 year sub-cycles
(see Table 1, McMinn, 1997), S/NN conjunctions (0 A°) formed angles to
the Moon ranging from 0 to 50 A° and 170 to 240 A° (see Diagram 3).
This applied in all years between 1760 and 1940.
Sun & Moon Diurnal Cycles
The Moon's nodes are so prominent in the timing of major financial crises
which indicates that lunar diurnal cycles may be important in financial
activity. The position of the Moon's nodes on the ecliptic circle is the chief
factor in cycles of lunar rising, culmination and setting. Additionally the
56 year cycle is composed in units of the tropical year - the 56 year
sequences, sub-cycles in multiples of 9 years and the various artifact sub-
cycles. This relevance of the tropical year also suggests that solar diurnal
cycles may be significant. The rising, culmination and setting of the Sun
varies very regularly over the year of 365.24 days. It could be
hypothesised that the 56 year cycle may be linked to the timing of solar
and lunar diurnal cycles and the interaction between these two cycles. This
could potentially be a fertile area for any new studies. Alas, diurnal cycles
can never be tested directly due to the inherent limitations of week day
market trading. How the 56 year cycle actually operates and what
scientific principles are involved remain unknown.
Horizonal plane is delineated by the circle, which separates the boundary
between the Earth and the heavens, as viewed from a particular site on the
Earth's surface.
* The ecliptic cuts the horizonal plane where the Sun rises and sets over
the solar day.
* lunar risings and settings occur where the Moon's orbital plane intersects
the horizonal plane. As it is inclined 5 A° to the ecliptic, the Moon's
orbital plane always intersects the horizonal plane near the ecliptic.
* the East - West axis is sited where the celestial equator and the horizonal
plane intersect.
The reference point for diurnal circles is speculated to be sited in the
eastern sector, near where the horizonal plane is cut by both the ecliptic
(solar risings) and the Moon's orbital plane (lunar risings). This would fit
in with other reference points for the 56 year cycle, which occur where the
ecliptic is cut by the Moons' orbital plane (the lunar nodes) and the
celestial equator (the equinox points).

Harmonics
Harmonics are based on the formula - 360 degrees of a circle divided by
N, where N is a whole number. Thus, 360 degrees divided by one gives
360 (1st harmonic), 2 gives 180 degrees (2nd harmonic), 3 gives 120
degrees (3rd harmonic), 4 gives 90 degrees (4th harmonic), 5 gives 72.5
degrees (5th harmonic) and so on.
In harmonics, regular fluctuations occur around circles of 360 degrees,
which correspond to integral divisions of 360. The circles used in
traditional astrology are the:
* ecliptical circle (equivalent to the zodiacal circle).
* angular circle, from the angular degree separation of two
points/heavenly bodies.
* diurnal circle, based on the rising, culmination and setting of a heavenly
body.
1st and 2nd harmonics (ie: 0 & 180 degrees of the ecliptical and angular
circles) are very strongly associated with the 56 year cycle. There was no
evidence of other harmonics being valid (eg: 60, 90, 120 degrees),
although they possibly may be relevant.

After an exhaustive appraisal of astrological research conducted between

1900 and 1976, Dean & Mather (1977) concluded that:
* 'The results of harmonic research to date suggest that astrological
significance lies not in the traditional signs and houses, but in the interval
between two points (or heavenly bodies). The decisive things are thus the
size of the interval, its relation to 360° and what comprises the two points.
* 'In the zodiacal circle, the reference point is probably one of the
cardinal points (ie 0 E°; 90 E°; 180 E°; 270 E°) and in the diurnal circle
the reference point seems to be located near the ascendant. This suggests
a common denominator, namely that in both circles the reference point is
a node'.
* '0° Aries and the ascendant are the traditional marking points in the
zodiacal and diurnal circles respectively. In each case the common
denominator is a node. This suggests that beyond the complexities of
astrology may lie a simple unifying factor, namely nodes. This is also a
natural consequence of harmonics. The evidence for such an attractive
theory is inconclusive……The geophysical evidence suggests that
unoccupied nodes are without significance, where as this is exactly where
astrology allocates importance.....Much more research is justified because
a simple unified theory of astrology based on nodes would be of immense
fundamental benefit'.
The findings derived from the 56 year cycle lend support for Dean &
Mather's conclusions. Traditional astrology has little relevance to this
cycle (eg: planets, house systems, zodiacal signs, sunspots, eclipses and so
forth.), although some fundamental concepts were corroborated (eg: the
importance of the Sun and Moon and their associated astronomical planes
and nodes). There is also a strong emphasis on the two equinox points - 0
E° & 180 E° (two of the four cardinal points) in this assessment.
Throughout the 56 year cycle, the reference points occur where the Sun
and Moon change their orientation with respect to an astronomical plane.
The Sun moves above/below the celestial equator at the equinoxes and the
Moon moves above/below the ecliptic at the lunar nodes. These node point
pairs are of prime importance in relation to financial markets, with the 56
year cycle able to be broken down into various angles between the Sun,
Moon and these nodes.
The findings from the 56 year cycle generally support the conclusions
draw by Dean & Mather (1977) and harmonics could prove a fertile
research area for further studies.

Traditional Astrology
Planetary cycles are exceedingly important in traditional astrological
theory. Various astrologers have conducted extensive studies on possible
planetary influences on business cycles, but the findings were inconclusive
and not backed up by the evidence (Dean & Mather, 1977). Williams
(1982) believed Jupiter - Saturn - Uranus cycles 'offered a clue' in
explaining the crises in Sequences 01, 21 and 41 proposed by Funk
(1932). On assessment, these were dismissed as having no relevance to the
56 year cycle. A planetary influence upon the 56 year cycle could not be
established despite numerous hypotheses being tested for significance -
planets by ecliptical segment, angles between the planets, planets sited at
certain precise ecliptical degrees and so forth. Some positive correlates
were produced between eclipses and financial crises. However, these
could be reasonably dismissed as artifacts arising from the importance of
the lunar nodes in the 56 year cycle. (Eclipses can only occur when the
Sun and Moon are both near the lunar nodes.) Traditional astrological
factors proved invalid and only the Sun and Moon can be advocated as the
prime influence on the 56 year panic cycle. However, the planets should at
least have a very subtle influence through the process of planetary
precession on the Earth, a topic covered in any basic astronomical book.

In Conclusion
From the findings, the 56 year panic cycle is most likely based on angular
- ecliptical - diurnal relationships between the Sun and Moon. This
conclusion is derived from the following:
* Based on the angles 0 and 180 degrees, angles between the Sun, Moon
and nodes repeat to within one degree every 9.0 and 56.0 tropical years,
the two basic time units associated with the 56 year cycle.
* Perfect correlations exist between the 36 year sub-cycles and: 1) the
ecliptical position of the north node on a specific date of the year. 2) the
ecliptical placement of S/NN conjunctions. 3) Moon angles to these S/NN
conjunctions.
* Major financial crises are most likely to occur when the north node is in
the quadrants 0 - 60 E° and 180 - 240 E° and least likely in the segment
255 - 335 E°
Given the key role played by the nodes and the tropical year, diurnal
cycles are likely to be very relevant, but could not be assessed from the
financial data. Lunisolar patterns would vary for each crisis and must also
change progressively over long time spans never repeating exactly.

Three astronomical planes appear to be highly significant in the timing of

financial crises:
* The Ecliptic is the plane the Sun gravitationally pulls on the Earth. The
heavenly positions of the Sun, Moon and lunar nodes are also referenced
on the ecliptical circle, a factor important in the Tropical Year and
Tropical Month.
* The Moon's Orbital Plane intersects the ecliptic at the Moon's north
and south nodes. This is the plane the Moon gravitationally pulls on the
Earth.
* The Celestial Equator cuts the ecliptic at the equinox points.
For Sun - Moon diurnal cycles, the reference point is speculated to be
located where the Earth's horizonal plane is intersected by the ecliptic and
the Moon's orbital plane.
The 56 year cycle may be reduced to various angles between the Sun,
Moon and the key reference nodes - the spring equinox and the lunar north
node. The angles that seem most important are 0 and 180 degrees, which
would suggest the 1st and 2nd harmonics are fundamental to
understanding this cycle. Why this is so remains enigmatic.
Overall, traditional astrology was not applicable to the 56 year cycle of
financial crises. Even so, some very basic views were valid such as the
importance of the Sun and Moon and their associated nodes and
astronomical planes. These several variables give rise to very complex
cyclical behaviour, which have a major impact on financial trends. Further
breakthroughs in cycle theory could open up the possibility of accurate
market forecasting years in advance.
The obvious question arises - Why are the equinoxes and lunar nodes so
relevant in trends of financial crises? Tidal effects between the Sun - Earth
- Moon are the favoured options to account for the 56 year panic cycle,
because of two key factors:
* The gravitational pull of the Sun and Moon on the Earth's equatorial
bulge causes the equinox points to move clockwise against the background
of fixed stars (precession) and the Moon's nodes to move around the
ecliptical circle relative to the spring equinox point (nutation).
* The cycles in Appendix 1 (the Saros and the 56 year cycle) could not
arise if the Earth - Sun and Earth - Moon distances varied slightly from
their current mean values. The cycles are very finely balanced and
distance is one of three key variables in tidal effects. The other two
variables are the mass and size of the bodies involved.
Thus it may be hypothesised that tidal harmonics involving the Sun, Moon
and nodes (equinoxes & lunar nodes) are the causal basis of cycles of
financial distress. Some evidence to support this attractive theory has been
offered in this paper. The nodes are only hypothetical points in the
heavens and geophysics would suggest that they should have no
significance. However, proximity to the nodes is where importance lies in
the timing of financial distress. The key factor seems to be where the Sun
or Moon changes its orientation relative to an astronomical plane (moves
from below to above or vice versa). The astronomical planes involved are
the ecliptic, the celestial equator, the Moon's orbital plane and probably
the horizonal plane. If perigee was found to be significant in market
trends, then it too would need to be considered in any Sun - Moon
analyses. Assuming such a view holds up to subsequent scrutiny, the
complexity of the 56 year panic cycle could be reduced to a small number
of first principles, thereby nurturing the design of much needed follow up
research. A simple, overall theory may be within reach, which would be of
tremendous benefit in explaining the cyclic nature of mass psychology and
the timing of financial crises.

References
• Culver, R B & Ianna, P A. The Gemini Syndrome: A Scientific
Evaluation of Astrology. Prometheus Books. 1984.
• Dean, Geoffrey & Mather, Arthur. Recent Advances in Natal
Astrology. Analogic. 1977.
• Funk, J M. The 56 Year Cycle in American Business Activity.
Privately published. 1932.
• Glasner, David (ed). Business Cycles & Depressions: An
Encyclopedia. Garland Publishing Inc. 1997.
• Kindleberger, C P. Manias, Panics and Crashes. John Wiley &
Sons. Published 1978. Revised 1989. Revised 1996.
• Kemmerer, E W. Seasonal Variations in the Relative Demand for
Money and Capital in the United States. National Monetary
Commission. Washington, D C. Government Printing Office.
1910.
• McMinn, David. Financial Crises & The 56 Year Cycle. Twin
Palms Publishing. 1995. Revised 1996. Revised 1997.
• Mill, John. Credit Cycles & The Origin of Commercial Panics.
Transactions of Manchester Statistical Society. December 1867.
• The Economist. Sell Before September. p 76. September 24, 1994.
• Williams, David. Financial Astrology. AFA. 1982.
• Wing, L L. Latitudinal Passage: A Principle of Solar - Terrestrial
Cycle Behaviour. Annals of the New York Academy of Science.
95 p 403-417. 1961.
• Wing, L L. The Effect of Latitude on Cycles. Annals of the New
York Academy of Science. 98 p 1202-1205. 1962.

GLOSSARY OF TERMS
• Celestial Equator is the plane of the Earth's equator extended out
into space onto the sky.
• Conjunction. When the angle between two points and/or planets is
0 degrees.
• Diurnal cycle. The rising/culmination/setting of a heavenly body -
solar day, lunar day, etc.
• Ecliptic. The plane of the Earth's orbit around the Sun which is
inclined at 23.5 degrees to the Earth's equator.
• Equinox. The times of the year (20 March and 22 September),
when the Sun passes over the Earth's equator (ie when the Sun is at
0 Aries or 0 Libra). The vernal equinox occurs when the Sun is at 0
Aries and the autumnal equinox when the Sun is at 0 Libra.
• Full Moon. Occurs when the Earth is found between the Sun and
Moon (ie: when the angle between the Sun and Moon is 180
degrees).
• New Moon. Occurs when the Moon passes between the Sun and
Moon (ie: when the angles between the Sun and Moon is 0
degrees.
• Node (Moon). The plane of the Moon's orbit around the Earth is
inclined at 5 degrees to the plane of the Earth's orbit around the
Sun (the ecliptic). The nodes are the points where these two planes
intersect. The nodes regress (ie move clockwise) around the
ecliptic.
• Nutation cycle. The time taken for the Moon's north node to
complete one 360 degree cycle retrograde (ie: clockwise) through
the ecliptic circle and equals 18.6133 years.
• Nodical month (or draconic month). The time taken for the Moon
to complete one cycle north node to north node and is equal to
27.2122 days.
• Nodical year (or eclipse year). The time taken for the Sun to
complete one cycle north node to north node and is equal to
246.6200 tropical years.
 • Saros cycle. This is the interval between two similar eclipses
(every 223 synodic months or 6,585.32 days) when the relative
angles between the Sun, Moon and nodes align to within a fraction
of a degree.
• Solstice. Times of the year when the Sun is furthest from the
equator at 0 Capricorn (December 22) or 0 Cancer (June 21).
• Sunspots. Vast giant storms on the Sun's surface which appear
dark in comparison to the surrounding surface.
• Synodic month. (Lunar month) The time taken for the Moon to
complete one cycle new Moon to new Moon and is equal to
29.5306 days.
• Tropical month. The time taken for the Moon to complete one
360 degree cycle of the ecliptic circle from spring equinox to
spring equinox and equals 27.3216 days.
• Tropical Year (or Solar Year) is the time taken for the Sun to
complete one cycle from spring Equinox to spring equinox and is
equal to 365.2422 days.

APPENDIX 1 THE SAROS & 56 YEAR SUN - MOON CYCLES

The Saros Cycle
Days Years Lunisolar cycles
6,574.36 18.000 18.0 Tropical Years
6,585.78 18.031 19.0 Nodical years
6,585.32 18.030 223.0 Synodic Months (One Saros Cycle).
6,584.51 18.028 241.0 Tropical Months
6,584.35 18.030 242.0 Nodical Months

Half Saros Cycle

Days Years Lunisolar Cycles
3,287.18 9.000 9.0 Tropical Years
3,292.89 9.016 9.5 Nodical years
3,292.66 9.015 111.5 Synodic Months
3,292.26 9.014 120.5 Tropical Months
3,292.68 9.015 121.0 Nodical Months

56 Year Cycle
Days Years Lunisolar Cycles
20,453.55 56.000 56.0 Tropical Years
20,450.58 55.992 59.0 Nodical years
20,449.94 55.990 692.5 Synodic Months
20,450.23 55.991 748.5 Tropical Months
20,449.97 55.990 751.5 Nodical Months

Business Cycles & The Number 56

"There are two types of economic forecasters. Those who know they don't
know and those who don't know they don't know." (J K Galbraith)

The understanding of business cycles has remained limited despite much

research over the past 160 years. The following paper discusses the
relationships between the 56 year panic cycle (Funk, 1932; McMinn,
1997) and the various business cycles of economic literature. Zarnowitz
(1992) believed that the term business cycle was a misnomer 'as no unique
periodicities were involved'. However, the existence of the 56 year cycle
would contradict this opinion as financial upheavals occur quite regularly
in patterns of the 56. Major financial crises listed by Kindleberger (1989)
have been underscored throughout the ensuing text. Readers are
recommended to read the work by McMinn (1997) for background
information on the 56 year panic cycle.
There are commonly considered to be four economic cycles determining
business activity:
The Juglar cycle consists of prosperity, crisis and liquidation and persists
for 7 to 11 years, with an average time span of about 8 years. This cycle is
based on fluctuations in prices, interest rates and other financial variables.
This could be postulated to be based on sub-cycles in multiples of 9 years
(McMinn 1997).
The Kuznets cycle of about 15 to 25 years is derived from growth rates
rather than absolute expansion and contraction in economic activity. This
cycle was mainly associated with the US construction industry before
World War I. It is not relevant to 20th century business trends. The
Kuznets cycle was derived from analysis of population changes, building
construction, capital formation and income.
The Kondratieff Wave of 45 to 60 years duration is found in the
economic history of US and European capitalist economies since at least
the late 1780's. It can be directly linked to the 56 year panic cycle of
McMinn (1997).
The Kitchin cycle is short term averaging only about 40 months and was
deduced from commodity prices and bank clearing interest rates during the
period 1890-1922 for the USA and the UK. It has also been strongly
linked to the inventory cycle. Since World War II, a Kitchin cycle of four
years and another of 40 months has been evident in Western Europe and
the USA respectively.

The Kondratieff Wave

In the 1920's, Professor Kondratieff (1935), the famous Russian
economist, studied price trends and raw material production levels in
capitalist countries. His long wave model has been widely discussed by
other researchers and therefore only a brief outline is presented in this
paper. According to Kondratieff's theory, capitalism was self regenerating
after long periods of economic decline. He hypothesised that capitalist
economies fluctuated with peaks every 45 to 60 years. Kondratieff
believed that his long wave averaged 54 years, which closely
approximated to the 56 year cycle. His theory incorporated two phases:
The Rising Wave is a long expansionary period of 20 to 30 years
containing many years of prosperity. This growth phase experiences
expanding investment in capital goods and implementation of new
technologies developed during the preceding down wave. Escalating
inflation and rising interest rates are also evident. Advanced economies
require raw materials and new markets for their increased output, fostering
development of new territories and stimulating growth in lagging
economies.
The Downward Wave: A peak in price levels is apparent, which
coincides with rampant inflation, speculation, high commodity prices and
war. These peaks are followed by a 'primary recession' and plateau phase,
during which inflation slows, unemployment rises, the finance sector is
euphoric and temporary political stability is achieved. There is also
declining capital investment, a levelling out of labour productivity and a
falling return on investment. This plateau stage lasted for up to 10 years in
Kondratieff waves I, II & III. A major slump is experienced leading to a
'secondary depression'. Little investment in physical capital is undertaken
and the agricultural sector is chronically depressed. This strong
contractionary phase persists for up to 25 years.
The long waves for the US economy are:

K wave Trough Peak End of Plateau Trough Duration

I 1788 1814 1819* 1843 55 yrs
II 1843 1864* 1873* 1896 53 yrs
III 1896 1920* 1929* 1949*(a) 53 yrs
IV 1949* 1974(b) ? ?
Years asterisked fall in the 36 year sub-cycles Series 1 & 2 (McMinn,
1997).
(a) Some sources time this low at around 1940 (Seq 12) or even 1933 (Seq
05).
(b) Some sources time this peak at 1980 (Seq 52).

Dating the peaks and troughs of the long cycles, varies widely according
to the economic researcher and the country being assessed. The concept of
long waves has emanated from empirical analyses of a range of variables -
prices, interest rates, growth rates and national income. In more recent
times, non economic data, such as war severity (measured in terms of lives
lost), strike activity, election results and other social - political indicators,
have also been utilised. The use of numerous factors in assessing the long
waves partly accounts for the discrepancies in the dating of the peaks and
troughs. Much would depend on the variables being considered. Even so,
the broad 45 to 60 year trend of expansion, peak and downswing applied
between the late 1780's and the 1970's. There is a high degree of
parallelism in the long cycles experienced in capitalist economies in the
USA and Western Europe. This parallelism applied to a range of factors
studied such as price indexes, interest rates and trade.
Controversy arises as to the authenticity of long cycles in economic
history, with a wide gamut of views being expressed in the literature.
Some sources (eg: Imbert, 1959) believe they have persisted since the 13th
century, while others considered them only to be relevant since
industrialisation in the late 1780's (eg: Kondratieff, 1935). Additional
sources regard long cycles as only important in developed market
economies, where as other opinions view Kondratieff waves as being
historically significant but not relevant to modern times. Some eminent
economists believe that long waves are invalid in US and Western
European economic trends (Michaels et al, 1981). Kondratieff based his
theory on only 2.5 cycles, which was inadequate to test its legitimacy.
Paul Samuelson, once described as the dean of US economists, believed
Kondratieff waves were 'nonsense' and a 'statistical absurdity'. With this
the distinguished historical economist, Kindleberger, agreed stating
'Kondratieff was like astrology'. The enormous range of contrary opinions
is confusing to say the least.

K-Waves & The 56 Year Sequences

McMinn (1997) numbered his 11 principal 56 year sequences as 01, 03,
05, 09, 12, 21, 32, 41, 48, 50 & 52. These would initially appear to be just
a random collection of figures. However, apart from Sequence 09, they
form very regular patterns found in the 9/36 year sub-cycles (McMinn
1997). On the rising wave, strong economic growth is recorded with
depressions and recessions of short duration. The principal sequences
occur infrequently in this phase (notably Seqs 32 & 41) and thus relatively
few major crises are evident.
The Kondratieff peaks for US inflation fall in a narrow range of the 56
year cycle between Sequences 46-54 around the 'cluster' of principal
Sequences 48, 50, 52.
Kw I 1814 Sequence 54
Kw II 1864 Sequence 48
Kw III 1920 Sequence 48
Kw IV 1974 Sequence 46
These peaks are followed by the plateau stages with financial euphoria
being widely evident.
1810's Era of Good Feelings.
1870's Reconstruction after the Civil War.
1920's Roaring 20's.
1980's Rampant speculation.
The beginning of the secondary depression is marked by a major panic:
Kw I 1819: Sequence 03.
Kw II 1873: Sequence 01.
Kw III 1929: Sequence 01.
This secondary depression was protracted and severe, as five of the 11
principal sequences occur in a 12 year time frame (Seqs 01, 03, 05, 09,
12). Further severe depressions were precipitated by the major 1837 and
1893 panics (both in Seq 21), prior to the Kondratieff lows for the USA of
1843 and 1896. The 1949 low fell in Sequence 21, although some sources
place this low around 1940 (Seq 12) or even 1933 ( Seq 05).
The big question debated in recent decades is whether the USA and
Western Europe would experience a protracted Kondratieff 'secondary
depression' in the current long wave. However, there has been no great
depression in the 1980's or 1990's. Growth rates and inflation have
declined from the levels recorded in the rising portion of the long wave,
but have remained positive most of the time. Extrapolating from previous
Kondratieff waves, the crash of 1987 (Seq 03) could have been expected
to usher in a serious depression in the late 1980's (1987 & 1989 - Seqs 03
& 05 respectively), followed by a recovery in the early 1990's and a
depression in the mid 1990's.
Panic Seq US Depressions
1819 03 1819-21 (Seqs 03, 05) & 1825-29 (Seqs 09, 12).
1873 01 1873-79 (Seqs 01, 03, 05) & 1884-85 (Seq 12)
1929 01 1929-33 (Seqs 01, 03, 05) & 1937-39 (Seq 09).
1987 03 No depression in the late 1980's or mid 1990's.
There has been no great depression, with a only a mild US recession
occurring in 1990-91. Predictions of the timing of such an event proved
futile, as it never materialised. Why the Kondratieff wave is not repeating
past trends in the current down wave cannot be readily explained, although
several possibilities arise.
* With the abandonment of the gold standard in the 1930's, governments
could print paper money to meet the currency needs of their expanding
economies. This option was not available pre 1930's as all money had to
be backed by gold holdings. This restriction on money supply growth
contributed to the severe deflation experienced during Kondratieff down
waves I, II & III.
* Changing economic conditions since World War II have markedly
reduced: 1) the frequency and duration of downturns. 2) the amplitude of
economic fluctuations (Zarnowitz, 1992).
* The 56 year cycle, being dependent upon lunisolar cycles, must change
progressively over time and never repeat itself exactly. The Kondratieff
wave should similarly alter and never repeat itself. The lack of deflation
and a great depression may be the result of good fortune rather than good
economic management arising from undetermined long cycle trends
associated with the 56 and Sun - Moon cycles.
The relative importance of these three factors is currently impossible to
verify.

The 56 Year Sequences & War

Kondratieff (1935) considered that 'wars originate from real especially
economic circumstances and take place during the expansion phase of the
long waves'. It has been noted that wars tend to manifest around the peaks
and troughs of US long waves as follows:
Troughs: Peaks:
1788: Revolutionary War. 1814: War of 1812.
1843: US - Mexican War. 1864: US Civil War.
1896: US - Spanish War. 1920: World War I.
1949: World War II & Korean War. 1974: Vietnam War.
Typically, the trough wars have wide approval and support by the US
public, where as the peak wars are unpopular and viewed as ending
prosperity. Following world wars, the leading country on the winning side,
which survives with its economy in tact, reorganises the world system
around itself. This may be achieved as the war economically bleeds both
the adversaries and the allies. For example:
• Thirty Years' War (Netherlands).
• Napoleonic War (Britain).
• WW I & WW II (USA).
The 56 year cycle may have some relevance to war, as many financial
crises are related to revolution and to the beginning and ending of war.
Year Seq War
1745 41 Jacobite Rebellion. English Black Friday (Dec).
1756 52 Beginning of the Seven Years' War.
1761 01 Ending of the French & Indian War (USA).
1763 03 Ending of the Seven Years' War (English & Dutch panics -
September).
1781 21 Ending of the US Revolutionary War (US deflation). Peace
treaty not signed until 1783.
1792 32 French Revolutionary Wars (English panic - Feb 1793).
1801 41 Peace of Amiens.
1812 52 War of 1812 (US depression).
1848 32 Year of Revolutions (French panic - March).
1864 48 US Civil War (French & US panics).
1866 50 Austro Prussian War (European panics - May).
1913 41 Second Balkans War (US & European crises).
1940 12 World War II (US near panic - May). French capitulation.
1989 05 Collapse of communism in Eastern Europe.
According to Kindleberger [1978], (1989), there may be a time lag for a
crisis to manifest after a war, as follows:
1857 41 After the 1854-56 Crimean War.
1866 50 After the American Civil War.
1920 48 After 1914-18 World War 1.
Kindleberger also commented that a major crisis may occur about 10 years
after the ending of a war. For example:
War Ended Crisis Seq
Seven Years' War 1763 +9 1772 12
US Revolutionary War 1783 +9 1792 32
Napoleonic Wars 1815 +10 1825 09
Crimean War 1856 +10 1866 50
US Civil War 1865 +08 1873 01
World War I 1918 +11 1929 01
Although war induced financial crises happened fairly frequently in
economic history, a 56 year cycle linked directly to wars could not be
established.

Mass Psychology
Kondratieff (1935) regarded the upwaves to be 'considerably richer in big
social changes in society' than periods of the down waves. Snyder (1984)
and other researchers have discussed the changing mass psychology
through the Kondratieff wave.
Rising Wave. At the beginning of the rising wave, social/political
conservatism and a strong work ethic prevail as a carry over from the
previous down wave. Near the top of the wave, there are major social
upheavals and radical changes in the lifestyles. Optimism prevails and
there is discontentment with traditional values and new sexual mores
emerge. New movements demand freedoms and basic rights for racial
minorities and freer sexual expression. Feminism comes to the fore being
marked by:
• Olympe de Gouges. 'The Rights of Woman'. 1791.
Mary Wollstonecraft's 'A Vindication of the Rights of Women'
1792.
• John Stuart Mill's 'Subjection of Women' 1869.
• the Suffragette Movement of the early 20th century.
• Betty Friedan's 'The Feminine Mystique' 1963.
Germane Greer's 'The Female Eunuch' 1970.
In the current wave, the 1960's/70's saw liberalism, sexual freedoms, gay
activism, abortion rights, birth control, interest in Eastern religions,
improvements for racial minorities and so forth.
The Plateau phase of the 1920's and 1980's witnessed the rise of social
and political conservatism. Euphoria pervades the economy and there is a
general feeling of 'greed is good' with people speculating and over
extending themselves with credit. The new rich are showy in their public
displays of wealth and luxury. Entrepreneurs are treated as media
celebrities, many of whom end up bankrupt or in prison for fraud when the
economic tide turns.
Downwave. The initial problems are viewed as temporary phenomena
rather than profound changes in economic trends. As the difficulties
persist, disillusionment becomes increasingly apparent, shattering peoples'
risk free view of the world which prevailed in earlier decades. Workers
seek to maintain their living standards while social unrest is aimed at
insulating people from financial hardship. Laws are passed to protect the
well being of the populace and conservative values and lifestyles are
adopted. The sexual excesses of the up wave give way to modesty and
romance with less tolerance towards deviant social behaviours. This does
not mean that old mores return as many of the freedoms established on the
up wave are maintained.
Due to the hard times, there is a willingness to settle for less with value
being placed on work, success, security and saving. Alas the ugly side of
human nature becomes apparent. Religious fundamentalism and political
extremism (both right and left) resurge in a clamber for radical solutions.
Racism increases as scapegoats are sought to vent frustrations (Previous
waves: anti Semitism in Europe during the 1870's/80's & 1930's/40's.
Current wave: Ethnic cleansing of the 1990's) There is less tolerance of
unconventional sexuality (Previous waves: Victorian morality of the
1870's/90's and Hitler sent homosexuals to the gas chambers in the
1930's/40's). The current down wave has seen the rise of the religious right
in US politics, with moves against abortion and less tolerance towards
racial minorities and homosexuals. Lastly, socialism becomes more
popular with the masses as there is a reaction against free market
economics, which is widely blamed for the adverse conditions.

Long Cycles: Their Proposed Causes

Kondratieff (1935) noted that 'explaining the long cycles is extraordinarily
difficult' and he was not so concerned 'with the problem of the causes of
the long cycles, but with that of characterising their course'. However, he
did theorise that the long wave arose from the wearing out and
depreciation of long lived capital equipment, such as railroads, canals and
factories. The replacement of such capital occurs in spurts of massive
investment in big expensive projects during the rising wave. The demand
for capital increases which eventually boosts interest rates. Investment is
dampened due to the higher cost of money and after a long time lag, the
rising wave loses momentum and the downswing emerges. Over
investment during the rising wave also results in depreciation of excess
capital on the down wave. Investment in large scale projects falls,
economic activity contracts and inflation declines. Lower investment
levels decrease demand for capital, which thus becomes cheaper resulting
in lower interest rates. Hence favourable conditions are again created for
economic recovery.
Kondratieff (1935) also discussed trends in technical innovations during
the course of the long wave. Important inventions are made during the
downswing phase of the cycle due to the depressed times and the need to
cut production costs. Even so, these new inventions were only widely
adopted at the beginning of the upswing when economic conditions
improved. He believed that scientific discoveries were non random and a
product of necessity during depression. At these times, there would be the
greatest pressure to develop new products, slash production costs, find
new sources of raw materials and established new markets. Such
developments could only be widely applied when favourable conditions
returned - low interest rates, low wages and low production costs - and
when existing inventory and capital stock were depleted. This would occur
after a long period of depression. However, Kondratieff (1935) was
'absolutely disinclined to believe that (cycles of technical innovation)
offers any explanation of the causes of the long cycles'.
Schumpeter (1939) distinguished between invention and innovations
(application of inventions). Initially, the inventions were adopted by a few
enterprises at the beginning of the growth phase. The products were very
much in demand and were increasingly copied by other enterprises,
resulting in high investment and economic growth. The phase of technical
innovation was eventually exhausted leading to economic stagnation. On
the down wave new technologies and more efficient methods of
production are developed, both of which are only fully exploited on the
ensuing upwave. For example, each wave was preceded by advances in
transportation: Kw I - canals 1780's; Kw II - railways 1830's; Kw III -
steamships 1880's & cars 1910's; Kw IV - aircraft, container shipping &
expressways 1950's. These advances needed new infrastructure generating
mass employment and expanding industrial production. The transport
revolutions are initially handsomely profitable, then widely over extended
to become increasingly unprofitable. The uniqueness of each cycle was
viewed by Schumpeter to be the result of technical innovations and
external events such as wars, gold discoveries and harvest failures.
Schumpeter (1939) also viewed cycles of different lengths as being due to
innovations requiring different time spans for their absorption into the
economy.
The existence of the 56 and related lunisolar influences in business cycles
(McMinn, 1997) suggests that the Kondratieff wave may emanate more
from changing mass psychology than cycles of investment or technical
innovations. (The latter two factors may be products of the former.)
McMinn (1997) hypothesised that people's moods oscillated between
optimism and pessimism in tune with sun - moon cycles. Financial crises
occurred when there is a sudden shift in sentiment from exuberance to
fear. The prevailing mood of business leaders determines whether long
term investments are made or inventions are widely applied or put on hold
until more favourable circumstances emerge. Consumers would also be
more likely to buy new products in periods of optimism and economic
security on the rising wave. During the general gloom of the Kondratieff
down waves I, II & III, good opportunities to invest in long term capital
facilities or adopting and marketing new inventions simply would not
arise.

Links Between Major/Minor Cycles

The existence of links between the major/minor business cycles has been
covered in economic references. Kitchin (1923) stressed the primacy of
the short term cycles and believed that the Juglar cycle was merely
aggregates of two, sometimes three, minor cycles each lasting about 40
months. The Juglar cycles averaged about 8 years, but ranged in duration
from 7 to 11 years. Furthermore, Kondratieff (1935) considered the long
waves and the shorter cycles to be linked in some manner and that the
'intermediate cycles are strung on waves of the long cycles'. During the
rising waves, these intermediate cycles were characterised by brevity of
depressions and intensity of upswings, while for the downward waves the
opposite applied with intense depressions and shorter periods of growth.
Schumpeter (1939) thought time spans of these economic cycles were
related as follows:
One Kondratieff wave equals 3 Juglar cycles.
One Juglar cycle equals 3 Kitchin cycles.
Schumpeter (1939) considered that 'every Juglar so far observed..... is
readily divisible into three cycles of a period of roughly 40 months'. On
further research, Zarnowitz (1992) found that 'there was no good reason to
insist on any particular fixed scheme of so many Kitchins per Juglar and a
more relaxed approach may be more instructive'.

The Juglar Cycle and Kondratieff wave have interrelationships as crises

manifest when the 56 year sequences 'intersect' the sub-cycles based on
multiples of 9 years (McMinn 1997). Analyses of the Juglar cycle has
regarded the following crises as major turning points in economic trends.
1810*, 1818*, 1825, 1836*, 1847*, 1857*, 1866*, 1873*, 1881, 1890,
1900, 1907, 1913*, 1920*, 1929*.
Crises *asterisked fell in the 16 months ended December 31 of the years in
the 36 year sub-cycles Series 1 & 2 (Observed: 10; Expected: 3.6).
Furthermore, the 1825 and 1881 crises appeared in principal Sequence 09.
From the 56, the connection between the Kondratieff wave and the Juglar
cycle was only a general trend with no obvious periodic relationships
between these two business cycles.
The Kuznets cycle could at least in part be based on the 18 and 20 year
sub-cycles associated with the 56. Although there was some variation
from one measure of economic activity to another, Kuznets dated troughs
in his cycle at 1878 and 1896 and peaks at 1873, 1892 and 1913. The latter
three years approximate to the 20 year sub-cycle between Sequences 01,
21 & 41 respectively. After World War 1, Kuznets viewed 1921 as the
peak and the trough as 1931 (Seq 03).
The Kitchin cycle of around 3.3 to 4 years could not be aligned with the
longer term cycles.

Conclusions
The business cycles of economic literature are highly variable and
notoriously unpredictable. In contrast, the 56 year cycle is more far more
precise as crises tend to occur in certain select sequence years. This 56
year panic cycle has a major influence on economic trends, with a
significant impact upon the 45 to 60 year Kondratieff wave, the 9 year
Juglar cycle and, to a lesser extent, the 20 year Kuznets cycle. This implies
that these three cycles may arise from the one very complex cycle.
Unfortunately, no link could be confirmed with the short term Kitchin
cycle of 40 months to 4 years. To date, the 56 year cycle has only been
firmly correlated with the timing of financial crises, but not necessarily
peaks and troughs of financial activity. Furthermore, the 56 has to date
only been developed to an elementary stage of understanding. Much
objective research is essential to determine the intimate relationships
between the 56 and the four main economic cycles.

References
• Funk, J M. The 56 Year Cycle in American Business Activity.
Privately published. 1932.
• Goldstein, J S. Long Cycles: Prosperity & War in the Modern
Age. Yale University Press. 1988.
• Imbert, G. Des Movements de Longue Duree Kondratieff. La
Pensee Universitaire. 1959.
• Kindleberger, C P. Manias, Panics & Crashes. MacMillan.
[1978], 1989.
• Kitchin, J. Cycles & Trends in Economic Factors. Rev of
Economic Statistics. Jan 1923.
• Kondratieff, N D. Long Waves in Economic Life. Review of
Economic Statistics. XVII. November 1935.
• McMinn, David. Financial Crises & The Number 56. Twin Palms
Publishing. 1997.
• Michaels, J W et al. Echoes From a Siberian Prison Camp.
Forbes. November 9, 1981.
• Schumpeter, J M. Business Cycles. McGraw - Hill. 1939.
• Snyder, J M. Kondratieff - The Long Wave Cycle. Richardson &
Snyder. 1984.
• Zarnowitz, Victor. Business Cycles: Theory, History, Indicators
and Forecasting. The University of Chicago Press. 1992.

To cite this page:

David McMinn: Astro Economics & The 56 Year
Cycle
http://cura.free.fr/decem/06mcminn.html
-----------------------
All rights reserved © 2000 David McMinn

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