What Does Socionomics Tell Us About the Deflation Economy and Coming Greater Depression?


Robert Prechter, President of Elliott Wave International, has written about a new study of socionomics in his book, The Wave Principle of Human Social Behavior and the New Science of Socionomics (1999). In the book he predicted a adverse social mood change era evidenced by worry, xenophobia, pessimism, conservatism, thrift, savings and a basic retrenchment. A waning alternatively of a waxing. He is also on record saying the Higher DEPRESSION started in 2000 with the dot com bust and may last into 2016 with a 90% drop in most assets and 30% plus unemployment rate and finally that globe war three started 09/11/2001.

Xenophobia is the worry and loathing of strangers. Xenophobic trends enhance as economies regress into deflation and peoples attitude turns sour. In a deflation economy, individuals in basic grow to be afraid and consequently hateful of strangers. The mood of the total populace wanes. Pessimism rules.

Folks are rabidly against the Manhattan muslim mosque getting constructed in New York City. A current poll asked the query: Is it acceptable to erect a Mosque and Islamic Neighborhood Center close to the 9/11 site? 37% stated ” yes ” , 62% stated ” no. ” To me this mosque circumstance is a symptom of peoples mood change to pessimism. Fear and herding are both essential socionomic factors. Man is a herd animal and the herd does not want the mosque there. President Barack Hussein Obama Junior is undertaking a ” Wag the Dog ” by putting so much interest on supporting the Manhattan Muslim mosque. To “Wag the Dog” is a euphamism for when a politician begins a war or does some other diversion to get the heat off his back. President Barack Hussein Obama has a sick deflation economy and his Democratic Party is in trouble in the 2010 midterm elections.

In addition to xenophobia, for the duration of a waning mood swing society does not start off new companies, loan money or invest. The retrenchment we are possessing is textbook Robert Prechter Socionomics. According to him, socionomics is a marriage of sociology and economics that sees societal mood swings from constructive to negative and back once more as the driving force behind booms and a deflation economy. Also, the likelihood of war increases in the down-swings like we are getting now. Man is a herd animal so he cannot aid following the herd. Not the way to invest, by the way. Getting more as costs go up and buying ” hand over fist ” at cost peaks. Socionomics has to do with the adjust in the mood and minds of man from constructive to unfavorable. Man is a herd animal. So, he would get thrown out of the cave by the clan if he didn’t get along. Prechter also wrote the books: The ELLIOTT WAVE PRINCIPLE (1978), was written by Robert Prechter and A. J. Frost, C.F.A., about Ralph Nelson Elliotts discovery in the 1930s that rates trend up and then reverse in recognizable patterns. Robert Precther’s other books CREST OF THE TIDAL WAVE (1995) and CONQUER THE CRASH (2002) are each about deflation and the coming Greater DEPRESSION.

Prechter says markets and certainly all nature is governed by the golden ratio or golden quantity (phi) .618. Prechter reports that the basis of this theory is in the study of Fibonacci numbers and fractal relationships. He has located evidence throughout nature – even down to subatomic particles that validates his discovery. Remarkably, he has found investment markets follow Elliott Wave, socionomics, Fibonacci(1 number added to the prior number 1,1,two,3,five,eight,13,21,34,55-and so on), and fractals in predictable patterns that can be employed to make investment decisions.

When analysts speak about the .618 retracement level they are referring to Elliott Wave and Fibonacci quantity ratio studies and points where markets usually make a turn. Important Elliott Wave Fibonacci turning points are .382 – .50 – .618(phi also recognized as the golden number, golden mean or golden sextant ruling all) – 1.382 – 1.50 – 1.682. Not adequate attribution is given to this important number despite the fact that awareness is expanding in the investment and monetary globe.

The socionomics book is an explanation of Elliott Wave Principle of (5 waves impulsive then 3 waves retracing) relating to Prechter’s marriage of sociology and economics.

Robert Prechter has located several situations of Fibonacci, and fractals in nature and in human relationships along with Elliott Wave Principle such as:

1. Most anything that can have statistics gathered and then charted will show five waves with a three wave reaction.

2. Spirals in seeds, hurricanes, sheep horns, snail shells if you do the math are Fibonacci numbers.

3. Branches in trees, arteries, brain, lung, nervous system and vein building. Phi apparently enables far more efficiency and robustness.

four. Stock, bond &amp commodity markets in brief and long time frames Given that man is a (herd) animal and the stock marketplace is a compilation of the work and sector of a mankind in total, the charts of these financial instruments show Elliott Wave Principles, fractals and Fibonacci in seeking back and predicting future (retracement levels).

5. 5 pointed star or a spot on a line all math is Fibonacci.

6. Social man – self organizing progress ruled by Fibonacci mathematics due to the fact it makes it possible for the greatest efficiency and robustness. Precter has tracked use of words such as deflation and found they fit the 5 wave impulse and 3 wave retracement Elliott parameters and turn at Fibonacci ratio points.

7. Arboration. Not just the branching angles bigger to smaller as 1 travels out from the plants base, but how stems and leaves each rotate about the base and spread to optimize the sunlight they obtain. All are Fibonacci number based ratios.

8. Fractals – think broccoli – every single small spear is a mirror image of the huge bunch. Believe tree – branch is image of whole. Believe coastline – edge of tide pool appears very same as if hunting down from airplane.

9. Proof clear down to subatomic particle behavior. Particles bouncing off walls of container look like coiled ferns which if you do the math are related to Fibonacci.

ten. The limbic system in the brain relates to emotional feelings and guides behavior necessary for self-preservation and the preservation of the species. If early man did not get along with the clan he was thrown out of the cave to freeze to death or was stoned to death. Likewise, if he did not run with and comply with his clan he was likely to get eaten by wild animals or get left behind and starve to death. So, now mankind invests the very same way. Purchasing more and much more as costs rise (evidence is the current true estate top).

Socionomics says following the herd is not the way to invest. Like the lemmings (tiny rat-like rodents) all following each other to death more than the cliff and into the sea to drown in a mass suicide. It is not the way for you to survive either. When the massive cycle goes into reverse there is no stopping the pendulum and no quantity of government income thrown at the issue will get it to swing the other way prior to it is ready as well. The excess waste, credit, government, guidelines and regulation – all the darned excesses – will come back down to reality.

“Those who can not keep in mind the past are condemned to repeat it.” George Santayana

We have only identified inflation in our lives. We are in denial that deflation and depression can come about. Stocks are sliding down a slope of hope. Men and women are worried and their mood is receiving ugly. That is what socionomics is all about.

Socionomics describes the waxing (constructive-optimistic) and waning (damaging-pessimistic) of peoples mood and how they react en mass.

No matter how numerous trillions of dollars the government throws at the dilemma, they would be better off minimizing taxes and letting business develop the new jobs.

Much better to be a contrarian investor now than to lose it all in the coming Higher DEPRESSION.

There are new ways to invest to short stocks that for each a single dollar invested you could get back numerous more. With the new, ETFs (exchange traded funds), as well as actual brief the market place mutual funds like BEARX or the URSA fund you by no means get a margin contact or run out of time. But, you have to get in on these early and right here in 2010 we are halfway into the greater secular bear marketplace. A lot of of the short-the-industry ETFs are house of Proshares or ishares.

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