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The Kitchin Cycle

Although the Kitchin Cycle was named after Joseph Kitchen, in 1923, both he and W. L. Crum independently established the 40-month (approximately 4-year) cycle in various UK and US financial markets. Notably, during the period 1868 to 1945, the cycle completed like clockwork. More recently, it has begun to vary, ranging from between 40 and 53 months. It is believed to have been one of the secrets of success of the Rothschilds family.

The Juglar Cycle

In 1860 by Clement Juglar identified a nine-year general economic cycle, as well as a pattern of alternating periods of prosperity and liquidations, with the first planting the seeds for the second. These patterns were well established and predictable (showing little variance) between the years 1840-1940 and is commonly referenced to this day as the “Decade Cycle.” Historic data has borne out that there is a 9.25-year cycle in stock prices that has repeated 16 times since 1834. The chances of that occurring at random are approximately 1 in 5000, which adds considerable certainty to the validity of this cycle.

The Kondratieff Cycle

Named after the Russian economist Kondratieff, who wrote about it in a paper called “The Long Waves In Economic Life,” which was published in 1925, this is perhaps the most important cycle identified to date.

Kondratieff identified a long cycle in the overall activity of developed markets that takes between 48 to 60 years to complete, based on an extensive study of statistical data on markets in the US, Great Britain, France and Germany (his primary sources of data related to wholesale prices, interest rates, wage levels and indexes of production spanning the years 1780 to 1920.

Later work done by Joseph Schumpeter and Edward Dewey confirmed Kondratieff’s initial findings and refined the cycle length to approximately 54 years.