Friday, June 27, 2008

The Kondratieff Wave (Kondratiev Wave or K-wave) theory is proposing the existence of the extra-long, 50+ years long cycles of growth in the modern market (capitalist) economy. The theory was proposed in 1920s by Russian economist Nikolai Kondratiev.

This site has a purpose to maintain the reference to the educational online resources that will allow anyone to quickly study the K-wave theory as presented in modern blogosphere and analyze the applicable charts and trends. It is also useful as a practical tool for long-term financial planning and investing.

I. Credit Cycle

    1. The Great credit cycle. This article introduces the supercycle, secular credit trends, accumulation and unwinding of credit
    • Historic Debt/GDP ratio sinse 1860
    • Historic mortgage debt in USA
    • Country-by-country credit growth in the last three decades
    • Cost/benefit ratio of the credit growth
    • Debt and savings rate

    2. Monetary base and interest rates. The long-term trends of interest rates and monetary base in the context of K-wave

    • The anomaly of 1990
    • Historic changes in monetary aggregates - M1, M2 and M3
    • Corporate and government interest rate trends
    • Trends in money supply and yields split the credit accumulation phase into two parts
    • Spike of the interest rates at the beginning of the credit unwinding phase
    • Credit crunch of 1990s in Japan

II. The Seasons and the Feedback theory

    1. The Seasons. The K-wave could be divided into four seasons: Spring, Summer, Autumn and Winter
    • Introduction into seasons
    • Stock market cycles and seasons
    • Kondratyev wave and the world

    2. The feedback loops

    • Positive and negative feedback loops
    • Vicious and virtuous cycles
    • Feedback loops in Kitchin cycle
    • Bifurcation points and season overlapping

III. Every Season in detail

    1. Summer and the Lemming theory
    • Inflation and hyperinflation
    • Corporate profits during Kondratiev Summer
    • Monetary base and Velocity
    • The Vicious Cycle
    • The Lemming theory
    2. Transition to Autumn
    • The Masters of the World
    • Paul Volcker
    • The Feds role
    3. Autumn and Minsky theory
    • The theory of Hyman Minsky
    • The Summer legacy
    • Bond market and asset prices
    • Savings rate and the “Global savings glut”
    • The Ponzi units
    4. K-wave: the Housing Bubble and the Lemming Theory
    • The secular Bull and Bear markets
    • The Housing Bubble
    • The Lemming Theory
    • The Social vs Economic conditions
    • Rising asset prices
    • The feedback loop in Winter of 2007
    • Estimates for the stock market
    5. K-wave: The Master Bubble
    • The world trade
    • The call for dollars
    • The patchwork for the global trade
    • The case for W shaped recession

External Sources