The Fourth Turning

There's a great article by James Quinn over at Financial Sense Online (hat tip NA) that I've just gotten around to working my way through - Boomers: Your Crisis has Arrived. If you have some time to spare, it is well worth a look.

Mr. Quinn has managed to provide many contemporary guideposts to the framework that was developed by William Strauss and Neil Howe when they wrote The Fourth Turning back in 1997 and the results are chilling.

In what has many similarities to Kontratieff waves for the world of economics and finance and, unfortunately for us Americans, is sure to only be exacerbated by what Paul Kennedy wrote about so brilliantly in The Rise and Fall of Great Powers, the Fourth Turning describes four distinct phases that society goes through over an 80 to 100 year cycle along with the types of personalities these phases produce.

The bad news is we're not in a good phase at the moment.

The good news is that there's one coming.

The really bad news is that it might take a while to get to the next good phase and things are likely to get pretty ugly between now and then.

The four phases are as follows and the start dates for the current cycle have been inserted:

• 1946 - THE FIRST TURNING – THE HIGH (Spring)
• 1964 - THE SECOND TURNING – THE AWAKENING (Summer)
• 1984 - THE THIRD TURNING – THE UNRAVELING (Fall)
• 2001 - THE FOURTH TURNING – THE CRISIS (Winter)

Have a look at the article to fill in all the details, particularly the personality types that correspond to each of the above. An interview(.mp3) with Mr. Quinn is also available as part of the weekly radio broadcast at Financial Sense - skip to about the 34 minute mark to get there directly.

Here's one part that was particularly chilling to me, in reference to the crisis period that we are now well into, a period that typically ends with highly destructive wars:

The external threat could be anything. Russia could invade Ukraine. Israel could attack Iran. When oil reaches $200 a barrel, disputes over drilling rights in the Arctic with Russia or China could cause a confrontation. Oil is the lifeblood of our society. If major shortages occur in the U.S. it would bring the country to a grinding halt. The panic would be so drastic that our Leaders will use every means at their disposal to get more oil. With the most powerful military on the planet at their disposal, and itching for a fight, our Leaders will manufacture a reason to go to war in order to secure oil supplies. The problem with waging a major war is that you need troops to sacrifice. The volunteer army will not do. When the government tries to reinstitute the draft, the fabric of this country will be torn to shreds. This will be where I get off this merry-go-round ride.

You can kind of see how this could materialize if all the money currently being created to cure the world's economies and financial markets actually succeeds in doing so and, all of a sudden, we have inflation-fueled economic growth and a big, bad global energy crisis.

ooo

Turning to the lighter side of things, here's this week's cartoon from The Economist: