The Celestial Wheel   Through The Millennium Contraction   An In-depth Forecast July  4, 2010       Back To The Celestial Wheel

Through The Millennium Contraction

Introduction

    The December 2007 In-Depth Forecast, Through The Second Gilded Age, examined the Second Gilded Age ending in 2008 and predicted a seven year contraction to follow -  the Millennium Contraction.

     That prediction has been proven out, in spades.  This Forecast updates Through The Second Gilded Age with additional detail as to timing, impacts and trends.

Mapping The Millennium Contraction Via Planetary Cycles & Transits

     Vedic Dasas, commonly known as Planetary Cycles, constitute the underlying planetary karmas (influences) for prediction.  The Celestial Wheel has long compared these with traveling down the river of life -- each river section corresponding to a Planetary Cycle.  This analogizes to a river's water source and the geography through which it flows.  As examples, the vibrant flow down from the mountains is like abundant and optimistic Jupiter.  A deep, dark and sluggish flatland channel compares to industrial Saturn.  An idyllic stretch through meadows is beautiful Venus.  Roaring and dangerous rapids is Mars.

     Transits, where the planets are in today's skies, are like weather events on the river.  Some transits damage, like flooding rains, hurricanes and tornados.  These bring events specifying how and when the Planetary Cycles' karmas actualize.  Like a weather forecaster, it's the dangerous ones the astrologer sees and that merit reporting to warn of danger.  But transits don't change the Planetary Cycles' river sections' fundamental qualities -- even as they can sometimes alter the course.  Naturally, these two planetary influences work together for predictive purposes.  Like a weak earthen levee can be over-washed, a Planetary Cycles' sensitive stretch of the river is vulnerable to a flooding transit.

     The U.S. 10 year Moon cycle beginning in November 1998 brought the Second Gilded Age.  9-11 was a companion transit, modifying the perceptional Moon's intoxication with power, mystical paranoia and greed to create the worldwide war on terror.  This changed the economic focus from domestic to international, most notably invading Iraq for its oil.  Four years later, New Orleans wasn't rebuilt after the Hurricane Katrina transit because of Gilded Age corruption and selfishness.  Yet, neither of these events changed the Moon cycle's essential nature, for we still experienced a Second Gilded Age of wealth gains for the rich, a debt-laden real estate bubble and auto industry bankruptcy.

     The 7 year Mars cycle that followed the Moon in December 2008 brings the Millennium Contraction -- a Celestial Wheel term.  The August 1, 2008 solar eclipse (a transit) exactly on the U.S. Rahu in the eighth house of calamity, precipitated an early start in September of the economic slide.  The April 2010 BP oil spill was a transit expressing Mars' violence.  That it matched up with the Mars planetary cycle made it horrendous.  The spill worsens and hastens the Mars Planetary Cycle's inevitable economic losses.  But the spill also changes this river section's course -- reining in giant corporations, stimulating environmental awareness and ending the age of oil.  (Recall past energy shifts from wood to coal in the nineteenth century and to oil in the twentieth.)  These, and other reforms, begin during this Mars planetary cycle to pave the way for the rebalancing society in the upcoming 19 year Rahu Planetary Cycle's Second Progressive Age.  The reason Mars' Planetary Cycle brings both economic loss and reform in the U.S. chart is because active Mars rules both the twelfth house of loss and the fifth house of merit and good deeds.

(Note:  Mars is the planet of war and not good in the U.S. chart.  This Mars Planetary Cycle has even resulted in U.S. companies not getting oil leases in Iraq,  Risk-tolerant China investing heavily in Iraq as U.S. companies hold back  Thus the greedy Moon cycle's goal is denied under Mars' cycle of loss from war.  Consider too that a primary aim of the Afghanistan invasion was to secure the country for a natural gas pipeline and to mine its mineral reserves.  That war appears to be lost, denying again during the Mars Cycle the economic gain.)   

Timing The Millennium Contraction

     Beyond being a sequel to, Through The Second Gilded Age, this analysis builds upon the April 2009 In-depth Celestial Wheel, Global Economic Outlook Into 2012 And Beyond.  Although both the the U.S. chart and the New York Stock Exchange were analyzed to arrive at the following conclusions, the U.S. chart is primary -- because the Celestial Wheel offers economic, societal and business forecasting, not stock predictions.  The added Planetary Cycles are for the U.S. chart --Mars major first and the minor Cycle second.

     #1  (From April 2009)To the spring of 2010, Mars/Rahu has seen a seesaw economy,, with the stock markets recovering from the DOW's 6500 low in March 2009.  But then the Mars transit brought the depressing oil spill, reversing fortunes.

     #2  The next 12 months to the spring of 2011, Mars/Jupiter is also actualizing, with some economic strength returning.  This, however, has been an uneven recovery favoring big corporations.  Deflation has harmed small businesses and individuals.  Lowered consumer demand, prices and wages and increasing unemployment are the primary drivers.  Too, real estate continues to flounder.  The upcoming transit collision of Mars and Saturn from late July into August will be another impactive transit.  Look for:

     (a)  Further harm to residential and commercial real estate.

     (b)  The stock market knocked down.

     (c)   Economic growth to stop. 

     (d)  The BP relief oil wells will fail and the leak could become worse.

     (e)  Israel will attack Iran.

(Note:  This difficult Mars/Saturn conjunction transit additionally includes debilitated Venus, bringing further stresses.  And, Jupiter will be weakly retrograde -- unable to offer its usual protection.  This transformational transit will be fully analyzed in an upcoming Celestial Wheel Short-subject Commentary, including the date range with specific sensitive dates.)

     However, Jupiter's protective and expansionary influence will start bringing the U.S. back from the abyss in the fall and continue through the spring.  Although this may sound unbelievable, the twelve months from the spring of 2010 to 2011 (Jupiter subcycle) is the best year in the seven year Millennium Contraction -- just as there were intervals of recovery during the long Great Depression.

(Note: putting this on a calender basis, the December 2009 In-depth, U.S. And Global Economic Trends For 2010 characterized the year as a seesaw.)

    #3  From the spring of 2011 to 2012, Mars/Saturn will bring major losses and the next big economic drop in The Millennium Contraction.  Thus, we will see it's not the Great Recession after all.  A harmful transit of Mars with Jupiter opposite Saturn in late April 2011laucnhes this twelve month interval with a crisis.  At that time, dissolving Ketu in transit will also cross birth chart Mars, signaling a gas/oil crunch, a stock market crash and/or a major violence.  Malefic Saturn in the U.S. chart is extremely damaging to income, industry and business in general.  The U.S. ran it's 19 year Saturn Planetary Cycle beginning in 1929 -- the Great Depression.

     4.  From spring 2012 to 2013, Mars/Mercury.  The last time the U.S. ran Mars/Mercury Planetary Cycles was in 1892 to 1893, when the Financial Panic of 1893 occurred.  This was the First Gilded Age's real estate boom's bust.  That four year depression, the worst in the U.S. history to date, was set off by transits -- a Mars/Saturn opposition followed by a Mars/Rahu conjunction.  (Note: some claim that 1873 was the big drop, but then how could the expansionary First Gilded Age have already begun and peaked in the 1880s?)  However, there is no major damaging transit to set off a major bust during Mars/Mercury.  The Mayan Calender's end in late December 2012 will bring a mostly psychological jolt that will end with a whimper, just like the heralded Harmonic Convergence of 1987 and the new millennium in 2000 (actually 2001) brought only false hysteria.

     5.  The next 12 months to spring 2014, Mars/Ketu & Mars/Venus signals the collapse of the dollar as U.S. sovereign debt service exceeds the ability to pay and confidence is lost in this fiat currency.  (Fiat means not backed by gold/silver, just the government's promise to pay through the ability to tax.  It is literally defined as decree.)  This is the long-delayed debt bomb explosion.  Mars/Ketu, 6/13 through 10/13, is a difficult Planetary Cycle signifying revolution, and in mid August 2013, transit Saturn and Rahu conjoin, signaling that collapse.  While inflation will precede and stimulate the dollar collapse, devaluing the dollar will cause interest rates to skyrocket.

     6.  From spring 2014 to 2015, Mars/Sun will see a resumption of the gold standard at least partly backing the dollar.  The U.S. remains the world gold leader,  The Treasury Department has 261.5 million ounces of gold in its reserves, representing about a third of the gold stockpiles held by governments around the world.  The planetary karma here is that the Sun signifies gold.  Economic struggle will continue, but some stability will begin to emerge as currencies have real value.)

     7.  The final 12 months considered here, beginning in the spring of 2015, Mars/Moon will see the Millennium Contraction over and economy beginning to recover.  The Moon's metal is silver, suggesting silver coinage and perhaps silver bullion at Fort Knox to augment gold bullion there.  In any event, the age of fiat currency will be over, and money will only be worth as much gold/silver as it is actually backed by the government and/or worth its weight in coinage.

     Conclusions  The Vedic flashlight illuminates more faintly the distant karmic path, making predictions for the last few years of The Millennium Contraction less reliable. 

     While Planetary Cycles are reliable indicators, potent transits are very difficult to see and interpret.  Further, they must be understood within the context of  future circumstances.  Consider, for example, how the situation changes if we pull out of Iraq and Afghanistan completely because these wars are unaffordable, if Saudi Arabia runs out of oil or the government falls (a long standing Celestial Wheel concern), if Iran gets the bomb, if Israel falls, if Hilary Clinton becomes the next President, if China's peasants revolt...  (Glenn Beck losing his mind doesn't count here.)

     However, this seven year Mars Planetary Cycle's section of the river of life is effectively mapped out.  It repeats the U.S. chart's sequence in the late nineteenth century: 

     The first 10 year Moon cycle in the 1880s brought the First Gilded Age. 

    The first 7 year Mars cycle in the 1890s brought a four year deep depression --  the Financial Panic of 1893.  This was a real estate bubble bursting and railroads failing.  Notice that this second Mars cycle from late 2008 to 2015 also brings real estate and transportation failures, the latter for the automobile industry.  This results because Mars signifies landed property and is conjunct Venus, the planet of vehicles, in the seventh, a house relating to business. 

    The third Planetary Cycle in this sequence was the 18 year Rahu, which brought the First Progressive Age under Teddy Roosevelt.  Those reforms began rebalancing society to regain shared democratic values.  The Second Progressive Age will begin then, in 2015. 

Private Sector Deflation

     The private sector of the economy has seen prices of goods and services dropping since the fall of 2008, when the Millennium Contraction's Mars Planetary Cycle begin with the stock market tumble and the real estate bubble burst.  (Note: Because all real estate is local, in some areas prices peaked in the summer of 2005 and began to decline the next winter.  In other regions, where prices had not escalated, they held through 2008...)

     This is a purifying process, cutting the fat out of the economy.  Health care currently runs 17% of GDP, while the rest of the world spends only 8%.  Over half has to be cut out, which should give pause to everyone pursuing health care as a career.  Alternative health care, though, will continue to prosper as people seek both less costly care and preventative medicine -- so they don't have to go to conventional doctors.  The primary deflationary area, however, is real estate, which bubble was based on Gilded Age greed, not value, and the bursting of which brought the Millennium Contraction.

      The First Gilded Age bubble followed by the burst beginning with the Financial Panic of 1893, The huge spike in unemployment, combined with the loss of life savings kept in failed banks, meant that a once-secure middle-class could not meet their mortgage obligations. As a result, many walked away from recently built homes.  From this, the sight of the vacant Victorian house entered the American mindset. In near the future, we will have haunted McMansions.  I recently joked with a client suggesting he find a bulldozed MeMansion and convert the remaining basement into a home.

Real Estate Deflation

     Since this is a real estate bust caused contraction, it's the core area of concern.  Further, because the housing industry is both such a large part of the economy, and also impacts everyone directly, it's key to measuring the Millennium Contraction's  impacts upon American life.  Below is the Case/Shiller Home Price Index Graph since 1880.  It is the sole accurate housing price study and includes ongoing reports.

     Note the First Gilded Age Bubble in the 1880s, followed by the its bursting with the Financial Panic of 1893.  Real estate prices actually were volatile until World War I, when they fell again.  It wasn't until after the Great Depression that real estate prices recovered with the post-war housing boom.  Prices were then flat, except for a couple of inflation-inspired blips, until the Second Gilded Age.  This bubble dwarfs the late 1800s bust when Victorian Mansions became haunted houses.

    Draw a line from the 1880s through the 20th century to see that real estate grows in price very gradually over the long term, in line with inflation-adjusted per capita income -- about $100,000 to $120,000 in over a century (the left vertical axis).  Extend this line a few years into the future to see the current bust has a long way to go down, about another 20% from $150,000 to $120,000.

     If we apply this 20% as a general deflationary guideline, then that will be the reduction in the size of the economy during the remainder of the Millennium Contraction.  However, this is a very broad brush.  Beyond health care being bloated over 100%, aren't there too many shopping centers, restaurants, hotels, golf course, ski resorts, vacation homes....? 

     This next Case/Shiller table shows average home price changes in select metropolitan areas in four intervals since the real estate burst began.  We can readily see the largest decreases have been in the hottest markets -- the Southwest and Florida -- as well as Michigan, hard hit by the auto industry collapse.

     Another factor to understand is that all real estate is local, for being immobile and relating directly to local economies.  Location, location, location.  Your town may suffer more or less, and in some locales, prices have held steady, or even gone up.  There is the additional factor that as the oil age ends, so does cheap transportation.  Outlying areas (exurbs) become unsustainable as people move to higher density, close-in neighborhoods.  In any area, a home outside the beltway will lose value compared to a home in an older suburb near the city center.

     Finally, as housing will continue to deflate about another 20%, you can use this table to make a rough estimate of  what values in your area will be by the end of the Millennium Contraction in 2015.

(Note:  One obvious question, is why haven't housing prices increased more?  The answer must be technology, coupled with the age of oil, has made home construction more efficient.  In the nineteenth century, houses were built by primarily hand labor with railroads doing long distance hauling of lumber and other supplies.  As the twentieth century advanced, oil powered machines took over -- from the lumber industry to trucking, to manufacturing components to construction with power tools, to improved building products...)

     To get an idea of where housing will end up, read this article, When Less Was More,

     Beyond geographic variables -- regions, individual communities and distance from urban cores -- size is basic.  Already prices per square foot have declined for large houses and increased for small ones, similar to used car prices for SUVs has dropped and high mileage cars has increased.

    After the First Gilded Age, not everyone abandoned their Victorian Mansions. The very rich kept theirs.  Many others were converted into inns, rooming houses and apartment buildings.  Or, the owners stayed and carved out rental spaces --rooms or apartments, or converted outlying buildings into apartments -- carriage houses, caretaker cottages and servant quarters.  Expect to see this trend repeated to shrink house sizes back down.  However, municipal zoning regulations can prohibit subdividing your home, however, as can homeowner association rules in many subdivisions -- single family and townhouses.

     Condominiums cannot generally be subdivided like free standing homes.  These have their own homeowner association regulations, and too, it's often not physically feasible to create a second apartment within an apartment.  

     Also expect more vacation homes to be put on the rental market.  There's already a glut here with the lodging business in the doldrums.  Rental rates will continue to drop, and sales prices will tumble over the next several years.  Resorts with vacation homes and/or condominium units are already suffering, and some must go out of business.  Time-shares, always overpriced and only marketable in a strong real estate market, are literally real financial death traps now.  Many will simply close as owners don't pay their mortgages and maintenance fees.  While all second homes and vacation homes have significant downside risk, those in more remote locations will deflate the most. 

    If you are in the market for a home or condominium for your primary dwelling you have risk of buying a depreciating assets -- going underwater on your mortgage.  Consider a lease/purchase option in which you rent a home for several years with the option to purchase it in the future at the then current market price, determined by multiple appraisals.

     An excellent way to learn about buying or selling your home is Home and Garden TV (HGTV).  Househunters shows what kind of houses people want and prices in various locations -- although it's pretty obvious many still want houses that are too large and luxurious.  A couple with a baby simply doesn't need, and will not be able to afford long term, a 3000 square foot 4 bedroom house for $400,000 or more.  There's a lesson here -- that just like cars and other products, fashion drives the market.  But, you can change your wardrobe, hairstyle or even your vehicle, quickly and inexpensively, but not your home.

Transportation Deflation

    As stated above, the Millennium Contraction also involves transportation (automobiles), as the first Mars Planetary Cycle in the 1890s brought a transportation bust in railroads.  I believe the history books will mark the bankruptcy of General Motors and Crysler as both the signal event and the beginning of the end of the age of oil.

     Certainly, smaller cars, hybrids, electric cars, scooters and now electric bicycles are already transforming the way we move around.  Railroads too a making a comeback as long haul trucking has become increasingly expensive.  Recall my discussion about this in my scooter trip chronicle, in the section, The Railroad Men And Warren Buffet.  Buffet bought the railroad because he correctly saw the lower freight costs compared with trucks.  Mass transportation, especially subways and light rail, will prosper.

     All of the changes deflate the transportation sector's large, expensive, polluting and inefficient age of oil vehicles.  Perhaps even already efficient trains will one day abandon the diesel engine.

     Beyond planning your own personal transportation transformation, the end of the oil age promises excellent investment opportunities in these emerging transportation alternatives.

Inflation

     When the Millennium Contraction hit with full force in the fall of 2008, the U.S. government bailed out the banks -- TARP.  The Federal Reserve also acquired massive amounts of bad loans and kept interest rates low.  These actions basically transfered private debt and losses to the Federal Government.  The new Obama Administration tried to reverse downward trend with an economic stimulus package in February 2008.  Other nations followed suit.

     The result was a transfer of debt and loss from the private sector to the public sector, creating huge deficits and burgeoning sovereign (national) debt.  Thus debt bombs result.  These were predicted in the U.S. And Global Economic Trends For 2010 and began to happen this spring in Europe.  But just as the Dutch boy put his finger in the dike to stop the leak, governments will stave of debt bombs exploding until the summer of 2013 -- which will certainly be unstoppable by then.

     There is the argument going on now whether to continue government stimulus programs or cut spending/raise taxes to balance the budget.  Hoover tried the latter in 1932, and that just plunged the economy into the basement.  This is the route the Tea Party advocates.  On the other hand, continued stimulus spending is the only approach to shore up the private economy and also keep state and local governments from massive cuts and bankruptcies.

     This fall's midterm elections will be be the pivot point in which direction the U.S. goes.

     Unfortunately, the above analysis -- Timing The Millennium Contraction -- predicts the U.S. sovereign debt bomb will explode in the summer of 2013, resulting in the dollar being devalued and major inflation occurring.  There's no fix because sovereign debt will have become unaffordable.  As the dollar is worth less, prices of everything will skyrocket.  Similarly, debt bombs will also go off in other countries, especially European.  Excessive government debt is a global issue.  There won't, therefore, be either another source of economic strength to avert the fall of the fiat currencies, nor nowhere else to hide.  The result of a devalued dollar causing high inflation upon a deflated private economy will causes prices to rise dramatically.  Decreased income coupled with escalating prices of goods and service is a recipe for a real depression.

     One can make the argument that it's better to balance budgets now rather than later to shorten and reduce the pain of economic contraction.  The longer it takes for the collapse of fiat currencies under the weight of sovereign debt, the worse it will be.  I don't know the answer here, and even though this appears to be a fixed karma, there remains the possibility of finding a safe path through this fiscal and monetary swamp to dry ground.

     Let's hope that in the current U.S. Planetary Cycle of Mars with Jupiter that Jupiter's wisdom and judgment will prevail in this fall's elections.  Popular Protests is the driver here.  As stated in the June 10 Popular Protests about the June 8 primaries, in which extremists did not do well, One interesting trend in these elections is that voters were seeking positive and achievable solutions for the Millennium Contraction.

But, It's Not Over 'Til It's Over

     There is, after all, free will, and the U.S. chart is characterized by both a roller coaster economy and tremendous wealth in both material and mental assets.  Since 1790, the U.S. has had as many as 47 recessions, which averages out to one within each five year period.  Well, haven't there been as many expansions?  These result from not just this chart's tremendous abundance, but also from luck, which is a real and tangible karma.  We all know people who are lucky, and we all know those who just can't get a break. 

     Mental assets are magnified by an increase in education, knowledge, population, technology and communications advances and globalization.  Consider too the advent of genius, like Thomas Edison, who transformed society?  Isn't it possible that Steve Jobs is another Edison, or that one or more other geniuses are working quietly away on inventions that will resolve problems appearing insurmountable today? 

     Beyond Edison, America has been incredibly enriched by scientists like Einstein and Tesla, and pioneer industrialists such as Henry Ford and Thomas Watson (IBM).  The internet, which is akin to global consciousness, now links budding geniuses around the world at light speed.  If Native Americans could have gone on-line, they would have had the wheel!  Plus, computers enable computations impossible during Einstein's era, when he truly only had a pencil and paper. 

     Imponderables is a good word here.  Certainly the most dire circumstances, nor The Celestial Wheel's interpretation of just one nation chart, can determine or predict the future welfare of humanity.

Planning Your Future

    This forecast paints a sobering picture, but that doesn't mean there aren't safe routes to high ground on the far side of the swamp, even as you may have to wade through some spots.  There is always a path ahead for everyone, although necessary changes upset established habits and require some inevitable sacrifices. The subject matter here was to broad to include comprehensive suggestions, although I offered many pointers.

         There is a rising tide of concern, often hysterical by many investment newsletters, about future inflation.  It does seem inescapable the era of fiat currency is nearly over.  Paper without backing has revealed itself as an empty promise with no check over the banksters' greed and politicians' lack of restraint.  Countries must thereby return to a gold and silver standard, as there is real value to these precious metals -- which holds everyone to rational economic choices and real consequences for their actions.

     It would be a good idea to hedge your your own personal future with some silver and gold.  Returning currencies to a precious metals standard will require countries stockpile more gold and silver, which is why China, India, Saudi Arabia and others have made large gold purchases recently.  This is also the reason investors have bid up the price of gold 400% since 2000 and silver has followed closely behind.  Still, gold carries some risk for its small quantities, manipulation by central banks and banksters, new discoveries inflating small supply and the emotional grip gold has on many -- jittery gold bugs.  See, Uncertainty Restores Glitter to an Old Refuge.  And, gold's high price makes purchases difficult -- like buying stock priced at $200, compared with $20.  Investing in gold requires a long term commitment, reserves you don't need to dip into and nerves of steel to sit through sometimes large price drops. 

     Silver is a safer, easier and a more negotiable investment -- as discussed in the April 18 Celestial Wheel, Here's The Deal On Silver.  Since then, Texas has issued its own silver coin.  Republic of Texas Begins Minting Private One-Ounce Silver Proof Medallions is strident, even inflammatory, but the rational is sound.  Silver coins and one ounce bars are the ultimate savings account -- which you can hold in your hand.  These can be easily bought and sold at neighborhood coin shops in small amounts, even used for everyday purchases.  This last, alternative currency with real value, is Texas' sound strategy to protect its citizens.  You can can keep silver in your safe deposit box or in your home -- even bury some in your yard if you wish.