Month: April 2019

To do this correctly, we must link each of today’s generations with a recurring sequence of four generational archetypes that have appeared throughout all the saecula of our history. These four archetypes are best identified by the turnings of their births:

• A Prophet generation is born during a High.
• A Nomad generation is born during an Awakening.
• A Hero generation is born during an Unraveling.
• An Artist generation is born during a Crisis.

Biologically and socially, a full human life is divided into four phases: childhood, young adulthood, midlife, and elderhood. Each phase of life is the same length as the others, capable of holding one generation at a time. And each phase is associated with a specific social role that conditions how its occupants perceive the world and act on those perceptions.

Over the millennia, man has developed three ways of thinking about time: chaotic, cyclical, and linear. The first was the dominant view of primitive man, the second of ancient and traditional civilizations, and the third of the modern West, especially America.

The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode.

• The First Turning is a High, an upbeat era of strengthening institutions and weakening individualism, when a new civic order implants and the old values regime decays.
• The Second Turning is an Awakening, a passionate era of spiritual upheaval, when the civic comes under attack from a new values regime.
• The Third Turning is an Unraveling, a downcast era of strengthening individualism and weakening institutions, when the old civic order decays and the new values regime implants.
• The Fourth Turning is a Crisis, a decisive era of secular upheaval, when the values regime propels the replacement of the old civic order with a new one.

While the rebound was powered by an abundance of money at low interest rates, the Fed found itself ejected from the driving seat. Having made such a mess during the collapse, it had lost whatever prestige it once possessed.

That weekend Churchill had the star of The Gold Rush, Charlie Chaplin, as a guest at Chartwell, his country house in Kent–they had met in Hollywood when Churchill was visiting the United States in October 1929 at the tine of the crash. Over dinner Chaplin opened the conversation by saying, “You made a great mistake when you went back to the gold standard at the wrong parity of exchange in 1925.”

The editor of the Economist, Francis Hirst, who had fallen ill on a trip to the United States and was convalescing in Atlantic City at year’s end, captured the mood. “Rich people who have not sold their stocks feel much poorer…. The first result therefore, has been a heavy decline in luxury buying of all sorts and also a large amount of selling of such things as motor cars and fur coats, which can now be bought secondhand at surprisingly low prices. The favored health resorts have suffered… a very great number of servants, including butlers and chauffeurs, have been dismissed.”

But while the bubble lasted, it was the people who were the least informed who were the ones making the most money. As the New York Times described it, “The old-timers, who usually play the market by note, are behind the times and wrong,” while the “new crop of speculators who play entirely by ear are right.”

It was Maynard Keynes who had first articulated the political dimension to exchange rate policy in the Tract, back in 1923: “The level of the franc is going to be settled, not by speculation or the balance of trade, or even the outcome of the Ruhr adventure, but by the proportion of his earned income which the French taxpayer will permit to be taken from him to pay the claims of the French rentier.”