The Art and Science of Cycles

The chart below was pulled from the book Cycles, The Science of Prediction by Edward Dewey and Edwin Dakin. Just so you know, the book was published in 1947 and is surprisingly well written. What is important to gain from this chart is the fact that it accurately predicted the high for inflation in 1979 (blue circles) and the low for inflation in 2006 (red circles).

There are some who feel that the use of cycles in determining trends doesn't stand up to the academic rigor of a finely researched economic or financial treatise. There are others who might say that using cycles to determine the future is hocus-pocus-gooble-dee-gook. However, the fact remains, in 1947 Dewey and Dakin published their findings that predicted that wholesale prices (inflation) would be at its highest point around 1979 and its lowest point around 2006.

These predictions takes into account all human action and reaction to causes and consequences of the conditions at the respective periods. How is this possible? I don’t know, but I find it fascinating and useful since it provides perspective that is necessary under such “crisis” conditions. Touc.