Note: The original version of this post was written in January 2016 which describes economic patterns by combining social cycle theory with Adam Smith's maxims into a single predictive model. It has been rewritten here to be more concise.

Update April 2020: The crisis years are finally here! The crisis came 15 months later than my model predicted. If I have time, I'll write another post as The First Crisis Year 2020.

2020 is just the start.

Welcome to the Pre-Crisis Years (2016-2018)
by Juan, January 2016

In my earlier posts, I designated 2019 as the spark of a global stagflation. This stagflation will increase from 2020 onwards up to 2030 when it will reach its peak, culminating in some kind of conflict. A stagflation is a phenomenon which has low employment and output while having high prices at the same time.

A Primer: The Metaphysics of Societies

According to Eastern social cycle theory, history repeats itself because humans are bound by Nature which is dualistic in itself. Nature is dualistic because existence necessitates two forces:

  1. A force for the Creator
  2. A force for the 'createe'

A universe with just a Creator and no creation is worthless, while a universe with just creation and no creator nor maintainer will cease to exist instantly if ever it could exist.

In Taoism, this duality is called Yin and Yang. In Hinduism, it is called Shiva and Shakti. In Western Christian philosophy, this is roughly similar to God and the Devil (I make this analogy even though this Christian perspective is absurd, just to associate the eastern idea to something familiar to the reader). This interaction between the two forces creates a recurring pattern while their existence is in force, just as the two forces of the Sun and outer space create a tug-of-war for the Earth manifesting as its orbital pattern. We will use the name Shiva-Shakti since its principles are better known, so that a gravitation that pulls the Earth to the sun is a Shakti-force, while the vastness of space is a Shiva-force.

Social Cycles

David Hume explained that, among human organisms, the concept of the self arises from human experiences which come from human senses which are limited by nature. When you buy a stock, you won't know if its price will rise or fall because you cannot sense all the thoughts of all the other buyers and sellers of that stock. So you buy it based on your own limited sensory experiences. Putting this under the two-forces model, we can say that the rise in stock prices is a manifestation of the Shiva-force, while the decline of prices is from the Shakti-force.

David Hume is the big daddy of our Superphysics  from which SORAnomics comes from

When you combine all of your individual experiences, it forms the metaphysical idea of your self-organism. When all the individual experiences of all the people in your country are combined (self-organisms), the result is the metaphysical idea or identity called a society-organism. Each society-organism then expresses its collective experiences as events. A stock bubble is a manifestation of a society-organism wanting or choosing stocks (as shiva-force). A presidential election is a manifestation of a society-organism choosing a leader (also as shiva). A war is a manifestation of a society-organism wanting a fight (shakti-force) with other society-organisms, and so on.

Through time, these desires and experiences form a pattern which manifest as social cycles, representing the force from the metaphysical Creator of humans and the physical Nature where humans exist. Our social cycle model applies on all events, but is easiest applied on presidential elections and economic events since they have very granular and detailed data as votes and prices, respectively. It can even be applied on sporting events because a team is also a society-organism made up of its team members and the score is the objective data that can be modeled, with the two forces being the desire of each team.

Our social cycles model comes from Plato and the Hindu varnas

Basically, the model starts with data from the 13th century as written by David Hume and Adam Smith (who also happened to be historians). I then filled in data from the 18th century, after Hume and Smith died, up to 2013 in order to see if the social patterns continued. If a stagflation does spark in 2019, then the pattern would be continuous. Note that such a pattern really represents the cycle of Western society which has imposed itself on the rest of the world through the colonial period, which then manifests as the political and economic systems of most countries. The cycles of China* might be different, meaning its stock bubbles are its own thing and not really a part yet of the Western cycles which we are predicting here. (The problem with Chinese cycles is that none of us can read Chinese so we can't get data to plot.)

* For now, my hypothesis is that there are two Chinese waves or cycles that either battle each other or alternate every 200 or so years -- the original Han wave from the Qin Emperor, and the foreign non-Han wave from the Mongols, Manchu, and other Warring States. The Han wave now rests in Taiwan, while the non-Han wave rests in Mainland China. Those two waves must battle out or get absorbed by a historical habit every hundred or so years, a process that has its roots with the Qin emperor, just as Western Europe fights Eastern Europe regulary as Romans vs Germanics, Catholics vs Protestants, and Americans vs Soviets

The Coming Stagflation is a repeat of the 1930's Depression, but with inflation

In the simplest terms, a stagnation is a non-growing economy, a depression is a declining economy, and a stagflation is a declining or non-growing economy with rising prices. The Great Depression began as the "Roaring Twenties" which degraded into a long recession which had to be relieved by a World War* as a reboot of the Western society-organism.

The ultimate cause of the depression was that the rich people from the Roaring Twenties wanted to be even richer, so they invented stock speculation (borrowing on margin) and imposed tariffs on imported goods. But Adam Smith said that societies have a natural level of productivity. If you exceed this level, you will be getting nothing back, and this nothingness (no revenue to match the investment) manifests as a crash. And that's exactly what happened in the Great Crash of 1929.

In businesses which can only be transacted with money, that money can always be found. If they do not find it, their failure is caused by their unnecessary and excessive enterprise, not of their poverty. It is not because they are poor that their payments are irregular and uncertain, but because they are too eager to become excessively rich.The Wealth of Nations Book 5

Suddenly, the US economy became nothing after 1929 and the US society-organism became weak. This empowered German, Italian, Japanese, and Soviet society-organisms to push their own ego-experiences as Nazism, Fascism, Bushido, and Communism respectively, leading to a metaphysical clash of ideas leading to a physical world war (David Hume wrote that mentality creates reality).

By applying Adam Smith's economic metaphysics, we can say that the 2008 Financial Crisis had similar dynamics as the 1929 Great Crash and secular stagnation is the current version of the Great Depression. Investment banks were already rich, but they wanted to be even richer so they invented speculative derivatives which would return no revenue.

Stagflation, Revolutions, and Conflict All Come From the Monkey Nature

In the 1970's, those rich were the oil companies and the Arab states who suddenly became wealthy from having more petrodollars from rising oil prices, and the dictators of Latin American countries who suddenly were able to borrow those excess petrodollars. The sudden wealth created inequality and inflation, which oppresses the poor the most.

A visit by Imelda Marcos to the Shah's Iran in 1971. The shah was deposed in 1979 while Marcos was overthrown in 1986 after plunging their countries into poverty and inequality.

The end effect depressions and stagflations are conflicts or wars, since they are the only ways for the human mind to naturally relieve itself of the oppression from poverty and inequality. This in turn is caused by the fact that our species evolved from monkeys and monkeys do not want inequality. The 1930's Depression was relieved by World War 2 and the 1970's Stagflation was relieved by the Arab-Israeli conflict and global Communist insurgency.

*As a monkey-based species, war and conflict is the natural solution of humans to injustice whether political or economic. Note that the greed which creates crises in the first place are also monkey-based propensities since we do not see cats and dogs fighting over objects.

The militarization of the Chinese and North Korean society-organisms (with their own ideas very different from the rest of the world) fits the model's prediction very well, as they are setting up for a future conflict.

Update 2018: 2008-2018 as Iteration 1, 2019-2030 as Iteration 2

America is already great, but Trump wants to make it even greater through a trade war and this will actually make America worse off. Trump is proof that the mentality that created the 1929 Crash and the 2008 Financial Crisis is still alive and kicking,due to the lack of an effective moral system to counter it.

If the mentality still exists, then it means the crisis patterns must also follow, which our model predicts to be stagflation sparking in 2019, gathering steam towards 2030, climaxing as conflict.

So what are the deeper implications of a Global Stagflation? A New Science!

If a global stagflation does start from 2019, then it implies that economic activity follows a predictable pattern or cycles which are ultimately under the field of metaphysics. Buying and selling is based on desire and the roots of desire lies in the study of metaphysics of the soul and not in study of psychology or the brain. In the ancient past, Jewish prophets made predictions about future events using their intuition which is an ability that allowed them to view or tap into their metaphysical society-organism. They would have a dream (intuition) about a future event that might or might not happen. The problem of this method is that the dream of the future event exists solely in the metaphysical dimension and might not cross over to physical reality, leading to some predictions that do not come true.

Our system provides a more scientific and realistic way of making predictions by plotting both the metaphysical behavior of each society-organism and the actual physical events that really happen. It would be like getting a gut-feeling (non-scientific, arbitrary) that there is an invisible entity in an area, and then spraying powder on it to see that entity indirectly with the specks acting as measurable (scientific) proof. With the society-organism, each speck of powder represents an event, and big blobs of powder representing big events like conflict or crises.

Events reveal the society-organism just as dust shows the outline of objects

The more event-data is available, the easier it is to reveal the hidden dynamics of the society-organism and its possible futures, just as having more stats of each basketball team can help predict their future victory or loss. This process can be automated with machine learning to create a digital prophet,which is the idea behind ISAIAH

Western economists and policy makers have no idea of metaphysics, so they do not know the root causes of economic crises, wars, and other negative events and therefore are unable to provide real solutions. Proof is that terrorism still exists and economic crises and inequality are still here. North Korea is still nuclear and China is still grabbing land unjustly (just like the Mongols).

By tapping into Western metaphysics of David Hume, Adam Smith, Spinoza and Eastern metaphysics in Hinduism, Buddhism, Sikhism, Taoism, etc., the root causes of any event can be known and the best solutions can be put forward. For the coming crisis for example, Adam Smith clearly points out the cause to be the invention of money and commercial paper instruments which allow value to be controlled by a few people, leading to economic feudalism. The solution therefore is a moneyless government-regulated free trade system which we call social resource allocation

With all human problems solved, the only problems that remain will be the problems of physics, and that's where our Superphysics  comes in.