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I found myself reading yet another gloomy article about the collapsing housing market in the United States this morning and my mind drifted to the subject of economic cycles of boom and bust.
Unlike, it seems, a lot of people, I feel relatively sanguine about down times and relatively unimpressed by up times. I was wondering why this was so when I realised that the best lesson I ever got about real world cycles – of anything from business to global warming – was sitting by the sea as a child and watching the tide go in and out.
Everything you need to know is right there. The sea never encroaches or retreats in a linear fashion – there are strong and weak waves, sometimes little cycles of them, that seem to go against the prevailing trend of high or low tide. Looking at those, you could easily fooled into thinking the trend was the exact opposite to what really happening. Only in the fullness of time could you see the big picture.
A lot of what passes as business commentary is caught up in these little spurts of activity. Some trend the right way, the others the opposite. But there is no way of knowing which is right until you see the whole.
So there is little point in getting caught up the minutiae. Even the most educated of us can be flat out wrong.
I always feel comforted by thoughts such as these. 🙂
No Longer The Only One 
Just like fractals, certain shapes and ways have a tendency to repeat themselves wherever you look. A lot can be learned from watching natural phenomenons. Spring and fall – then spring again. A winter without frost makes way for more mice than usual. All the mice eat more than nature can provide – plus predators have better times. In a short while, the number of mice will have decreased to it´s normal level or below. Predators will begin to starve and move away, but grain and other seeds will have good times. Over and over again.Nothing´s new about the present situation. Not even the fact that every time economies are booming, someone will believe that this time, there will be no low-tide.House owners here in Denmark are having a ball right now because of the crisis in the US. Interest rates have fallen significantly lately – following falling interest rates in the US. And we have no sub-prime crisis.But wait another year or two and the low-tide will come to our parts.Ups and downs. Ups and downs.The clever ones will consolidate themselves when the times are good, and buy land and real estate when times are bad. Just the opposite as what the majority does.Nothing´s new under the sun.
It is just as you say, Allan. There really is nothing new under the sun! Thanks for your thoughtful and interesting comment!