A complete understanding of economics requires a thorough knowledge of the long and short term trends covering a global perspective and over a long time period – often times hundreds of year or more (referred as Macro Trends).
A reason many people miss the big moments and become unprepared for changes that often times seems to occur unexpectedly and without the proper preparation, is because most people only experience a small and tiny piece of what’s happening and have a time window of experience to compare changes in events which are very short – many times only 2-3 years. Seldom people look at 10 years ahead or before, and no more. Looking at a longer period can reveal patterns that are most useful for understanding, planning and preparation. At times, knowing the Macro Trends could make the difference between success and failure.
In any given geographical location or country, there exists periods of roughly 10 to 20 years where economic conditions cycle from good conditions to poor conditions. These economic trends also often include political cycles that together re-occur over and over. These trends also cover the so call business cycles from business expansion, peak, contraction, recession and trough which tends to last 5 to 10 years. In all trends, society also gets affected with these economic cycle conditions which ranges from extremes of happiness and prosperity to extremes of unhappiness and periods of loses.
These periods of 10-20 years are enclosed within a bigger economic and political cycles that occurs over many years (approximately 50-100 years). In these bigger cycles, society is also affected – positively or negatively – and is often affected in large degree than in the shorter trends. Periods of great productivity and progress are disrupted by periods of stagnation and losses which – at the extreme – can lead to social unrest, revolts, and in some extreme conditions even revolution and wars.
Economies and markets have had such cycles throughout history and in different places the world over – from ancient Mesopotamia to Asia and from the industrial revolution from Britain to presently the United States.
Studying and learning the timeless and universal mechanics underlying these Macro Trends over similar cases in history is a must in order to have a set of universal principles and more importantly to have the ability to anticipate possibilities and be always prepared.
