Turning Time

Dallas, Paris, and Europe (NYC?)

We talk frequently about the way central banks and governments affect the economy. In the grander scheme of things, though, whatever the Fed does is more like throwing a hand grenade into a large building. Yes, you’ll make some noise and cause some damage. People may be hurt. But the building won’t care, and the owner will fix it.

Economically, what really matters, in the long run, is Human Action, the kind Ludwig von Mises called “purposeful behavior.” We all make choices that reflect our backgrounds, experiences, and environments. These choices add up to form “the economy.” Adam Smith called it the Invisible Hand.

But these choices aren’t purely voluntary. We face external constraints, and not just from governments. As humans, we’re subject to time and space. Our choices reflect the era in which we live and the others who share it. This affects our choices and, thus, the kind of economy we collectively create. And it changes over time.

Today, I’m beginning a series of letters on these big-picture thoughts, prompted by Neil Howe’s new book, The Fourth Turning is Here. It’s available at your favorite bookseller now. This is an update of Neil’s 1997 work with the late William Strauss. Their concept of generational turnings has entered pop culture, but unfortunately, not everyone has read their books, which have much more insight than most realize. I want to help give you a broader understanding.

In future letters, we’ll dig into other long-term cycle theories by George Friedman and Peter Turchin. Both foresee something similar to the Fourth Turning at about the same time but for entirely different reasons. That’s quite interesting to me. Then we’ll visit my thoughts about my own view of the “fin de siècle” (which wording I use to suggest the end of an era and the beginning of a new era) I have termed the Great Reset, the end of the Debt Supercycle. That these various ways to look at cycles in history seem to be pointing to a tumultuous period just ahead seems more than coincidental to me.