The 90-Year cycle is a very important cycle to traders and investors.
It is a cycle that WD Gann and others found to be highly reliable in their analysis and work.
We make this point as the 1930s (90 years back in time) is said to have been the hottest decade on record in the United States.
The heat records persisted with widespread drought which caused the infamous Dust Bowl.
That's the event where clouds of dust from the Midwest occasionally drifted over to the east coast including a dusted Washington DC. It came to be known as the “Dirty Thirties”.
1934 and 1936 were unprecedented years for heat and drought in the United States.
It wasn’t just the USA that suffered, as the extreme weather persisted globally.
The Los Angeles Times of December 30, 1934, had this headline:
"Whole World in Freak Weather Year 1934 – COLD, HEAT, DROUGHT, AND FLOODS SET NEW MARKS – Unprecedented Extremes Recorded in Every Corner of the Earth; Even Climate has Changed in Spots"
Does history repeat itself?
Can we find clues in past patterns?
Approximately 180 years ago, the 1840s had a similar drought.
The Lack of rain and shift of climate contributed to the decimation & almost extinction of the Bison on the Midwest prairies of the USA.
As Europeans & Native Americans pushed westward, it encroached on the land that the Bison had depended upon for ages.
So why bring this up?
As traders, we have to be cognizant of past patterns to inform our current decisions.
Given the unprecedented heatwave in the northwest of the country right now-traders and investors should be ever mindful of the 90-year cycle.
Is this is the start of a similar weather pattern as what the nation experienced in the 1840s and 1930s?
If so, the nation is in for a diminished multi-year period of crop production.
And we know from the law of supply and demand that means higher prices.
Now we have to think logically about what investments/trades would benefit from this potential scenario.
Who will be the winners of our shifting times?
What trades will have the wind at their backs?
Alongside some of the more obvious trading candidates such as base agricultural and meat & protein alternatives who else?
Humankind if anything is adaptable to the climate and changing times.
It is often said that innovation and technological change come when the market craves and needs the innovations- and not before.
There will be new technologies appearing that will address the issue of a multi-year drought scenario.
Keep your eyes out for those involved with solutions.
Keeping a watchful eye on the theme may bring about some great trades both long and short.
“When the weather is hot, keep a cool mind. When the weather is cold, keep a warm heart.”-An Old Wise Man
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