"$d_web"'economics, markets/231225 Pancholi, Patel: 18.6 year cycle, what it holds for 2024.txt' 08********08 #] 27Dec2023 Andrew Pancholi, Akhil Patel: 18.6 year cycle, what it holds for 2024 Akhil Patel, author of The Secret Wealth Advantage video 47:42 (47 minutes long) : 2,062 views Dec 25, 2023 Join Akhil Patel and myself discussing what lies ahead for 2024 over a fireside chat. Please share this video and subscribe to this channel. Find out more about The Market Timing Report and/or contact Andrew through https://markettimingreport.com/ Contact Akhil through https://propertysharemarketeconomics.... In this video we discuss… An overview of the 18.6-year cycle The four main phases of the cycle How accurate has this cycle been in the past? How did this cycle fare in 2023? What does the cycle tell us about 2024? We look at the future of AI Where are we in the residential property cycle? How is commercial real estate likely to be impacted in 2024? What lies ahead for the stock market? How the historic growth of railroads influences technology today. We look at innovation and technology cycles Which commodities are likely to lead the pack? How colonialism and imperialism are repeating We discuss China's expansion What will be the impact of this on commodity prices? Where is the stock market heading? Thoughts on The Presidential Cycle And much much more "$d_web"'economics, markets/Cool stuff/cycle Akhil Patel: roadmap to the 18.6 year cycle.png' 08********08 #] YouTube Transcript using geany regexpr : pair time-txt: search : ([0-9]*\:[0-9]*)\n(.*) replace: \1 \2 group paragraphs : start by listening to narrators, inserting empty lines to segregate [speaker, concept]s remove timestamps within paragraphs : select text after timestamp of first line to end of last line of paragraph search : ([0-9]*\:[0-9]*) replace: use only "In selection" button!! remove \n from within paragraphs, using multiline geany option : search : \n replace: remove triple for entire commentary search : replace: 0:02 Andrew Pancholi : hello everybody Welcome uh it's that time of the year when we want to see what lies ahead Andrew pancholi here from the foundation for the studies of cycles and also we've got AEL Patel with us from the secret wealth Advantage so0:19 uh what we're going to do in a minute is quiz AEL and combine our thoughts and see what we can see to be ready for 2024 0:26 Andrew Pancholi : before we get into this a bit of background of what we will be discussing is as you know our uh dear founder Edward Dewey was uh uh really um embracing the 18.6 year cycle that he really found was present in most of human behavior natural behavior geological behavior all sorts of stuff multiples of that cycle and of course in the uh through human behavior the interactions of commodity and stock market so uh with that in mind uh 0:52 Andrew Pancholi : akel has uh uh recently over the last six months published a book which takes a very deep dive into this 18.6 year cycle that's identified and we've brought aill back so that first of all he can explain the uh overview of the 18.6 year cycle we'll have a look to see how it played out in 2023 and uh see what lies ahead and we'll also throw in some other bits and pieces from other cycles that we uh look at and chat about so ail welcome back 1:25 Akhil Patel : lovely to see you again really good to see you Andy it's always a pleasure speaking to you my friend so we're really looking at 2024 so where do we stand within the big picture of the 18.6 year cycle that you write about which is exactly the same as what JY and of course our friend and your business partner Phil Anderson also mentions of course Phil has now gone to ground to research more Gan and other bits and pieces so uh so Phil um ail take us away give us the big picture please okay um maybe if I for your listeners who not familiar with the cycle maybe if I just visually illustrate how the cycle is structured so I'm just going to share my screen what I have on this diagram is basically an overview which I've taken from uh illustration in my book page 23 which basically shows how each cycle is structured so it's an 18.6 year cycle on average actually very little variation it's the main boom bus cycle so uh when you hear about major Financial crises that usually the end of the cycle um and 2:33 Akhil Patel : what you tend to find is it's got four main phases the first one is what I call the recovery which is basically the start of the cycle out of the prior crisis uh things recover you know governments are successful in bringing the economy back to growth uh property markets recovering stock markets getting back to uh growing again uh and businesses are expanding 2:58 Akhil Patel : um a few years in you tend to get the second stage which is a midcycle recession when you get periods of expansion sometimes things can go a little over the top uh you get a minor recession generally tends to be fairly short um not very significant in terms of things collapsing uh typically I mean sometimes it does vary um s absolutely fabulous I mean that's that's a challenge that all of us face in the work we do be it in Market or forecasting geopolitical strategy whatever it is is the ability to define the signal and extract that from the noise and I think that's a very clear point and I think that's a uh a great point to conclude this interview so Afkill thanks very much it's been fun discussing 2024 and also looking at the full cycle with you so uh wishing you a uh very happy successful and prosperous 2024 and looking forward to uh um seeing again uh both for more presentation work but also for another nice bottle of red or something so take care and a Happy New Year to you thank you so [Music] mucgovernments stimulate their way out of it they're quite successful in doing so they get a lot of credit for doing that and that sets the 3:24 Akhil Patel : stage uh the scene for the third stage which is the boom which is much more speculative because people have survived the mid cycle uh you tend to find there's much more Bank credit available governments have stimulated by you know infrastructure programs which is you know good for the economy and so on and that leads into a much bigger real estate boom um a few years before the peak uh you get a really kind of feverish speculation period where everyone is jumping in there's a lot of fomo you know markets alltime highs you hear lots of stories about people making making unimaginable wealth from property and other things uh and things really go over the top they lead to a peak and then because the banking system has been involved in fueling the prior boom uh when things turn down it brings down the banking system and it takes several 4:15 Akhil Patel : years to sort that out and usually get a major banking crisis sometimes a sovereign currency crisis um and uh almost always a fairly significant economic depression uh and that period uh completes the 18 year cycle each of the phases are roughly sorry each of the expans phases are roughly seven years in length uh and then the the crisis period 4:39 Akhil Patel : the end is about four years or so which completes an 18 year cycle so that's kind of an overview of how the cycle is structured but 4:48 Andrew Pancholi : before we go any further yeah let's just um so that's interesting uh uh so that so that's the sort of abstract of it there the theory of it uh if we were to just put that into pra actors um uh where does uh we we begin that cycle in 2011 to 12 yeah as a a followup from the global financial crisis and if we were to back test that cycle going back a previous generation uh sorry a previous cycle effectively uh sorry it is a generational cycle as well I'm jumping ahead here see it would take us back to about 1993 is that correct as the start of the previous SOC so we've got an anchor point of 2011 which is the recovery from the global financial crisis and then after that we would go back to um 70 uh sorry uh from the PRI 93 would go back to round about 75 which would be the OPEC oil crisis significant depression Global recession and uh and also really the the major low of uh uh Western stock prices as we know it is that correct 5:51 Akhil Patel : yeah yeah so late 74 was the low in the stock market and often you know the stock market lows before the cycle gets to its really kind of end point um you know because stock markets are always ahead of events as you know better than I do um and I think you you made a very important point that people refer to that sort of early to mid-70s crisis as the oil shock and it's true that OPEC doing what it was doing had a very significant effect on the world economy but what people tend not to realize is that we were moving down into a economic depression any way because real estate prices were collapsing Banks were coming down they were needing to be bailed out and so on and so regardless of whether or not the oil shock could happen we would have had a very significant economic difficulties of course the oil shock then then made it uh even more difficult and made geopolitics very difficult and it was a very messy decade um but it would have been a pretty significant crisis anyway 6:53 Andrew Pancholi : now exactly so I mean as with these things uh you know just uh for all our members here at the foundation and uh our other Cycles friends that are watching this um you know this whole idea that a single cycle tends to sort of reflect a a pattern but the overlay of or or synchronicity or alignment of multiple Cycles will create a shock or an event so uh I think that's a pretty important point to make so U so with this in mind AEL um how well has this present uh unfolding of the cycle since 2011 uh how well has it performed what have we seen I mean can we just uh perhaps we can bring the chart back up again there and uh uh talk us through what we've what we've been seeing since 2011 and uh are we seeing a complete alignment have there been some misses and you know because I always find that by every now and then if we find a in either an inversion or a a lack of alignment uh then there's another cycle hovering around that we must put our Sherlock Holmes hats on our dear stalkers and find uh uh the Rogue there because there is no such thing as a Black Swan so yeah take it away EO 8:08 Akhil Patel : yeah sure okay um so bringing back that chart so you've got the overview so you would say that the start is around as you say 2011 2012 there I should point out there's not a single day when a cycle starts there usually a transition between the end of the previous cycle and the start of the new one um and so just going by the general dimensions of the cycle I'm just going to move to the next slide I'm going to come back to this after we talk about when we start talking about 2024 but just to give you an overview of the structure you tend to find that each each expansion is about seven years in length and so if you were saying right 2011 is the low in the real estate market it's when things are starting to move around um you would already be expecting that around 2018 2019 things are going to start slowing into the midcycle uh recession and actually you know in 2019 we definitely got slowing of the global economy the yield curve inverted PMI data was coming down and so on and then on top of that in 2020 we had covid crisis which led to a pretty sharp recession was actually also a short one and as I said before the midcycle recession tends to be shorter of uh than the end of cycle crisis and in fact um because of the stimulus measure zero interest rates and so on we had pretty much the shortest recession in US history uh so it was only four months I think officially so that was the mid cycle now you then say well the second half of each cycle tends to be about seven years in length there's some variability as to kind of the the relative lengths of the first and second half of the cycle so if 2019 marked the beginning of the midcycle you would then be thinking seven years on from that should be around the peak of the current uh cycle when it really gets over the top and so we'll be looking at around 2026 as the coming Peak and so the years 2023 2024 I know the news has been really negative but actually we are um I think fairly squarely in the second half expansion and one of the signs for me that uh we were there uh when and people didn't realize it is you know we were guaranteed at the start of 23 to be in recession at some point I mean I think uh Economist Bloomberg and Tor and other uh experts said it's virtually nailed on guarantee that we're going to get a recession in 2023 what do we have we had a very resilient economy um it's been quite growing house prices the US have been growing since February March um in fact jobs data is looking quite strong it's been persistently strong despite all these interest rate things despite the fact that fed has been talking tough about needing to you know get things under control and so on and one of the reasons why it's been so resilient is where in my mind where we' be in the cycle so um I think that kind of illustrates that actually um the overall structure is working rather well despite all the major sort of um events you know covid inflation Ukraine the stuff in Gaza um whatever's kind of been thrown at uh the cycle as were about the global economy it's it's Shrugged off given where we are in the cycle 11:33 Andrew Pancholi : oh that's fascinating and just for those of you who are new to cycles and I know there's people um many people now um you know in your early 20s that have been corresponding with have' got into this so this might seem a long time back but just to sort of give you the uh the roots of this that the beginning of that cycle is a recovery from the global financial crisis so just uh for the youngsters amongst us which were very welcome and pleased to see no longer an elderly gentle or L's Pastime so the observance of Cycles is actually pretty exciting and of course if you embody this at an early age like those of you that have been speaking to then you've got your life made you don't have to uh listen to all the nonsense that the media and governments pedal so um yeah so so realistically this worked pretty well for 2023 right and fact let me just take it back to 2020 because if we go back I think probably uh 2018 I was with you and Phil in London at uh an event and I I know we were discussing I had the view that 201920 would see a significant pullback in a market crash based on the 90e cycle of course the 90e cycle is actually five patterns of 18 years I know we get a bit of skewing with the half year there but and um I remember you categorically saying I don't think it's going to be a big pullback and you were absolutely right I mean we still got a third of them of the market but it recovered within weeks rather than going into a prolonged um pullback so you know there's a lot of credence to this cycle the way you look at it and uh that's a big uh I've certainly paid a lot more attention to it since uh since that so uh we did see that we saw the pandemic coming uh drilling down into 2023 the Silicon Valley Bank situation did that fit into the pattern 13:24 Akhil Patel : I mean you you wouldn't normally expect such a major kind of quote unquote banking crisis in the middle of the cycle um but actually I think that almost answers itself it wasn't a crisis it didn't really affect very many banks um and it was I think sort of Fairly unique to the United States um so you had all these Banks which were really flush with cash and and so on because there was a Slowdown in the tech industry because of high interest rates um and you know they weren't managing their risks properly you know deposited insurance and so on and then there was some calls for some you know concern because Banks themselves weren't managing their sort of risks properly either and so there's some doubt about silic Valley Banks so everyone withdrew their money and they could do so very quickly because Tech enabled Banks and you know the run on on Silicon Valley Bank was 48 billion in dollars in two days I mean no bank has ever experienced anything remotely like that and they were just unprepared for that but as you saw there wasn't a major crisis it wasn't a Layman Brothers moment as a lot of people feared um and actually the FED stepping in with liquidity uh sorted it out and I think what the thing that this will now put into people's minds is that the FED stepping in can sort it out and it it gives a certain amount of confidence to what they do which when you get to the end of the cycle because you have a falling real estate market uh uh and sort of a falling General real estate marketing not just in the US in countries around the world all at the same time Central Bank actions won't be nearly as effective or they will be effective but it'll take a lot longer and in the period when they're starting to take effect people really panic and then that feeds on on itself and that's when you get all the of widespread Banking and business failures and so I think you we've had a little bit of a important lesson in 2023 which you know as far as I can tell not many people have really paid much attention to 15:28 Andrew Pancholi : yeah I think you're absolutely right I mean from my point of view the um the the big panics 1857 1907 they were all part of super super Cycles but again all those Cycles pretty much are subsections of the um of uh sorry are are multiples of the 18.6 year uh pattern so I think we're doing it in 1857 would certainly tie in we know 72 years previous to that um we saw a crisis and 72 years on from that we saw a the 1929 crash and 72 years on from that we saw the end of the tech boom as we got into 2000 2001 so again the 72 year cycle there um illustrating effectively four rotations of this cycle but was there anything else in 2023 that we've seen that really aligns with your cycle 16:12 Akhil Patel : well we had this um concern about commercial real estate in in the middle of the year and and you know some of the headlines were suggesting it's going to be worse than the global financial crisis again I'm not saying that well I mean commercial real estate is a very diverse asset class I mean it includes data centers which are doing very well that includes you know Central Manhattan Office Buildings which aren't because you know we work in different ways than we used to um so the office kind of parts of this commercial Market are not doing great because people are still trying to work out what the office of the future is going to be but we're seeing in London and New York and other places that actually a lot of these districts are now being repurposed so you know I I think this is another sort of indication of how the cycle progresses it doesn't mean mean that everything is going up all the time for 14 of 18 years it means that the market finds a way to resolve problems it's only at the end of the cycle where it's much more difficult to do so and it leads to Major collapses so that sort of I think was confirmation of that we're seeing a major construction boom all over the place I mean there's cranes everywhere in every city you go to um that's again what you would expect there's actually quite a lot of spending going on people are exhibiting sort of signs of lavish havior which you tend to find into the peak um so you know as far as I'm concerned the cycle really has worked like clockwork I mean it's not to say that there haven't been very significant events but the underlying forces that drive our economies through boom and bust uh are delivering the cycle once again there's really nothing that's happened that sort of leads me to think that maybe there are things that are taking it in a different direction 17:52 Andrew Pancholi : oh thank you yeah and I just literally came back in from Washington DC yesterday and uh whilst I was out there I just of speaking with some clients uh um I something drew my attention to the fact that DC now has the greatest number of uh commercial available properties has just overtaken San Francisco so obviously there's a bit of an exodus with the cultural side of uh life in San Fran but uh I think Washington DC coming into a situation where there's a surplus of commercial real estate and uh um availability of you know the rentals have dropped there so I thought that was quite interesting as is that anything you can comment on the 18:30 Akhil Patel : yeah commercial commercial real estate is is much more volatile but in in a in a sense um they tend not to be uh it's not as big a market as the residential real estate and also um you know people have longer time Horizons where they can make adjustments is basically the point i' make but I I think when he's talking about commercial real estate I think I suspect we're not talking about logistic centers and so on which you know Amazon warehouses and so on we're talking more about sort of off office space and you know Washington's full of massive offices and uh when prices get high governments tend to move out and they try to decentralize and so on you see that sort of thing going on in the UK as well and that leaves gaps that need to be filled um maybe people don't visit Washington as tourism so hotels are empty not as full as they used to be so yeah there are some adjustments taking place and Covid really was a not have changed things per se but it really accelerated trends that were maybe already starting to happen so moving people to remote working using conference video conference facilities and so on um and this is just that adjustment process uh taking place I don't think it's likely to lead to a collapse um at this moment in time 19:51 Andrew Pancholi : so is that something that I haven't asked you before uh is that within this 18.6 year cycle is there a point where you see an expansion in technology and Innovation is there Innovation you know sort of like the idea of invention as we used to call it but now we call it Innovation yeah um Can does that fit into the cycle very specifically 20:09 Akhil Patel : um yeah it does in a couple of ways uh the first is that each new cycle is started Often by the roll out of a new technology which kind of gets things moving again it starts allows new businesses to start up and in Innovation or invention is is the driver of new business formation and employment so it's kind of kicks things off and a very good example after the crisis in 1907 for example was the introduction of the Model T in 1908 or um you know you could talk about the 1950s after the second world war the sort of interstate system and commercial air travel which of course you're um you know more about than I do uh and then the the '70s it was the personal computer and the Silicon um microchip and so on um in the 90s it was the internet and then I think for this one there's been any number of Technologies but for me the thing that has really made the difference in so many different ways it's being a 4G and a smartphone it's just um it's sort of it's it's been the foundational thing for so many different businesses for you know the development of AI models because so much more was put online and so on and enable them to train up and and so on of course computing power and additive manufacturing and the blockchain and all that other things that come in on top of that um and then so that was the kind of the main way in which technology can affect the cycle the second uh thing is that I mentioned that the second half of every cycle is a major boom and often at the center of that boom is a central industry and often at that Central industry is a new technology uh and in my book I cite the example of the 1840s which was the railway boom and so Railway was really a game-changing invention Innovation um and you could you could argue that AI is playing a very similar role and I CH by the way I chose that example quite deliberately being 180 years uh from the current time which of course will make your ears pick up um and the the the railway technology was very um uh was was gamechanging but the first few years of the kind of speculation there's a lot of hype everyone was launching Railway schemes some of them were fraudulent some of them were just you know not kind of didn't really make sense and you could argue that you seeing a little bit of that with AI you know there's a lot of AI everyone's saying AI this AI that it's going to change this it's going to change that um you know some people are scared of it some people think it's gonna change everything tomorrow so there's a lot of uh of that kind of thing going on which to my mind mirrors what we had in the 1840s so it's a sort of thing that can pull in a lot of investment and a lot of excitement it's a new story um and that can enable markets to to go to new highs we've already seen that with the mag s so far but it's now starting to rotate into other parts of the markets and so on so um it's a it's an interesting historical parallel from my point of view and it's also founded on technology 23:16 Andrew Pancholi : that's fascinating because you know so you've mentioned this 180 year cycle which is effectively 10 18 year Cycles uh again we we've just got the halves there to sort of play around with but you know that gives it a tolerance of five years um but um this I this suggests really that that the technology now uh is going to be of a greater uh the the the impact of the present technology is going to have a a greater magnitude because it's it's part of a super cycle as well as the 18.6 year cycle uh so uh yeah like you say the the railroads really did revolutionize not just America eh har and everybody but also Europe as well because up till that point I guess people just wanted Faster Horses don't they really so 24:00 Akhil Patel : um exactly yeah and and actually the um I mean it's it's a very good point that uh you know it is going to be revolutionary but as with the railways it took you know 30 to 40 years before you really saw the full impact before you had the networks and all the different ways in which uh Railways could support not only people moving around but also Freight and other things I think the same thing will be with AI now it's sort of hyp and on and people are exploring different use cases but it's maybe in the next cycle and the one after that that we really see it being embedded uh in our lives in our economies in our businesses in our homes and so on that's something just something just speaking about this 24:41 Andrew Pancholi : uh this is really fascinating because because back in the 1840s from 1830s onwards really uh we you know um we saw uh well well you know we talk about the 137 18 37 top and crash that went in a five-year downturn which really was partly due to boom and bust in Railways but it was also due to um Canal building around the Chicago area but coming back to this idea that the prevalent booms and busts were based around the new industry uh and that's what we saw in 1857 and we also saw that in 1876 off the top of my Edward you know um uh where we got uh you know things like the Cincinnati trust uh Ohio and Cincinnati sorry the Ohio Trust going bankrupt because they had too many bonds that were effectively junk bonds based on Railways Etc so I'm wondering now do you think then so it's just an opinion question nobody really knows the answer to this but on this premise that the the dominant Innovation or Innovative technolog is the boom and bust vehicle so therefore do you think AI is going to create the next few collapses uh booms and bust do you think that that technology could be part of uh you know it was like if we go go back to the end of the 90s that you know the dot boom and bust came you know uh so now it's um it's AI do you do you think AI is the field where where the danger lies potentially for a bust following the boom 26:11 Akhil Patel : I'd say so I mean I'm not entirely sure how because we have you know it's only been a year since we've all introduced a chat GPT and other things um yeah I mean it's it's clearly the destination where a lot of investment capital is going because it's the new story so it draws in capital and everyone becomes exposed to it both on the upside and then potentially on the downside um yeah I mean you might find that uh a lot of Finance related businesses are somehow using AI and it's just goes horribly wrong and an obvious example of that would be say a bank that employs AI to you know do credit scoring and credit checking or something like that uh and it kind of and we're seeing with chat GPT that it Hall Ates and it gives you some very definitive answers but it's total bollocks maybe you know you get that kind of scenario with uh with a bank or maybe it's a different thing where you know every bank is using AI in a particular way and they don't see interactions between you know AI programs in different banks and you know you know the financial system is all very interconnected and so when something happens in One Bank other Banks react in a certain way and maybe people who are overseeing it don't really know what's going on because one of the things that we know already from AI is that you don't really know what's going on underneath the hood right um and so yeah it's it's quite possible and I I suspect this won't be a story just for the current cycle it will be for the next cycle as well as you as you point out 27:43 Andrew Pancholi : yeah that's just just when we're just talking now that's sort of this notion hit me so and of course with AI garbage in garbage out right so that's uh that you know guo that's uh um and of course there is this uh optimism isn't there a new technology will solve The World's problems and uh exactly that's just human behavior really 28:04 Akhil Patel : that's true it may do but it'll create a whole load of other problems 28:08 Andrew Pancholi : exactly that's exactly it yeah be careful of what you wish for lest it come true right so yeah um so let's move ahead into 2024 uh let's take a deep dive into that if you if that's okay um AEL 28:25 Akhil Patel : yeah sure okay I'm just gonna share that previous chart again if that's all right um yeah sure so I mean I should say just by way of introduction of this chart I know introduced it but I actually produced this uh chart in 201 16 uh so I kind of set out you know when the star the cycle was I set out the main phases and the only thing I've changed to this chart in all that time is moving this yellow dot one year along the uh x-axis so up up and down the slopes in that time that's the only thing I changed now what you tend to find is that there are certain patterns that apply to each cycle and actually the the way to really see this in depth is if you read uh my friend Phil Anderson's book The Secret Life of real estate and banking where he goes through the full history of the US cycle by cycle and you actually see how it repeats um so you have the first half you have the midcycle recession as I said uh government stimulates the way out of uh out of the economy and you get kind of looser monetary and fiscal policy uh which kind of ensures that the recession at the mid cycle tends to be shorter they also roll out massive programs of infrastructure spending and we have seen all of that over the last couple of years so we saw Zero interest rates we saw massive surge of uh money into the into the economy and then we had all this all these infrastructure programs it wasn't only the sort of build back better out of of covid it was things like the inflation reduction act um we still have the belt and Road initiative I know it's been going on for some time but that's Had A Renewed impetus even though it has run into difficulties in some areas you have the eu's global gateway and all this kind of 30:13 Andrew Pancholi : let's just drill down into the Belton Road actually if that's okay yeah I mean the expansion has been phenomenal and of course it's been very prevalent not just in South America but also uh in the Caribbean so um as you said it's running to some challenges yeah let's talk about that tell us more about your thoughts on that just in case not everybody's aware just exactly what that is 30:31 Akhil Patel : um so yeah well so it was I think launched about 10 years ago in it took a few years to get started but it's China's well it's it's got a number of initiatives but it was to bind through infrastructure countries predominantly across the Eurasian land mass so you know from China all the way to Europe to the the Chinese economy through Rail and port and road infrastructure um and in addition to that it wanted to create Maritime Roots you know around the world so it had a maritime component and that involved South America of course and Africa and places infrastructure in Africa so it was a global almost a global initiative providing uh capital for major infrastructure projects that improved and increased connectivity between many countries and of course China being by far in the way the largest manufacturer in the world and also the largest importer in the world of particularly energy and stuff um and you know it I mean it's delivered at least I don't know what the figures are precisely but you know hundreds of billions of dollars worth of infrastructure Investments and we'll probably do as much again over the next few years I mean of course there are some difficulties there's the idea that actually countries have to borrow from China in order to uh fund the Investments which they then have to repay and if they can't then they have to give up their assets so it's created some controversy incidentally um Western countries in in previous eras have been accused of exactly the same thing um and in return for um getting countries into debt they've you know negotiated votes at the UN and other things so um it's not a uniquely Chinese issue I have to say to be fair to exactly it's part of part of big country trying to control what smaller countries do 32:33 Andrew Pancholi : yeah I mean the East India Company was one of the biggest examples and the Dutch East India company as well so 32:37 Akhil Patel : exactly it's it's a it's a rather sordid tale and in fact you could argue so far the Chinese one has probably been the least sorted of all of them I mean there's plenty of scope for it to get a lot worse of course um but so far I don't think it's been too bad um so but I think the point about all of this is that because of covid because of geopolitics because of all these other things uh it's resulted in major programs of infrastructure investment and that's very consistent what with what happens in the second half of every 18.6 year cycle of course um and just moving up along the sort of sloping line demand for infrastructure creates demand for Commodities because raw materials are used to uh to build these things uh it doesn't mean that Commodities just going to go straight up there's obviously any Comm Market has supply and demand issues and one of the issues that we've seen over the last couple of years and this is perhaps one area where Covid's had a very big impact is um uh China's reopening China being fairly open then closing down completely then sort of reopening not reopening you know holding Commodities during times when commodity prices were low and then you know not needing to increase demand in the global Commodities Market afterwards and so on there's lots of adjustments going on at the moment but on the whole commodity prices have been relatively in my mind um I mean they haven't collapsed even though there's been all this sort of turbulence uh in in many areas and lot of false hope and then false uh uh pessimism and so on um 34:15 Andrew Pancholi : which Commodities would you see as Front Runners at this moment in time 34:18 Akhil Patel : I mean there'll be the traditional ones um so you know the oil the energies um uh copper iron oil I mean on top of all of that you know we've now got sort of the green agenda so Copper is going to be very big you have sort of batteries and other things being very prominent so lithium is it at the moment the dominant technology for that of course it's people are looking to change that um uh we have of course um the agriculturals which I think follow slightly separate Cycles maybe more related to weather and other disruptions I mean you'll know as much or if not actually probably a lot more than I do about all these things um and so we've had a bit of uh turbulence from various sort of economic Trends not really being established but I think they're starting to resolve themselves to my mind as we end 2023 um I mean the other point to make of course is that Commodities tend to do a lot better when the dollar is falling and because of interest rates and inflation trying to get that under control and so on dollars surged and that's caused a lot of issues in various places but also in the Commodities markets as well um so I I see some of that starting to resolve itself now and the news has definitely changed uh some of the kind of trends that I think will take us to the end of the cycle of now now starting to reveal themselves as we move into 2024 um as you as you move into um the final years of the cycle markets tend to move into all-time highs we've seen that with many stock markets I mean actually quite a few stock markets this year are poised or at all-time highs um uh and then uh you get what I call the era of very easy money now when people say oh very easy money we've already had that it's gone much tighter now I'm not talking about what the government is doing I'm talking about what banks are doing um and what banks love to do is lend money and what they really love to do is lend money to real estate because you can extend a loan for 25 years or 30 years pays interest for all that time and you only have to do one set of due diligence and typically that's computer based so it's your cost are low and your profits are or your revenue is significant uh and and the great thing about real estate lending is once the person has paid off the loan you can extend another loan on exactly the same P piece of real estate for another 25 years so it's like an earnings Carousel that just keeps going round and round um and actually in fact when interest rates are high Banks make bigger profit so they do want to you know lend more in this environment than when it was uh zero interest rates so uh you tend to find that banks are competing with each other to grab market share that means there's a lot of availability for um for loans uh and as prices property prices in particular rise people have to borrow more you're starting to see deposit requirements going down you're starting to see Banks not requiring too much proof of income and so all the things that we saw in the 2000s in the equivalent point in the last cycle you're starting to see again so I think these are some of the major kind of trends that we that are going take us through 2024 37:29 Andrew Pancholi : um I that's fascinating as uh so basically the stock market is going to be heading up really is that how we read this 37:38 Akhil Patel : that's how we read this and it's going to be powered by you know sort of more positive news um and it's going to be I think it also the prospect of higher earnings in the future is basically what the stock market is pricing in uh and so I see that as how things are going to play out of course there are some warning signs which you might want to talk about um but that's yeah that's my overall thesis 38:04 Andrew Pancholi : let's come to those warning signs uh in a moment I just just want to back up on the Commodities thing 90y cycle from the Dust Bowl coming in so I think there will be some stresses there um we can talk about that some other time uh let's come back to the challenges and stresses well before we do that uh the presidential cycle coming in typically in the election year I'm just glancing over it tends to uh really sort of uh uh head up doesn't it really so uh you know um overall into round about September October uh a little bit of a pullback in March um uh any thoughts on that you think that's going to do pretty much the same thing this year or do you think we're going to be more bullish or uh and let's talk about the threats that you're seeing as well 38:48 Akhil Patel : yeah I mean so I mean you're the you're the expert in the stock market so I'll leave that to you but um in terms of the politics of it and that General point is that when an incumbent is running for re-election in particular um they're doing everything they can in the year before and the year of an election to get reelected and therefore to stimulate the economy so it's no surprise that Powell has now said just before the end of the year no more interest rate Rises he's taken a very different tone I'm sure that Biden is telling him it's got to be very positive in 2024 central banks aren't quite as independent as people think they are um I so I think that's the general backdrop so quite good for the economy quite good for the stock market and so on of course there may be pullbacks and so on 39:37 Akhil Patel : now the warning sign I'd have is also related to that is this will be one of the most bitterly contested elections in US history and US history's got plenty of contested elections um but you know you've got a situation where one side doesn't believe the last election was fairly won you know you've got some State saying well this guy tried to overthrow the government he's you know he's not fit to run he can't run it's illegal and so on that's been challenged all over the place I'm not sure that many people on Trump's side will accept any decision by any court so and they know this's Prospect of conflict violence who knows and markets don't like that sort of uncertainty and so it's possible that this blows up and um uh and you know it creates um problems in the markets but if you know absent something really ridiculous um then you'd expect 2024 to be a fairly bullish year for for stocks at least that's the way that I see the presidential cycle but of course you know more about that than I do 40:38 Andrew Pancholi : well I I think we've um you know when we looked at the last election um um we knew it was going to be contentious you're looking at the 144 year cycle so just exploring that and uh what happened with you Ullyseys Grant so there are Clues there and I think uh um the other thing to bring in for for America for the United States is that we are in these Civil War Cycles this 82 to 84 year p and we are you know accelerating in that so you know uh previously these divisions have been over race and color and I think now they're going to be over ideology so I think it's going to move towards red versus blue and uh just you know as I show was in America yesterday and uh um I saw the approval ratings for Biden uh with regards to Biden omic down as low as 14% so uh things are not looking very stable anywhere in that respect 41:33 Akhil Patel : yeah yeah so it's and Trump's approval rate well obviously not in office but his his whatever ratings are looking quite strong so but you know these things I think it'll be much closer than the current polls are suggesting um because Biden is in the position of being the incumbent and you know if it's it's actually also fairly rare for an incumbent to be removed when you're actually in an expansion so when the economy is growing um so I think that's that it would also be quite rare for him to lose so he he'll have a big chance which obviously means that more conflict and more aggro and more heat and uh stuff so I don't I think I've said that markets will be up and and I've said you know Trends are established but one thing you can guarantee is that the news will be all over the place because uh it's going to be so many different things going on see media loves conflict because you write lots of stuff about it um and so emotionally I think it's going to be a very turbulent year I don't think it's be very easy to navigate 42:41 Andrew Pancholi : so let's uh set this against the backdrop of the decennial pattern which certainly I use a lot and I know you do and uh uh what we tend to see is that years ending in three are bullish and so far that's proven to be correct years ending in four are less bullish but are still bullish uh this is looking at Dow data going back 122 years so that does suggest a bullish Market but maybe not as strong as uh this present year and then of course years ending in five historically have seen quite large runs up so just projecting ahead to 2005 looking at the way you uh showed us the cycle there do you think I mean that that certainly supports this idea that we could get a strong boom in the stock market all the way into that Peak for 2025-26 would you is that a reasonable understanding or or would you want to put some caveats on that Akill 43:35 Akhil Patel : no I mean it fits it fits the decennial pattern I mean years four to six tend to be if anything is straight up this tends to be those years of mid second half of year four all the way to sometime in year six um and you know that's very consistent with where we are in the Real Estate Circle the final years you expect them to be in some ways the most bullish years Peak around 2026 it fits it fits that perfectly um you know again it's all it's always subject to events and other things unforeseen things but I it's kind of my working hypothesis that it'll take something fairly significant for that not to happen um I would say and just by way of um it's not a caveat but you know how you tend to find the final years of the decade tend to be strong they are strong if the real estate cycle context is supportive and a very good example of that is 2008 so eighth year is is usually a strong year um but of course in 2008 because we're in the financial crisis at the end of the real estate cycle it was you know pretty much down all year so so that's um I think that's kind of how I fit the two cycles together 44:52 Andrew Pancholi : fascinating so uh do you have any closing thoughts or overviews that you'd like to offer to people viewing this uh presentation 45:01 Akhil Patel : um no not really I mean I've I I I should have um maybe said at the beginning uh that I've been studying Cycles obviously not as long as you have but for for a good sort of tell me I'm old know just you got into it earlier than I did um but I'm now in my second decade of cycle study should we put it that way and um you know it's I think the reality is that you know history has quite definitive patterns if you know what to look for and it's often hard to spot particularly if you're not dealing of always with numerical data uh but if you understand those it's then gives you a working hypothesis and then you've got to be fairly light with your sort of forecast you treat the market in the Market's context you you know look at what's going on in the price chart and so on um so having said all of that I think that I haven't seen anything that has been quite as stable as the real estate cycle and one of the reasons why I'm so confident is in it and as I try to outline in what I write in my book and elsewhere that um it is not just on based on price patterns it's also related to you know fundamental laws of economics and when those those are very stable and unless they're changed somehow by you know changing the way we structure our economies and so on you can pretty much guarantee that the cycle will repeat in some way then the then the trick is to be able to spot it repeating when all the news and all these other things are trying to distract you um and so that's I think behind some of the Fairly what I've tried to be fairly definitive about My Views about what's going on uh in this interview and that's the basis for it 46:49 Andrew Pancholi : I think it's absolutely fabulous I mean that's that's a challenge that all of us face in the work we do be it in Market or forecasting geopolitical strategy whatever it is is the ability to define the signal and extract that from the noise and I think that's a very clear point and I think that's a uh a great point to conclude this interview so Afkill thanks very much it's been fun discussing 2024 and also looking at the full cycle with you so uh wishing you a uh very happy successful and prosperous 2024 and looking forward to uh um seeing again uh both for more presentation work but also for another nice bottle of red or something so take care and a Happy New Year to you thank you so [Music] much