Sunspots - The Real Cause of Higher Grain Prices | Tom McClellan

Tom McClellan (Jul 27, 2012) - Sunspots are a big driver for wheat prices. Various pundits are putting out stories blaming the drought in the plains states on global warming [...] A better explanation for the drought, and the ensuing spike in grain prices, is that this is all part of the normal 11-year sunspot cycle. But to find that relationship in the data is what the story is about. The first point to understand is that sunspot activity has now been scientifically linked to changes in cloud formation. When the sun is more active, the charge particles streaming out from sunspot activity help to sweep away cosmic rays that might otherwise hit earth's atmosphere, where they play a role in cloud formation [... | HERE + HERE] Once you get past that more difficult scientific hurdle of understanding that cosmic rays and clouds are related, it is pretty easy to understand that less cloud formation is related to less precipitation, and thus poorer growing conditions for rain-irrigated crops. That is what we are seeing with this year's drought, and it has been pushing up grain prices accordingly. Looking across the last hundred years of price data on wheat, it can be difficult to see the relationship between the sunspot number and wheat prices. Part of this comes from the fact that there are other factors which sometimes act upon crop yields and thus grain pricing. But a big factor is that the units we use to measure wheat prices, i.e. US dollars, can vary themselves, causing the relationship with sunspots to sometimes be disguised by what the dollar itself is doing. 



If we look at the history of these two sets of data before the modern era of floating currency exchange rates, we can better see how they were correlated. This chart shows raw wheat prices, un-adjusted for the value of the dollar. The sunspot number data is shifted forward by 2 years to reveal that bottoms and tops in the sunspot number tend to be followed a couple of years later by bottoms and tops in wheat prices. This relationship got into some trouble in the middle part of the chart, when President Roosevelt's New Deal price fixing artificially inflated wheat prices. The intention in the 1930s was to benefit farmers by keeping wheat prices up. That effort switched during WWII to the government putting a cap on all prices, including wheat, to support the war effort. Rationing of food, fuel, and other items took over for market forces. Additional trouble came in the 1970s, when the Arab Oil Embargo pushed up oil prices in 1973-74, reducing acreage under cultivation. Then later in that decade, the rising value in the dollar pushed down the dollar price of most commodities compared to prices in other currencies. So using dollars to see the normal cyclical relationship in price data became problematic.

All of this explanation brings us (finally!) back to the lead chart above. In [the above] chart, I have adjusted the dollar price of wheat, multiplying it by the US Dollar Index, which was created back in 1971. This mathematical step produces a unit-less measure of the value of wheat by factoring out the dollar's movements. Doing this allows us to better see how the peaks and troughs in wheat prices have been related to the sunspot cycle. I want to emphasize again that the sunspot number is shifted forward in that chart by 2 years, to reveal its leading indication for how wheat prices will behave. The conclusion from this is that the upward move in the value of wheat right now is just following the swoop upward in the sunspot number that began in 2009. We should expect to see generally rising prices for wheat and other grains until about 2 years after the sunspot cycle has peaked, a peak which has not even happened yet.

Martin Armstrong's Political Economy | 72 Year Cycle of Political Change

"Bretton Woods took place in 1944. Adding 72 years brings us to 2016. This model has been
uncanny in predicting political change." (recent interview HERE)

Martin Armstrong (Jan 8, 2013) - Where does the Political-Economy Model stand right now for the West? The answer to that question is the epic turn appears to be 2016. Bretton Woods took place in 1944. Adding 72 years brings us to 2016. This model has been uncanny in predicting political change incorporating the same frequency for volatility. The Russian Revolution of 1917 was right on target with the fall of the Berlin Wall 72 years later in 1989. This strongly warns that this wave in the Economic Confidence Model due to peak 2015.75, will be extremely important. This is the time frame we have been looking at for the past 30 years for the next Sovereign Debt Crisis. Certain trends simply cannot be sustained beyond 72 years without change. 

"High Treason" - Federal Republic of Germany established May 23, 1949 + 72 Years = 2021

This time that change is coming by dragging the politicians by the hair cave-man style. How intelligent people just cannot see the problem with borrowing perpetually and never having any intention of paying off the debt, it’s simply unimaginable. The previous cycle turning in 1872 and that led to what is known as the “long depression” of the 19th century everyone concedes lasted for 26 years. This is why the real estate model is 78 years. It too is closely aligned with political turmoil that always brings structural change [...] Consequently, we are looking at 2014 for the beginning of a rise in separatism and civil unrest around the West. Then we see 2016 and the start of a nasty economic decline. We could see things get real bad during the 2016-2020 phase. That may actually be the bottom in the European economic meltdown (see also HERE)

Martin Armstrong (Oct 17, 2015) - Each country has its own unique cycle. There was a very major turning point in France that nearly became a revolution [in May 1968]. Even Charles de Gaulle secretly left France for a few hours after fearing for his life and a revolution [...] The French socialist state is now collapsing under Hollande. Civil unrest will erupt moving into 2017 and then there is the risk of another major cultural revolution as the youth do not share the same values as the socialistic elites who are in control. We will see that risk erupt by 2020 or 51.6 years from the May 1968 cultural revolution (see also HERE)