Japan's Yen Collapse Threatens to Drag the US Down With It | Alex Krainer

In March 2022, while the yen was trading around 115 to the US dollar, I wrote that the "yen will burn to a crisp over the coming years." Four+ years (and numerous interventions) later, it takes 159.2 yen to buy one dollar, the weakest it’s been in 40 years, which is amplifying Japan’s rampant inflationary pressures. If the oil prices continue to rise, which seems likely, and if the yen continues to fall, which also seems likely, Japan could find itself in a disastrous double jeopardy.
 

 

» The predictable disintegration of Japan's fiscal and economic position is now all but inevitable. Japanese Government Bonds will collapse. The unraveling could resemble what Germany had experienced 100 years ago. «

Namely, Japan has to import about 3 million barrels of crude oil per day which, at current prices, is well in excess of $250 million/day, settled in US dollars. The higher the oil price goes, the greater Japan's demand for US dollars, and the greater the downward pressure on the yen. The lower the yen, and the higher the prices of oil and other imported goods, the more inflation Japan imports via its US dollar oil purchases.

US Sovereign Liquidity Strain: Facing weak demand that pushed 30-year yields to a 16-year high of 5.33%, the US Treasury doubled its liquidity buybacks of 10-, 20-, and 30-year bonds from $2 billion to over $4 billion per operation. By issuing short-term debt to repurchase long-term debt, the Treasury temporarily suppressed yields by 9–10 basis points.

Aggressive Japanese Capital Flight: Japan, the largest foreign holder of US debt, liquidated $26.4 billion in Treasuries in June alone (bringing holdings to $1.117 trillion) to raise funds to defend the falling yen.

Failing Currency Interventions: Despite joint US-Japan interventions pulling the yen back from 40-year lows near 164, the currency quickly erased over half those gains to trade above 159, pressuring the Bank of Japan to prepare further sales.

Systemic Risk: The alignment of Japan selling US debt to protect its currency alongside the US acting as the buyer of last resort for its own bonds indicates deep structural friction in global debt markets, deferring broader volatility across equities, real estate, and fixed income. 

Raising rates is not an option

Ordinarily, when they wish to strengthen their currency, central bankers raise interest rates. That would make Japanese financial assets more attractive to global investors, which would boost the demand for and purchases of yen. But the Bank of Japan (BOJ) can hardly afford to do that, given that it would bankrupt the Japanese government, which is leading the developed world in terms of debt-to-GDP, which currently stands at around 240%.

» As inflation accelerates, the Nikkei could continue to soar. However, the nominal gains in stocks will be more than offset by their losses in yen, still leaving investors with close to total losses in real terms. «

 Nikkei (weekly candles), July 2022 to August 2026.

Raising interest rates would also crash Japan’s financial markets and with it, Japan’s pension funds. When the BOJ raised the interest rates by only 0.25% on 31 July 2024, the Nikkei collapsed by -12.4%—its worst one-day crash since the Kobe earthquake in 1987. Currently, Japan’s debt to GDP stands at around 240%.

Sustainable market manipulation?

The answer, probably, is yes, but not this week. Given that raising interest rates is unpalatable, Japan had the option of selling its $1.1+ hoard of US Treasuries and using the proceeds to buy and prop up the yen. In fact, Japan’s Finance Minister Satsuki Katayama was anxious enough about her government's fiscal position that on July 10 she explicitly encouraged Japanese households and pension funds "to increase their investments in Japanese financial assets."

But selling US investments to buy Japanese assets would put further pressure on US interest rates, putting a squeeze on the US Government which is already in a massive fiscal bind. In fact, the US Government can be so sensitive about foreign governments selling their Treasury debt that they can regard it as an act of war. Accordingly, Ms. Katayama quickly backpedaled from her cunning plan. Instead, the US and Japan together coordinated an intervention to support the yen and relieve Japan’s inflationary pressure.
 

» The reason why even real assets turn worthless is that inflation 
indiscriminately annihilates the purchasing power in an economy. « 
The Economics of Inflation. Basis for all curves: January 1922 = 100. 

In late July, the US coordinated market operations with Japan to support the yen, which have been somewhat successful: they knocked the yen back up from its 40-year low of 164 yen to the dollar to below 156. Since then, however, the yen fell back to just under 160 yen/USD, where it is trading today.

Even when governments do it, currency rate manipulations ultimately fail: they buy a temporary respite from the accelerating collapse, but they cannot reverse the decline as they leave the structural causes of the financial imbalances intact. In the end, I believe that the yen will indeed burn to a crisp (as will the euro and the British pound) and that Japan will ultimately drag the United States with it.

We'll know it when it happens

Unfortunately, predicting the timing of all these events is out of the question. Note, my original article about Japan being the harbinger of bad things to come is over 16 years old, and its predictions are yet to unfold in full. US/Japanese joint yen rescue operation may not be over yet. Further efforts to boost the yen could be successful, especially if they trigger large-scale short covering in the markets.

Namely, global investors and traders have accumulated the largest short position on record against the yen. Panicked short-covering could give another boost to the yen in the near term, but in the end, the predictable disintegration of Japan's fiscal and economic position is now all but inevitable.

What happens next

Reiterating my earlier prediction with relation to this crisis, we can make three predictions about Japan’s economy:

► We'll see a period of stagflation (inflation+recession), the inflation part could ultimately morph into hyperinflation;
► Interest rates will continue to rise, and the price of Japanese Government Bonds will collapse. I believe that the unraveling could resemble what Germany had experienced 100 years ago;

► The Nikkei could continue to rally (for now)—as currency and debt turn worthless, equities tend to go vertical as we saw in many cases through history, including Venezuela, Zimbabwe, Argentina, Israel, and the Weimar Republic too.

Thus, as Japan's inflation accelerates, the Nikkei could continue to soar. However, the nominal gains in stocks will be more than offset by their losses in yen, still leaving investors with close to total losses in real terms. The reason why even real assets turn worthless is that inflation indiscriminately annihilates the purchasing power in an economy. When everyone’s purchasing power converges on zero, we really get the great reset: owning nothing minus being happy.

 

Quoted from:

Alex Krainer (August 17, 2026) - Japan financial tsunami barreling for the US. 

NASDAQ, DJIA & Bonds: Next Bullish Wave May Be Starting | Larry Williams

Let's start with the three core market tools—often misunderstood and rarely used together effectively: 

 

■ Fundamentals determine value: Markets ultimately move for fundamental reasons, and value is rewarded over

    time—not necessarily today, this month, or even this year. A value-driven framework is indispensable. 

■ Technicals define the present: They reveal current market conditions—trend, momentum, overbought or

    oversold states.  

■ Cycles provide the edge: They project direction and timing, identifying when opportunities are most likely to

    emerge.

The process is straightforward: What has value? Where are we now? Where are we going? You need all three—none is sufficient on its own. We begin with cycles, specifically the NASDAQ, which has exhibited structural strength since 2009.

Bullish NASDAQ Cycle Analysis

Market cycles consist of recurring lows, rallies, and declines, but not all waves carry equal weight. Some phases are structurally stronger—and we are currently in one.

 

NASDAQ: In a dominant bullish cycle wave with typical June strength → August pause → higher continuation;

bias remains up, buy pullbacks.

 

A comparable wave (3.5-Year, 41-Month, or Kitchin Cycle) in 2016 produced a sustained rally. The current configuration is similar. Since 2023, the NASDAQ has been in a pronounced bullish cycle. While my primary focus is typically the NASDAQ, recent instability in the Dow has increased its relative importance this year. Current cycle positioning suggests the early stages of another strong upward phase—historically associated with meaningful advances.

NASDAQ Could Rally Again: Historically, this cycle turns higher in June roughly 90% of the time.

 

Why the NASDAQ Could Rally Again: Historically, this cycle turns higher in June roughly 90% of the time, experiences a modest pullback in August, and then continues upward. That pattern implies a constructive setup.

Markets do not require declines to rally. They often consolidate sideways before advancing—a behavior repeatedly observed. While many investors wait for pullbacks, the absence of weakness does not negate bullish conditions. My 2026 forecast anticipated higher prices and emphasized buying pullbacks—not waiting for a breakdown that may never materialize.

Dow Jones "Explosive Wave" Pattern 

The Dow is forming a recurring "explosive wave" structure: consolidation followed by a sharp advance. This sequence—sideways movement transitioning into a rapid rally—has repeated multiple times. 

 

DJIA: Sideways consolidation within "explosive wave" structure likely resolving into sharp upside move late June–August.

 

The current phase is a consolidation with a bullish bias. Historically, such setups resolve into strong moves, often beginning between late June and August. This pattern is relevant for longer-term positioning.

The expected mid-June low should be understood as a cycle low in the NASDAQ and DJIA—a tactical buying opportunity, not necessarily the absolute price bottom. The broader outlook remains intact: 2026 is a bull market year.

Inflation, as anticipated, has moved higher and remains closely linked to bond market dynamics. The longer-term trajectory still points toward declining interest rates into the early 2030s. This brings us to bonds.

Bond Market Setup & Seasonality

Bond seasonality is currently in a bullish phase, historically associated with rallies. Cycle analysis aligns with this timing, reinforcing the setup. The Money Flow Index indicates institutional accumulation—an early and important signal.

 

Bonds: Seasonal + cycle low with rising institutional accumulation signals an emerging rally; 

near-term dip is a tactical buy entry.

Institutional Positioning in Bonds: Professional money is rotating into bonds. Commitment of Traders data shows commercial participants holding their largest long position since 2023. Historically, markets tend to advance when large, informed participants accumulate. 

 

COT data shows commercial participants holding their largest long position since 2023. 

 

Combined with a seasonal low, a cycle low, and improving money flow, the evidence points to a high-probability buying zone.

 

Wait for short-term pullback, then enter in alignment with the broader cycle and seasonal trend.

 

Bond Market Strategy: On the daily timeframe, bonds are near a seasonal low with capital beginning to flow in. The tactical approach: wait for a short-term pullback, then enter in alignment with the broader cycle and seasonal trend. While the market has already begun to move higher, a near-term retracement would provide a more favorable entry.

Stay the course. There is no bear market. Despite persistent skepticism, the primary trend remains upward. The strategy is unchanged: buy pullbacks, not fear them. We are in a bull market.

Reference:

Larry Williams (May 26, 2026) - The Next Bullish Wave May Be Starting. (video)

 

See also: 

Larry Williams (February 19, 2026) - 2026 Market Update: Crude, NatGas, Metals, Stocks, Cocoa. 

Larry Wiliams (December 23, 2025) - 2026 Market Forecast: Cycles, Risks, and Opportunities.

David Hickson (May 18, 2026) - Hurst Cycles Update: SPX, NDX, ASX, DAX, NIFTY, Gold, Bitcoin.  

TPR (May 19, 2026) - Pre- and Post-Memorial Day Seasonal Patterns in US Stock Indexes. 

Jeffrey A. Hirsch (December 29, 2025) - 2026 Midterm Election Year Seasonal Patterns of US Indices.

 NDR (January 21, 2026) - 2026 S&P 500 Composite: Seasonal, Presidential & Decennial Cycles.

Namzes (January 10, 2026) - 2026 Hurst Cycles Playbook for the S&P 500.  

W.D. Gann (2025) - The 10-Year Cycle. 

 

 A New Fed Chair is not All Doom & Gloom.

Kevin Warsh is now Fed Chair, reviving fears that markets "test" new leadership—citing Bernanke (2007–09 crisis), Greenspan (1987 crash), and Volcker (late-1970s inflation). Yet history does not show leadership changes reliably trigger downturns. Context: since 1930, the S&P 500’s average annual drawdown is 16.1% (bearish extreme), its average best rally is 25.9% (bullish extreme), and mean annual return is 8.0%.

Post–Fed leadership changes, S&P 500 performance is generally not bearish: except at the 3-month horizon, advance rates exceed a 60% bullish threshold and average returns are positive. If Eugene Meyer (Great Depression) and Greenspan (1987) are excluded as likely timing outliers, results improve further: all intervals show higher average returns and win rates; at 1 year, the S&P 500 averages +12.7% and is higher 90% of the time.

The US Just Made Gold Its Number One Export | Gerry Nolan

America just made gold its number one export, and it’s pouring straight into China via Switzerland. For the last five months running, US gold shipments have topped everything else the country sells abroad. In March alone, they were 1.7 times larger than oil, twice pharma, and two and a half times aircraft engines.

 

» How exactly does this serve the United States? «

  

Most of it doesn’t even stay in America: it sails through Switzerland’s refineries and lands in Beijing’s vaults. This is highly unusual. The US doesn’t ship its oldest store of value to its biggest rival at record pace under normal conditions. Geopolitical tension, inflation hedging, and quiet signals that gold is becoming a settlement mechanism in US–China trade have flipped the script.

America is quietly surrendering the one asset that still commands respect when the dollar starts to wobble. It’s the visible symptom of a deeper reckoning: Beijing is no longer content to hold endless piles of US Treasuries or accept dollars for its oil and goods. With every sanctioned barrel and every BRICS handshake, China is forcing real settlement in the one currency that can’t be printed into oblivion. The empire ships bullion east while its navy steams around the Gulf, pretending it still runs the world. The numbers don’t lie, and neither does the direction of travel.

» Real money to the competition while the dollar-printing machine keeps spinning. «

 

So, tell how exactly does this serve the United States? It doesn’t. But it sure as hell serves China. The empire is literally melting down its patrimony and handing the real money to the competition while the increasingly worthless dollar-printing machine keeps spinning.

Gerry Nolan, May 5, 2026.

 

See also:

Martin Armstrong (May 3, 2026) - Gold and the Stock Market Will Rise Together. (video)
Ray Dalio (2025) - How Countries Go Broke: The Big Cycle.

"Prepare for US War on Iran within 72–96 Hours" | US Col. Douglas Macgregor

The US is on the verge of launching an air and missile war against Iran. It appears likely to begin within the next 72 to 96 hours. The goal of this operation is to inflict such horrific destruction on Iranian infrastructure and society that the leadership is forced to submit. A key factor in this timing is the Ford Carrier Strike Group. Having recently passed through the Strait of Gibraltar, it is expected to reach its position in the Eastern Mediterranean by Sunday. This group provides essential reinforcement for air and missile defense in Israel. Once this defensive shield is in place, the trigger could be pulled as early as Monday, February 23.
 

Surpassing post-Iraq benchmarks, a massive US mobilization—anchored by 50 stealth fighters,

150 transports, 35 warships, and 50,000 personnel—converges with peak IDF combat and rescue

readiness to signal a 90% strike certainty within a Trump-projected weekend window.

The political objective is not necessarily regime change, but rather forcing Iran to comply with a specific list of demands originally outlined by Prime Minister Netanyahu and adopted by the Trump administration (total nuclear cessation, ballistic missile dismantlement, abandonment of the Axis of Resistance including Hezbollah and various Shiite populations in the Emirates, Yemen, and the Gulf).

It is unlikely that Iran will submit. Unlike the 12-day conflict seen last June, this would be a "fight to the finish." Iran has built immense redundancy into its command-and-control structures. If the leadership is neutralized, local commanders have standing orders to continue missile launches automatically. With an arsenal of thousands of missiles, Iran could potentially sustain launches 24 hours a day for weeks. Furthermore, their air defenses—potentially bolstered by untested but advanced Chinese technology—could prove far more capable than anticipated. They claim the ability to identify targets at ranges of 700 kilometers, reaching deep into Iraq, Syria, and the Caucasus.

Tehran’s blockade of the Hormuz choke point—the artery for 20% of global petroleum

—leveraged alongside Sino-Russian naval maneuvers, would catalyze a systemic global

meltdown of vertical oil prices and runaway inflation.

 

This conflict will not be a "cakewalk." We must anticipate significant casualties—potentially hundreds, if not a thousand, if things go poorly. Beyond the immediate battlefield, the geopolitical consequences are vast. We should expect Iran to activate proxies throughout the region and perhaps even in the Western Hemisphere via cooperation with drug cartels. Turkey is increasingly hostile toward Israel and the US meddling in what they consider their "backyard." A war would create a massive refugee crisis that Turkey desperately wants to avoid, potentially pushing them to provide direct or indirect support to Tehran. Russia and China have invested billions in Iran. While they may not intervene directly, they will likely provide the Iranians with every possible resource to ensure they survive the onslaught.

This war is tied to a larger struggle over the future of the global financial system. We are seeing the rise of BRICS (Brazil, Russia, India, China, South Africa, and others), which represents an alternative to Western institutions like the IMF and the World Bank. If the US appears militarily weak or unable to achieve its objectives in Iran, it could accelerate the collapse of the US bond market. Experts have long warned that if the 10-year Treasury yield hits the 5% mark, it could signal "game over" for the current global financial order.

Wars are easy to start but notoriously difficult to end. If we maintain the position that we will not negotiate—labeling every opponent as a "Stalin" or "Hitler"—we leave ourselves no path to peace other than unconditional surrender, which is rarely achieved through airpower alone. We risk entering a conflict that we cannot stop, resulting in a strategic defeat similar to Vietnam.

Reference:
Colonel Douglas McGregor (February 19, 2026) - Prepare For Iran War in 72-96 HOURS! (video)

 

United States of Epstein Island: BREAKING—Rep. Lieu said Full
Epstein Files Show Trump Raping Children, February 19, 2026.

 

Gusano Rubio evokes the return of Western colonialism—and Europe applauds. 

Munich Security Conference, February 14, 2026.

 

See also:

Bradley F. Cowan (February 12, 2026) - Heliocentric Uranus Cycle and American War (2026-2033).

Alexander L. Chizhevsky (1922) - Mass Excitability during Solar Cycle 25 (2019–2030).

Silver and Commodities: The Case for Long-Term Investment | Andrew Hoese

Silver's recent surge marks the early stage of a major bull market, driven by long-term structural forces rather than short-term speculation. I challenge analysts who date macro bull cycles from 2000 due to recency bias, arguing instead that the true departure from sound money began with the Federal Reserve's establishment or the post-1933 era of gold confiscation and the Great Depression. 

Silver/S&P 500 ratio (XAGUSD/SPX, monthly closes, log scale), 1909-2025.

 

The Silver/S&P 500 ratio shows a double bottom breaking higher in 2020 after decades of decline, confirming a long-term uptrend. This aligns with a medium-term squeeze and short-term breakout, creating ideal conditions for significant gains. Short-term pullbacks, though possible after the recent advance, are immaterial against these broader supports. Trading the short term without long-term alignment poses the primary risk.
 

Broader macro dynamics reinforce this outlook. A weakening US dollar is prompting rotation into precious metals (Silver, Gold, Platinum), emerging markets (e.g., Africa and Latin America ETFs), and commodities. Declining US shale oil production—the first year-over-year drop in history—signals supply constraints that could drive substantial inflation, necessitating further money printing, higher rates, and accelerated dollar depreciation in a self-reinforcing cycle favoring hard assets.

 

Silver/Gold ratio (XAGUSD/XAUUSD, monthly closes, log scale), 1931-2025. 

 

S&P 500/Silver (SPX/XAGUSD, monthly closes, log scale), 1890-2025.

 

S&P 500/Gold (SPX/XAUUSD, monthly closes, log scale), 1884-2025. 

 

Silver (XAGUSD, monthly closes, log scale): Long-term Cup and Handle breakouts with 10x price targets, 1800-2025.

 

Supporting evidence appears in parallel breakouts: gold miners versus the S&P 500, Silver versus Gold (a massive base signaling outperformance), and currencies like the Swiss franc against the dollar—all linked primarily to dollar weakness rather than isolated fundamentals. I advise against complexity via frequent trading, premature profit-taking, or asset class rotations. Instead, acquire undervalued assets and hold through the cycle. This commodity upswing is nascent; base metals (Copper, Aluminum, Nickel, Zinc, Lead), energy, and agriculture should join precious metals higher in 2026.

 

Successful investing requires aligning three timeframes: short-term (highly volatile and news-driven), medium-term (a few years, moderately stable), and long-term (a decade or more, frequently ignored). The greatest opportunities emerge when all are bullish. While short-term timing is notoriously difficult—explaining widespread losses among day traders—favorable long- and medium-term trends allow investors to endure temporary setbacks through patient holding of undervalued positions. 

 

On a logarithmic scale, Silver's advance remains in its infancy, poised for a sustained structural repricing distinct from prior cycles. Investors should resist selling early, as the ultimate magnitude may surpass expectations.

Reference:
Andrew Hoese (December 28, 2025) - SILVER SHATTERS $80! Why the Historic Run is Just Beginning: Think Long-Term. (video)

 

 » An epic Silver fractal is playing out. « 

  

» A case can be made for $147. Big question is from where we get a correction. « 
Peter Brandt, December 26, 2025.

 

See also: 

Rowan Hogg (December 27, 2025) - The Vedic Astrology of Silver in 2026: Silver Prices About to Enter New Reality.

Andrew Hoese (October 12, 2025) - Early Global Commodity Supercycle: Top Investment Picks. 

Alex Krainer (March 26, 2025) - Are Metals Kicking Off the Next Commodity Supercycle?

The Vedic Astrology of Silver in 2026: New Price Reality | Rowan Hogg

As of December 22, 2025, Silver traded around $69 per ounce, marking a substantial surge from approximately $30 at the start of 2025—validating earlier predictions of a breakout beginning in September 2025. Silver is forecasted to experience significant upward momentum throughout 2026, entering a "new reality" of higher valuations. Despite intermittent corrections, I anticipate Silver ending the year 2026 substantially higher, supported by ongoing industrial demand and safe-haven flows. 

 

 » To analyze Silver astrologically, we use a chart dated June 15, 1931, at 9:30 a.m. in Manhattan, New York. This marks the

first trade of Silver futures contracts in the United States on the National Metal Exchange, a precursor to the modern COMEX. 

Although Silver has been traded for centuries, this date represents the formalization of modern Silver futures trading. «

This prediction combines tropical Western astrology with Vedic sidereal techniques, using a foundational chart for Silver futures dated June 15, 1931, at 9:30 a.m. in Manhattan, New York. Key signatures include Jupiter's interactions with natal Pluto and Jupiter (wealth expansion), Uranus influencing natal Venus (technological and revolutionary boosts), and lunar/Cancer emphases (silver's traditional rulership by the Moon).

 
Monthly Key Transits and Expectations for 2026:

■ January: Upward momentum; Jupiter stations direct over natal Pluto (wealth expansion); Sun trines natal Venus.
■ February: Rise continues; Venus in eighth house aids investments; Mercury retrograde may expose manipulations.
■ March: Bullish with FOMO. Venus conjuncts North Node and Uranus, echoing prior surges.
■ April: Mainstream visibility increases. Venus transits the tenth house; potent conjunctions over natal Venus.
■ May: Multi-year potential boost. Venus over natal Moon; Uranus compresses natal Venus; Jupiter hits natal Pluto again.
■ June: Correction; Uranus squares natal Mars/Neptune (volatility, confusion); potential macro signals.
■ July: Rise amid banking stress; Sun over natal Pluto/Jupiter; possible Eastern market shift.
■ August: Slight gain despite health scare risks. Jupiter conjunct ascendant.
■ September: High volatility, possibly downward. Chiron and Ketu influences suggest overexpansion concerns.
■ October: Volatility in mining sector. Debilitated Sun and Saturn dampen speculation.
■ November: Renewed boom. Ketu with Jupiter; potential emergency monetary policies propel prices.
■ December: Volatile but overall higher close. Uranus stresses continue, yet speculative energy persists.

2026 is viewed as a transformative year for Silver, with commodities outperforming amid anticipated global challenges (e.g., political instability, financial strains).

 

Reference:

Rowan Hogg (December 22, 2025) - The Vedic Astrology of Silver in 2026: Silver Prices About to Enter New Reality. (video)

Silver (SI-Futures) Midterm Election Year Seasonal Pattern, 1973-2024.

 

See also:
Rowan Hogg (December 26, 2025) - Financial Astrology 2026: 10 Predictions that will shape the Markets. (video)

Gold Production Mirrors the Long Wave, It Doesn’t Drive It | Nikolai Kondratieff

As regards the opening-up of new countries for the world economy, it seems to be quite obvious that this cannot be considered an outside factor which will satisfactorily explain the origin of long waves. The United States have been known for a relatively very long time; for some reason or other they begin to be entangled in the world economy on a major scale only from the middle of the nineteenth century. Likewise, the Argentine and Canada, Australia and New Zealand, were discovered long before the end of the nineteenth century, although they begin to be entwined in the world economy to a significant extent only with the coming of the 1890’s. 

 

» We know that commodity prices reach their lowest level toward the end of a long wave. This means

that at this time gold has its highest purchasing power, and gold production becomes most favorable. «
Second Transvaal Gold Rush: Miners of the Republic Gold Mining Company,

De Kaap Valley, Eastern Transvaal gold fields, South Africa, 1888.

 

It is perfectly clear historically that, in the capitalistic economic system, new regions are opened for commerce during those periods in which the desire of old countries for new markets and new sources of raw materials becomes more urgent than theretofore. It is equally apparent that the limits of this expansion of the world economy are determined by the degree of this urgency. If this be true, then the opening of new countries does not provoke the upswing of a long wave. On the contrary, a new upswing makes the exploitation of new countries, new markets, and new sources of raw materials necessary and possible, in that it accelerates the pace of capitalistic economic development.

There remains the question whether the discovery of new gold mines, the increase in gold production, and a consequent increase in the gold stock can be regarded as a casual, outside factor causing the long waves. An increase in gold production leads ultimately to a rise in prices and to a quickening in the tempo of economic life. But this does not mean that the changes in gold production are of a casual, outside character and that the waves in prices and in economic life are likewise caused by chance. We consider this to be not only unproved but positively wrong. 

 

 » An increase in gold production leads ultimately to a rise in prices. «

California Gold Rush (1848–1855): Over 300,000 settlers flooded newly conquered Mexican

territory, seizing lands of 70 indigenous peoples and carrying out the California Genocide.

 

This contention originates from the belief, first, that the discovery of gold mines and the perfection of the technique of gold production are accidental and, secondly, that every discovery of new gold mines and of technical inventions in the sphere of gold production brings about an increase in the latter. However great may be the creative element in these technical inventions and the significance of chance in these discoveries, yet they are not entirely accidental. Still less accidental—and this is the main point—are the fluctuations in gold production itself. 

 

These fluctuations are by no means simply a function of the activity of inventors and of the discoveries of new gold mines. On the contrary, the intensity of inventors’ and explorers’ activity and the application of technical improvement in the sphere of gold production, as well as the resulting increase of the latter, depend upon other, more general causes. The dependence of gold production upon technical inventions and discoveries of new gold mines is only secondary and derived.

» Although gold is a generally recognized embodiment of value, it is only a commodity. «
Grasberg Mine, operated by PT Freeport Indonesia, is one of the largest global gold

and copper reserves, producing 1.7M oz gold, 6M oz silver, and 1.5B lbs copper in 2023.

 

Although gold is a generally recognized embodiment of value and, therefore, is generally desired, it is only a commodity. And like every commodity it has a cost of production. But if this be true, then gold production—even in newly discovered mines—can increase significantly only if it becomes more profitable, i.e., if the relation of the value of the gold itself to its cost of production (and this is ultimately the prices of other commodities) becomes more favorable. If this relation is unfavorable, even gold mines the richness of which is by no means yet exhausted may be shut down; if it is favorable, on the other hand, even relatively poor mines will be exploited.

When is the relation of the value of gold to that of other commodities most favorable for gold production? We know that commodity prices reach their lowest level toward the end of a long wave. This means that at this time gold has its highest purchasing power, and gold production becomes most favorable. This can be illustrated by the figures in Table 2.

Table 2.— Selected Statistics of Gold Mining in the Transvaal, 1890–1913.

Gold production, as can be seen from these figures, becomes more profitable as we approach a low point in the price level and a high point in the purchasing power of gold (1895 and the following years). It is clear, furthermore, that the stimulus to increased gold production necessarily becomes stronger the further a long wave declines. We, therefore, can suppose theoretically that gold production must in general increase most markedly when the wave falls most sharply, and vice versa.

» Gold production must in general increase most markedly when the wave falls most sharply, and vice versa. «

Wangu Gold Deposit, 2024: China discovered one of the world’s largest gold deposit

in Hunan, with over 1,000 tons valued at $83B, located 19 kilometers underground.

 

In reality, however, the connection is not as simple as this but becomes more complicated, mainly just because of the effect of the changes in the technique of gold production and the discovery of new mines. It seems to us, indeed, that even improvements in technique and new gold discoveries obey the same fundamental law as does gold production itself, with more or less regularity in timing. Improvements in the technique of gold production and the discovery of new gold mines actually do bring about a lowering in the cost of production of gold; they influence the relation of these costs to the value of gold, and consequently the extent of gold production. 

 

» Improvements in the technique of gold production actually do bring about a lowering in the cost of production of gold. «

Kumtor Gold Mine, Kyrgyzstan, 2025: Nationalized in 2021, one of Central Asia’s largest gold reserves, 

began underground mining, projected to add 147 metric tons of gold to state reserves over 17 years.

 

But then it is obvious that exactly at the time when the relation of the value of gold to its cost becomes more unfavorable than theretofore, the need for technical improvements in gold mining and for the discovery of new mines necessarily becomes more urgent and thus stimulates research in this field. 

 

» Gold production is subordinate to the rhythm of the long waves. «

Muruntau Gold Mine, Uzbekistan, 2025: Holds the world’s largest gold reserves, one of the largest open-pit

gold mines, ranks second in global production, producing 2M+ oz annually, expected to operate for decades.

 

There is, of course, a time-lag, until this urgent necessity, though already recognized, leads to positive success. In reality, therefore, gold discoveries and technical improvements in gold mining will reach their peak only when the long wave has already passed its peak, i.e., perhaps in the middle of the downswing. The available facts confirm this supposition. In the period after the 1870’s, the following gold discoveries were made: 1881 in Alaska, 1884 in the Transvaal, 1887 in West Australia, 1890 in Colorado, 1894 in Mexico, 1896 in the Klondike. The inventions in the field of gold-mining technique, and especially the most important ones of this period (the inventions for the treatment of ore), were also made during the 1880’s, as is well known.

» The increase in gold production takes place somewhat earlier than at the end of the downswing of the long wave. «

Lafigue Gold Mine, Ivory Coast, began production in August 2024, targeting 200,000 oz gold annually over 13+ years.

  

Gold discoveries and technical improvements, if they occur, will naturally influence gold production. They can have the effect that the increase in gold production takes place somewhat earlier than at the end of the downswing of the long wave. They also can assist the expansion of gold production, once that limit is reached. This is precisely what happens in reality. Especially after the decline in the 1870’s, a persistent, though admittedly slender, increase in gold production begins about the year 1883, whereas, in spite of the disturbing influences of discoveries and inventions, the upswing really begins only after gold has reached its greatest purchasing power; and the increased production is due not only to the newly discovered gold fields but in a considerable degree also to the old ones. This is illustrated by the figures in Table 3.

Table 3.— Gold Production, 1890–1900 (Unit: thousand ounces).

From the foregoing one may conclude, it seems to us, that gold production, even though its increase can be a condition for an advance in commodity prices and for a general upswing in economic activity, is yet subordinate to the rhythm of the long waves and consequently cannot be regarded as a causal and random factor that brings about these movements from the outside.

 

Quoted from:
Nikolai Kondratieff (1926)  - The Long Waves in Economic Life.

 

 

See also: 

Ahmed Farghaly (October 6, 2025) - High Inflation: We are in Kondratieff's "Summer of Summer". 

 

 » Since the Kondratieff wave was not a transverse wave, meaning the wavelength varied, this tends to imply we may see the “real” high in commodity prices (adjusted for inflation) form in line with the ECM in 2032. This is by no means a straight, linear progression. There will be booms and busts along the way. Therefore, that is when we will see the final REAL high in gold, agriculturals, metals, etc. «   Martin Armstrong, March 16, 2013.

  There is NO STORE OF VALUE because everything rises and falls.