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| Most people think the Sun rests at the center of the solar system, and that the planets orbit it. This is almost correct, but not quite (HERE). |
Historically, most cultures believed that their collective behavior was influenced by the Sun and extraterrestrial cycles. Since 1755, when continuous recording of solar sunspot activity began in the West, much research has focused on the possible impacts of the solar cycle on climate, weather, agriculture, and, consequently, on financial markets. In the broader social realm, increased violence, crime rates, upheaval, revolutions, military attacks, and the intensity of warfare have been linked to the solar cycle and the resulting disturbances in the geomagnetic field (HERE).
The tidal and electromagnetic forces exerted on the Sun by the motions of the other planets—primarily Jupiter and Saturn—are the cause of cyclic solar activity. Outside of the Sun, Jupiter and Saturn combined contain 92% of the total planetary mass and 86% of the angular momentum. The Sun's radius is 0.0044 astronomical units, while Jupiter and Saturn can move the barycenter about 2.2 solar radii away from the center of the Sun. The total angular momentum in the Solar System is constant, while the angular momentum of each individual part of the system, referred to the Center of Mass, is variable. When Jupiter and Saturn are in conjunction with the Sun, the barycenter is far outside the Sun. But when both planets are on opposite sides, the barycenter is inside the Sun. Jupiter's magnetosphere extends well beyond Saturn's orbit. If it were not for the presence of the solar field itself, Jupiter's magnetosphere would reach the center of the solar system. Saturn also has a large magnetosphere, about one-fifth the size of Jupiter's. The variation in the Sun's motion about the Center of Mass is characterized by a periodicity of 178.770 years: Every 16 loops around the barycenter, the Sun repeats a very similar path. The slight time derivative or torque to this 178.770-year cycle, a time-dependent periodic function of +/- 1.05 years, is called the torque cycle. This is determined by nine subsequent synodic periods of Jupiter and Saturn (9 * 19.858 years = 178.720 years) and was used by Theodor Landscheidt to forecast sunspot cycles.
Probably, the earliest recorded hypothesis about the relation between solar and business activity was presented in a paper by German astronomer Wilhelm Herschel in 1801, who called attention to an apparent relationship between sunspot activity and the price of wheat. In 1875, British economist and statistician William Stanley Jevons suggested that there was a relationship between sunspots and business cycle crises. He reasoned that sunspots affect Earth's weather, which, in turn, influences crops and, therefore, the economy. In 1934, Argentinian Carlos Garcia-Mata and Felix I. Shaffner revisited the evidence about the links between solar activity and the business cycle in the US. They did not find support for Jevons’ theory about cyclical solar activity affecting crops. However, they uncovered a statistically significant correlation between fluctuations in non-agricultural business activity in the US and the solar cycle.
Solar maximums are good predictors of US recessions, effectively predicting at least 8 out of 13 recessions between 1935 and 2012. Recessions occurred in the months around and after the solar maximums much more often than in other periods. Out of 13 recessions during this period, 8 started within 2 years around solar maximums, counting from 3 months before until 20 months after them. What about the remaining 4 recessions that occurred between 1935 and 2012, including the Great Recession of 2008-09? The brief recession of 1945 was likely caused by a reduction in US government supply and military orders at the end of WWII. Similar causes likely triggered the recession of 1953-54 after the end of the Korean War (historically, recessions have often occurred after the end of major wars). The painful recession of 1974-75 was caused by the oil price shock. And the Great Recession of 2008-09 was triggered by the collapse of sub-prime lending in the US, which exposed massive overvaluation of the housing stock and flaws in mortgage lending and securitization practices.
In the 64 years from 1948 to 2012, all 6 periods of sunspot maximums overlapped with minimums of the US unemployment rate. Moreover, each time the dynamics of unemployment shifted from a declining trend to a rapid increase, with the unemployment rate peaking 2-3 years after the sunspot maximums.
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