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NIGHT-CYCLES IN HISTORY: 18-YEAR CYCLES OF DEPRESSION AND BANK CORRUPTION

In Part One, we looked at the distinctions between Fundamental and Technical Analysis, and claimed that Fundamental Analysts (the rational, scientific force) ruled the Day-Cycles of history, whereas Technical Analysts (the prophetic, artistic force) ruled the Night-Cycles of history.

Many readers, most readers, I'm sure, do not believe there are really Day-Cycles and Night-Cycles in history.  Those who missed Part One, with its descriptions of Day-Cycles and Night-Cycles can find the original article at:

www.seekingalpha.com/instablog/428250-michael-clark/12441-technical-analysts-who-needs-them-part-one

A draft copy of the book I am writing on this theme -- “Turn Out the Lights” -- is available at the following web site:

www.hoalantrangallery.com/Turnoutlights.htm

Another way of looking at these historical cycles of Day and Night is that the Day-Cycle is exemplified by Private Enterprise and the Night-Cycle is exemplified by Public Enterprise.  The Day is individual-centered; the Night is group-centered.  The Day is the time for individuals to follow their own ambitions and dreams; the Night is the time for individuals to follow the ambitions and dreams of their social group, their nation, their clan, their family.  The Day expansion is dominated by Life thoughts, things always getting better; the Night contraction is dominated by Death thoughts, the death of the nation, the death of the world, and one's own personal mortality -- things always getting worse.  The Day has relatively no boundaries -- one is just going to get richer and richer, more powerful, more successful; the Night has very clear, very localized, boundaries and limitations (impressed on the soul as the money begins to vanish).

Are American financial cycles really divided neatly into 18-year cycles of 'debt expansions' followed by 18 year cycles of 'debt contractions'?  It seems hard to believe.  Do the 'Laws of Nature', so precise in the minds of most scientists, really also manifest in collection human activity?  Shockingly, this would make humanity as much a part of nature as stones, heliotropes, lions, planets, suns, comets, etc.  Is this really possible?

Why do these cycles manifest in 18-year energy-packets?  I do not know this.  I have some speculations -- but they are too involved, and too unresolved, to publish here.  Clearly cyclic repetition is a pattern in nature: Saturn's full cycle relative to Earth is 28+ years; Jupiter's annual cycle is 12+ years; The Sun's annual cycle, relative to Earth, is 365+ days; the Moon's monthly cycle is 28+ days.  The Sun's sunspot cycle is 11+ years.  So suggesting there is order in the universe is not really a revolutionary idea.  Applying these laws to humanity on earth leads to raised eyebrows however, as though history was uninfluenced by the rationality that apparently pervades all nature.

Let us look at these cycles, looking, first, at the Night-Cycles, which are supposedly characterized by material contraction, darkness, chaos, spiritual death, a return to nationalism (a national seed idea), the death and rebirth of the masculine Patriarchal Idea.

Note: I will focus more on historical Night-Cycles, assuming that readers who have lived through these more recent depressions will be familiar with the events of these cycles.

1713 Night Cycle Debt Deflation begins – 1731 Day Cycle Debt Inflation begins
1749 Night Cycle Debt Deflation begins – 1767 Day Cycle Debt Inflation begins
1785 Night Cycle Debt Deflation begins – 1803 Day Cycle Debt Inflation begins
1821 Night Cycle Debt Deflation begins – 1839 Day Cycle Debt Inflation begins
1857 Night Cycle Debt Deflation begins – 1875 Day Cycle Debt Inflation begins
1893 Night Cycle Debt Deflation begins – 1911 Day Cycle Debt Inflation begins  
1929 Night Cycle Debt Deflation begins – 1947 Day Cycle Debt Inflation begins
1965 Night Cycle Debt Deflation begins – 1983 Day Cycle Debt Inflation begins
2001 Night Cycle Debt Deflation begins – 2019 Day Cycle Debt Inflation begins
 

cycles



 

 

 

NIGHT CYCLE 2001-2019: We are currently undergoing the debt deflation depression and descent into chaos.

NIGHT CYCLE 1965-1982: No decade has been more rife with social chaos, disintegration of the Patriarchy, racial division, financial uncertainty (both deflation and inflation at the same time: stagflation – and unemployment rates above 10%) -- the U.S. endured riots and burning cities, racial warfare -- and the U.S. lost its first war in Vietnam mainly because she had lost her identity, no longer believing in her 'heroic' mission to save the world for freedom and democracy (i.e., for capitalism).  Capitalism and Patriarchy were under attack nationally and internationally.  Communism was spreading in both eastern and western hemispheres.

This Night-Cycle did not end until Ronald Reagan, the re-born Patriarchy, re-established the Fire Element of Daylight (the Day-Cycle) in 1982.

NIGHT CYCLE 1929 - 1947: No era, until today and our current Night-Cycle, typified better the collapse of a global economy.  The rise of fascism (coming again to Europe) and the Second World War generated a worldwide Chaos lasting for about 18 years.  People will argue that the Bull Market started earlier than 1947 -- but the Bull Market is not the same as the Day-Cycle.  The Bull Market 'anticipates' reality -- it is not a leading indicator.  Some will note that the Bull Market bottom was established in 1933 or even 1932 -- but that was clearly not the beginning of the Day-Cycle of order, clarity and business-related harmony.  World War II ended in 1945.  Economic growth did not occur at all, except as a result of war-related 'government spending'.

Stock market returns seem to support our thesis of discrete expansion/contraction cycles:

STOCK MARKET RETURNS
1923* DJIA @ 75.23 - 1929 DJIA @ 331.65: CREDIT INFLATION CYCLE:  Positive 400% or positive 67% per year.
1929 DJIA @ 331.65 - 1947 DJIA @ 175.66: CREDIT DEFLATION CYCLE:  Negative 47% or  negative 3% per year.
1947 DJIA @ 175.66 - 1965 DJIA @ 854.36: CREDIT INFLATON CYCLE:  Positive 386% or positive 22% per year.
1965 DJIA @ 854.36 - 1983 DJIA @ 1045.07: CREDIT DEFLATION CYCLE: Positive 22% or positive 1% per year.
1985 DJIA @ 1045.07 - 2001 DJIA @ 10,604.59: CREDIT INFLATION CYCLE: Positive 915% or positive 51% per year,
2001** DJIA @ 10,604.59 - 2019: CREDIT DEFLATION CYCLE (through 2/09 DJIA @ 7850.41): Negative 26% or negative 3% per year.

* Could not find DJIA prices back to 1911.
** Current deflation from 2001 to February 2009.

NIGHT CYCLE 1893 - 1911: Teddy Roosevelt's war against the large corporations began when he became president in 1901 – and he helped to break up (a form of castration of the Solar Hero) over 40 of the largest corporations (trusts) that controlled Washington through 1909; again, in this Night Cycle, the banks helped to cause a series of economic depressions.

David Whitten writes in his article "The Depression of 1893":

 

The Depression of 1893 was one of the worst in American history with the unemployment rate exceeding ten percent for half a decade....The Depression of 1893 can be seen as a watershed event in American history. It was accompanied by violent strikes, the climax of the Populist and free silver political crusades, the creation of a new political balance, the continuing transformation of the country's economy, major changes in national policy, and far-reaching social and intellectual developments. Business contraction shaped the decade that ushered out the nineteenth century...

 

Whitten claims there were two depressions, 1893-1894 and 1895-1897.  Of course, these two depressions were probably the same depression, with separate surface appearances, but with a common root system.

There was also a depression in 1901.  And there was also a bank-panic that caused a recession/depression in 1907 – the so-called 'Banker's Panic" (does this sound familiar) -- caused by J.P. Morgan, America’s leading banker, for the sole benefit of... America’s leading banking family, the Morgans.

During 1907, the New York Stock Exchange lost 50% of its value, this as the nation struggled with recession, and banks and trust companies failed, one by one, after runs by fearful citizens.  The Panic of 1907 started in New York City, but soon spread across the country, as local banks failed and businesses sank in to bankruptcy.   Various causes of the panic have been suggested by historians: a credit crunch; a depositor’s loss of confidence in the banking system; the lack of a central bank to inject capital into the financial markets....

The economy turned nasty in the summer of 1907.  U.S. Steel, the largest industrial corporation in America, reported a sharp drop in earnings and orders; railroad earnings followed suit.  The Charles W. Morse’s Shipping Corporation then collapsed, sending a sign to America that more hard times were approaching.  In the autumn, New York City had trouble selling its municipal bonds on Wall Streets.  There were no buyers.  In October, the Heinze-Morse chain of banks failed.  And runs on the Knickerbocker Trust Company, the Trust Company of America, the Lincoln Trust Company and more than ten other financial institutions forced them out of business.  By late October, panic was widespread.
    Trust companies were required to maintain cash reserves of only 2-3% -- and could afford to pay higher rates of return than ordinary banks because of this.  However, when runs on trust companies happened, with so little reserves on hand, these companies were hard-pressed to cover depositors’ demands.

We are seeing here, as we have seen in the other Night-Cycle periods, a sustained de-construction of matter lasting for very close to 18 years.  There are bull rallies in the stock markets during periods of economic deflation.  There are companies that grow.  There are attempts made by the masters of money to turn the tide of the economy in the direction of prosperity.  These rallies are bear traps.  The bears control the markets, with their negative energy: a combination of dread, sense of righteous desire for self-martyrdom, appreciation of the tragic (the tragic view belongs to the Romantic, the Autumn Persona) – and a real terror of sudden poverty which leads to tight-fisted saving as an ethic, which new Puritanism sinks the world further into inactivity, as the currency dries up in bank accounts, no longer circulating, which cripples the body politic.  Banks refuse to lend, since fewer and fewer people become credit worthy.  Fewer and fewer people want to borrow, as borrowing is viewed by the suddenly self-sufficient natures as foolish, at best, or part of a criminal intrigue they wish to avoid.  Bankers are viewed as satanic accomplices.  The capitalist is equated with the slave-owner and the heartless landlord.  Then we see the appearance of Teddy Roosevelt -- 'the Trust-Buster' -- and his desire to essentially castrate America's largest most powerful corporations for their abuses of the American public and the global economic scene, an American plutocracy that threatened the integrity of democratic government.
 
NIGHT CYCLE 1857 - 1875: the American Civil War is the centerpiece of chaos and 'social' enterprise.  But there was also a great depression of 1857?

Donald J. Mabry, in his article ‘Economic History, 1843 -1857’ describes the vigorous American expansion of this Day-Cycle.  The inflation of the masculine Ego-bubble brings inflated prices, an inflated sense of national mission, and an inflated masculine energy that fuels a  period of world conquest.  (As the symbolism of the masculine phallic erection indicates, the power of this type of (erotic) expansion is periodical and designed to be limited.)  Mabry writes a quite wonderful description of the manifestation of the Day-Cycle energies:
 


From 1843 to 1857, the market economy showed what it could do without a major economic depression. The results were impressive. In the 1844-1854 period, the total value of all commodities rose 69%. In the 1840s, output per worker rose an average 10% in the 1850s, 23%. In part, it was simply a further acceleration of the market economy after the 1837-1843 depression.
  
Commercial agriculture grew faster than ever. By 1846, the formerly protectionist Northwest was exporting so much wheat to foreign markets that it became a free trade area and voted for low tariffs in 1846. By 1850, the Northwest exceeded the Northeast in wheat production with as the wheat growing areas moved into Wisconsin, Iowa, eastern Kansas and Nebraska. The use of the mechanical reaper pushed wheat production from 30 million bushels in 1850 to 100 million in 1860. Meatpacking and the production of corn and hogs was almost as spectacular. In the South, in the 1840s, cotton production increased 60% and, in the 1850s, increased 100%. The increasing productivity and profitability brought an increase in slave prices as plantation owners, faced with labor shortage, competed with each other for workers. In the 1790s, a prime field hand sold for $300; by 1840, the amount was $1,000; and by 1860, $1,500. Some of this price increase was simply inflation but the figures indicate that the prices were climbing.
  
    The growth of regionally-specialized commercial agriculture was closely tied to the development of a national system of transportation and communication. The railroad network created in the 1850s brought the railway system to full efficiency. In the 1840s, there were only 6,000 miles of track in the nation, by 1852, there were 12,000 miles; and, by 1860, there were 30,000 miles. By 1857, one billion dollars had been invested in railroads, two-thirds during 1850-1857. By the early 1850s, the completion of 5 trunk lines connecting Boston, New York, Philadelphia, Baltimore, and Charleston with Ohio and Mississippi by way of Albany, Buffalo, Pittsburgh, Wheeling, Atlanta, Chattanooga and on to Chicago, St Louis, and Memphis. One could go from the Atlantic Coast to Chicago or St Louis in two days for $20. Numerous feeder lines meant that even more locales could use railroad transportation.
  
    American exports grew from $144 million dollars in 1850 to $334 million in 1860, but imports were greater than exports. The trade deficit grew from $5 million in 1850 to $58 million in 1860 and was met by the exportation of gold.
  
    Immigration surged upwards, especially from Ireland and the German-speaking parts of Europe. Before 1825, there were 10,000 immigrants yearly. By the mid-1840s, ten times as many or 100,000 a year were coming. By the early 1850s, the number had reached 400,000 a year. In the 1844-1854 period, 3 million immigrants came. They did factory work, the dirty work in railroad and canal construction, domestic service, and any other jobs that they people who were already in the US would not do them. The Germans tended to settle in the Mid West; the Irish tended to stay in the Northeast. The Irish started displacing the women who worked in New England and other Northeastern factories. So many came that strong resentment against them grew in many places. A common expression about the Irish was "it's a good thing the wheelbarrow was invented; it taught the Irish to walk on their hind legs."
  
    Their coming to the United States helped grow the economy. Immigration is a subsidy of the receiving country. Most people do not realize this. From the time a child is born until he or she immigrants, people had to pay to raise that child. In other words, a capital investment is made. When the person immigrates, then the country to which the person goes gets the benefit of that capital investment while the sending company loses it. So immigration represents a source of wealth for the receiving country. That immigrants tend to be healthy, ambitious people means that the investment is worth a great deal to the receiving country.
  
    The rounding out of the vast and lucrative market set the stage for the Industrial Revolution to occur in the US. From the 1850s on, industry was the motor for economic expansion. Large-scale factory production had been developing since the War of 1812. There was such growth in the 1840s that, by 1850, the value of manufactured products exceeded the value of agriculture. From 1850 to 1860, the value of manufactured goods went from just over $1 billion to just under $2 billion. The value added by manufacture rose 157% from 1839-1849. From 1844-1854 it rose 134%."



But was there an economic depression in 1857?

The Panic of 1857.  America did have an economic panic that began in 1857; this led into the Dark Half of the 18-year cycle (the Night-Cycle), which led, shortly thereafter, into the American Civil War.


    J.S. Gibbons writes in his book "The Banks of New York, Their Dealers, the Clearing-House, and the Panic of 1857." 

 

The major financial catalyst for the panic of 1857 was the August 24, 1857, failure of the New York branch of the Ohio Life Insurance and Trust Company. It was soon reported that the entire capital of the Trust's home office had been embezzled. What followed was one of the most severe economic crises in U.S. history.
    Almost immediately, New York bankers put severe restrictions on even the most routine transactions. In turn, many people interpreted these restrictions as a sign of impending financial collapse and panicked. Individual holders of stock and of commercial paper rushed to their brokers and eagerly made deals that "a week before they would have shunned as a ruinous sacrifice." As the September 12, 1857, Harper's Weekly described the scene on the New York Stock Exchange, "…prominent stocks fell eight or ten per cent in a day, and fortunes were made and lost between ten o'clock in the morning and four of the afternoon."
    The Report of the Clearinghouse Committee, produced in the years following the panic of 1857, found that "A financial panic has been likened to a malignant epidemic, which kills more by terror than by real disease." Yet behind the reaction of New York's bankers to the closing of a trust company lay a confluence of national and international events that heightened concern:

The British withdrew capital from U.S. banks; grain prices fell; Russia undersold U.S. cotton on the open market; manufactured goods lay in surplus; railroads overbuilt and some defaulted on debts; land schemes and projects, dependent on new rail routes, failed.

To compound the problem, the SS Central America, a wooden-hulled steamship transporting millions of dollars in gold from the new San Francisco Mint to create a reserve for eastern banks, was caught in a hurricane and sunk in mid-September. (The vessel had aboard 581 persons—many carrying great personal wealth—and more than $1 million in commercial gold. She also bore a secret shipment of 15 tons of federal gold, valued at $20 per ounce, intended for the eastern banks.)
    As banking institutions of the day dealt in specie (gold and silver coins instead of paper money) the loss of some thirty thousand pounds of gold reverberated through the financial community. Howell Cobb, secretary of the treasury, encouraged not only the placement of vast amounts of such government gold on the market, but also redemption of government bonds at a premium. At his suggestion, President James Buchanan proposed to Congress that the Treasury be authorized to sell revenue bonds for the first time since the Mexican American War.
    Although bankers showed the first signs of concern, depositors soon followed. On October 3 there was a marked increase of withdrawals in New York, and over the next two weeks withdrawals nearly quadrupled. Reports of financial instability, perhaps exaggerated, were quickly carried between cities by the new telecommunications medium, the telegraph.
    As the public's faith in soundness of financial institutions continued to plummet, the nation's banks began to collapse. Although the East Coast was hardest hit—with bank closures in New York, Philadelphia, Baltimore, and elsewhere, bank failures also reached across the Missouri River to cities such as Omaha. The climax came on October 14, ”Suspension Day, when banking was suspended in New York and throughout New England.
    The term panic refers to the worst moments of a financial crisis. What follows is frequently a recession (a period of reduced economic activity) or a depression (a more serious and prolonged period of low economic activity, marked especially by rising unemployment). The contraction of the economy that followed the panic of 1857 was profound and had parallels in Europe, South America, South Africa, and the Far East causing it to be held as the first worldwide economic crisis.

In the U.S., the setback caused significant job loss; a major slowdown in capital investment, commerce, land development, and the formation of unions, as well as in the rate of immigration. The effects of the "revulsion," as it was referred to at the time, lasted a full eighteen months and reverberated until the onset of the Civil War."
 


Gibbons speculates the worldwide financial crisis lasted for 18 months (again the number 18).  My thesis, of course, is that the period of chaos and depression lasted much longer, from 1857 – 1875: 18 years.  Historians tend to think of history as a succession of unconnected (or loosely-connected) events.  Discrete happenings: here today, gone tomorrow.  A connecting theory or structure of history will enable historians to organize isolated incidents into a fabric of causes for better understanding cycles in history.
    Historians seem to agree that there was a Panic of 1857, a Civil War of 1861-1865, a Panic and Depression of 1869-1871, and a Panic of 1873.  My argument is that these depressions were all part of the same general phenomena: the Night-Cycle of the deflating Masculine Ego bubble, a spiritual death of the culture leading to chaos, social warfare, economic depression. 
    Life expands; Death contracts.  Heat expands; cold contracts.  Life constructs the Tree of Life; Death de-constructs the Tree of Life, returns energy to the soil, returns to its winter roots, before building the next generation of the plant of life.

NIGHT CYCLE 1821 – 1839: This Night-Cycle began somewhat early during this epoch of American history.  In 1819, to be exact. Historians have called the Panic of 1819 ‘the first great American depression’.   But before this Night-Cycle depression, there was, of course, a Day-Cycle expansion and a housing bubble.
    C.J. Maloney writes in “1819: America’s First Housing bubble”:
 


From the Roaring Twenties to the "great moderation," America has always shown a flair for labeling things, and speculative manias are no exception. Historians remember the ignorant, blissfully happy times that preceded the Panic of 1819 by the same label as those who lived through them — the Era of Good Feeling.
    Like so much of what is fatal to civilized society, the Panic of 1819 was birthed in the turmoil of war, specifically the War of 1812, a now-largely-forgotten episode best remembered for delivering Francis Scott Key's hard-to-sing and harder-to-listen-to "Star-Spangled Banner."
    As in every war, the host government's first battle was to pummel the local currencies, which in 1812 America consisted mostly of state bank notes redeemable in gold, or at least promised to be. Wars are always expensive and the government's inability to print paper money at will is a huge disadvantage to them. The America of 1812 adhered to a gold standard; it had to go, and by 1814 it went.
    By that year, not being able to redeem in gold all the promises of gold they had printed, the state bankers were in a fine mess, and the politicians, instead of throwing them into jail for fraud, granted them legal immunity to continue the swindle. After all, these banks were printing like mad in part to buy all those government bonds, to lend those same politicians credit in time of war and, as you doubtless know, twenty-gunned frigates like the Hornet didn't come cheap.
    Now freed from having to actually raise money (gold) prior to issuing paper promises for it, the banking system's highly inflationary printing binge went into overdrive. During the war's three years, domestic prices rose by 25% and import prices by 70%.
    From 1811 to 1815, banks multiplied like mushrooms on a dung heap, lending out credit they didn't have as if it were manna from heaven. Where actual money in bank vaults had decreased by 9.4% during that period, paper bank notes and deposits, all with claims on that money, had increased by 87.2%. Keynes himself would have been proud (Rothbard, A History of Money and Banking in the United States, 2002, p. 73).
By December 1814, the British, having decided that Napoleon was more interesting to fight than America, signed the treaty that ended the War of 1812. This outbreak of peace was accompanied by an upswing in trade between the two nations' businessmen.
    British manufacturers were eager to begin trade again and the flood of goods and the easy availability of credit made Americans ravenous consumers. Imports, which stood at $12.9 million in 1814, reached $151 million within two years, and this during a period when imported goods, freed from the wartime risk of getting deliberately sunk in transit, were rapidly falling in price (Dupre, The Panic of 1819 and the Political Economy of Sectionalism, 2006, p. 280).
    During this orgy of consumption, "merchants throughout the country overextended themselves…aid[ed] in their efforts by the availability of bank credit" (Dupre, op.cit., 2006, p. 271). Whatever in 1819 qualified as a widescreen TV, I'm sure Americans had plenty of it because fusspots from that time, much as in ours, moaned about the people's sad attraction to wasteful spending on trivial luxuries. America as a whole was importing far more than it was exporting, as our exports were flat in volume and rising only in terms of depreciating paper bank notes.
    In addition to our ancestors' heightened attraction to imports, "the sudden availability of vast new reaches of territory, combined with the loose money left over from the war" (Brands, The Money Men, 2006, p. 66) ignited a real-estate mania in America, particularly along the young nation's frontier areas. Illinois, overrun with fevered buyers, was the epicenter with Ohio not too far behind. Cincinnati laid claim to being the Las Vegas of the mania, and, according to one historian, most of it was subsequently repossessed.
    As 1815 came to a close, the proliferation of paper bank notes and credit had the financial system of the United States in a mess — a direct result of the political establishment deliberately allowing the state banks to counterfeit with impunity. Now, seeing the orgy of speculation, stock-jobbing, and pursuit of luxury imports that their policies had created, Congress stepped in to clean up the mess. 
    Amidst much hypocrisy, backroom dealing, bribery, threats, and displays of great oratorical skill, they proposed for themselves more money and power: another central bank, America's second go at the institution. (We are now on our fourth.) The new Bank of the United States was up and running by 1816, with the ostensible purpose of bringing the state banks' inflation to heel.
    Instead, the men who ran the new central bank promised not to demand redemption of any state bank paper notes until over one year later. And they bailed out the insolvent state banks with $6 million in taxpayer money. The more things change, the more they stay the same.
    To add injury to insult, the men who ran the central bank "jumped on the inflationary bandwagon" themselves (Dupre, op.cit., 2006, p. 271). Printing paper and promises with Bernanke-like abandon, within two years of its creation they had loaned $41 million worth of gold promises and issued paper bank notes redeemable in gold worth $23 million, all on top of just $2.5 million worth of gold (Dupre, op cit, 2006, p. 270), a level of leverage insane enough to make a Lehman Brothers risk manager feel right at home.
    "Flood[ing] the market with bank notes it could not now redeem" (Dobson 2002, p. 105) between 1816 and 1818, the supply of paper bank notes and credit on the US market grew by 40.7%, "most of it supplied by the Bank of the United States" (Rothbard, op.cit., 2007, p. 87). The Philadelphia and Baltimore branches of the bank would prove to be the most profligate — and the most corrupt — of all.
    The economic dislocations gained steam throughout 1816–1818, and prices in real estate, land, and slaves floated upward on credit. As 1818 feverishly arrived, though, it was only the greatest of the fools who were buying. The music would soon come to an end since the postwar prosperity was built on a foundation of nothing more than pieces of paper with promises scribbled on them. In the actual vaults, there was precious little money (the pledged gold) at all.
    Soon enough this became a problem, as notes from the Bank of Kentucky promising gold wouldn't sit well with a merchant from Liverpool, England. Foreign merchants demanded payment in money, not paper. Plus, payment was coming due for the Louisiana Purchase and the French also wanted gold, not paper. The central bank was responsible for coming up with that money. Foreseeing disaster, it slammed on the monetary brakes.
    So recently the Johnny Appleseed of credit, the Bank of the United States now returned as a loan shark's heavy. In one hand they held the state bank notes, with the other they demanded the gold pledged by them, which the state banks had little of.
    When it was realized that many paper bank notes were just that, their values began to collapse, many to zero (the same amount of gold you could get for it), and the money supply contracted at a ferocious rate. From the fall of 1818 to the beginning of 1819, demand liabilities at the central bank fell from $22 million to $12 million (Dupre, op cit., 2006, p. 272) and the total money supply fell about 28% (Rothbard, op.cit., 2007, p. 89).
    Insolvent banks and overextended debtors alike collapsed, while prices, no longer pumped up by the bubble, raced downward to their equilibrium. As the money supply cleansed itself of the bad apples, time and effort had to be paid so that the flow of funds could adjust back to their best uses, following prices as their guideposts. It was a massive, countrywide downturn, and introduced a slowly industrializing America to a new experience — mass unemployment.
 



David S. Reynolds writes in his book 'Waking Giant: American in the Age of Jackson':



All the way back during the Presidency of James Monroe, American workers got a harsh lesson in the vicissitudes of capitalism when the economy crashed. The Panic of 1819 initiated the nation’s first major depression.
    As in the case today, that crash, too, resulted from a confluence of national and international events. In the heady atmosphere after the War of 1812, both U.S. imports and exports surged.
    This was the first of several severe downturns that would tarnish America’s otherwise vigorous economy throughout the 19th century.

European demand for American goods, especially agricultural staples like cotton, tobacco, and flour, increased. To feed the overheated economy, state banks proliferated, and credit was easy.
    The federal government offered for sale vast tracts of western lands, fueling real estate speculation funded by bank notes. Reserves of specie, or hard money, plummeted, especially in the West and the South.
    As early as 1814, Thomas Jefferson warned, “We are to be ruined by paper, as we were formerly by the old Continental paper.” Two years later, he asserted that “we are under a bank bubble” that would soon burst.
 


Jefferson's 'bank bubble' was similar to all the 'bank bubbles' that culminate and demolish  every Day-Cycle, time after time.  One constant in American history is the greed and political corruption of bankers: these titans/monsters create the ‘giants’ of the Day-Cycle bubbles that lead the society into unlimited, extravagant expansion of wealth, and, inevitably, into the experience of Night-Cycle depression where the giant is turned into a midget through the judgmental (moral/religious) process illustrated so descriptively in religious literature, such as The Egyptian Book of the Dead or Dante's Divine Comedy: self-judgment, self-condemnation and self-hate as the power-body shrinks, the presence of power shrinks, efficiency and prowess shrink, and the society divides into warring principles: body against soul – which is, in political terms, a description of civil war.
   Reynolds continues:



"The Second Bank of the United States was supposed to steady the economy, but gross mismanagement in its early phase sapped its effectiveness.
    The bank’s first president, William Jones, instead of taking steps to regulate the nation’s currency, doled out huge loans that fed speculation and inflation. He also kept lax watch over state banks, where fraud and embezzlement created chaos.
    A congressional committee’s proposal to terminate the nearly insolvent Bank of the United States had little backing — because 40 members of Congress held stock in the bank.

The bank’s problems arose at precisely the wrong moment, when the economy needed a firm rudder during its postwar expansion. Jones resigned and was replaced by the South Carolina congressman Langdon Chews — and later by the Philadelphia lawyer Nicholas Biddle.
    Although the bank sharply contracted loans in 1818, the damage had been done. The Bank of the United States, far from helping the economy, was among the destabilizing forces that led to the depression of 1819.
    At the same time, swelling crop yields in Europe reduced the demand for American farm products, whose prices plunged. An economic contraction in Europe led banks there to reduce credit. The crisis abroad, coupled with the contraction at home, forced American banks to call in their loans as well.
    By early 1819, credit, once so easy, was unavailable to many Americans. With specie reserves depleted many American banks failed, and other businesses followed. Sales of public lands plummeted. Unemployment soared, and in some regions food and other basic necessities were difficult to come by.
    Especially hard hit were cities outside of New England like Philadelphia, Pittsburgh, and Cincinnati. Farmers suffered too, though many survived by resuming a subsistence lifestyle.
    With insolvency rife, prisons were overcrowded with debtors. The depression lingered for two years. It was the first of several severe downturns that would tarnish America’s otherwise vigorous economy throughout the 19th century.
    The Panic of 1819 fostered mistrust of banks, bankers and paper money. The volatile Tennessee politician Davy Crockett spoke for many when he dismissed “the whole banking system” as nothing more than “a species of swindling on a large scale.”
    The aging Thomas Jefferson complained that the new generation, “having nothing in them of the feelings or principles of 1776, now look to a single and splendid government of an aristocracy, founded on banking institutions, and money incorporations... riding and ruling over the plundered ploughman and beggared yeomanry…”
 


Reynolds suggests that the 'depression lingered for two years'.  Was this, in fact, true?  Using our logic, the ‘depression’ should have lasted from about 1821 to about 1839.  In fact, this is what we do see.
    Panic and Depression, 1832:  In 1832, President Andrew Jackson refused to renew the charter of the Second Bank of the United States; and Jackson transferred government monies to state banks.  Nicholas Biddle, head of the National Bank, called in all outstanding commercial loans.  A panic followed; and then a recession.  Eight hundred banks closed; and the national banking system collapsed.  One third of manual laborers were out of work in New York City alone.  And the national unemployment rate was over 10%.
    Panic and Depression, 1836:  President Andrew Jackson comes to recognize that his defeat of the National Bank in 1832 might present long-range problems for the country.  In an effort to short-circuit the inflationary consequences of unlimited printing of money by unregulated state banks, Jackson issued the Specie Circular, which law required all public lands be paid for in gold or silver, hard currency.  Land sales and prices collapse.  The hoarding of precious metals.  Land and metals speculation explodes.
    Panic and Depression, 1837-1843:  Historian Reynolds writes that five weeks after Martin Van Buren’s election, national pessimism and erratic bank policies sank the economy and triggered ‘the worst depression that the United States had known’.  Reynolds writes that this fourth panic since 1819 lasted from 1837 through 1843:



The [1837] downturn resulted from various international and native economic developments.
    In 1836, the Bank of England, fearing a run on its deposits of specie (silver and gold), sharply contracted credit. British companies curtailed their business with the United States. Foreign demand for U.S. cotton plummeted, cutting cotton prices nearly in half.
    Southern planters suffered and many northern companies associated with the cotton trade failed. The Specie Circular, which mandated that speculators could purchase public land only with hard money, caused a drain of specie from eastern to western banks.
    In April 1837, world prices suddenly collapsed, creating a run on banks. On May 10, 1837, all banks in New York suspended specie payments — that is, they refused to redeem paper currency in silver or gold. Banks in New Orleans and other cities soon did the same.
    The specie suspensions caused panic, which in turn led to widespread bank failures. The New York diarist George Templeton Strong said, of the banks, “So they go — smash, crash. Where in the name of wonder is to be the end of it?”
    All told, around 40% of America’s 850 banks soon were out of business. Most sectors of the economy slumped. Business failure brought unemployment. By January 1838, half a million Americans were jobless.
    The economy then briefly rebounded, but another contraction abroad brought on a second panic in October 1839, leading to four more years of depression.  Wholesale prices tumbled, and the nation’s money supply shrank. Imports plummeted, as did property values. America would not again see such deep, prolonged economic malaise until the Great Depression of the 1930s."
 


This Night-Cycle period also saw the rise of the ultimate American Night-Cycle populist political leader: Andrew Jackson.  Friend of the workingman, and of the farmer, adversary of the East Coast ruling class, banking oligarchy, and of urban manufacturing.  In the class war, the soul sides with the poor during the Night-Cycle, as it sides with the rich during the Day-Cycle.  The Soul, the Middle Principle, which some call the principle of Love, re-creates the Earth during the Day-Cycle, and re-creates the Heavens during the Night-Cycle.

NIGHT CYCLE 1785 - 1803:  We see that this period of contraction ended in 1803, the same year America purchased the Louisiana Territory from France.  What better metaphor for the Principle of Expansion can we have than an actual business transaction that, in one swoop, doubled the sized of America as a country, without a single shot being fired? 

But what happened in America between the revolutionary triumph in 1785 over the British Empire and the purchase of Louisiana in 1803?  Well, deflation for one thing.  And social chaos.  And class warfare brought on by debt, debt, debt.

The whole idea of 'class warfare' is a flawed idea, in fact.  During the Day-Cycle, the rich dominate the poor as a matter of course.  This is completed, in fact, usually in the form of a racial ideal, instead of a class distinction.  In the Night-Cycle, as the poor grow weary of the social and economic domination by the rich, they rebel against the Ruling Class.  The Ruling Class, of course, likes to win the class war.  It is only when they begin to lose traction in this struggle that the rich begin crying about the dangers of 'class warfare'.

In 1785, America and Americans were faced with a mountain of debts.  Robert A. Becker writes in his book "A Companion to the American Revolution":
 


The states ended the war, as did Congress, with massive debts to pay.  Virginia’s public debt stood at 4,250,000 pounds in 1784; Massachusetts’ (debt) at about 1,500,000 pounds in 1785.  The state debts included money owed for supplies, their old depreciated war currencies, some of which still circulated, and debts owed to soldiers for back pay.  The post-revolutionary states regularly allocated 50% to 90% of their revenues to pay the interest they owed on their revolutionary debts.  To raise it, and some principal, the states levied heavy new general taxes, and tried where possible to collect indirect taxes, such as imposts – the very revenues Congress wanted to appropriate for the national debt.  The politics of postwar finance and taxation in every state was, then, a matter of vigorous an occasionally violent dispute….
    The legislature’s refusal to relent on its deflationary debt policy in the midst of the postwar depression was in part responsible for the outbreak of rioting in western Massachusetts known as Shays’ Rebellion.  Throughout the new republic, as taxes rose to sink the states’ debts in the midst of deflation and depression, angry taxpayers began demanding relief – tax abatements and postponements, the right to pay in virtually any sort of outstanding state or federal notes or certificates, or to pay in commodities and produce.  Most state (Massachusetts excepted) adopted extensive tax relief programs in the mid-1780’s…
 


General Henry Knox, the Commander of U.S. forces who opposed tax rebels in 1786, wrote:



As the situation worsened in 1786 armed bands of impoverished debtors forcibly prohibited courts from sitting including the Court of Quarter Sessions in Worcester County. Violence was most intense in New England and the Northeast, where population pressures combined with depleted soil to press subsistence [sp] farmers to desperation. Rioting mobs intent on preventing the enforcement of judgments [sp] against debtors struck in many areas, including New York, Connececut [sp], Vermont, New Hampshire, Rhode Island, and Massachusetts.
    In Massachusetts, Connececut [sp], and Rhode Island the discontent was organized along military lines. thousands of men, commanded by continental army Veterans and current officers of the Massachusetts state militia, were organized into rebel regiments."
    The most important military engagement of these revolts was Shays' Rebellion, a battle for a Federal arsenal at Springfield, Massachusetts, on January 25, 1787.
    Their Creed is, that the property of the United States has been protected from the confiscations of Britain by the joint exertions [sp] of all, and therefore out[sp] to be the common property of all; and he that attempts opposition to this creed is an enemy to equality and justice and ought to be swept from the face of the Earth."
 


‘Common property’ being the key words here.  The driving ethic of the Night-Cycle is the ‘public good’, the ‘common weal’ -- i.e., public enterprise.  Read this in the sense of community equality.  The driving ethic of the Day-Cycle (and we must remember that individual souls cycle between the Day and the Night, becoming the things/ideas they once hated, and hating the ideas that once composed and embodied their earlier identities) is ‘private enterprise’, the ‘rights of the individual’, ‘personal destiny’. and the rights of 'personal property'.
    Generally speaking, war against a foreign enemy is a keystone of the Day-Cycle expansion.  Civil war between the rich and poor is a keystone of the Night-Cycle contraction.

Another key to understanding this duality is that, like Prometheus, the Day-Cycle elementals (Federalists and Nationalists in this context) are forward-looking, with an overriding will to re-create the future.  Like Epimetheus, the Night-Cycle elementals (the Anti-Federalists and Democrats) are backward-looking or reflective, romantic.  They want time to stop, because, in the Night-Cycle, time, in a sense, does stop.  The Night-Cycle takes over when the future begins to look dark and threatening.  The Day-Cycle takes over when the light again illuminates the future, making it appear bright and hopeful.  The eyes take over again (the ‘I’s’ take over); after the ears have ruled through the Night.
    Night-Cycle elementals are pessimistic because there is no light: the mind is darkened.  The Future is gone; the Future is black and threatening.  Night-Cycle elementals have to feel their way through the labyrinth of darkness by touch and by sound, being essentially blind to the future.
    Day-Cycle elementals are optimistic because, suddenly, there is light again.  A positive vision of the Future can again be seen.
  
The Federalists at this time (the Day-Cycle elementals) were wedded to the Roman model, empire through the power of the modern city-state as a megalopolis, which is a cultural/political form of the body.  The megalopolis is the giant's body.  The Anti-Federalists or Democratic Republicans (the Night-Cycle elementals) were wedded to the Greek model, agrarian in nature, where the power resided in diverse city-states and not in any megalopolitan capital city.  The Anti-Federalists did not want a powerful capital in Washington; they did not want a standing federal army; they did not want a centralized national bank.  The Federalists wanted all of this.
    The Federalists wanted money, glamour, power, on an international stage.  They wanted to actualize their ego, in psychological terms.  They wanted to manifest their daemon, their inner, driving will to power.  The Federalists were endowed with outward manifestation.  The Anti-Federalists wanted to follow the more humble path.  The Anti-Federalists were endowed with inward-manifestation.
  
The struggle between Cowboy and Indian, Day and Night, Federalist/Nationalist and Democratic/Republican/Anti-Federalist was nicely symbolized in the furious rivalry displayed between Alexander Hamilton (urban empiricist plutocrat pragmatist and Day-Cycle Giant) and Thomas Jefferson (agrarian democrat, friend of the farmer, Night-Cycle Philosopher).  Here we see Dionysus standing toe-to-toe with Apollo.  The practical intellectual Hamilton going out toward the Sun, seeking to build the world of forms on the Earth, bank towers, edifices of man’s virile will, attempting, as a man, to become a god of creation; and the dreamy intellectual Jefferson going back toward the Moon, seeking to preserve the world of form as it was, as Nature had made her, manifesting qualities of grace, modesty and balance.
    Hamilton was a republican only in the broadest sense of the word: republican, with a strong taste for monarchy.  He believed that the rich should rule the world; that the poor had no place in government and no aptitude for governing the world.  He felt that the bankers should guide the world.  And that government should work with the banks to establish an empire that controlled the world in orderly progress and enlightenment.  This was a white man’s world, of course.

Thomas Jefferson, on the other hand, put freedom ahead of order.  His fear of a federal tyranny was greater than his fear of anarchy brought on by a weak central government.  That is, he trusted the common man more than he trusted the rich.
    Hamilton -- an East Coast banker himself -- embraced a concentration of power in the hands of the elite few; he held humans to be hopelessly flawed.  Jefferson’s philosophy embraced a decentralized power that was spread among many people and at many levels through many institutions; he believed that, through education, admittedly flawed human beings could be, over time, perfected.
    Hamilton’s vision embraced success founded upon business and through the wealthy old-money aristocracy; he admired the class system based on the English model; he wanted to make America into a new Europe; he desired lead America’s advance into the new technological age; and he saw the American future fixed in Atlantic coastal cities whose power expanded through business and international trade.  Jefferson’s vision was founded in the farming community; he favored mild laws and equal opportunity and a relatively classless ‘aristocracy of ability’ rather than an old-money aristocracy; he envisioned American as an asylum for the world’s oppressed; he desired to preserve America’s simplicity and equality and desired an expansion westward, away from Europe; he wanted America to avoid the corruptions and the political antagonism and snares of Old World Europe.
    In foreign policy, Hamilton favored Britain, and opposed the ideas of the French Revolution.  Jefferson favored France, and supported the ideas of the French Revolution.

The great struggle of the era centered on Hamilton's proposals as Secretary of the Treasury to fund America's debt and to establish a National Bank, to help provide liquidity for American businesses through the creation of an American money supply that would ultimately be controlled by the old-money American Ruling Class living along the East Coast seaboard.
   
Robert R. Blain writes in his paper ‘United States public and private debt: 1791 to 2000’:



One problem was Revolutionary War debt . . .
The problem faced by the First Congress was Revolutionary War debt. Under the Articles of Confederation, Congress had been unable to collect the taxes needed to pay interest on that debt, so the debt had grown by compounding interest from about $40 million to $75 million. The Constitution strengthened the central government precisely to collect taxes to pay interest on the debt. Abraham Lincoln at Gettysburg may have said that the new nation was "conceived in liberty" but the Constitution was conceived in debt.
The other problem was no money supply . . .
As a new nation, the United States needed to create a money supply. Congress could have created that money by the authority given it in the new Constitution: "to coin money and regulate the value thereof." It chose instead to use the authority also given it in the Constitution to borrow money. The choice was fateful. It shifted control of the country's money from Congress to its creditors, private bankers.
Hamilton's "funding" plan . . .
The funding system that was adopted was first recommended to the First Congress by the US Secretary of the Treasury, Alexander Hamilton. He was a banker and a plutocrat. He believed that wealthy people should rule the country. He distrusted the common people. So Hamilton recommended a "funding system" -- an odd name because no funds were created -- that put the wealthy in control of the money supply and, therefore, the country. The first step was that Congress pass a law obligating itself to pay interest to holders of Revolutionary War debt certificates. By so doing, Hamilton argued that people would consider the debt certificates valuable and would exchange them for goods and services, thus the debt certificates would circulate as money.
Hamilton's Bank plan . . .
The second part of Hamilton's recommended plan was to allow holders of debt certificates to use them to buy stock in a national bank that Congress was also to charter, The Bank of the United States. That bank would create the country's money as loans costing interest. By putting these two parts of the plan in place, the $75 million debt would become the base for a growing money supply, but all of it as debt.
Interest causes debt to compound . . .
The problem with Hamilton's plan was that interest had to be paid on the debt-circulating-as-money. If the debt certificates were used to pay the interest, the money supply would shrink and money shortages would cause economic recessions. To maintain debt-money in circulation, owners of the debt, the creditors, would add more debt to what was already owed. So debt would grow at about the rate of interest forever. After 200 years of debt money, total public and private debt has grown to about $20,000,000,000,000. That's $20 trillion, and it will continue to grow, like a snowball rolling downhill, by ever-larger amounts.
Why did they do it?
If such a system had caused bankruptcy is so many cases in Europe [Florence, Genoa, Venice, Spain and England] why did members of the First Congress adopt it?  On January 28, 1790, a few days before his speech to the First Congress predicting a debt explosion, Congressman James Jackson gave another speech in which he accused [certain] congressmen of sending agents throughout the country to buy up the depreciated debt certificates before Hamilton's plan became known to the public. In this way, these congressmen would own the certificates when the Funding Act was passed into law and the value of the certificates appreciated to their face value. Then, they and their friends would become stockholders in the new Bank of the United States and profit from interest and growing debt.
Some people protested . . .
At the time, James Callender, reporter for the Philadelphia Gazette, wrote: "The funding law was passed through Congress by the influence of a majority, who purchased certificates from the army at under value: and who voted for the law, with the single view of enriching themselves. It is firmly believed and loudly asserted, by at least one half of the citizens of America, that the funding system was devised, not for the sake of paying the real creditors but of wronging them. Hamilton planned. Congress voted. The president approved."
    In a letter to the editor, a 'farmer' protested: "Such injustice and oppression may be colored over with fine words; but there is a time coming, when the pen of history will detect and expose the folly of the arguments in favor of the proposed system, as well as the iniquity."
The precedent became practice . . .
After warning that, "A funding system will be highly dangerous to the welfare of the Republic…[that] it must hereafter settle upon our posterity a burden which they can neither bear nor relieve themselves from," James Jackson added: "It will establish a precedent in America that may, and in all probability will, be pursued by the Sovereign authority, until it brings upon us that ruin which it has never failed to bring." That is exactly what happened.
Why didn't someone stop it?
Thomas Jefferson tried to stop it. He warned, "If the American people ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless.... The issuing power of money should be taken from the banks and restored to Congress and the people to whom it belongs. I sincerely believe the banking institutions (having the issuing power of money) are more dangerous to liberty than standing armies. My zeal against these institutions was so warm and open at the establishment of the Bank of the United States (Hamilton's foreign system), that I was derided as a maniac by the tribe of bank mongers who were seeking to filch from the public."

 

Hamilton argued that ‘a national debt attaches many citizens to the government who, by their numbers, wealth and influence, contribute more perhaps to its preservation than a body of soldiers.’  In other words, if the wealthiest citizens have a stake in the preservation of the government, the government will probably be preserved.  If the government is good for the rich, then the government is good for everyone.  This was an early version of the 'trickle-down' theory apparently.
    Jefferson answered: "I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man."
    When President Washington asked his cabinet to speak on this issue, Jefferson argued that the National Bank proposal was unconstitutional; the Constitution did give Congress the power to tax U.S. citizens and to provide for the general welfare of Americans.  But these powers needed to be interpreted narrowly.  ‘To provide for the general welfare’ said nothing about a National Bank.
    Hamilton argued for a very broad reading of the Constitution.  He wrote: ‘It is conceded that implied powers are to be considered as delegated equally with express ones. Then it follows, that as a power of erecting a corporation may as well be implied as any other thing, it may as well be employed as an instrument of means of carrying into execution any of the specified powers, as any other instrument or mean whatever... A bank has a natural relation to the power of collecting taxes - to that of regulating trade - to that of providing for the common defense... [Therefore] the incorporation of a bank is a constitutional measure...’
    Washington was convinced by neither argument.  But he took Hamilton’s side.  The Bank of United States opened its doors in Philadelphia in 1793.
   
In 1793, Congress investigated corruption in the financial dealings of Alexander Hamilton.  Hamilton admitted having made illegal payments to James Reynolds, a convicted swindler whose release from prison had been hastened by Hamilton’s Treasury Department.  Hamilton admitted to members of Congress that he had made bribery payments to Reynolds to prevent him from publicly disclosing an adultery Hamilton had committed with Reynolds’ wife Maria.  The matter died in the Congress.  Many historians believed that Hamilton concocted the story of the affair to cover-up illegal insider-selling of information that profited Hamilton’s friends.  A private indiscretion was easier for the public to forgive than a banking scandal perpetrated by the Secretary of the Treasury.

In 1804, after years of bitter acrimony with New York state rival Aaron Burr (Thomas Jefferson’s Vice-President, 1800-1804), the man who had unseated Hamilton’s father-in-law Philip Schuyler as Senator from New York, Hamilton fought a fatal duel with Burr. On the morning of 11 July, Burr mortally wounded Alexander Hamilton, who died the next day.
    Hamilton won the war but lost the battle.  His plan to fund the debt and his plan for a National Bank became the law of the land, even as Hamilton’s personal end was being fashioned by historical events.

The long era of economic deflation – and the painful unwinding of debt -- that started after the victory of America over Great Britain in 1785 ended (the 18-year cycle ended, that is), in 1803.  The Panic of 1797 was caused primarily by the deflation of assets held by the Bank of England.  BOE deflation  spread to America and to the Caribbean, disrupting commercial and real estate lending.  Many historians consider this the first American ‘recession’.  This recession lasted through 1800.

NIGHT-CYCLE 1749 - 1767.  There is not a lot of historical data available on the ‘national economy’ in America before the founding of the United States.  There is anecdotal evidence (letters of Benjamin Franklin) that there was a hosing bubble in America that developed when Franklin was living in Europe, prior to his return to America in 1762.  It is clear that this housing bubble did burst, as records indicate a John Morton, sheriff of Chester County, Pennsylvania, who would later sign the Declaration of Independence, seized 180 farms beginning in 1766, at a point when our Night-Cycle would be just about ending and turning up.  There was an economic depression in America that began in 1764, after the passing of England’s Currency Act, which rescinded the right of American colonies to issue Colonial Scrip, credit-based money, which destroyed liquidity needed to run an economy and led to depression and foreclosure on unsecured developed property and land.

I am not suggesting that panics and contractions occurred only during Night-Cycles in American history.  Analogically speaking, Day-Cycles do have ‘Nights’, as Night-Cycles have “Days” – but the Day-Force is weak during the Night-Cycles, and the “Night-Force” is weak during Day-Cycles.  The Crash of 1987 happened near the beginning of the 1983-2001 Day-Cycle.  But it did not lead to an economic depression because the positive force of expansion was too strong to be brought to its knees by the crisis.  Bear Markets have ‘Bear Traps’; Bull Markets have ‘Bull Traps’.
    Primary energy flows are positive (expansive) during the Day-Cycles; and primary energy flows are negative (contractive) during Night-Cycles.