Boom & Bust

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What are the facts about boom & bust cycles?

bullsand bearZeit, meaning "the times" in German; zeitgeist– the mood of a period.

A bear and a bull are shown cheek to jowl in this cartoon depicting the legendary relation between market downturns when scarcity dominates symbolized by the bear and the bright up turns in the markets symbolized by the bull. The bear stands for a bust and the bull stands for the boom.

A boom is the accelerating part of an economic cycle and the bust is the collapse or decelerating part of that cycle. Busts have been referred to historically as, panics, bubbles, recessions, and depressions. These terms are frequently used to economic down-turns in market activity referring to different characteristics of these rise and fall in prices, wages, and commercial activity.

It is as if mercantile cycles were a wave:

This is a wave pulsating through a population's social and economic relationships formed by the combined actions and investment decisions of workers, owners, speculators, consumers, and policy makers or enforcers based on the aggregate behavior all buyers and sellers over time.

The high point is the crest of the boom, the trough is the low-point, or bottom of the bust.

 

A cyclical behavior pattern: waves of commercial scarcity and glut in American economic history.

 

Major depressions in US and western history: years elapsed & cycle length between recessions, causes.

 10

recessions:  years elapsed   cycle length  related events

 1

1784 23 35 revolt & war

 2

1819 33 18 Land sales

 3

1837 18 20 2d National Bank. [1]

 4

1857 20 16 Railroads

 5

1873 16 19 Credit Mobilier

 6

1892 19  15   resources

 7

1907 15   22 fuel speculation

 8

1929 22 28 financial speculative collapse

 9

1957 28  32 world trade
10 1990 32 10 stock speculation
11
2008     Housing speculative bubble

recent recessions.

Duration of recessions

cycle time span average
minimal: 10 to 25.1 years. 7.59 years.
maximum: 35 to 25.3 years. 8.07 years.
     

 

Cost of oil over time.

 

Notes:

[1] The Flour Riot of 1837 was a social disturbance that broke out in New York City in 1837. The riot was triggered by a combination of the rising cost of flour, which had increased from $5.62 a barrel (196 lb. or 88.90 kg) to $12 a barrel and the panic of 1837.

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Date: 12 -8-08 *&* 10-1-2015