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“Indeed, the Fed’s loose monetary policy known as QE has all but blunted the impact of the final deflationary leg of the 60-year cycle for the financial sector. Equity prices were largely exempt from the final 5-6 years of the deflationary long-wave. The 2008 credit crash was essentially the “super crash” that many long-wave analysts were calling for. It arrived a few years ahead of schedule but was still within the final “hard down” phase of the 60-year cycle (defined as the last 10 percent of the cycle’s duration). The recovery since the 2008 super crash was fierce and unprecedented, thanks largely to the scope and scale of the Fed’s intervention.
Now that the 60-year cycle is winding down we can see the last vestiges of its deflationary pressure in certain inflation-sensitive commodities. The crude oil price has been in decline since June, as you can see in the following graph. Since a wide range of retail consumer prices are based on the oil price, the lower the price of oil goes, the better it will bode for the retail economic outlook entering 2015 once the new 60-year up-cycle kicks off. ”
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