Wine Industry Confirms Same Trend in Energy
One industry which reflects the same trend that we see in crude oil, the massive deflationary vortex of economic decline, is none other than the wine industry. The wine industry is also suffering from a major glut and here too wine producing real estate has peaked in France back in 2007 and is not scheduled to bottom until 2020.
Real Estate sales in the Champagne region of France with its 300 houses and 15,700 vineyard has continued to decline. There was an initial low in 2009 following the 2007 high with the rebound into 2011 correlating with oil. The wine industry has suffered tremendously within this deflationary implosion confirming that what we see in oil is by no means some CIA plot. This dovetails in with the sharp decline in liquidity in the financial markets as well. All of these signs are pointing to a very serious economic decline ahead that may in fact reach Great Depression levels since we are starting from much higher levels of systemic unemployment.
The supply glut unfolding in wine in recent years reflects the decline in consumer demand coupled with the rising taxation and declining economic growth. The further decline in the wine industry appears on target into 2020. This reflects the same divergence during the Great Depression whereas commodities peaked in 1919 and declined also for 13 years into 1932 where they bottomed WITH the stock market.
We can see here reflected in the silver yearly chart of the era that the major high was 1919 and low was 1932. It took the devaluation of the dollar by Roosevelt to turn the tide. The strength in the dollar forced all commodities much lower. This is what we must go through as well today. As economies decline and move into default, the dollar will be driven higher.
Back in 2007, the wine industry in the Champagne region assumed the bull market would never end. They increased their production sharply just as new gold mines open going into the peak. In France. they agreed to increase planting of vineyards starting in 2008. This also coincided with a downturn in the economy that further escalated the glut in supply. When you look at the buyers, 55% of the Champagne region’s shipments are consumed in France with the balance being exported. The UK has been the biggest buyer of French wines accounting for 10% of all production followed by the USA coming in at just 6% with Germany taking third place at 4%. True, China has been a rising buyer. However, China’s demand for French wines does not even make the top ten.
Consequently, looking at the wine industry correlates to the trend emerging in oil. This confirms that what we are seeing in energy is part of a major overall trend. We see this also unfolding in the precious metals as they head into their benchmark targets.
End of the German Dream?
The crisis in Germany is brewing at a rapid speed. There is no country that has suffered the pains of Russian sanctions in the West more than Germany because the Russian market has compensated Germany in the past years, covering up many problems of the German economy from the euro crisis. As the economy has turned down inside the EU, German sales of products declined. That decline was replaced with Russian buyers of everything from food to German cars. With Russian trade now cut off, the economic decline in Germany is starting to become visible. There is also a rising anti-foreigner trend emerging in Germany with the economic decline in motion. The German Press, perhaps the last real free press, warn of the coming police state in Germany.
The German Dream is about to burst. The majority of municipal governments in Germany are insolvent. Then we have the surge in pension coming. Germany is caught in a perfect storm of financial chaos. This may be why Germany has been the target of US and British surveillance for fear that the country will hold the keys to Europe.
With the coming crack in the German Dream, we should expect a surge of capital flight headed into the dollar come 2015. This will be enough to send the dollar higher and that will help to break the rest of the world where they issued dollar based sovereign debt. The dominoes are falling. We will have to restructure the world economy just to survive.
Cycles & the Flow of TIME
More and more emails are starting to recognize that cycles are all about time. Albert Einstein’s theory of relativity is one of the most ignored fundamentals that applies even to economics. We see many people in general are unable to grasp the deep meaning of what Einstein truly discovered. This blindness stems from our linear perception of time. Relativity was something much more important than providing plots for movie adventures.
Einstein wrote:
“Since there exists in this four dimensional structure [space-time] no longer any sections which represent “now” objectively, the concepts of happening and becoming are indeed not completely suspended, but yet complicated. It appears therefore more natural to think of physical reality as a four dimensional existence, instead of, as hitherto, the evolution of a three dimensional existence.”
In reality, the theory of relativity applies in markets far more than most would even ponder. True, it is extremely complex. It is virtually impossible for most people to contemplate the fourth dimension outside of a straight line concept of a steady flow in one direction. How do we measure and deal with a dimension that can be altered by gravity? If there is no real “now”, is it possible that waves of time flow through all dimensions yet yield the illusion of “now”?
Time dilation is an actual difference of elapsed time between two events as measured by observers either moving relative to each other or differently situated from gravitational masses. Nevertheless, being able to map the flow of time and relate it back to a three dimensional world is tricky, but our only hope.
We are withdrawing from Afghanistan this weekend. This comes after 13 years of a NATO involvement. Gold rallied for 13 years as did oil. Curious. Is TIMEunpredictable? Or is it that the complex nature of time is unknowable by simple minds?