The Rural Voice, 1982-08, Page 13"Even Leviticus 25 in the Bible
indicates that there's a 50 year cycle. It
culminates in what is called the year of the
Jubilee which is the 50th year. This is
basically a 50 year debt cycle."
McMaster describes the cycle from
depression lows to inflationary highs this
way: "Once a depression has lasted for
awhile, people get thrifty and save their
money. This thrift leads to a willingness
to invest. This leads to economic activity.
Economic activity leads to prosperity.
With this prosperity, people forget about
the lessons they learned the hard way. So
prosperity leads to the use of credit.
Finally, abuse of credit and inflation leads
to a short term view (of investment) and a
growing lack of confidence in the
system."
"We've seen this since 1977 with the
destruction of the long term mortgage and
debt market," said McMaster. At this
point in the cycle, he believes that poor
collateral and excessive speculation cul-
minates in a panic that leads to a
depression.
For agricultural products the near term
situation is not all bad, because corn and
wheat may bottom in the fall of 1982 or
1983, and soybeans may mark a cycle low
soon and move higher in 1983, according
to McMaster's projections.
For all businessmen, McMaster's
advice is "stay liquid."
"The age of debt is over," he
concluded.
In summary, the value of understand-
ing the Kondratieff Wave is not in
predicting prices for crops, or predicting
interest rates or stock markets. The value
in reading briefly about the Kondratieff
cycles lies in recognizing that no market
(be it land, corn, interest rates .+r
inflation) is a one way street.
And the Kondratieff Wave is not a
means to predict doom and gloom. But
the businessman who is ready to weather
the worst and longest depression (while
still maintaining enough agility to
capitalize on a business upswing if by
chance it docs occur,) will he the one who
survives.
It is impossible to pin down exactly
where we are in the Kondratieff cycle. (In
fact it's not l000n sure that the cycle trill
even continue.) But there is a sery good
chance that a 40 year upswing is over or
nearly over, and that the next 10 to 2(I or
even 30 years will he tough, and will
represent major social and economic
change.
That is the warning from the grave of
h1r. Kondratieff.
Today Bill has more
invested in this tractor
than his dad paid for the
entire farm in 1948
Farming today
is big business...
Young people in farming and
agribusiness know tough decisions
are being made in agriculture. And
those decisions get tougher every
day.
If you're a young person with an eye
on tomorrow, equip yourself with a
good education which includes
practical skills and applied
knowledge of agriculture.
Ridgetown College of Agricultural
Technology offers post secondary
agricultural education geared to
help face future complexities in far-
ming and the farm service industry.
If you want a career in agriculture,
then there's room for you in the two
year diploma program at R.C.A.T.
Ridgetown College. A residential
agricultural college ... and an educa-
tion that means business.
■
&
tt/ Contact: The Principal,
Ridgetown College
Ridgetown, Ontario. 674-5456.
THE RURAL VOICE/AUGUST 1982 PG. 13