Over the past 100 years there have been a series of events that take place every seven years, affecting the American economy and the world. This seven year cycle goes back further than 100 years, in fact it is biblical- the people of Israel were told that every seven years that they should leave the land uncultivated to rest (Leviticus 25:1-4). Much like the observance of rest and reflection every seventh day, every seventh year would be a year to focus on bringing oneself closer to God as well. This year happens to be the seventh year and it has many people wondering what will happen. It is no small wonder that many are taking steps to prepare themselves financially as the pattern of economic disturbances during this seven year cycle is astounding.

~2008- Final meltdown of stock and real estate markets in the US, investors lose an average of 54% of net worth
~2001- 9/11 attacks- Sept. 17 worst day in stock market history
~1994- Bond market crash
~1987- Black Monday stock market crash
~1980- Savings and loan crisis- Interest rate hike by the Fed- Start of US recession
~1973- Gas crisis- Arab oil embargo- Bretton Woods collapse- Start of 1973-1975 recession in US
~1966- Credit crisis in US
~1959- Monetary recession- Fed interest rate hike
~1952- The Fed leaves Government control, becomes independent bank.
~1945- US Dropped atomic bombs on Japan, ending WW2- Recession of 1945
~1938- Unemployment in the US peaked at 19% – Hitler seizes control of Germany and Czechoslovakia, essentially starting WW2
~1931- Worst Year for stocks during Great Depression
~1924- Unemployment in the US peaked 25.4%
~1917- US declares war on Germany and Austria, enters WW1- Recession in US – Bolshevik revolution takes place, introducing communism, and thrusting Lenin into power
~1910- Panic of 1910- recession in the US

While we are never sure about how events will unfold until after everything is said and done, it is pretty obvious that there are several situations worldwide that may contribute to the list of major economic events in this seven year cycle. For instance, there are companies in Russia that are selling oil exclusively priced in Yuan. Most people would not necessarily understand the significance of such a step. The reality is that, since 1973, oil worldwide has been solely priced in US dollars. A few years ago there was speculation that the OPEC nations would have moved away from the dollar as the main means of pricing oil by 2018, which would be crippling for the dollar. It seems that this assertion was well founded.

[W]ith today’s confirmation of a fully functional petro-yuan system being implemented by Russia, the world no longer needs to accrue dollar reserves to purchase energy, and the beginning of the end of the petro-dollar is now underway.” – Examiner

It has also been reported that China is set to take over the pricing of gold by the end of the year. While it would be presumptuous to assume that this is something that is set in stone, there is little evidence to support that anything else would transpire. The reality seems to be that the rest of the world looks at the paper price of gold as irrelevant. When you consider that the price of physical metal in china is, at the time of this writing, selling for a $600 premium over the paper price it seems that the physical market has shown the true value of the metal which can, and will, ultimately lead to the demise of fiat currencies.

“…China, through the Shanghai gold exchange, will become the default market for price discovery, and at that point will re-adjust gold to its true value, instantly causing massive chaos in the fiat currency markets and leaving the world little alternative but to implement a complete currency reset.” –Examiner

Interestingly enough China has been conspiring with Russia openly for years to “De-Americanize” the world. There was overwhelming support for the Chinese based alternative to the IMF, the AIIB (Asian Infrastructure Investment Bank), at its inception there were over 40 nations that pledged support for the new alternative and that number has grown to 57 countries. The increased interest in the AIIB leads one to believe that a rather large portion of the world has grown weary of the dollar and the economic policies that come with it. It is these policies and subsequent failures that have paved the way for the (almost) worldwide support of the AIIB.

“The dominance of the greenback is the root cause of global financial and economic crises”– Justin Yifu Lin, former Chief Economist of World Bank

There has been massive speculation as to what will happen in the Eurozone over the coming months as a result of the instability and massive debt to GDP ratio that has plagued Greece over the last few years. While there seems to be an end in sight, until their spending is reigned in and there is a more comprehensive overhaul to the budget as well as spending there can be no real progress made. It does however seem to remind the world that overspending can and always will lead to catastrophe. Greece serves, unfortunately, as a reminder of what can happen when government spending and debt gets out of control. This spending ultimately affects the people of the country, not just the government.

“Bank customers will still not be able to cash checks, only deposit them into their accounts, and they will not be able to get cash abroad with their credit or cash cards, only make purchases. There are also restrictions on opening new accounts or activating dormant ones.” –The Associated Press 

There is no such thing as a crystal ball, however there are some clear signals of trouble ahead. We have just highlighted some of the most compelling situations from around the world that all seem to be culminating this year. What is intriguing to us is that every major central bank the world throughout is buying more gold than they have in almost half a century, even countries like Iraq and Nepal. Now, the people in charge of central banks are significantly more well informed than the average person could ever hope to be, so, “why the sudden interest in gold?” you may ask. The answer seems to be that the entire world is concerned with paper currencies in general, and more specifically the viability of the US Dollar as a reserve currency- hence the interest in the Yuan, the Shanghai Gold Exchange, and the AIIB. We cannot predict whether these situations, or some other unforeseen event, will be the catalyst for a major economic event here in the US, we can only point out that there is a financial storm brewing. Do you have your umbrella?