Thursday, April 3, 2008

Astrology can predict booms & busts

Mathematical models of human behavior, like models of the economy, cannot predict what is essential to our human condition, the role of volatile feelings. In history, periods of even progress have been interrupted by episodes characterised by fear or euphoria. Astrology can fill this gap in our understanding and explain and predict such espisodes.

Alan Greenspan has said the following:

"I do not say that the current systems of risk management or econometric forecasting are not in large measure soundly rooted in the real world...But these models do not fully capture what I believe has been, to date...the innate human responses that result in swings between euphoria and fear that repeat themselves generation after generation with little evidence of a learning curve. Asset-price bubbles build and burst today as they have since the early 18th century, when modern competitive markets evolved. To be sure, we tend to label such behavioural responses as non-rational. But forecasters’ concerns should be not whether human response is rational or irrational, only that it is observable and systematic. This, to me, is the large missing “explanatory variable” in both risk-management and macroeconometric models. Current practice is to introduce notions of “animal spirits”, as John Maynard Keynes put it, through “add factors”. That is, we arbitrarily change the outcome of our model’s equations. Add-factoring, however, is an implicit recognition that models, as we currently employ them, are structurally deficient; it does not sufficiently address the problem of the missing variable." [1]

In other words, Greenspan is saying that there is something the scientific and systematic models fail to incorporate and it has to do with how human beings act or react. In this regard, he mentions a "missing variable", but does not propose what that variable may be. However, he says that it is "systematic and observable" in the economic and financial history of the world.

This is where astrology comes in. A major role of scientific mundane astrology, like the Systems' Approach, is to accurately predict the nature and timing of developments and to show when a beneficial/adverse time is likely to take place that either stimulates/disturbs people and changes their behavior. Scientific astrology has a fundamental role to play in the prediction of the future and can thereby help to complete the incomplete economic and financial models of today, including models that are used to better manage risk. Indeed, a critical role of astrology is to warn people to be careful when the times become fraught with risk and danger of losses as we are now witnessing.

Based on the SAMVA USA chart, many accurate predictions about the economy and financial markets have been made, including a prediction for financial market volatility in 2008.

1) Alan Greenspan, "We will never have a perfect model of risk", Financial Times, March 16 2008.

No comments: