Tuesday, September 28, 2010

Karma cures the economy

Today, US policy makers are trying to revitalise a banking system that collapsed and an economy that has tanked. Since 2007, the authorities have injected huge amounts of funds into the banking system and economy in the hope of reflating the system and getting the economy moving again. A consensus seems to be that these efforts have helped but are not enough to return the economy to robust growth. Many predict that it will take the economy many years to recover. Based on an analysis of major planetary periods in the SAMVA USA chart, this article reveals why this is necessarily so and why the present dilemma is an echo of the dialogue during the final decades of the 1890s. Importantly, the problems where finally resolved with the onset of the Sun major period in 1896. The Sun period ushered in the Progressive Era and a social consensus to invigorate industrial production based on the gold standard. The secret ingredient making this possible was the national karma seen in the chart. The Sun period was accompanied by technological advances and increases in gold production that finally allowed the economy to push forward. A similar auspicious turning point in US history is expected in the year 2016.

Current debate
Leading economists identified with the policies of the Democratic party, including Nobel prize winner Paul Krugman, suggest the US should deal with its problems by reflating the economy by printing more money and thus allowing inflation to rise.[1] Such remedies could help the government, firms and households to reduce their debts, which are hampering a recovery and keeping unemployment high. However, at the same time, a rise in inflation would also harm the owners of financial wealth, including creditors and pension savers, and those receiving a nominal monetary income. This is because the purchasing power of assets and incomes is eroded with inflation. Failing to heed this advice, to reflate the economy with an inflation tax, the story goes, the government risks continued difficult times and a slow process of defaults due to the high debts preventing a timely recovery in the economy.

Echoes of the past
The present dialogue echoes the US political dialogue of the 1880s and 1890s. During the so-called Gilded Age, easy money policies of the so-called bimetallists clashed with the hard money policies of those favouring the gold standard. Today, we have the same easy vs. hard money debate, albeit the US dollar is no longer linked to the price of gold. The Federal Reserve now manages the amount of money in the financial system through its monetary policy operations.

SAMVA USA horoscope
An authentic horoscope for the USA was discovered only a few years ago. The SAMVA USA chart makes it possible to accurately interpret not only the nature of the collective entity that is the USA in terms of the natal potential seen in the horoscope, but also the dynamics of the horoscope with respect to evolving trends and events of any given time in US history. More importantly, an authentic horoscope allows us to predict the broad themes and the types of significant events that are likely to be prominent in future national affairs. The major and minor trends in history are read from the 120 year Vimsottari dasa-bukhti cycle of major and sub-periods. The planetary periods offer insight into the evolution of issues at the heart of the national debate. Meanwhile, significant events can be seen through an analysis of transits in the chart. Importantly, the functional nature of each planet, determined by the house in which its moolatrikona sign resides, is crucial, along with the planets general nature, for a reading of its indications. The planet‘s sign and house placement, along with any interactions by aspect with other planets or sensitive points is important for the accurate interpretation of its expression in the national life.

120 year Vimsottari period cycle
The US has general elections every two years to choose a part of the members representing the population in the US Congress. Every other General Election, or every four years, the President of the USA is also elected. During such elections, the national debate reaches a crescendo, with the party and President being elected that somehow captures the popular imagination. The issues involved are normally recorded for posterity making a comparison of past trends with present ones possible. Of course, the transits of planets in a given sub-period of over 120 years ago will be quite different from the ones in the same sub-period at the present time. As such, we would expect the emphasis to be slightly different, in part due to different significant events. That said, we would expect some singular undercurrent of popular thought to be very similar. In this article, we compare the history of economic policy in two identical planetary periods involving the planet Venus and its nine sub-periods lasting from 1876 to 1896 and again, 120 years later, from 1996 to 2016. The focus is here on the economic policy of these two periods, notably the role of monetary policy and inflation. It will be shown that despite the government being confronted with different events and challenges, there was a fundamental similarity in economic tensions. In particular, once the veneer of historicity has been stripped off, the similarities that emerge are quite breathtaking. The analysis leads us to the prediction that we can expect ongoing economic concerns until 2016, when the fortunes are expected to change with the onset of the Sun period. However, first let us go over two basic issues related to inflation, i.e. the dollar and gold.

History of the US dollar
In 1775, the United States and the individual states began issuing "Continental Currency" denominated in Spanish pesos and (for the issues of the states) the British Pound of the state's currencies. The continental currency suffered from printing press inflation due to lack of coordination in monetary policy between Congress and the States. Benjamin Franklin also described how British sabotage during the Revolutionary war contributed to the debasement of the currency such that it ceased to circulate in May 1781 after it had become worthless.[2] It was replaced by the silver dollar at the rate of 1 silver dollar = 1000 continental dollars. At its inception as a Union of thirteen States based on a Confederation type of government in 1781, the USA was only a minor trading power. Following the ratification of its new constitution, the U.S. Constitution, in 1789, the government began operation. In 1792, the US "dollar" was established and pegged to the Spanish Empire's 8-real peso ("piece of eight"), a large silver coin.[3] America continued to accept Spanish-American pesos as late as 1857.

In 1834, the US Congress set up a "bimetallic" system, based on both silver and gold where 1 ounce (troy) of gold was valued at $20.67 while 1 ounce (troy) of silver was valued at $1.29, at a fixed conversion rate to gold, at 1/16 of an ounce. The 1/16 ratio was abandoned in 1873, when huge deposits of silver were discovered and mined. In 1878, however, as a subsidy for politically influential silver producers, the Bland-Allison Act required the government to buy a limited amount of silver ($2,000,000 to $4,000,000 a month) at $1.29 per ounce and coin it. This compromise bimetallism, the so-called "limping standard," was replaced by a gold standard in 1900.

A US promise to redeem foreign-bank dollars in gold at $35/ounce formed the basis of the Bretton Woods Agreement (1944) for fixed foreign exchange rates. The Bretton-Woods system collapsed in the early 1970s, partly because continued US inflation made gold convertibility unworkable.[3] Since that time, the US dollar has been a fiat currency and as such freely floating on international foreign exchange markets. During the floating dollar era, the dollar’s value has been quite volatile viz-à-viz other currencies but enjoyed popular acceptance as a transaction, pricing, vehicle and reserve currency internationally. At the same time, as gold is no longer the standard of value, the onus is on the Federal Reserve to restrain its printing of money to prevent its excess quantity from causing inflation .

Gold production
The first significant gold rush in the United States was in Cabarrus County, North Carolina (east of Charlotte), in 1799 at today's Reed's Gold Mine. Thirty years later, in 1829, the Georgia Gold Rush in the southern Appalachians occurred. It was followed by the California Gold Rush of 1848–52 in the Sierra Nevada, which captured the popular imagination. The California gold rush led directly to the settlement of California by Americans and the rapid entry of that state into the union in 1850. Successive gold rushes occurred in western North America, moving north and east from California: Fraser Canyon, the Cariboo district and other parts of British Columbia, and the Rocky Mountains. One of the last "great gold rushes" was the Klondike Gold Rush in Canada's Yukon Territory (1898–99). It helped open up the relatively new US possession of Alaska to exploration and settlement and promoted the discovery of other gold finds there.[4] The gold production in the USA skyrocketed as a result. Monetary policy, the printing of money, was tied to gold. The discoveries at the middle of the 19th century did little more than allow gold production to keep pace with the expanding economic activity and a sharply growing population. Aside from an explosion in spending on arms, the Civil War of the 1860s had a devastating influence on the economy. It was followed by the reconstruction spending of the post-war period. Nevertheless, it is clear that during the remainder of the century, gold production did not keep pace with the needs of the economy and deflation, instead of inflation, emerged. In turn, deflation had an influence to constrain economic activity.

In the second half of the 19th century, after a period of inflation (rising prices) following the Civil War and the Reconstruction period, the US experienced deflation (falling prices). This has been linked to the Long Depression from 1873 to 1896, when the US was on a gold standard and gold production did not keep pace with the monetary needs of a growing economy.

Astrology of the Venus period
As Venus is 4th lord of the SAMVA USA chart its indications of communal harmony, fixed assets and natural resources come to the fore. Venus is also general indicator of comforts and luxuries in life. Importantly, Venus is badly placed and weak in the 6th house of conflict, financial stability and health. This suggests that problems are to be expected for the indications of Venus of the nature of the indications of the 6th house. A weak planet cannot promote its indications and is vulnerable to setbacks when transits turn adverse. Indeed, financial stability issues and conflict were a major part of the political debate during the first Venus period (1876-1896) in the SAMVA USA chart. The unequal distribution of income and wealth was at the root of the malcontentment of the period. Not surprisingly, the same issues have come to haunt in the second Venus period (1996-2016).

1888 election themes
“The annexing and subdividing of the Dakota Territory into states … was a major issue of the election”. Conflict over land is clearly an indication of Venus as 4th lord. Harrison's opponent, “Cleveland was the leader of the pro-business Bourbon Democrats who opposed high tariffs, free silver, inflation, imperialism and subsidies to business, farmers or veterans. His battles for political reform and fiscal conservatism made him an icon for American conservatives… Cleveland took strong positions and in turn took heavy criticism”.[5] Importantly, Cleveland lost the election. His message was not yet ripe for the country. “The Republicans nominated Harrison, because of his war record, his popularity with veterans, his ability to express the Republican Party's views, and the fact that he lived in Indiana.” Harrison seemed to embody qualities linked to Jupiter as 6th lord of conflict being the sub-period lord at the time. “Harrison’s administration is most remembered for economic legislation, including the McKinley Tariff and the Sherman Antitrust Act, and for annual federal spending that reached one billion dollars for the first time…He also saw the admittance of six states into the Union.” [6] The legislation was intended to protect America's interest in international trade but also to restrict the rampant exploitation of the Robber Barons.

1892 election themes

Cleveland came back to wrest the election from Harrison. “Democrats attacked the "Billion Dollar Congress", and used the issue, along with the growing unpopularity of the high tariff, to defeat the Republicans, both in the 1890 mid-term elections and in Harrison's bid for re-election in 1892.” Still, Cleveland's hard money policies met great resistance. "In the Great Plains and the South, grain and cotton farmers, suffering from falling crop prices, demanded currency inflation to raise prices. “As Democrats convened in Chicago in June 1892, Cleveland was the front-runner for the nomination but faced formidable opposition. He had come out against the free coinage of silver, thereby earning the enmity of western and southern Democrats. Most damaging of all was the opposition of his home state; the New York delegation, packed with Tammany men, frequently demonstrated their hostility to Cleveland's candidacy on the convention floor.” By 1892 a Populist party had also appeared, to call for free coinage of silver to achieve this goal. President Cleveland resisted, stating that such a monetary policy would destroy confidence, prolong the recession, and injure city consumers." “Although the Cleveland forces preferred Isaac P. Gray of Indiana for vice president, they accepted the convention favorite, Adlai E. Stevenson of Illinois. As a supporter of using greenbacks and free silver to inflate the currency and alleviate economic distress in the rural districts, Stevenson balanced the ticket headed by Cleveland, the hard-money, gold-standard supporter” [6] Interestingly, the sub-period of Mercury was operating, and as 3rd lord of enterprise and commerce an emphasis was on business friendly policies, including "responsible" monetary policy associated with the gold standard. However, this also ensured continued economic malaise, the source of anger among the silver coinage supporters. “Cleveland’s intervention in the Pullman Strike of 1894 to keep the railroads moving angered labor unions nationwide and angered the party in Illinois; his support of the gold standard and opposition to free silver alienated the agrarian wing of the Democratic Party”.

1896 election themes
“By the 1880s, McKinley was a national Republican leader; his signature issue was high tariffs on imports as a formula for prosperity, as typified by his McKinley Tariff of 1890. As the Republican candidate in the 1896 presidential election, he upheld the gold standard, and promoted pluralism among ethnic groups. His campaign, designed by Mark Hanna, introduced new advertising-style campaign techniques that revolutionized campaign practices and beat back the crusading of his arch-rival, William Jennings Bryan. The 1896 election is often considered a realigning election that marked the beginning of the Progressive Era.”[7] In 1896, the Democrats, taken over by southern and western inflationists, ran William Jennings Bryan on a free silver platform. Ethnic voters surged into the Republican ranks-for the depression was a disastrous one and the Republican party had always urged active government intervention to stimulate the economy".[9] In addition, as city dwellers they feared inflation. The Republicans combined the bimetallism issue with the tariff question and promised a return to prosperity, social order, and morality. They argued that inflation caused by free coinage of silver would create a "53-cent dollar" that would rob the workingman of his buying. William McKinley's election began a long period of one-party (Republican) domination in the northern states and in Washington. Fitting with the Sun major period having begun, “McKinley did win, and his policies of promoting pluralism, industrial growth, and the gold standard determined national policies for two decades”. McKinley won again in the 1900 election, but was assassinated in 1901, when Theodore Roosevelt, his Vice President, became President, earning a place in history as a strong leader.

The national karma
By the late 19th century the U.S. had completed its "Westward expansion." The country had also been suffering from demand side problems in the economy since "the Panic of 1873" and through the three years of recession following "the 1893 Depression". This period has been termed "The Long Depression".[9] The spell was not really broken until 1896, when monetary expansion surged ahead, helped by the increased gold production in the latter half of the 1890s and early 1900s. In the famous work of Milton Friedman and Anna J. Schwarts on the monetary history of the United States, the following statement is fascinating in this regard

"The final years of the [19th] century saw a dramatic reversal of economic conditions. The stock of money had fluctuated about roughly a constant level from 1892 to 1897, in June 1896 it was lower than in June 1892, in June 1897 about the same as in June 1892. From then on it rebounded upward at an extraordinary rate...to 1902 - a cumulative increase of 80 per cent in five years."[10]
This was made possible with the sudden surge in gold production and the continued hard money policies of the national leaders. Not surprisingly, it was during the six year Sun major period in the SAMVA USA chart from 1896 to 1902 that the national conditions improved significantly. It is not a coincidence that such a mighty rebound occurred in gold production and hence monetary and economic conditions during this period, as these are a key indications of the Sun. A similar fate likely awaits the US in coming years. Like the very best astrologers, modern day bimetallists, like Paul Krugman, are likely right, a full recovery will be slow in coming given the present monetary and fiscal policy stance. That said, while we know that a favourable karma will manifest some years from now, we do not know exactly how it will do so as the USA is no longer on a gold standard and the modern economy is much different from the economy of the late 19th century. However, a major improvement will come.

Post scriptum
Author & astrologer V. K. Choudhry has made the following comment with respect to this article:
"Some improvement in the economy is likely in the Mercury sub period of Venus main period between 18th April, 2012, to 18th February, 2015. Lot of new and global enterprising activity is likely. It is likely to be rewarding though being volatile."
In this regard, a review of the last Mercury major period may be helpful. At the same time it is recalled that the Mercury sub-period, although important for the shorter term trend, is operating within the context of the longer term trend set during the Venus major period. In the earlier Venus-Mercury period (April 18, 1892- February 18, 1895), a stock market panic on May 5, 1893 started a mini depression which lasted until 1896, linked to difficult transits at the time. The article is focused on the shift of major trends from the Gilded Age associated with the Venus major period to the Progressive Era which began with the Sun major period. A similar major trend shift is expected around 2016.

[1] Krugman, Paul (2010). “Default Is In Our Stars”. September 25. New York Times.
[2] The Continental Currency
[3] The History of the Dollar
[4] Gold mining in Alaska
[5] Grover Cleveland
[6] Benjamin Harrison
[7] William McKinley
[8] The US Presidential election of 1892
[9] The Depression of 1893
[10] Friedman, Milton and Anna J. Schwarts (1963). A Monetary History of the United States, 1867-1960. Princeton University Press, Princeton.

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