Number of Sunspots and Inflation CYCLESHi friends
Today im going to explain about the relationship between Sunspot Numbers and Inflation rate from 1960 to now.
so lets start with inventor of this theory : William Stanley Jevons's
In 1875 and 1878 Jevons read two papers before the British Association which expounded his famous "sunspot theory" of the business cycle.
Digging through mountains of statistics of economic and meteorological data,
Jevons argued that there was a connection between the timing of commercial crises and the solar cycle.
it called 5.31-Year Cycle too.
In the stock market and in the economy, there are both natural frequencies and artificial excitation frequencies.
The four-year presidential election cycle is a great example of an excitation frequency, and it has demonstrable effects on stock prices.
The schedule of FOMC meetings 8x per year is another possible example of an artificial excitation frequency.
When a demonstrable cycle period appears that one cannot tie to some manmade excitation frequency,
then the supposition is that it is a "natural" frequency of the economic system.
Something about the economy or the market results in an oscillation on a certain frequency which may not have a good outside explanation.
Perhaps it is in how money flows. Perhaps it is in how human brains make decisions about surplus and scarcity. It is hard to know.
This 5.31-year frequency in the CPIs cycle seems to fall into that category as a natural cycle,
because the 5.31-year period does not match any known excitation frequency related to human activity nor the economic calendar.
So that makes it probably a natural frequency.
In above chart , there does seem to be a relationship between sunspots and the inflation rate.
We see lots of instances when the peak of the sunspot cycle coincided with the peak of the inflation rate.
There have been spikes in the inflation rate not tied to the sunspot cycle, such as the spike during the Arab Oil Embargo of 1973-74.
this examples did, interestingly, come at the halfway point of the sunspot cycle, fitting the half-period harmonic principle(5.31 year cycle).
The current rise in inflation fits both the longstanding 5.31-year cycle and the upswing in the sunspot cycle.
Solar researchers expect the current sunspot cycle rise to end in July 2025, which is 3 years from now.
But the 5.31-year cycle says a top in the inflation rate is expected right now.
That would mean seeing the inflation rate bottoming around 2025 just as the sunspot cycle is peaking.
Sometimes cycles present us with conflicts that are hard to reconcile.
The point of the 5.31-year cycle that we can take away for right now is that the inflation rate should be falling for the next ~2.2 years.
But that does not mean we get to zero percent inflation right away.
The drops take a while to unfold. Inflation is likely with us for a while, and we have to get used to that idea.
