“History is seasonal, and winter is coming.” — The Fourth Turning, 1997
“A forecast is never so useful as when it warns man of a crisis.” — Bertrand de Jouvenal (“Maxims of Wall Street,” p. 112)
My newsletter, Forecasts & Strategies, specializes in making predictions about the markets and global trends. I’ve been writing my newsletter since 1980, and I’ve had my share of good calls and a few bad ones.
One thing I can definitely say: forecasting is a tough business, and you’re lucky if you can accurately predict five out of 10 events. After writing my newsletter for 43 years, I consider myself a survivor.
Enter sociologist Neil Howe.
In his new book, “The Fourth Turning is Here,” Howe updates his co-authored doomsday book, “The Fourth Turning,” that came out in 1997. He is the sole author, as his co-author William Strauss died in 2007, unable to see the unfolding of their dire predictions.
The original “Fourth Turning” was published in 1997, and created a sensation. It argued that America was going through a cultural cycle that has been repeated throughout the ages of history, and the fourth stage ends badly — a crisis, they said, that is “roughly a decade away from the next era of Crisis.”
They summarize their thesis as follows:
“First comes a High (1946-1964), a period of confident expansion as a new order takes root after the old has been swept away. Next comes an Awakening (1964-1984), a time of spiritual exploration and rebellion against the now-established order. Then comes an Unraveling (1984-2005), an increasingly troubled era in which individualism triumphs over crumbling institutions. Last comes a Crisis (2005-2025) — the Fourth Turning — when society passes through a great and perilous gate in history.”
The authors were pretty specific in their timetable in 1997: “Sometime around the year 2005, perhaps a few years before or after, America will enter the Fourth Turning.”
Is the Future Predictable?
I’m always skeptical of predicting a specific date of when something will happen.
How accurate are their four cycles? For one thing, they have the Second and Third Turnings mixed up. The period from 1964-1984 was more like an “Unraveling,” with the Vietnam War, student riots, the first energy crisis and the inflationary 1970s. The period from 1984-2005 turned out to be an era of “Awakening,” with the Reagan Revolution, the collapse of the Soviet socialist central planning model and a balanced budget under Bill Clinton.
It is true that the New Millennium (the Fourth Turning) has had its share of crises, starting with the terrorist attacks of 9/11 in 2001… and then the financial crisis of 2008-09, which almost ended in total economic collapse… followed by the Covid pandemic/lockdown of 2021.
So, the Fourth Turning (if it exists) has proven to involve one crisis after another.
And yet, we’ve enjoyed remarkable recovery and prosperity in between, as evidenced by the “Mother of All Bull Markets” on Wall Street in 2009-2021 (one of my good predictions).
In fact, the worst scenarios predicted by the authors never occurred. In 1997, they wrote: “The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically or succumb to authoritarian rule.” They were worried that the Fourth Turning could end in “total war” and “unimaginable horrors.” Certainly, if the Feds had not intervened in reversing the Financial Crisis of 2008, it could have been ugly. But they did, and we survived once again. America is a resilient nation.
As William Vanderbilt said, “This country is very elastic… like a rubber ball hit, it will spring up again.” (Maxims, p. 109).
The authors ended their book with this warning: “The next Fourth Turning could mark the end of man. It could be an omnicidal Armageddon, destroying everything, leaving nothing,” but pushed back, saying this scenario is “not likely.”
Their predictions were secular in nature, but Christians who believed in the Apocalypse and the Second Coming of Christ took notice.
Is the Fourth Turning “Crisis” Over or Just Beginning?
Enter 2023. What is Neil Howe saying now? The book jacket boldly boosts:
“Now, right on schedule, our own fourth turning has arrived. And so Neil Howe has returned with an extraordinary new prediction. What we see all around us — the polarization, the growing threat of civil conflict and global war — will culminate by the early 2030s in a climax that poses great danger and yet also holds great promise, perhaps even bringing on America’s next golden age.”
You can order the book here and decide for yourself.
Note that he has moved his dates up by a decade, and his outlook is still deeply pessimistic. But notice he hedges by suggesting a “golden age” after the collapse. It’s like a stock market forecaster who predicts a bull market while hedging his bets saying, “But we could have a bear market crash before that.”
There’s no question the book describes a doomsday scenario of dysfunctional government, gun violence and even civil war and hopelessness in the upcoming generation. (Surprisingly, Howe doesn’t mention the threat of global warming!) It suggests that we’re headed for the “Mother of All BEAR Markets”!
Are Things Really That Bad?
Given his negative description of America, you would think the stock market would be at an all-time low. Actually, it’s near an all-time high! Perhaps he could learn a thing or two reading The Maxims of Wall Street: “Bull markets climb a wall of worry.”
There’s a lot of evidence that America is in decline. Our public schools are not improving SAT scores. Crime is on the rise. Church attendance is in decline. The United States is now ranked #25 in the Heritage Foundation’s Economic Freedom Index. It used to be ranked in the top 10 for years.
And yet, Steven Pinker, in his book Enlightenment Now, highlights these positive developments:
(I thank Alex Green, chief investment strategist, for this reference.)
Who knows? Maybe the negative things mentioned earlier will turn around after the 2024 election. With God and Man, all things are possible.
But perhaps it’s best to remember these words of wisdom from J. Paul Getty, America’s first billionaire: “Businessmen can profit handsomely if they will disregard the pessimistic auguries of self-appointed prophets of doom.” (Maxims, p. 112).
He wrote that in 1965, and despite stock market crashes, real estate collapses, banking crises, hurricanes and global warning, we continue to survive and prosper.
This summer, I visited the “Library of Mistakes” in Edinburgh, Scotland. (See my Skousen CAFÉ at The Greatest Threat to Your Wealth (No, It’s Not the Government) – Mark Skousen).
Let’s hope “The Fourth Turning is Here” will be added to the bookshelves of “The Library of Mistakes”!
This Book Belongs on Your Night Stand
In almost every Skousen CAFÉ, I find myself quoting something from “The Maxims of Wall Street,” and with good reason. This column is no exception. In its 283 pages there is much wisdom, packed with short stories, proverbs and advice that can make you money, and save you from making some big mistakes in life.
Bert Dohmen writes that “Maxims” is a “beautifully bound collector’s item. It should be on every investor’s bookshelf and read regularly.”
Many of my subscribers do that very thing, and have Maxims on their desk at work or at home. As Dennis Gartman, editor of the Gartman Letter, states: “It’s amazing the depth of wisdom one can find in just one or two quotes. I have it on my desk and refer to it daily.”
Order your copy today. “Maxims” is in its 10th anniversary edition, available at a discount for only $20. Additional copies are only $10 each, and they make a great gift for friends, clients or relatives. If you order an entire box (32 copies), you pay only $300. I autograph and number each copy, and mail them to you at no extra charge if you live inside the United States. To order, go to www.skousenbooks.com.
I’m coming to Miami!
I will be speaking at the Economic Club of Miami on Sept. 14, 2023, 5:30 — 7:30 pm:
Location: Miami Dade College Wolfson Campus, 300 NE 2nd Avenue, Room 2106, Miami, FL, 33132
Price is $25 for the entrance fee. To register, go here.
Join Me at My Favorite Investment Destination: New Orleans!
I always look forward to the New Orleans Investment Conference, to be held this year on Nov. 1-4 at the Riverside Hilton Hotel. It is the granddaddy of investment conferences, especially for gold bugs, and I have attended every year since 1976! New Orleans is my favorite town to visit, with great jazz, a cultural haven and the world’s best restaurants.
Presenters at this year’s conference include keynote speaker Matt Taibbi. He was one of the favorites at FreedomFest in Memphis, speaking about his expose of Twitter censorship and the future of free speech on social media. Other speakers include Peter Schiff, Jim Stack, Brien Lundin, Robert Prechter, Mary Anne and Pamela Aden, Rick Rule, Adrian Day, Jim Rickards and the Real Estate Guys Robert Helms and Russ Gray.
To sign up, go to this link. Or call 1-800-649-8411 and be sure to mention you are a subscriber.
P.S. Come join me and many of my Eagle colleagues on an incredible cruise! If you book before Sept. 29, you’ll receive a spend-as-you-wish $250 ship board credit! In addition, this is all-inclusive — meals, drinks and even the excursions are included in your one-time price! We set sail on Dec. 4 for 16 days, embarking on a memorable journey that combines fascinating history, vibrant culture and picturesque scenery. Enjoy seminars on the days we are cruising from one destination to another, as well as dinners with members of the Eagle team. Just some of the places we’ll visit are Mexico, Belize, Panama, Ecuador and more! Click here now for all the details.
Good investing, AEIOU,
You Blew It!
Walter Block: Defending the Undefendable
Walter Block, an economics professor at Loyola University in New Orleans, is a long-time friend. We’ve debated many topics over the years, but we’ve learned to disagree without being disagreeable.
He is famous for writing a book entitled “Defending the Undefendable.” You can read the latest (2018) edition here.
Block argues that all actions involving “consenting adults” that do not initiate force or violence should be legal, including prostitution, bribery, black mail, loan sharking and price gouging, as well as selling illicit drugs, alcohol and tobacco, all of which he labels as “victimless crimes.”
I am sympathetic with his view that we should maximize freedom of choice when it comes to the legal system, and making many of these actions illegal has unintended consequences. Prohibition during the Roaring Twenties is an excellent example, how prohibiting the sale of alcoholic beverages turned ordinary citizens into criminals, and made the mafia a highly-profitable enterprise.
But just because an activity is legal doesn’t necessarily make it morally right. Frequently there are victims. “Free to choose” does mean “free to lose” from time to time.
That’s why we can’t ignore the second half of the legalization process. That’s where I differ from Walter. He makes no moral judgment on drinking, smoking, prostitution or blackmail.
I do. For example, when you legalize the drinking of liquors and beers, citizens should support an educational program of responsible drinking. You have to persuade adults young and old to be moderate drinkers, or not to drink at all.
I find it interesting historically that it was only after Prohibition was overturned that Alcoholics Anonymous began. It was a Christian group that started AA and its 12-step treatment in 1935, two years after the 21st amendment was passed in December 1933 repealing Prohibition.
After Roe v Wade, which legalized abortion in all 50 states in 1973, pro-life groups were energized and began programs to discourage abortions and to encourage out-of-wedlock mothers to give their children up for adoption rather than aborting them. Interestingly, since the early 1980s, the number of abortions has steadily declined. Persuasion works!
Smoking has declined in large part because of efforts in high schools to discourage smoking. Making it illegal to smoke cigarettes only entices young people to smoke as a form of rebellion.
In short, communities and governments have a responsibility to teach morality and ethical behavior after legalizing alcohol, drugs, smoking and prostitution. As one leader said, “We teach them correct principles and they govern themselves.”
Remember: “The triumph of persuasion over force is the sign of a civilized society.”
See Mark & Jo Ann Skousen’s pamphlet, “Persuasion vs Force.”