Garet Garrett, author of A Bubble that Broke the World, 1931.

The other day I stumbled across the Generational Dynamics website. (Disclaimer, link will transport your web browser back to 1997 technology.) Author John J. Xenakis explains Generational Dynamics as “a historical methodology that analyzes historical events through the flow of generations, and uses the analysis to forecast future events by comparing today’s generational attitudes to those of the past.

To be precise, my google travels brought me to Xenakis’s website through his review of Garet Garrett’s 1931 book, “A Bubble that Broke the World [pdf].” Mises.org notes that Garrett “ascribes the [1929 stock market] crash to the pile of up debt, which in turn was made possible by the Fed printing machine. This created distortions in the production structure that cried out for correction. So what is the answer? Let the correction happen and learn from our mistakes.”

I’m not completely sold on Xenakis’s theory, but considering the rhythm of history, it may help explain a few things. He notes the timing of past financial crises: the 1637 Tulipomania bubble, the South Sea bubble of the 1710s-20s, the bankruptcy of the French monarchy in the 1789, the Panic of 1857, and the 1929 Wall Street crash. All roughly 70-90 years apart. The explanation for this regular timing?

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