I have to convince you into believing in cycles because what I emphasize on Part 1 is based on the idea of cycles. Rise and fall of nation, forest fires, credit expansion leading to credit contradiction etc are all in the form of a cycle.
The Book Of Change
Olympics is near, but I am not trying to show off some of China's greatness, bear this in mind =). I-Ching is one of the five classics that ancient chinese must read before they go for their imperial exams. Even though it is more of a philosophy book, most people claim to use it for divination purposes. Ignore the divination part, I'm not superstitious either. But the idea of the book is about changes which eventually lead to a cycle for everything.
Basically it employs the binary expression of 1 and 0 to come out with the possibility
of everything regarding the universe. There are 64 diagrams altogether but what I'm interested in and going to explain is the very first diagram known at the "Qian" (expression of 111111)In I-Ching, most effort is spent on this diagram and the second diagram which is the exact opposite of "qian".
I will briefly describe the diagram starting from the first expression (the first 1).
1. Chinese likes to use dragon. The first expression describe a hidden dragon that has no use currently. I must clarify that I-Ching has nothing to do with the movie crouching tiger hidden dragon! Jokes aside, basically the dragon is waiting for an opportunity. Just that currently, it's preparing for the time for to time.
2. Moving on to the second expression - garnering the support of the masses and being beneficial to the masses which in turn benefits oneself. Benefits move two ways. One that gives to the community will eventually benefit and take from the community.
3. Peacefulness sums up the third expression but this is what we see on the surface. Actually a turning point is being talked about at this stage, where one chooses to achieve more or is simply pleased with current stage. Outcome depends on one's behaviour.
4. With some thoughts, you should know what's coming for the fourth expression. One chooses to achieve more and grabs the opportunity and jumps straight for the top. But to an extent, one is not leaving the community alone. There is another side of this where one chooses to be pleased with current stage but it is not very relevant.
5. At this stage or the fifth expression, the dragon is high up in the sky. It enjoys a greater support and respect from the masses. Most have recognised the dragon and embraced it. The masses here are greater than those in stage 2.
6. The last expression emphasizes on "regret". This regret is already entrenched at the fifth stage because one gets complacent after conquering the world. One no longer considers one's actions or prepares for crisis time. The dragon rises blindly and flies too high out of its comfort zone, causing it to regret. The dragon was once a rising dragon but had become a battling dragon at this stage. The result of this is because of the fifth stage actually.
Fuzzy Logic Time
I have to admit that applying I-Ching on the economy and stock market is unheard of and to an extent, crazy. But as crazy as it sounds, I feel that one should treat this with an open mind.
Personally I think the process from stage 1 to stage 5 is pretty straightforward. The important part of this "qian" diagram lies with the underlying problem at stage 5 and the ending stage which respresents a downfall. Well, "qian" diagram is supposed to be a very auspicious diagram if you manage to draw using divination methods. But notice that it ends on a sour note. It could end on the fifth stage but because of the elasticity (this is why it covers all possibility) of the I-Ching philosophy, it reminds people of the possible downfall of the dragon because seeds of crisis are planted unknowningly at stage five. Complacency is dangerous.
Let's look at the rise of USA.
If you refer back to K-wave theory last week, it actually shows that the winter period (stage 6) was from Great Depression to World War II. Winter is immediately followed by Spring so World War II is the turning point actually. Singapore does not have any seasons change, we have summer all year round and believe me, the weather is devastating. So I never reach experience the change from winter to spring. I will attempt to apply the various stages to the rise of USA.
1. Opting for an isolationism pokicy, USA did not want to participate into World War II. Since the Great depression, the recovery was rapid (hidden dragon).
2. Supported the allied countries and joined the United Nation after the war. Was also one of the two dominant superpowers afterwards.
3. It could have enjoyed some peace but it chose to fight for superpower by entering into the cold war. Meanwhile, the American people completed their great migration from the farms into the cities and experienced a period of sustained economic expansion.
4. Reagan took a hard line against the Soviet Union, teaming up with friend and ally Margaret Thatcher against the "Evil Empire". Communism finally collapsed in Russia in 1991.
5. After the fall of Soviet Union, the United States emerged as the world's sole remaining superpower. Well don't forget that the stock market was in a wonderful bull run that started in 1982 as United States fight for superpower. But as expected, seeds of crisis are planted along the way. Complacency sets in.
6. You have the crash of Nasdaq which was caused by speculation, a sign of recklessness and complacency isn't? Subprime housing crisis was also one of the consequences that result from the complacency of financial "geniuses". Trust me, this is not the end yet. Again, to link it back to last week post, the derivatives market could be the final meltdown of the world's financial system and the eventual downfall of the great U.S of America.
This odd fact that a reaction that makes sense arises out of a technique seemingly excluding all sense from the outset, is the great achievement of the I Ching
Carl Jung
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