Clocks are suppose to enable us to tell the time. Before the clock a sundial was used. The sundial had one problem in that when the day was cloudy, it was hard to tell the time. The sundial basically relied upon casting a shadow across a circle that had markings which designate the time of the day.
The economic clock is supposed to be a reliable means of telling what investment is the best investment to be in at the current time in the economic cycle. However, what might have seemed to be a reliable means of telling the what the market was doing for the last 200yrs appears to have come unstuck. This is because the clocks predictions were based on a model that virtually only included Europe and and North America, with the additions of Japan, Taiwan, South Africa and Australasia.
Most of the world's population was largely excluded from wealth and economic growth that affected these first wold economies. The second world economies included the Russian Communist Countries, China and India and Arab countries. The third world was seen as Central and South America, Africa and parts of South Asia.
What the economic clock advocates have failed to take into account is that the second world countries have come on board the global economy and are fast becoming first world countries. What this means is there are 2.5 billion people in India and China who are beginning to participate in the global economy that previously were excluded and also another 1 billion from the Arab and previous European and Russian communist countries.
The new world order is taking place as wealth is being transferred from the Western First World countries to the emerging Second World Countries.
What this means from a financial perspective is the old economic order is on the way out and the new one is evolving. Not to take this into consideration is a mistake when making investment decisions based on the economic clock model. The basic concepts of the economic clock probably are principles that follow one another, except we have seen the share market and real estate both rising together, which is contrary to the economic clock model.
The economic clock goes like this:
1 o'clock --- rising interest rates
2 o'clock --- falling shares
3 o'clock --- falling resources
4 o'clock --- falling overseas reserves
5 o'clock --- falling employment
6 o'clock --- falling real estate prices
7 o'clock --- falling interest rates
8 o'clock --- rising shares
9 o'clock --- rising resources
10 o'clock --- rising overseas reserves
11 o'clock --- easier money
12 o'clock --- rising real estate
In Australia, since the year 2000, there has been continued rising share prices and rising real estate prices and rising resources and rising employment and easier money, which has thrown the clock right out of the window.
Effectively the last six hours of the clock have not responded to the hour glass and the measurement has proven unreliable. Well at least for now, while the emerging countries are making their presence felt in the current global economy.
Just like the old sundial, the one used on the equator would not be reliable at the north pole, due to a changing economic environment the economic clock appears be difficult to understand.
Happy Riches knows how to show you how. Happy Riches also runs an educational membership club which has a focus on people becoming healthy, wealthy and wise. Happy Riches can be found at http://www.happyriches.name
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