SPECIAL REPORT
This exclusive North American article will be broken into a series of five consecutive posts providing our readers with useful market edges and insights that are unprecedented amoung peers, into the empirical patterns behind historical and "possibly future stock market crashes." The article is sourced and supported by the author's research; having first been published earlier in renowned European journals. Applying such knowledge wisely, thereby optimizes the chances for better decisions and increased wealth - First Financial Insights, Toronto, April 2015
When we go back into
the past, three transitions took place with far-reaching effects.
The First Industrial Revolution
The first industrial
revolution lasted from around 1780 tot 1850. It was characterized by a
transition from small scale handwork to mechanized production in factories. The
great catalyst in the process was the steam engine which also caused a
revolution in transport as it was used in railways and shipping. The first
industrial revolution was centered around the cotton industry. Because steam
engines were made of iron and ran on coal, both coal mining and iron industry
also came to bloom.
This revolution ended
in 1845 when Friedrich Engels, son of a German textile baron, described the
living conditions of the English working class in “The condition of the working
class in England“. The result of this revolution: an immense gap between rich
and poor.
A New Philosophy Intoxicates Human Ideas, Systems And Deeds
The Second Industrial Revolution
The second industrial
revolution started around 1870 and ended around 1930. It was characterized by
ongoing mechanization because of the introduction of the assembly line, the
replacement of iron by steel and the development of the chemical industry.
Furthermore coal and water were replaced by oil and electricity and the
internal combustion engine was developed. Whereas the first industrial
revolution was started through (chance) inventions by amateurs, companies
invested a lot of money in professional research during the second revolution,
looking for new products and production methods. In search of finances small
companies merged into large scale enterprises which were headed by professional
managers and shares were put on the market. These developments caused the transition
from the traditional family business to Limited Liability companies and
multinationals.
Consumerism Transforms Into Religiosity
After the roaring
twenties the revolution ended with the stock exchange crash of 1929. The
consequences were disastrous culminating in the Second World War.
The Third Industrial Revolution
The third industrial
revolution started around 1940 and is nearing its end. The United States and Japan played a leading role in the
development of computers. During the Second World War great efforts were made
to apply computer technology to military purposes. After the war the American
space program increased the number of applications. Japan specialized in the use of
computers for industrial purposes such as the robot. By now the computer and
communication technology take up an irreplaceable role in all parts of the
world.
How Long Can We Continue Making Stuff?
The acceleration phase
of the third industrial revolution started around 1980 with the introduction of
the micro processor. The third industrial revolution has clearly reached the
saturation and degeneration phase.
Dow Jones Industrial Average
<< Fig Exchange
rates of Dow Jones during the latest two industrial revolutions. During the
last few years the rate increases have accelerated enormously.>>
NEXT Part #4 - Stock Index Graphs Are Fata Morganas.
ABOUT ARTICLE
Wim Grommen writes: This paper advances a hypothesis of the end of the third industrial revolution and the beginning of a new transition. Every production phase or civilization or human invention goes through a so- called transformation process. Transitions are social transformation processes that cover at least one generation. In this paper I will use one such transition to demonstrate the position of our present civilization. When we consider the characteristics of the phases of a social transformation we may find ourselves at the end of what might be called the third industrial revolution. The paper describes the four most radical transitions for mankind and the effects for mankind of these transitions: the Neolithic transition, the first industrial revolution, the second industrial revolution and the third industrial revolution.
The article “A new stock market crash, a pattern?”, in dutch "Nieuwe beurskrach, een wetmatigheid?” was published in a magazine “Tijdschrift voor economisch onderwijs” (magazine for economical education), a monthly publication of the VECON, A union of teachers in economic and social subjects in theNetherlands
ABOUT ARTICLE
Wim Grommen writes: This paper advances a hypothesis of the end of the third industrial revolution and the beginning of a new transition. Every production phase or civilization or human invention goes through a so- called transformation process. Transitions are social transformation processes that cover at least one generation. In this paper I will use one such transition to demonstrate the position of our present civilization. When we consider the characteristics of the phases of a social transformation we may find ourselves at the end of what might be called the third industrial revolution. The paper describes the four most radical transitions for mankind and the effects for mankind of these transitions: the Neolithic transition, the first industrial revolution, the second industrial revolution and the third industrial revolution.
The article “A new stock market crash, a pattern?”, in dutch "Nieuwe beurskrach, een wetmatigheid?” was published in a magazine “Tijdschrift voor economisch onderwijs” (magazine for economical education), a monthly publication of the VECON, A union of teachers in economic and social subjects in the
