And yet the year 1931 would prove to be even more pivotal. It has been called “the year that made the Great Depression great.” In April 1931 a much longer and steadier crash began that brought Wall Street to its lowest levels of the century. The year 1931 was also when a deflationary spiral began, bringing the American and world economies into paralysis.
Could there be any connection between the Great Depression and the ancient mystery? Were it not for what happened during the years 1930 and 1931, the initial recovery could have continued, thus averting “the Great Depression.” But it was then that the Shemitah came. The Shemitah took place in 1930–1931.
More specifically, the Shemitah began in late 1930—the same time the world economy began its steady deterioration. In April 1931, the center of the Shemitah year, the stock market began a long-term crash that would bring Wall Street to its lowest levels of the twentieth century and to the depths of the Great Depression.
The seventh year reached its climax with the approach of Tishri, the month that manifests the Shemitah’s financial repercussions. On September 19, 1931, an event of seismic proportions took place in the financial world: the British Empire made the decision to discard the gold standard upon which its currency rested. The decision resulted in a worldwide panic that triggered the largest monthly percentage drop in stock market history and plunged the nation and the world into the lowest depths of the Great Depression. When did this global financial cataclysm happen? It took place on the fourteenth day of Tishri, the once-in-seven-year Tishri, the month of the Shemitah’s financial repercussions—its climactic autumn wake.
The ancient Shemitah and the Great Depression proceeded simultaneously. The Shemitah fell entirely within and at the core of the Great Depression. Thus the overlap of the Shemitah to the Great Depression is 100 percent.
The Ancient Mystery Behind the Greatest Collapses of Modern History
We have now looked at the majority of the greatest long-term collapses in stock market history and found an amazing thing: The majority happen according to the timing of the ancient Shemitah. And the connection is not minimal. Rather, the average overlap of the Shemitah to the collapse of the stock market is 85 percent.
If we alter the parameters to include the greatest long-term collapses from the time of the Great Depression onward, the results are just as striking. Of these, over 70 percent of them happen according to the timing of the Shemitah. Of the top five of these crashes, 80 percent of them take place according to the timing of the Shemitah. As for the top two greatest crashes, it becomes 100 percent.
We have opened up the first mystery, a mystery of two realities: the greatest stock market collapses of modern times and an ancient ordinance from Scripture. The two realities would appear worlds apart. How could they possibly be joined in any way? And yet they are bound together, strangely and inexplicably.
Now we will look at the cycles of the modern financial world, the greatest heights and turning points, and the cycles of the ancient mystery.
Chapter 11
The CYCLES of SINAI
Cycles and Turning Points
THE GREATEST HIGHS or peaks of the stock market constitute turning points—the ending of a period of expansion and the beginning of decline. A peak in the financial realm, by definition, will mark the beginning of a downturn or a collapse. A major descent in the stock market will often be connected to an economic collapse, either as its foreshadowing or its effect.
If the financial and economic realms of ancient Israel could be plotted on a line graph, what would it look like? With the coming of the Shemitah, it would manifest as turning points, very similar to those appearing in a stock market graph. The Sabbath year would, in effect, produce a peak followed by a plummeting line. The descending line would represent the nation’s productivity as well as a “remission” in its financial realm.
What happens if we now look at the greatest turning points, the highest apogees in the last forty years of stock market history, along with the key turning points in the economic realm, the recessions and economic downturns of that same period? What will it reveal?
It will certainly include some of the great crashes of modern times, which we have seen in the last chapter—but much more. It will present a progressive record of the financial and economic fortunes of America and the world over the last several peaks and crashes in the order in which they occurred. It will provide a clear and large-scale view of the timing of each turning point as well as the relationship of each turning point to the others.
The data relating to the financial realm will come from the list of the stock market’s greatest turning points, its greatest peaks, and troughs of the past forty years. Will any pattern emerge? And is it possible that there will exist any connection to the ancient cycles ordained in the sands of Sinai?
In the last forty years there have been five major peaks and turning points in stock market history.
First Turning Point: 1973
The first turning point comes at the start of 1973. On January 11 the Standard and Poor’s (S&P) 500 reached a peak of 120. The market then began a long descent through the rest of the year and through much of the following year. It hit bottom on October 3, 1974, at a level of 62. The loss represented 48 percent of the market’s value. The collapse in the financial world foreshadowed and then overlapped with a collapse in the economic realm and a severe global recession.
Second Turning Point: 1980
The second turning point happened on November 28, 1980, as the S&P 500 reached a level of 140. After this, came a long descent through all of 1981, reaching its low point on August 12, 1982, at 102, the stock market having lost 27 percent of its value. This collapse had been preceded by an earlier one in 1980, when the Dow Jones Industrial dropped from a level of 903 on February 13 to a low of 759 on April 21.
But the turning point in the financial realm would be preceded by another in the economic realm in January of 1980 as the economy entered a severe recession. This has been thus called a “double-dip recession,” and although there would later be a slight recovery, the economy would resume its downward slide in July of 1981. The collapse would affect much of the developed world and witness the highest levels of unemployment since the Great Depression.
The economic crisis had begun even earlier in 1979 as the Iranian Revolution triggered a massive spike in oil prices. The period from 1979 to the beginning of 1980 was one of stagflation, rising inflation combined with declining output growth. During this time the nation’s gross national product (GNP) shrank from 5 percent to 1.5 percent. It was 1979 as well that saw the nation’s rate of inflation soar into double digits.
So here we have a clustering of turning points. The economic crisis crystalized in 1979, became a worldwide recession in January 1980, and resulted in the fall of the stock market in November of that same year.
Third Turning Point: 1987
The third turning point came on August 25, 1987. This followed a seven-month boom in stock market prices beginning at the start of the year. At the end of August the S&P 500 reached a peak of 336 and then began to fall. That collapse contained, in October, the greatest stock market percentage crash in American history, known as “Black Monday.”
The descent was short lived, reaching its conclusion on December 4, 1987, at a low point of 224. Its short and unique nature avoided triggering a recession. But in its brief duration its impact was severe, causing the market to lose over 33 percent of its worth. It took two years to regain the levels lost in August 1987. It became one of the most enigmatic collapses in financial history. Its causes are still debated to this day.
Fourth Turning Point: 2000
The stock market reached its fourth major apogee on March 24, 2000, attaining a level of 1,527. Its fall coincided with the bursting of the Dot-Com Bubble. This led to an economic recession in March of 2001. The recession continued until November of 2001. In the midst of the recession came 9/11. The impact of the events of 9/11 caused one of the most d
ramatic collapses in Wall Street history and further crippled the nation’s financial realm. The market continued a long descent until hitting bottom on October 9, 2002, having lost 49 percent of its value. In this case the financial collapse preceded, exceeded, and contained the economic collapse.
Fifth Turning Point: 2007
The fifth turning point took place on October 9, 2007, when the S&P 500 peaked at 1,565. The stock market then began a dramatic year-and-a-half collapse. Soon after the financial turning point came the economic turning point as the economy entered into recession in December 2007. The financial collapse reached its lowest point on March 9, 2009, at 676, having lost over 56 percent of its value. Three months later, in June 2009, the recession drew to its close. The period between apogee and the trough became known as “the Great Recession.”
The Mystery of Cycles
We have just looked at the five major peaks in modern stock market history or the five major turning points and collapses in the financial world. Is there anything striking about the resulting picture?
When do the greatest peaks and key turning points of modern stock market history take place?
• The first takes place in 1973.
• The second takes place in 1980.
• The third takes place in 1987.
• The fourth takes place in 2000.
• And the fifth takes place in 2007.
What is the relationship of one peak to the next? The math is, of course, simple, but for the sake of clarity, here it is:
• The first and second peaks and turning points, of 1973 and 1980—a cycle of seven years
• The second and third peaks, of 1980 and 1987—a cycle of seven years
• The fourth and fifth peaks, of 2000 and 2007—a cycle of seven years
The mystery of the Shemitah ordains that an economic and financial transformation take place in the seventh year. Thus these two realms are altered according to a seven-year cycle. What we see now in the rise and fall of the stock market is that all five of the greatest peaks or turning points in modern financial history are connected to the preceding peak or the following peak by a cycle of seven years.
Crashes of 1973, 1980, and 1987 Seven-Year Cycles
Crashes of 2000 and 2007 Seven-Year Cycle
The Crash Cycles
According to the ancient mystery, in the seventh year there is to occur a cessation in the nation’s economic and financial realms.
In the seventh year there shall be a sabbath of solemn rest for the land, a sabbath to the LORD. You shall neither sow your field nor prune your vineyard.
—LEVITICUS 25:4
If we go back to our theoretical graph charting ancient Israel’s Year of the Shemitah, we would find peaking and plunging lines. The lines charting Israel’s Shemitah in economic turns would represent an economic downturn or recession. The lines charting the Shemitah on a financial graph would represent a financial collapse. If we now take this into the modern world and look at the graphs representing the American and global economic and financial realms, what do we find? We find the same phenomenon. The one line represents financial collapse and the other represents economic recession.
If we go back again to our theoretical graph of ancient Israel and expand it to cover a period of several decades, what will we find? We find that the Shemitah years have produced several of these peaking and plunging lines more or less evenly distributed throughout the time covered in the graph. More specifically we find that these peaks and slopes are connected to the other peaks and slopes by a cycle of seven years.
What happens if we now do the same thing with our graphs covering the actual financial and economic fortunes of the modern world of the last four decades? We find the same ancient phenomenon reappears. The greatest peaks and downturns are distributed more or less evenly over the period. More specifically, we find that the five greatest peaks and crashes are connected to the preceding or succeeding peaks and downturns by a cycle of seven years.
The Sacred Cycles and the Five Collapses
We have witnessed an amazing correlation. In the past four decades of modern history the economic and financial realms of America and the world have followed the ancient mystery that ordains economic cessation and financial collapse taking place according to a seven-year cycle.
But could there be more to the mystery? Is it possible that any of these collapses could be joined to the Shemitah in a still more specific way? The Shemitah is based not just on a seven-year cycle but on a specific seven-year cycle ordained in the Bible. Only one out of seven years can be the actual appointed Year of the Shemitah. Could any of the five great peaks, apogees, downturns, and collapses of the last four decades bear a more specific connection to the once-in-seven-years Shemitah of ancient times?
The Test: We will now take one more look at the five peaks and the five collapses of modern times. But this time we will have one specific focus—that of timing. Do any of these peaks and collapses bear any connection to the timing ordained in the ancient mystery?
The Mystery of the First Turning Point
The sequence begins in the winter of 1973, January 11, when the S&P 500 reached its peak of 120 and then began a long descent. The first Shemitah of this period began in September 1972 and continued to September 1973. Four months after the Shemitah began, the stock market collapsed. Thus the peak and the crash took place entirely within the biblical Shemitah
The First Collapse and the Biblical Shemitah
The financial collapse then coincided with a global economic recession. The recession began in the Shemitah’s wake, autumn 1973.
The Mystery of the Second Turning Point
Seven years later the American economy fell into a recession that constituted one of the most severe downturns of modern times. The first phase of a double-dip economic collapse began in January 1980. Is there any connection between this and the ancient mystery?
Again, the answer is yes. The Shemitah began in 1979—the same year that the economic crisis began—a year that saw a dramatic surge of inflation, an energy crisis, and a steady decline of growth output. Four months after the Shemitah began, the economy began its descent.
The Second Collapse and the Biblical Shemitah
Thus the recession of 1980 began in the midst of the Shemitah. The financial realm followed with a collapse beginning in the Shemitah’s wake, the autumn of 1980.
The Mystery of the Third Turning Point
Seven years later the stock market reached its next apogee as the S&P 500 peaked at 336 on August 25, 1987. It then began its collapse, a collapse that involved the greatest single-day percentage crash in Wall Street history. Is there any connection between these events and the ancient mystery?
The answer is, again, yes. From the end of the recession in the early 1980s onward the American economy had been in a phase of rapid expansion. But in the latter part of 1986 came the third Shemitah of the forty-year period. That same year a shift took place. In 1986 the period of rapid economic growth came to an end and was replaced by an economic slowdown. The Shemitah then coincided with most of 1987, ending in September of that year.
Only one month of Elul in seven years can complete the Shemitah and begin the buildup to the end of the seven-year cycle. The Elul of the seventh year began on August 26, 1987.
That same day the stock market changed its momentum and began to collapse. As the Hebrew month progressed, the stock market grew increasingly unstable.
On October 19, 1987, came the greatest stock market percentage crash in Wall Street history—Black Monday.
The Third Collapse and the Biblical Shemitah
The crash took place in the one month of Tishri in seven years that begins at the Shemitah’s moment of financial nullification and manifests its repercussions.
The 1990s: The Exception—or Not Quite
Even though the decade of the 1990s is not of special note in view of stock market collapses, it is noteworthy to mention here. It was stated at the outse
t that we should not expect the phenomenon of the Shemitah to be formulaic or simplistic, or that it would always happen according to a set and regular schedule. Thus we would not expect that every Shemitah be linked to an economic or financial collapse, or that every economic or financial collapse be linked to the Shemitah. The 1990s would be a case against the idea that one can put the phenomenon onto a systematic schedule. There was no major stock mark collapse at the time of the Shemitah or in that decade.
On the other hand, something striking did take place. Once a Shemitah and its repercussions are finished, the next phase of buildup or recovery begins. Take a look at the following financial graph charting the stock market of the 1990s. You’ll observe a striking change. In view of what would come next, the growth at the beginning of the decade appeared mild, if not strained. But then came a noticeable turning point. Suddenly the stock market began a markedly upward turn. The expansion was dramatic and remarkable. It continued until the time of the next crash. The Shemitah of the 1990s concluded in September of 1994. When did this turning point and upward boom, which would end in the next crash, begin? It began at the end of 1994 and the beginning of 1995, right at the end of the Shemitah’s wake.
The Mystery of the Shemitah: The 3,000-Year-Old Mystery That Holds the Secret of America's Future, the World's Future, and Your Future! Page 7
