Shemitah, blood moons and the global economy
Thursday 17 September 2015
The tinfoil hat brigade thinks a coincidence of astronomical events might signal a crash in the global economy. Annoyingly, they may not be wrong.
September 13 was Elul 29, the last day of the Shemitah. The Shemitah is the biblical ‘year of release’. Every seven years, the Israelites were supposed to cancel debts, let slaves go free, and leave their fields fallow. It was a kind of economic and environmental reset, preventing poverty from becoming entrenched through unsustainable debt.
Now that kind of early economic policy might not appear to be relevant in the 21st century. Except that the last several Shemitahs (the word is used of the final day as well as the seventh year itself) have been accompanied by economic calamity of one kind or another. On September 17 (Elul 29) 2001, the Dow Jones fell by 684 points, its largest ever crash up to that time. That record was beaten on September 29, 2008 - the next Shemitah - with a 777-point fall.
In fact, right back to the Great Depression, the Shemitah year is linked with major financial calamity. The bond market massacre of 1994. Black Monday and the stock market crash of 1987. The Savings and Loans crisis and recession of 1980. The oil embargo and recession of 1973. So the list goes on.
This time around, Elul 29 fell on a Sunday, so there was no stock market crash - though the days before and after were filled with turmoil on the markets. There was also a solar eclipse that day. Plus this year sees the fourth lunar eclipse or ‘blood moon’, on September 28th - another signal, state the proponents of the theory, that Something Very Big is going to go down this month or year (red moons are a feature of biblical prophecy).
The moon will turn red on September 28th - and so will the Dow Jones
Known for their love of tinfoil head attire, some hardcore bitcoiners as well as American conspiracy theorists (yes, there’s an overlap) and Christian fundamentalists expect some kind of imminent economic implosion. Some even expect a ‘flight to safety’ in gold, silver and bitcoin as a result.
Usually, I would entirely dismiss this stuff. We live in Interesting Times, to be sure, but any attempt to fit global events to the biblical calendar comes across as contrived beyond measure. Confirmation bias comes into its own here - you can pretty much pick any major event and fit it to the schedule in question, ignoring the momentous events that have fallen outside your time window (like the train wreck of the Chinese stock market).
But an IMF economist with whom I have a passing acquaintance (they’re not circles I typically tend to move in) suggested there might be something to it. Why? Not because it’s based in any kind of objective reality, but because people think there might be something to it.
In other words, it’s the old Keynesian Beauty Contest. You might think a security is worth holding, but if you think the market doesn’t agree, you’ll want to sell anyway. And what about the people who don’t believe it at all, but see other people who don’t believe it selling because they see the people who do believe it selling? And what about the people who see those people... The market moves on the decisions of traders who are second-guessing each other, and second-guessing other traders’ second-guessing, and...
You get the idea. So goodness knows what’s going to happen in the coming weeks, but - knowing the market’s insatiable appetite for irrationality - I wouldn’t dismiss anything just yet.
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