Economic cycles are a fundamental characteristic of financial systems around the worldRegardless of how advanced technology becomes or how adept our economic management practices are, these cyclical fluctuations remain an inescapable realityThe study of these cycles holds significant importance for understanding broader economic patterns and trends.

Among these cycles, the Kondratiev Wave, often referred to as the long wave, stands out due to its ability to predict long-term economic health with considerable reliabilityNamed after the Russian economist Nikolai Kondratiev, this theory identifies four distinct phases within each wave: recovery, prosperity, recession, and depression.

The stages of the Kondratiev Wave primarily reflect the performance cycles of the leading economy, which, in the contemporary context, is represented by the United States

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Analyzing this economic powerhouse provides crucial insights into global economic dynamics and potential future trends.

The current Kondratiev cycle can be broken down as follows: the recovery period spanned from 1982 to 1991, prosperity from 1991 to 2008, recession from 2008 to 2020, and the ongoing depression is set to last from 2020 to 2031. Presently, the consensus indicates that we are indeed navigating the depression phase of this cycle.

However, there are diverging opinions regarding the specific timing of this depression phaseNotably, one prevailing view suggests that the decline began in 2015 and will conclude in 2025, a perspective that has gained traction within financial marketsUpon deeper scrutiny of U.Seconomic trends, one could argue that the recession phase began in 2008, with the true onset of the depression appearing post-2020.

The anticipated duration of this current depression is approximately ten years, culminating around 2031 when a new recovery phase should emerge

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Contrary to popular belief, 2025 may not signify the beginning of recovery, but rather a deepening of the ongoing depression rather than a turnaround, with substantial crises potentially looming around 2028.

Whereas the downturn during the pandemic in 2020 resulted in relatively fleeting economic distress with a rapid recovery, the latter half of the current depression is expected to be much longer-lasting and more economically debilitating.

Historically, both recession and depression phases have faced pivotal shocksFor instance, during the Great Depression of the 1930s, the initial shock hit in 1929, followed by a second severe blow in 1937-1938. Similarly, shocks were witnessed during the oil crises in the 1970s, where the first occurred in 1973 and the second around 1979-1980 with geopolitical upheavals following the Islamic Revolution.

Such initial shocks in economic cycles are closely tied to landmark events

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The collapse of the Bretton Woods monetary system and the oil crisis of 1971-1973, along with the subprime mortgage crisis in 2008 and the COVID-19 pandemic in 2020, all marked significant transitions within their respective cycles.

The second shock often, however, occurs predominantly in emerging markets or resource-dependent countriesFor example, a dramatic decline in the Chinese stock market in 2015 illustrates how such dynamics can ripple globally.

Typically, during periods of Kondratiev depression, economies must navigate through two significant shocksThe first shock tends to be acute, whereas the second shock may be less severe but still impactfulHistory suggests that following the second shock, a recovery phase often begins within two to three years.

In the present scenario, the two notable shocks during the recent recession took place in 2008 and again around 2015 or 2018. The first shock of the current depression was triggered by the pandemic in 2020, while a second shock is anticipated around 2028. This interpretation diverges from many mainstream views.

One common misconception is that funds typically shift from the real estate market to the stock market during real estate downturns

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This is misleadingDuring a real estate upswing, the stock market doesn't automatically enter a bull phaseConversely, during real estate adjustments, the stock market often faces its own form of correctionThe real estate sector serves not only as an industry but also as a bellwether for overall economic performanceWithout a recovery in this sector, broader economic revival and a stock market uptick remain elusive.

Next year, the U.Sgovernment will undergo a transition of power, likely ushering in policies favoring heightened trade protectionismSuch shifts are expected to exacerbate challenges faced by the global economy, contributing to the current path toward recession.

Interestingly, depression phases also coincide with the emergence of new industriesTaking the U.Sas an example, the rapid growth of the artificial intelligence sector hints at a significant transformative impact on the economy as a whole

Amidst this technological revolution, many traditional sectors will grapple with obsolescence and the need for adaptation.

As industries evolve, the inevitable transitions between the old and new will exert pronounced effects on economic stability, facilitating heightened volatilityThis feature of the current Kondratiev depression reflects the essential nature of economic realignment.

Currently, stocks related to artificial intelligence chips and other tech giants benefiting from AI developments are near historical peaks, suggesting limited room for further expansionInstead, a period of stabilization seems likely to ensue, spanning roughly a year and possibly leading up to a peak.

The U.Sis expected to conclude its interest rate hike cycle in the latter half of 2023, with the resultant negative impacts becoming apparent in 2024 as the nation shifts into an interest rate reduction phase

Nonetheless, the existing delays indicate that rate cuts alone will not be sufficient to avert an impending recession.

As the government transition completes, as AI stock peak concludes, and the onset of rate cuts emerge, we shall officially enter the latter half of the depression phaseThere exists a real possibility that the U.Sstock market may plunge into a prolonged bear market commencing in 2025, signifying an end to the exceptionally bullish trends witnessed over the past century.

This new bear market phase could last several years, with adjustments that are both significant and shocking, as we enter what could be dubbed the "super cycle wave IV" adjustment phase.

The super cycle wave encapsulates the rise and fall of national fortunesThe adjustments of this phase may persist for approximately two decades, potentially extending until the mid-2050s

Interestingly, many may interpret this adjustment phase as the terminus of a 200-year bull market in U.Sstocks since the country's inception, but in reality, a subsequent upward phase will follow this adjustment, lasting for another 20 to 30 years.

By the time we reach the peak of the super cycle wave V between 2070 and 2080, it will reveal the comprehensive conclusion to the bull market that has characterized U.Sfinancial trends since its founding.

In the short and mid-term, the U.Sstock market is poised to enter a three-month period of shaky adjustment starting from July 2023, with predictions of at least a 10% decline in the Dow Jones indexThe anticipated low points could hover around 36,000 to 37,000.

By late October, a renewed upward trend is projected, marking the last surge before the onset of the bear marketAs it stands, the time available for the A-share market to flourish is sharply limited