Astrology & the Financial Markets

Over the weekend, I was lucky enough to join a 90-minute Zoom presentation, Markets & Mundane Astrology. It was given by Gianni Di Poce, a financial astrologer based in the United States, and hosted by Astrology University.

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The following is under no circumstances to be taken as financial advice either from myself or Gianni. It is offered only in the spirit of exploring the effect the planets have on the markets. 

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Interest Rates & Inflation

A key indicator of overall market momentum is bond prices, which usually have an inverse relationship to interest rates: when interest rates fall, bond prices increase and vice versa. 

In tracking bond prices concentrate on 10-year US Treasury Notes as they are the least effected by actions taken by the American Federal Reserve Bank (‘the Fed’). Keep in mind that the Fed has always dominated the short-term American bond market. It also worth noting that globally, most central banks like the Fed have recently been engaged in Quantitative Easing (QE), a process by which they purchase predetermined amounts of government bonds and other financial assets to inject cash into the economic system. This means the Fed is now a major player in the long-term bond market.

For the Fed, this began in November 2008. But by the early 2010’s the Fed had commenced a tapering program (thereby acknowledging the dangers of inflation), whereby they began to ease of their QE plan. Will this continue as planned?  Quite possibly not. Watch what happens when Venus turns retrograde in mid-December 2021. 

Gianni reminds us that interest rates are basically a function of (1) inflation, (2) demand for money (i.e. people are willing to borrow to buy now to avoid higher future prices), and (3) risk premium faction (lenders charge higher interest rates for weaker borrowers).  It is worth noting that like many other central banks the Fed has been engaged in a Zero interest rate policy (ZIRP) following the Great Recession (2007-2009). This has affected both inflation and bond prices, leaving us currently with a steepening Yield Curve (longer-term bonds yield higher return) suggesting investors expect rising inflation and stronger economic growth in the near future. 

With the planet Jupiter coming into conjunction with Neptune in April 2022, inflation is most certainly in the cards. Also note that after deflation, necessarily comes inflation and the Saturn/Pluto cycle is a huge indicator of this. When the planetary pair were both in Capricorn (2018-2020), it was no accident that we experienced hyper deflation and just now we are coming out of this. Gianni anticipates that inflation will be on the rise from April 2022 perhaps all the way through 2024/25, when Jupiter enters Gemini.

Take away: in the coming months, we can expect interest rates and inflation to be on the rise. Pay attention to the bond markets to see how this will be received by investors. In general, as the price of bonds fall, the equity markets benefit and share prices rise. 

Geopolitical Instability & the US Dollar

With higher inflation, comes the danger of hyper-inflation, which could negatively impact the currency markets. One only has to look at what happened in Weimar Germany between 1921-1923 to see how much misery was created with an impossible rise in prices. Many have been predicting a similar fate for the US Dollar. After all, it was a mix of high inflation and huge national debt that brought Weimar Germany to its financial knees and the national debt of the United States is at an all-time high. 

Gianni acknowledges that the combination could be dangerous for the dollar but in his view, the fact that the dollar is currently the world reserve currency (i.e., it is the currency of choice for other central banks and major financial institutions for international transactions) precludes hyperinflation. However, reserve currency can be lost. It’s happened before. For example, the £UK lost its position as the world reserve currency to the $US as the result of the geopolitical instability that followed in the wake of WWI.

Naturally, this did not happen all at once. But as the rest of the world sought political and economic security, it became clear this was no longer to be found in troubled Europe. Could the $US be replaced? For example, might political and economic security be found instead in the Chinese CNY or RMB or even Bitcoin, over the next few years? Anything is possible. The Chinese economy is projected to overtake the American economy perhaps even in the current decade and Bitcoin (and other crypto currencies) do enough significant freedom from political strife.

Although Gianni admits there are many in Washington who would like to see the dollar no longer the world’s reserve currency, in his view, this isn’t likely to happen. The Americans would loose the way of life to which they’ve become accustomed and politically that won’t be easy to sell. None the less, if unplanned geopolitical and economic instability is truly a significant factor in loss of reserve currency status and/or hyperinflation, the $US may be coming up to a big surprise. Gianni agrees with many astrologers that between now and 2025-6, as a stable nation state, the United States is in for a rough ride.

Civil war is a realistic possibility.

USA Headed for 2nd Civil War?

During that period, the US will suffer its first Pluto return, 2^nd Neptune opposition, and 4^th Uranus return. Typically such transits bring significant disruption – if not utter chaos – to everyday life. Do not forget that when the United States first broke from Britain, it suffered an ugly bout of hyperinflation. Pluto (dealing with debt and debt restructuring) will return to the same place when the United States was first formed in 1776. This is not to mention that Neptune will enter Aries in the spring of 2025, and of course, the last time that happened (to the day) marked the start of the Civil War, which was marked by an intense period of hyperinflation.

Will history repeat and, if it does, will it bring down the US dollar in an extended period of hyperinflation? For now, the only answer is to watch this space.

Take away: there is a reasonable chance that civil unrest in the United States will do significant damage to the value of the US dollar sometime between 2022-2025. Hyper-inflation is the most likely result. Play close attention as to how the American government deals with its spiralling national debt as well as cultural disagreements within its own borders. We may see a taste of what is to come as early as mid-February 2022 (first hit of the Pluto return).

Market Momentum 

• Except for the Corona Crash in March 2020, when the share markets lost 40% of their value almost overnight, the equity markets have been on a bullish trend since 2017. There is every reason to believe that there is still some upward play in this rally. However many believe that the rally is now in process of maturing and when it does, there will be between a 10-20% correction in equity prices. This may come as early as December December 2021 – January 2022, when Venus (which rules stock exchanges) turns retrograde. Venus retrogrades have a history of bringing sharp market reversals. Until then, there may be a significant amount of sideways movement in prices. Mercury goes retrograde 27 September through mid-October; this usually manifests in ‘frothiness’ (i.e. uncertainty/indecision) in the market during which shares tend to have false moves both up and down as well as sideways trading.

• Crude oil prices hit a generational low in April 2020. Indeed 2020 was a year of many firsts. But now oil and gas prices are on the rise and for the foreseeable future (unless another ‘black swan’ event like Covid occurs), expect this upward trend to continue. 

• Bitcoin and similar alternative currencies are here to stay. Prices are now beginning again to rally. This won’t go on forever and we might expect some market peaks as early as December 2021. As Pluto moves into Aquarius (as early as March 2023), we should look for digital currencies to overtake cash. Likewise, widespread adoption of block-chain technology, a digital form of record-keeping, which although mostly in the public domain is decentralised and so notoriously difficult to trace transactions.

• Although interest rates are set to rise, this ought not to have a huge negative impact on house prices in the United States, at least not to the same extent it did in 2008-2009. 

• Traditionally, gold and silver have been hedges against mounting government debt but at least with gold, that’s not lately proven the case. The market ahead looks better for silver than gold.

• With three direct hits of Saturn square Uranus during 2021, we ought not to be surprised that the global ‘supply chain’ on many goods/commodities has been severely disrupted and because Saturn rules the labour market, shortages in labour ought to come as no surprise. We can expect a last hurrah with such disruptions for  Christmas 2021.

• With Uranus moving through Taurus, we ought not to expect a settled market in anything (including cryptocurrencies) until at least June 2023, when Uranus enters the last decan of Taurus. 

Uranus in Taurus – USA leads disruption in world order from 2018 – 2025

Take away: expect continued disruptions in supply chain (including labour) at least until early 2022. Likewise, unsettled markets all around likely until 2023 and perhaps beyond. Watch what happens in the United States.