1860s, 1940s, 2020s: It’s ‘Fourth Turning’ Season
Years ago, I worked with a fascinating independent economist.
He cared little for mainstream thinking about markets, and had no company or department line to tow with his research or predictions.
His predictions were both bold and fascinating.
Because if most investors look at the financial world through a short-term lens, clinging to interest rate announcements, election results, earnings reports and the like…
This guy seemed as though he had a crystal ball.
Specifically, he believed that every boom and bust, in every market, stemmed from an 18-year cycle in land prices that has held true for hundreds of years.
While that might sound strange, his work demonstrated that there did, in fact, appear to be an observable cycle at work.
He either had an uncanny ability to predict major financial events, or there was something in his cycle theory.
The number of accurate predictions he made seemed unlikely to have come from luck alone.
So when I encountered another, bigger cycle theory last year — one that goes far beyond just financial markets — I was, perhaps, more open to it than I might have been otherwise.
By the end of this Benchmark, you can tell me whether you see evidence of a repeating, predictable pattern, or simply conveniently arranged dates and events.
Heads up: Some of what follows might seem a bit out there.
What if history has a biological clock?
Harvard-educated policy analyst William Strauss and Center for Strategic and International Studies economist Neil Howe first collaborated in 1991, on a book called Generations.
The book mapped US history from 1584, and led them to found a consultancy business which advised the military and businesses on the shifting ‘social mood’ that precedes market and kinetic shocks.
This work led them to publish The Fourth Turning in 1997. In this book, they laid out a profound thesis; that human history has a biological clock.
They argued that history moves in a feedback loop that resets every 80–100 years, about the length of an average human lifespan.
This cycle moves in four distinct seasons, or ‘turnings’ which last about 20 years.
1. The High (Spring)
An era of institutional strength and weak individualism.
2. The Awakening (Summer)
An era of cultural revolt against the established order.
3. The Unraveling (Autumn)
An era of institutional decay and triumphant individualism.
4. The Crisis (Winter)
An era of systemic reset and institutional liquidation.
Strauss and Howe refer to this whole cycle as the ‘Saeculum’. You can also think of it like the Ouroboros — the snake eating its own tail, in an ongoing cycle of creative destruction.
The Fourth Turning’s core narrative is that society must periodically undergo a crisis (The Fourth Turning) to clear away the exhausted institutions and ‘unpayable promises’ of the previous cycle.
2026: Right on cue?
The useful and/or entertaining part about cycle theories is that they allow you to contextualize events and themes in the world today.
To try to make sense of what seems like unpredictable chaos.
One of the core concepts of this particular theory is that each season of this cycle marks a significant change in the relationship between the individual and the institution.
Banks. Governments. Universities.
There are times when the individual places great trust in, and feels very satisfied with, the institutions which govern them.
There are others when that trust breaks down, and the individual doesn’t like or believe in those same institutions.
That time is the Crisis, or Winter, of Strauss and Howe’s cycle.
Which, according to them, is where we are right now.
The institution is piling pressure on the individual. The economic numbers bear that out:
The US dollar has lost 97% of its purchasing power since the creation of the Federal Reserve in 1913 — and 99% when you compare it with gold.
Inflation has destroyed about one-third of the dollar’s value since 2020 alone.
For the first time in history, the US will shortly spend more on paying the interest on its debt than on its entire defence budget (which is nearly $1 trillion).
At the time of writing, the conflict in the Middle East is putting huge pressure on oil supply and fuel prices, which is only feeding distrust and dissatisfaction in the institutions which the individual funds via taxation.
In fact, aggregate public confidence in centralized institutions has hit a historic low of 16%.
According to Gallup, this mirrors trust levels last seen during the height of the Great Depression in the 1930s.
Which brings us back to the cycle itself.
We’ve been here before
Another cool thing about cycle theories is that you can map them onto the past.
Strauss and Howe reckon that this fourth turning will conclude between 2026 and 2033.
We’re right at the end of the 80(ish)-year cycle, in other words.
So what about last time?
The previous fourth turning resolved in the 1940s.
The Great Depression had severely damaged the relationship between the individual and the institution.
Debt-to-GDP hit 106% in 1946 — the previous all-time high before our current 2026 breach of 124%.
This era marked the transition from coal and steam to oil and mass production.
World War II served as the forced R&D lab for the Age of Oil which powered the subsequent 80-year boom.
The 1944 Bretton Woods Agreement liquidated the old gold-exchange standards and installed the US dollar as the world’s reserve currency.
Institutional trust bottomed in the 1930s but was regenerated by the war, leading to the highest levels of civic unity in US history by 1946.
There are many parallels.
If you go back to the fourth turning before that?
The 1860s were a period of crisis, too.
People stopped believing in the government entirely.
Federal debt had grown by more than 4,000% in just five years, jumping from $65 million in 1860 to nearly $3 billion by 1865.
The Legal Tender Act of 1862 introduced ‘Greenbacks’ — the first unbacked federal paper money.
Eleven states tried to quit the U.S. so they could stop following its laws and paying its debts.
This led to the American Civil War, and multiple historic shifts.
This era saw the decisive move from Wood to Coal as the primary driver of industrial GDP — a technological shift which defined the next generation.
Investing in a Fourth Turning market
So if history moves in these (relatively) clear four seasons, how do you approach the current fourth turning as an investor?
The Benchmark is in no way a vehicle for financial or investment advice.
But if you think there’s something to this particular cycle theory, it’s interesting to look at the last such time.
During the last Fourth Turning (1929–1946), the winners weren't necessarily the ones who made the most money.
They were the ones who didn't lose everything in the initial crash… and then owned the right real-world assets for the recovery.
Examples of assets that performed well:
Gold mining (Homestake Mining): The stock went from $65 in 1929 to $495 by 1935 — a 660% increase while the rest of the market crashed.
Cash (Deflation): Prices dropped by 25% between 1929 and 1933. Because everything got cheaper, $1.00 in 1933 had the same buying power as $1.33 just four years earlier.
Cheap escapism (Coca-Cola): While most companies went bankrupt, Coke’s net income stayed rock solid, moving from $10 million in 1928 to $14 million by 1934.
Essential staples (P&G): Procter & Gamble was one of the few companies to maintain 100% of its dividend payments to shareholders every single year of the Great Depression.
Military industry: U.S. war production spending went from $1.5 billion in 1940 to over $80 billion by 1944. Companies like Boeing saw their workforce grow from 4,000 to over 50,000 in that same window.
Beyond the reset
If this all feels heavy, remember the core promise of the Fourth Turning: Winter is not the end.
According to this theory, we’re living through the 'liquidation' phase of history.
The unpayable debts, the broken institutions, and the outdated 'spreadsheets' are all being audited at once.
It’s messy and volatile.
The resolution of this cycle — likely coming by the early 2030s — is what Strauss and Howe call the 'Great Gate'.
It is the moment we stop arguing about the past and start building the new social contract for the next eighty years.
For the investor, the goal isn't just to 'win' the winter; it's to survive with capital and sanity intact so you’re ready to build when the Spring arrives.
This week's quote:
“Denial is the most predictable of all human responses. But, rest assured, this will be the sixth time we have destroyed it, and we have become exceedingly efficient at it.”
— The Architect, The Matrix Reloaded
Invest in knowledge,
Thom
The Benchmark
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