Benner was the first one to illustrate time hierarchy and Pareto showcased hierarchy in everything. Could they have connected the idea in 1900 before the Pareto curve?

Benner's Prophecies - Future up and down in prices was written in 1875. A keen technician will sooner or later hit the fascinating time geometry of the Benner cycle. Samuel Benner was a prosperous farmer wiped out financially by the 1873 panic. He turned to wheat farming in Ohio and took up the statistical study of price movements as a hobby to find, if possible, the answers to the recurring ups and downs in business. He noted that highs of the business tend to follow a repeating 8-9-10 yearly pattern. With respect to economic low points, he noted two series of time sequences indicating that recessions (bad times) and depressions (panics) tend to alternate.

The 1819, 1837, 1857 and 1873 panic years reflect a repeating 16-18-20 pattern. E R Dewey, Director of the Foundation for the Study of Cycles, assessed Benner's pig iron price forecasts over a 60 year period and regarded this cycle as showing a gain to loss ratio of 45 to 1, which was “the most notable forecast of prices in existence”. Benner's cycle worked well throughout the 20th century and was a very good indicator of US crises and/or recessions (McMinn, 2004). These cycles were aligned with observed chronological trends. Frost and Prechter republished the Benner Cycle and updated it in 1978. I updated the Benner cycles and they suggest a top in 2010, a slowdown and low in 2011 a cycle high again till 2019 and then depression in 2021.

Plummer talked about cycles having a triad structure of a head and shoulder (red) where the head B was bigger than the two shoulders owing to translation (refer: http://timetriads.com/article/256 ). For me, it was not a cycle but ‘Time’ itself and this ‘Time’ was not just one triad, but triads like a fractal. I showcased how the time triads created the head and shoulder pattern (refer: http://timetriads.com/article/1057).

Now the question to be asked is that did Benner through his time geometry not describe a head and shoulder formation in 1875? Did he not mix up increasing sequence of 8-9-10 years with alternating sequence of 9-10-8 years? Were these not smaller cycles of 8 and 9 years around a larger cycle of 10 years? How different are the depression and recession cycles from confluence and non confluence of two cycles? When larger and smaller cycles coincide in a low we have a depression and when they don’t the falling of the smaller cycle creates just a recession? Pareto was born in 1848 when Benner was struggling with the price cycles. Pareto’s curve is the reason for fractal nature of markets and nature. Pareto efficiency is at the heart of economic models. Benner showcased how time hierarchy was intrinsic to prices. Could they have connected the idea of exponential curve with ‘Time’ geometry? Well if they could have connected it then, I won’t be making an effort today to prove that the Ohio farmer was as big a genius as Pareto, time was indeed a fractal and making money needs an understanding of time, not the price.

Mukul Pal, CMT, Orpheus Capitals, Global Alternative Research