Roosevelt Balances The Budget, Recession Ensues

1937

USA

Roosevelt fears an unbalanced budget and cuts spending. In the summer, the nation plunges into another recession. Despite this, the yearly GNP rises 5.0%, and unemployment falls to 14.3%.

1938

England

Britain becomes the third nation to recover as it begins deficit spending in preparation for war.

USA

The yearlong recession results in GNP falling 4.5%, and unemployment rising to 19.0%.

Ralph Nelson Elliott first publishes the refined results of his studies in a monograph titled "The Wave Principle".

USSR

Professor Kondratieff's sentence is reviewed and he received the death penalty. It is speculated that he was killed the same year.

1939

Europe

WWII begins with Hitler's invasion of Poland.

USA

Unemployment falls to 17.2%.

Ralph Nelson Elliott detailed the "Elliott Wave Theory" in a series of articles in Financial World, which states that stock prices are governed by cycles founded upon the Fibonacci series (1-2-3-5-8-13-21...). This theory was based on his observation of the stock market in the late 1920's.

According to the Elliott Wave Theory, stock prices tend to move in a predetermined number of waves consistent with the Fibonacci series. Specifically, Elliott believed the market moved in five distinct waves on the upside and three distinct on the downside.

1940

US National debt $42,967,531,037.

USA


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