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The Business Cycle, Elections, and the Coming Decade: Is This Time Different?

Throughout history, a fascinating pattern has emerged in U.S. presidential elections and market cycles: Republicans tend to get elected near the peak of a business cycle, and recessions often occur while they are in office. Is this merely coincidence, or is there a deeper psychological and economic phenomenon at play?


Why Republicans Often Get Elected Near Market Peaks

One possible explanation lies in human psychology and confidence cycles. When the economy is booming and stock markets are near all-time highs, people tend to feel optimistic, self-reliant, and confident in their ability to succeed. This mindset often aligns with Republican policies emphasizing free markets, tax cuts, and deregulation—making voters more likely to elect a Republican president during these times.

On the other hand, when the economy is struggling or in recession, voters tend to seek security and government intervention, favoring Democratic policies that promise social safety nets and economic stimulus.


Looking at history:

  • 1929 – Herbert Hoover (Republican) was in office when the Great Depression hit.
  • 1969 – Richard Nixon (Republican) took office just before the 1970s stagflation era.
  • 1981 – Ronald Reagan (Republican) started his presidency amidst a recession.
  • 1990 – George H.W. Bush (Republican) saw a recession in the early ‘90s.
  • 2001 – George W. Bush (Republican) took office just before the dot-com crash and recession.
  • 2008 – The Great Financial Crisis erupted under Bush’s final year.
  • 2020 – The COVID crash happened under Trump.

This pattern suggests that Republican presidencies often coincide with the market reaching its natural top, followed by a contraction that leads into recession.


Is This Time Different?

Donald Trump, the Republican frontrunner for the 2024 election, previously took office in 2016 when markets were already in a strong bull run. If he wins again, the situation will be unique: the stock market is already at record highs, and investor sentiment is euphoric. But at the same time, a peculiar signal is flashing: gold is also making all-time highs.


Gold’s Surge and Central Bank Hoarding: Do They Know Something?

Historically, gold has been a safe-haven asset, rising when uncertainty looms. Yet, despite record stock market optimism, gold is surging to new all-time highs, and central banks worldwide are accumulating reserves at an alarming rate.

Why would central banks hoard gold when the economy appears strong? This could be a sign that major financial institutions anticipate a crisis ahead—whether due to de-dollarization trends, geopolitical tensions, inflation concerns, or the potential for an extended downturn.


Benner’s Cycle and the Long Bear Market Ahead?

One of the most intriguing theories in long-term market cycles is Samuel Benner’s cycle theory, which has accurately predicted major economic tops and bottoms for over a century. According to Benner’s cycle, the next major market peak is expected around late 2025 to 2026, after which a prolonged bear market could unfold.

If Benner’s prediction holds true, the post-2026 market downturn could last until 2032, making it one of the longest bear markets in modern history. This would be significantly different from the quick recessions of 2008 or 2020, where markets rebounded within a few years.


What Can We Do? Preparing for Uncertainty

While no one can predict the future with absolute certainty, historical patterns, gold signals, and Benner’s cycle all suggest that the next few years could bring major economic turbulence. If the cycle repeats, we may experience:

  • A final market push-up into late 2025 or early 2026
  • A multi-year bear market from 2026 to 2032
  • A potential economic restructuring on a global scale

So, what can investors and individuals do? The key is preparation, not prediction. Diversification, risk management, and a focus on quality assets will be crucial in navigating whatever lies ahead. The market will do what it does—but those who are prepared will always be in a better position to adapt and thrive.

History may not repeat exactly, but it often rhymes. Are we ready for what’s next?




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