SAM WILLIAMS: CYCLES AND WAVES, REALITY AND ILLUSION.
November 21, 2025 6 Comments
I apologise for getting the author’s name incorrect. I have reposted the article acknowledging that Sam Williams is the actual author.
Errata: the last paragraph on page 5 should read Graph 4 not Graph 3.
THEPLANNINGMOTIVE.COM 
Just a note: The critiqueofcrisistheory blog is written by Sam Williams, not Mike Treen.
Thanks I will correct
“This interest rate repression enabled the US economy to escape recessions”
I’m having difficulty formulating my question but I’ll ask anyway. There was a time when I believed recessions in capitalism were unavoidable period. Apparently interest rate repression enables economies to defy Kitchin/business cycles. So business cycles can be avoided with consequences such as prolonging depressions. We have witnessed how negative interest rates helped restore profit rates. Can capitalism avoid recessions indefinitely by manipulating interest rates?
Sorry for the delay in responding. You have asked the most important theoretical question of our age. Certainly the FED and PBOC (China’s central bank) managed to avoid a recession at the end of 2015 but at the cost of much more anaemic growth thereafter. As for 2019, because of the pandemic, we will never know.
What we do know is that recessions clear the excesses that capitalism builds up especially unbearable debt. That has not happened. However we will only witness the fall after the AI euphoria settles.
Generally it’s the following scissors effect which snips the cycle causing expansion to turn into contraction; one blade is formed from the falling rate of profit, the other from the rising rate of interest as illiquidity builds. The important second blade is the one repressed by central banks.
Thanks for remembering and taking the time to respond.
I think we’re about to see if by manipulating interest rates the US can avert the upcoming recession. ADP private payroll is off by -30K instead off +40K as expected.
So assuming Bessent will be the next FED chief and cuts interest rates. The long end of the bond market is stubbornly stuck above 4%. To bring that down the Fed will need to resume QE and ZIRP but Bessent is against QE and ZIRP. In an essay in the WSJ he said:
“The ‘extraordinary’ monetary-policy tools [QE and ZIRP] unleashed after the 2008 financial crisis have similarly transformed the Federal Reserve’s policy regime, with unpredictable consequences.”
“Successive interventions during and after the financial crisis of 2008 created what amounted to a de facto backstop for asset owners.
“This harmful cycle concentrated national wealth among those who already owned assets.”
Very good observations. In my latest article I point out that in China suppressing recessions has come at a high price, primarily through far slower growth and collapsing investment.