2026 looks like 1972. What came next

The Liquidity Map · Macro report

2026 looks like 1972. What came next

US inflation is 3.7%, close to where it was in December 1972, just before a wave that reached 12.3% within two years.

In 1947, Dewey and Dakin described a 54-year price cycle, and 2026 falls exactly 54 years after 1972.

Below: the two waves in each cycle, and how far rates, yields and oil still have to climb.

October 18th, 2026 · 6 min read

Key takeaways

Dewey and Dakin's 54-year cycle puts the next inflation high around 2033.
In 1918-1920 and in 1974-1980, inflation came in two waves, and the second was bigger than the first.
If the pattern holds, the 2022 wave was only the first, and the second would come after a longer pause than in the earlier cycles.
The 10-year yield? has already passed its 2023 high, but the Fed? rate is still below its own.
Apart from gold, already past its 1980 peak, the other indicators are at 21-59% of their 1980-81 peaks.

The latest CPI moved the market, but the bigger question is where we are in the inflation cycle. I redid the charts on real data going back to 1914, to see what the 54-year cycle says and where it doesn't fit.

Definition

The 54-year cycle

A rhythm found in US wholesale prices: 27 years up and 27 years down. Edward Dewey and Edwin Dakin described it in 1947, and their series is expressed in gold, not in today's dollars. It isn't a law of nature, just a pattern that has roughly repeated itself.

The cycle

A high every 54 years, since 1817

Their series has highs in 1817, 1871, 1925 and 1979, and lows in 1790, 1844, 1898, 1952 and 2006.

The next high of the cycle falls in 2033, 54 years after the one in 1979.

I track it through CPI, which lags wholesale prices.

The 2033 high is more of a zone than a date, and on the clock map in the shmita report I placed it between 2033 and 2036.

2033The next cycle high, 27 years after the 2006 low.

US annual inflation since 1914. Gold lines are the cycle highs, grey lines the lows, and the shaded zone is 2033-2036.

But the cycle isn't a straight line.

The waves

In the last two cycles, inflation came in two waves

When I put CPI since 1914 on a chart, I see the same pattern in the last two cycles: a first wave, a pause and a second wave, bigger than the first.

Not everything fits: the 1947 peak, at 19.7%, sits in the cycle's downswing.

Back in 2023 I wrote on X that a second peak could pass 10%, above the 2022 high.

If 2022 was the first wave, 2033 would mean a pause of more than 10 years, twice as long as the one in 1974-1980.

The cycle also has critics: Milton Friedman wrote, after Dewey and Dakin's 1947 book came out, that the evidence wasn't presented in full.

Cycle	First wave	Second wave	Gap between them
1918-1920	20.7% (Nov. 1918)	23.7% (Jun. 1920)	1.6 years
1974-1980	12.3% (Dec. 1974)	14.8% (Mar. 1980)	5.3 years
2022-?	9.1% (Jun. 2022)	hasn't come yet	4.3 years so far

US CPI, annual change. The month in brackets is the month of the peak.

9.1%The June 2022 peak, the highest in 40 years.

That leaves the question of what the present looks like.

Today

Where we are: 2026 versus 1972

2026 sits 20 years after the cycle low, just like 1972, and inflation is close to where it was: 3.7% now, against 3.4% in December 1972.

Rates look different: in December 1972 the Fed rate sat almost 2 points above inflation, while today it's barely level with it.

Wholesale prices, the series in which the cycle was first identified, are already rising 12.8% a year.

That's almost double the 6.5% rise in 1972. In the meantime, the 10-year yield touched 5.31% on October 5th, the highest since 2002.

The grey line in the first chart below is 1964-1982 inflation moved forward by 54 years, and the first wave in 2022 came 6 years ahead of the 1974 one, shifted to 2028.

Wholesale prices peaked in November 2021 and CPI in June 2022, seven months later.

Indicator	Dec. 1972	Dec. 1974	Dec. 1980	Sep. 2026
Inflation (CPI)	3.4%	12.3%	12.5%	3.7%
Wholesale prices	6.5%	20.9%	12.5%	12.8%
Fed rate	5.3%	8.5%	18.9%	3.75-4.00%
10-year yield	6.4%	7.4%	12.8%	5.0%
WTI crude	$3.6	$11.2	$37.0	$97.3

Inflation and wholesale prices are annual changes. The rate, the yield and oil are monthly averages, and for 2026 the rate is the target range.

12.8%Annual increase in wholesale prices through September, the biggest in four years.

US annual inflation since 2018 (blue) and 1964-1982 inflation moved forward by 54 years (grey).

Annual change in wholesale prices (gold) and CPI (blue), since 2019.

To see how much further there is to go, let's compare with 1980.

The distance

How far rates, yields and oil still have to climb

I compared today's value of each indicator with its 1980-81 peak, adjusting gold and oil for inflation.

I expect yields, rates, inflation and oil to climb toward 2033.

The Fed rate is at a fifth of its peak back then, inflation at a quarter, the 10-year yield at a third, and oil at 59%.

To me, the 1980-81 peaks are benchmarks to compare against, not targets.

114%Gold as a percentage of its 1980 peak, in today's dollars.

Today's value as a percentage of the 1980-81 peak. For the Fed rate it's the top of the target range, and for the yield, the October 15th close.

The Fed rate (blue) and the 10-year yield (gold), since 1962. The shaded zone is 2033-2036.

The 1970s show what worked then.

The 1970s

In the 1970s, gold and oil won, not stocks

Between 1972 and 1980, gold went from an average of $58 to about $850 in January 1980, almost fifteenfold, and oil rose more than tenfold.

Over the same period, the S&P 500 lost 43% adjusted for inflation.

In nominal terms, the S&P 500? rose only 15%, while consumer prices doubled. Today's oil, at $97, is at 59% of its 1980 peak, and the 2008 peak, at $206 in today's dollars, was higher still.

-43%The S&P 500, inflation-adjusted, between December 1972 and December 1980.

By what factor each one changed between 1972 and 1980. Gold: the 1972 average against the January 1980 peak.

WTI crude, monthly price in September 2026 dollars, adjusted for inflation with CPI. The dotted line is the 1980 peak.

But inflation isn't the only clock.

In sync

Around 2035, several clocks point to the same zone

The 2033 inflation high comes right before the end of the secular cycle? in stocks, which I estimate for 2034-2035, after a bull market? that began in 2009.

The next shmita year after 2028 falls in the same zone, 2035-2036, and the clock map in the shmita report puts them all on the same time axis.

Inflation, the secular cycle and shmita point to the same zone, not to the same year.

To me, that means 2033 isn't an isolated event but the first piece of a group of signals converging around 2035.

2035The year around which the clocks converge: the end of the secular cycle, 99% of Bitcoin mined and the next shmita year.

That's where positioning starts.

How we're positioned

This report doesn't change what we hold but what I watch: the Fed rate, the 10-year yield and inflation become, alongside the shmita calendar, the signals for a second inflation wave.

If the signals above are confirmed, I'll read that as the start of the second wave, and then the 1970s will become a working model for me, not just history.

Until then, today's numbers are a warning, not a signal.

Conclusions

The cycle gives me no price or exact date, only an order in which to read the numbers, and the ones below tell me along the way whether the pattern holds.

What to watch this week

Does the Fed rate pass 5.33%, the 2023 high? Right now it's 3.75-4.00%.
Does inflation pass 9.1%, the 2022 high? Right now it's 3.7%.
Does the 10-year yield stay above 4.98%, the 2023 high, or fall back below it? Right now it's 5.1%.

2026 looks like 1972. What came next

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