The predictions for this Year of the Dragon are fairly lengthy, so we will post them in two parts. This Part 1 looks at the economy and the presidential election in the United States. Part 2 considers other matters that may be important in the coming year.
The Chinese (Oriental, lunar) New Year begins on February 10, 2024. Based upon a progression of years moving in a 12-year cycle – each year associated with a particular animal – this is the Year of the Dragon. The most recent Dragon year was 12 years ago, in 2012. Each year is also associated with one of the five elements – wood, fire, earth, metal and water – and this is going to be a wood year. It is the Year of the Wood Dragon. Combining those two cycles, one sees that the Year of the Wood Dragon repeats every 60 years (12 x 5). The most recent Year of the Wood Dragon was 1964.
What will this new year bring? That is always an interesting question. In this post we will make some predictions, and then see what really happens. These predictions are not based on astrology or psychic abilities; they are based on analyzing cycles. Assuming that there is a basis for the cycles that are recognized in Chinese astrology, it should be possible to look at what has occurred in similar past years and extrapolate what may be coming in the future. That is the approach we are taking here.
You may wonder how accurate this method of predicting has been. Well, the track record is pretty good. Last year – the Year of the Rabbit – began with almost every economist and pundit predicting a recession and a bad year for the stock market. Looking at the cycles, though, we said that there would not be a recession and that the Dow Jones Industrial Average could reach an all-time high. Both of those things came to pass.
We also warned that Turkey and Ecuador were prone to major earthquakes. Well a devastating earthquake, measuring 7.7 on the Richter scale, struck in Turkey only days after the Year of the Rabbit began, causing some 60,000 deaths and incredible damage. Only a month later, a strong earthquake measuring 6.8 was experienced in Ecuador. It caused extensive damage, but only a few deaths.
Other predictions were also accurate, but we should turn now to the predictions for the coming year. Here is an executive summary of all the predictions:
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PREDICTIONS |
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In Chinese astrology, Dragon years are usually considered an auspicious time of good luck. Research has shown that significantly more babies are born in Oriental populations during Dragon years than in the preceding or following years because parents believe that Dragon children will be lucky and successful. The Wood element is
said to represent the Spring season, and symbolizes growth, renewal and vitality. Therefore, the coming Year of the Wood Dragon should be a good one for many people. There will be ups and downs, but overall we should be optimistic.
U. S. Economy
The economy of the United States is a good place to begin examining cycles. It is an area that interests most people, and there is such a large amount of data available that cycles are easier to identify. The first Dragon year following the Great Depression was 1940, so let us look at the Dragon years that have occurred since that time.
Some of the basic statistics for making economic projections are unemployment, inflation and gross domestic product (“GDP”). For the Dragon years, those items are summarized in the following table:
|
Unemployment |
Inflation |
GDP |
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1940 |
14.6% (down from 17.2%) |
0.7% (up from 0%) |
+8.8% |
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1952 |
2.7% (down from 3.1%) |
0.8% (down from 6.0%) |
+4.1% |
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1964 |
5.0% (down from 5.5%) |
1.0% (down from 1.6%) |
+5.8% |
|
1976 |
7.8% (down from 8.2%) |
4.9% (down from 6.9%) |
+5.4% |
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1988 |
5.3% (down from 5.7%) |
4.4% (unchanged) |
+4.2% |
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2000 |
3.9% (down from 4.0%) |
3.4% (up from 2.7%) |
+4.1% |
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2012 |
7.9% (down from 8.5%) |
1.7% (down from 3.0%) |
+2.2% |
As you can see, the unemployment rate has decreased in each of the years. The most recent figures available show the rate to have been 3.7% in December, 2023. Historically, that is a low rate. It can’t drop too much more. Still, history tells us that at least a small drop is likely during the coming year.
Turning to the inflation numbers, the inflation rate has decreased each year except for 1940. In 1940, it increased a tiny 0.7% from no inflation that was measured the previous year. For the 12 months ending in December, 2023, the annual inflation rate was 3.4%. Again, that is a low number. But, again, history tells us that we should expect further decreases. That should please the Federal Reserve Board, which is trying to get the rate to about 2%.
The gross domestic product of the United States has increased in each of the Dragon years. Therefore, it seems unlikely there will be a recession in the coming year. One interesting trend that may be seen is that from the last Wood Dragon year (1964), the rate of GDP growth has decreased in the following Dragon year. Perhaps that implies that we will have a very low GDP increase this year – less than 2.2%. Or, perhaps this new Wood Dragon year will start a new GDP cycle and we will see a robust growth in the economy.
The American stock market is, of course, greatly influenced by the economy of the United States. Dragon years have been generally good economic times, so we could guess that those years were also good for the stock market. Indeed, most of them have been, as seen in the following table showing the Dow Jones Industrial Average (“DJIA”) in Dragon years:
|
Begin |
High |
Low |
End |
% Change |
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1940 |
151 |
153 |
112 |
121 |
-12.72 |
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1952 |
270 |
292 |
256 |
292 |
+8.42 |
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1964 |
766 |
892 |
766 |
874 |
+14.57 |
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1976 |
859 |
1,015 |
859 |
1,005 |
+17.86 |
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1988 |
2,015 |
2,184 |
1,879 |
2,169 |
+11.85 |
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2000 |
11,358 |
11,723 |
9,796 |
10,788 |
-6.17 |
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2012 |
12,397 |
13,610 |
12,101 |
13,104 |
+7.26 |
The DJIA has shown substantial gains in each of the Dragon years except 1940 and
2000, when there were substantial losses. Both of those down years were years of the Metal Dragon. What that means, exactly, is hard to tell, especially as we enter a year of the Wood Dragon. In the Five Element system, Wood and Metal are not compatible, since metal (such as an axe) can cut wood. Because of the incompatibility, we can probably discount those two down years and expect a fairly good year for stocks.
Looking at the last three Wood Dragon years, the market was up nearly 10% in 1844, up nearly 20% in 1904, and up nearly 15% in 1964. It seems likely that the DJIA could be well above the 40,000 level by the end of the year.
U. S. Presidential Election
Since the Chinese zodiac is a cycle of 12 years, and the United States holds its presidential election every fourth year within that cycle, every Dragon year is also a presidential election year. That gives us some good data to look at in trying to predict the outcome of the 2024 election.
It has already been shown that Dragon years are good for the economy. When the economy is doing well, people are unlikely to want to change the leadership that has brought the good times. So, you would think that the party in power would be successful in the election. Indeed, that is what has usually occurred.
At the end of this section is a table showing how the incumbent or his party has done in each of the elections held in Dragon years since the beginning of the United States. The incumbent president has lost only two of the nine times that which he was running for re-election.
In those elections in which the incumbent was not running, the incumbent’s party has lost only two of seven presidential races. The political party system was quite different in the first Dragon elections – 1796 and 1808 – so those have not been considered in determining which party was the winner. Also, we should not consider there to have been an incumbent party in 1844, as we will discuss in a moment.
At the present time, which is very early in the year 2024, almost everyone thinks that the election will be between the incumbent, Joe Biden, for the Democrats, and former president Donald Trump for the Republicans. We shouldn’t be too sure about that, though. In the 19 elections that have been held in Dragon years, the incumbent has run for re-election less than half the time. Mr. Biden and Mr. Trump are both elderly and subject to the health problems that come with age, and Mr. Trump is facing a number of very serious legal problems. It would not be surprising if one or both of them is not on the ballot in November.
In the elections held in the past two Wood Dragon years – 1964 and 1904 – the incumbent presidents – Lyndon Johnson and Theodore Roosevelt – won re-election with landslide victories.
The next previous Wood Dragon year was 1844, and that was a very strange election. The incumbent president was John Tyler. In the 1840 election, Whig candidate William Harrison had won the presidency and Tyler was elected vice-president. Harrison became ill and died only 31 days after assuming office, and Tyler became president. Tyler had never been the Whig Party’s choice to lead the party or the country. Most prominent Whigs were supporters of Henry Clay, and they tried to force Tyler to resign. He would not do so, and was expelled from the Whig Party. When the 1844 election came around, the Whigs nominated Henry Clay to run against Democratic candidate James K. Polk. As Tyler’s presidency was winding down, his most pressing issue was how to bring Texas into the Union to create additional slave-holding territory – Tyler being a Virginian. It was not at all clear that that could be accomplished, and Tyler started a new party, the Democratic-Republican Party, which nominated him as its candidate for president. It appeared that if he ran, he would take enough votes that would otherwise go to Polk that Clay might win the election. In his acceptance speech, Tyler said that he would drop out of the race if he saw that Texas would be annexed. That happened, Tyler withdrew, and Polk was elected president.
The two elections in which the incumbent’s party lost were 1952 and 2000. In 1952, incumbent Harry Truman had become quite unpopular due to his handling of the Korean War and the Cold War, and he decided not to run for re-election. The Republicans nominated Dwight Eisenhower, who was a World War II hero and immensely popular. “Ike” won an easy victory running against Democrat Adlai Stevenson.
The 2000 election pitted Republican George W. Bush against Democrat Al Gore, with incumbent President Clinton term limited. Gore won the popular vote by a narrow margin, and the electoral vote was even closer. In the end, whichever candidate won in the state of Florida would become president. The vote in Florida was so close that a recount was required. Before that recount could be completed, the Supreme Court intervened, deciding the case of Bush v. Gore, a controversial 5-4 decision that gave Florida’s votes to Bush.
The two elections in which the incumbent president ran and lost were 1892 and 1976. Both of those were strange elections. In 1976, the incumbent was Gerald Ford. In the 1972 election, Richard Nixon was chosen as president and his vice-president was Spiro Agnew. Both of those men resigned in disgrace during their term, and Ford, who was the Speaker of the House of Representatives, was appointed to complete the term of the president. He was a Republican and the Republicans were very unpopular due to the antics of Nixon and Agnew and the Watergate scandal. Democrat candidate Jimmy Carter had been governor of Georgia. He was seen as a Washington outsider at a time when the people were fed up with the Washington politicians, and he was elected president.
The 1892 election was even stranger. Democrat Grover Cleveland was elected as the only president to serve non-consecutive terms. Cleveland was originally elected in 1884. He ran again in 1888, and he again won the popular vote, but Republican Benjamin Harrison had more votes in the electoral college. Harrison proved to be an unpopular president, and Cleveland ran against him again in 1892. That time, he won a plurality of the popular vote and a majority of the electoral votes, making him president once again. The election was complicated by the candidacy of James B. Weaver of the Populist Party, a very successful third party that actually won the electoral votes in five states.
This history shows that if Joe Biden actually does run for re-election, he will probably win. Still, Grover Cleveland’s story provides a sound basis for saying that Donald Trump
has a chance to be elected to a non-consecutive term as president. However, Cleveland secured the most votes in each of the three elections in which he ran, while Trump has lost by many millions of votes in the two elections in which he has been involved. Then again, Trump may not actually run come November.
If, in the end, Mr. Biden does not run for re-election – for whatever reason – history would indicate that his party should still win, and the election would be won by the Democrat’s candidate.
In Part 2, we will consider other matters that might be expected during the coming Year of the Dragon.
TABLE – DRAGON YEAR ELECTIONS
|
Year – Winner |
Result |
| 1796 – John Adams | |
| 1808 – James Madison | |
| 1820 – James Monroe | Incumbent re-elected |
| 1832 – Andrew Jackson | Incumbent re-elected |
| 1844 – James Polk | |
| 1856 – James Buchanan | Party of incumbent won |
| 1868 – Ulysses S. Grant | Party of incumbent won |
| 1880 – James Garfield | Party of incumbent won |
| 1892 – Grover Cleveland | Incumbent lost |
| 1904 – Theodore Roosevelt | Incumbent re-elected |
| 1916 – Woodrow Wilson | Incumbent re-elected |
| 1928 – Herbert Hoover | Party of incumbent won |
| 1940 – Franklin Roosevelt | Incumbent re-elected |
| 1952 – Dwight Eisenhower | Party of incumbent lost |
| 1964 – Lyndon Johnson | Incumbent re-elected |
| 1976 – Jimmy Carter | Incumbent lost |
| 1988 – George H. W. Bush | Party of incumbent won |
| 2000 – George W. Bush |
Party of incumbent lost |
| 2012 – Barack Obama | Incumbent re-elected |