Inflation has led to political revolutions since Medieval times and we may be witnessing the fifth such great revolution in history unfolding in the Middle East and in our own country right now, said Dr. Ed Yardeni, president and chief investment strategist of Yardeni Research.

Yardeni cites the work of historian David Hackett Fischer, who described civilization’s first four major inflation cycles in his 1999 work The Great Wave: Price Revolutions and the Rhythm of History. The first price change wave was during Medieval times, culminating with The Black Death. The next three occurred in the 16th century, the 18th century and the turn of the last century. Each wave lasts about 100 years, according to Fischer’s work

Yardeni, referencing Fischer’s work, describes the waves as beginning with rising inflation and then followed by governments printing money. Changes in prices then begin to occur more rapidly in response, causing income inequality as the elite resist tax increases. The slighted, especially the younger generation, get desperate and angry, mobilizing in groups to spur a political revolution. The wave ends with tremendous financial volatility and ultimately a deep collapse in prices and interest rates....