Editors' pick: Originally published Nov. 9.

Ninety years ago in Russia, an economist found a pattern in capitalist countries' economies. And if the pattern he found holds, it could mean we're in for another few chilly years, economically speaking.

Nikolai Kondratiev was born in 1892 in the Russian Empire. In the 1920s, he developed a theory about long-term economic cycles. His theory proposed that prices, foreign trade, interest rates, pig iron and coal production in capitalist countries moved in periodic waves of about 50 to 60 years. He thought that "Great Depressions" are a natural part of capitalism, and are followed by periods of recovery.

(Kondratiev's work ultimately led to his imprisonment and eventual execution in 1938. Joseph Stalin didn't like that Kondratiev's work didn't show that the evil capitalist system would collapse after the Great Depression of 1929.)

Kondratiev's ideas are found in his book The Major Economic Cycles, published in 1925. He compared the economic history of several western nations with the predictions from his theory. Past economic performance (as far back as 1789) had a near-perfect match with his ideas of long waves of economic contraction and expansion.

He then attempted to predict future economic cycles using his theory. The results so far have been surprisingly accurate. Other economists refined his ideas, and named these long-term cycles Kondratiev Waves (or K-waves) in his memory.

There are many factors that drive K-wave cycles, although there is debate over which factors are most important. To be sure, investment profits, the relationship between industry and agriculture, population growth, war, prices and technology are all key factors in K-waves. Debt buildup and debt repudiation are two other major factors.

Some economists think that these 50- to 60-year cycles are an inevitable part of how the world works -- and that K-wave expansions and contractions are just a natural part of any economy.

K-Wave Seasons

Over time, the Kondratiev Wave Theory was refined and divided into four phases: spring, summer, autumn and winter.

Spring involves an economic upswing as the winter phase ends. Technological innovation and development help to drive productivity while inflation rises.

Summer includes boom times, but often ends in war.

Autumn is when the economy plateaus. There may be a stock market crash after a speculative boom and market euphoria.

Winter is the period of economic depression, deflation, bankruptcy and unemployment. This "cleanses" the economy of debt. (Kondratiev felt that depressions were not all bad because they cleaned the system of excess).

And according to K-wave proponents, that's where we are now.

The most recent winter began in 2000, around the time of the Nasdaq/tech crash. Economic winters usually last about 20 years, based on what's happened in the past. So, the global economy is still in for a few more years of tough times.

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What the Facts Tell Us

A K-wave winter is supposed to include a myriad of troubling economic signs: deflation, rising interest rates, a troubled financial system, collapsing commodity prices (except gold, which usually goes up), currency crises, bear stock markets and a cleansing (or repudiation) of debt.

The financial system is certainly struggling. The most recent potential casualty is Deutsche Bank (DB) - Get Report , Europe's largest bank.

Commodity prices have also been low as supply has outweighed demand. The S&P GSCI Total Return Index (which tracks global commodity prices) is down 52% for both the last three and five years. The exception is gold. Gold prices have risen 200% since 2000, and demand has surged as uncertainty looms.

Currency crises have happened in multiple countries -- for example, in Venezuela. And the euro seems to be in a permanent currency crisis.

Global deflation is not yet a major issue. Granted, deflation has already hit Japan and is threatening to affect Europe. And during the 2008-2009 financial crisis, the U.S. also flirted with deflation. Despite zero and negative interest rates in many markets, deflation is a problem in only a few countries.

There are a few key elements that are still missing from the K-wave winter period. These include rising interest rates, a bear market and debt repudiation.

Interest rates have never been lower, as most major economies have dropped interest rates to nearly zero -- and some economies have even adopted negative interest rates, as mentioned.

There was a major stock market crash in 2008-2009, and some markets entered bear territory earlier this year for a short time. But, there's no global bear market in equities.

And as for debt, the global economy has kept borrowing more and more. Since 2000, the world's total debt load has skyrocketed more than 130% to more than $200 trillion. Clearly, debt repudiation has not yet begun.

But these missing factors -- no rising interest rates, crashing stock markets, offloading of debt -- are all related to one thing: the interest rate policies of the world's central banks.

Warping the Cycle

Central banks have been doing everything they can to keep their economies growing and prevent the depression that is predicted by the Kondratiev wave cycle. They're cutting interest rates to new record lows to try and stimulate economic growth.

Low interest rates encourage inflation instead of deflation. Countries and individuals take on more debt when rates are low, as opposed to repudiating it. Low interest rates are normally quite good for stock markets as well.

Central banks may be preventing the "cleansing" of debt and excess that is a part of the natural cycle of economies. It should happen every 50-60 years, just as it has been happening for the past 1,000 years.

If that is indeed what's happening, then government interference is only delaying the "spring" boom that comes after a K-wave winter. The cleansing will come eventually, but it will likely be much worse.

One way to you protect your assets from the Kondratiev winter and any coming volatility is to buy gold.

Gold is a safe-haven in times of economic distress. It holds its value when all other markets crash. It's one of the oldest forms of money and is a fantastic store of value.

So if the worst is yet to come, owning gold will help you get through it.

One of the best ways to own gold is through an ETF. The SPDR Gold Trust ETF (GLD) - Get Report is an easy way to own gold and can be purchased on the NYSE.

For all the reasons to buy gold, and some of the best ways to do so, download our latest free report on gold by clicking here.


Kim Iskyan is the founder of Truewealth Publishing, an independent investment research company based in Singapore. Click here to sign up to receive the Truewealth Asian Investment Daily in your inbox every day, for free.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.