Armstrong Economics Blog/Dow Jones
Re-Posted Feb 6, 2020 by Martin Armstrong
QUESTION: Mr. Armstrong
Thank you for this education. I’ve had to unlearn almost everything from the MBA I got. They’ll never teach this stuff in schools, it’s too dangerous.
Question: If the Dow closes above the January high in Feb, would that be a cycle inversion, with the market going up when it should have turned down on the Jan 2020 ECM? Or it implies a shallower pullback ahead? I’m still a little confused on how to read the signals.
Many thanks
AA
ANSWER: No, we are not in a cycle inversion. The Dow aligned with the ECM, not the NASDAQ which the forecast array showed was aligned with February, not January. Then Socrates wrote in the report on Friday 31st of January noting there was a RARE event that had taken place on the Weekly Level of our model. Socrates wrote:
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RARE SUPER POSITION EVENT
We have elected an Intermediate and Long-Term Weekly Bullish Reversal. However, we have also elected a Short-Term Bearish Reversal in a Superposition Event warning that this may prove to be a low.
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As I have warned, this was not going to be a major crash. This is still a choppy consolidation and even at the WEC, I showed we had a consecutive string of Monthly Directional Changes into April. Each market has its own cycle. If it coincides with the ECM, all that reflects is that such a market is often the focus of attention. But this turn in the ECM is so profound, the changes in the trend are so many it appears that perhaps the most serious issue will be political. I warned that Trump would not be found guilty. But this issue shows that there is a constitutional problem. The Framers of the Constitution NEVER took into account that the impeachment process would be so abused in this manner. There was no HIGH CRIME or MISDEMEANOR that Trump committed.
Even Bill Clinton, who did create a felony of perjury that any citizen would have been put in prison for, I disagreed with his impeachment because it was in a private legal case. It did not involve the office of the president. This claim that Trump sought foreign interference in the US election is really bogus. He asked them to “investigate” which if the FBI had asked it would not be an issue. He did not ask to make up something. Hillary paid to create the fake dossier by a foreign agent alleging acts in Russia. She actually did seek to interfere in the election and it was that dossier which then was used by the FBI to wiretap Trump’s campaign. That is Watergate stuff that forced Nixon to resign.
The whistle-blower met with the Democrat Schiff and he not only lied about that, but then they protected his identity when others like Snowden and Assange would be put to death if they could. This is a complete abuse of the whistle-blower statute that Schiff has violated denying Snowden and Assange Equal Protection of the Law. I would not even shake the hand of Schiff. What he has done is just outrageous and an abuse of power of his office. He has undermined the Constitution and destroyed the very power of impeachment forever. It was NEVER intended to be a tool to remove an opponent to influence elections or to bring an impeachment simply because you disagree with the president’s decision.
The Constitution demands that all members of Congress must take an oath of office to support the Constitution before assuming office. In order to comply with the Constitution, Congress has enacted federal laws to execute and enforce this constitutional requirement. Federal law regulating oath of office by government officials is divided into four parts along with an executive order which further defines the law for purposes of enforcement. 5 U.S.C. 3331 provides the text of the actual oath of office members of Congress are required to take before assuming office. 5 U.S.C. 3333 requires ALLmembers of Congress to sign an affidavit that they have taken the oath of office required by 5 U.S.C. 3331 and have not or will not violate that oath of office during their tenure of office as defined by the third part of the law, 5 U.S.C. 7311 which explicitly makes it a federal criminal offense (and a violation of oath of office) for anyone employed in the United States Government (including members of Congress) to “advocate the overthrow of our constitutional form of government”. The fourth federal law, 18 U.S.C. 1918 provides penalties for violation of the oath office described in 5 U.S.C. 7311 which include: (1) removal from office and; (2) confinement or a fine.
Executive Order 10450 defines “advocate” and specifies it is a violation of 5 U.S.C. 7311 for any person taking the oath of office to advocate “the alteration … of the form of the government of the United States by unconstitutional means.” Our form of government is defined by the Constitution of the United States. It can only be “altered” by constitutional amendment. Thus, according to Executive Order 10450 declarers any actions taken by government officials who have taken the oath of office prescribed by 5 U.S.C. 3331 which alters the form of government other by Constitutional Amendment, is a criminal violation of the 5 U.S.C. 7311.
Adam Schiff should stand trial and a jury should decide if he has violated the Constitution for the personal political gain of his party based upon probable clause that he lied about meeting the whistle-blower.
If we look at the hatred in politics and Pelosi tearing up the State of the Union speech and the Squad not even attending, we have witnessed the very collapse of the United States. This is the end of a functioning government. I BELIEVE this may be the turning point when we look with highlight back on January 18th, 2020.
On January 16th, 2020 at 2 p.m., Chief Justice John Roberts traveled by car from the Supreme Court to the Senate to assume his role as presiding officer over the impeachment trial of President Donald Trump. Roberts received a formal invitation to attend from Secretary of the Senate Julie Adams that morning. Upon arriving at the Senate, Chief Justice Roberts was sworn in by Sen. Charles Grassley (R-Iowa), acting as president pro tempore of the Senate. Shortly after senators took an oath to do “impartial justice,” the body unanimously moved to issue a summons to President Trump notifying him of their trial and the charges against him. That was all the 16th and Trump was required to respond to the summons PRECISELY in writing by Saturday evening the very day of the Economic Confidence Model – January 18th, 2020.
I have been a real scholar of constitutional law. I have even had lawyers call me for my opinion. In law school, they teach you maybe a few weeks on the Constitution. The vast majority of laws are statutory which is really the meat and potatoes. Rarely do issues rise to the level of the Constitution because most laws are presumed to be constitutional and it is your burden to prove they are wrong. What this Impeachment of Trump has demonstrated is that the Founding Fathers never anticipated that politics would disintegrate in such a fashion. The oath the senators took to be “impartial” was a joke – nobody was for this was a partisan battle to the death of the Constitution. The Democrats know they cannot defeat Trump, so they themselves interfered with the 2020 election and tried to have him removed.
After Clinton and Trump impeachments, as a constitutional scholar, these impeachments demonstrate that because the Founding Fathers never defined what constitutes a HIGH CRIME or MISDEMEANOR, it has allowed the process to be abused. This Trump Impeachment to me was the deathblow to the Constitution and any possible hope of a fair, impartial, and reasonable democracy from here on out.
- 5 U.S.C. 3331:
“An individual, except the President, elected or appointed to an office of honor or profit in the civil service or uniformed services shall take the following oath: ‘I, AB, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.’”
“…an individual who accepts office or employment in the Government of the United states…shall execute an affidavit within 60 days after accepting the office or employment that his acceptance and holding of the office or employment does not or will not violate section 7311 of this title. The affidavit is prima facie evidence that the acceptance and holding of office or employment by the affiant does not or will not violate section 7311 of this title.”
5 U.S.C. 7311 (1):
“An individual may not accept or hold a position in the Government of the United States of the government of the District of Columbia if he (1) advocates the overthrow of our constitutional form of government…”
“Whoever violates the provisions of section 7311 of title 5 that an individual may not accept or hold a position in the Government of the United States or the government of the District of Columbia if he (1) advocates the overthrow of our constitutional form of government [and] shall be fined under this title or imprisoned not more than one year and a day or both.”
- Executive Order 10450
Let the Political Games Begin – Battle to the Death
Armstrong Economics Blog/Politics
Re-Posted Feb 6, 2020 by Martin Armstrong
Well when our computer warned that the 2020 election was going to be the most contested and violent, we just saw how it will kick-off. The impeachment trial has ended and it was really a joke. At least Clinton and Nixon committed crimes that anybody else would have gone to prison for committing. This was a serious mistake for the Democrats and it illustrates that the party no longer represents their more middle of the road liberal policies.
It was a symbolic battle of this nation’s state of affairs that was on display for everyone to witness. Trump snubbed Pelosi. Pelosi stood up immediately following President Trump’s State of the Union address and tore up the pages of his speech, on camera, as the president began to exit the podium for the entire world to watch. This was throwing down the gauntlet and this election will be the vilest we have perhaps witnessed, surpassing the most notorious confrontations in history since Abraham Lincoln and the start of the Civil War.
I will state once again — NEITHER SIDE will accept the result in 2020. The government has ceased to function.
Is the Boom-Bust Cycle Dead?
Armstrong Economics Blog/Understanding Cycles
Re-Posted Feb 6, 2020 by Martin Armstrong
QUESTION: Do you agree with Bridgewater’s Bob Prince that the Boom-Bust Cycle is over? Have they made an offer to buy you out yet?
SH
ANSWER: Absolutely no way. His theory is that the tightening of central banks all around the world “wasn’t intended to cause the downturn, wasn’t intended to cause what it did.” Prince explained, “I think lessons were learned from that and I think it was really a marker that we’ve probably seen the end of the boom-bust cycle.”
That is an interesting take, but it reflects the typical investment manager focus. They tend not to pay attention to history and always assume that the financial world started as far back as maybe 1971 if not 1990. The boom-bust cycle that he refers to has been the classical economic expansion and contraction in economic activity. However, the very book I just published, “Manipulating the World Economy,” deals with this issue of central bank intervention. He seems to think that since the financial crisis and monetary easing has disrupted that cycle, that it has fueled the longest-running bull market in stocks.
This is why Bridgewater has had a terrible year in 2019. They have completely misunderstood the market and do not grasp the capital flows and how they drive markets. Indeed, Bridgewater Associates, the world’s largest hedge fund firm, had a very difficult 2019 because of this view. The firm’s flagship Pure Alpha strategy was essentially flat in 2019, with Pure Alpha 18%, the more leveraged version, falling 0.5% for the year, according to an investor in the funds. It has been this fundamental focus which is why they missed the bull market.
The repo market is already proving the idea that the boom-bust cycle is dead. Interest rates are pushing higher and the Fed is desperate to try to prevent that rise. You cannot defeat the business cycle. Even Paul Volcker admitted that much (Rediscovery of the Business Cycle). Many people have thought that governments have killed the business cycle. They have ALL BEEN PROVEN to be wrong!
No, I have never met Ray Dalio that I remember. If I did, it was just in passing perhaps at some cocktail party. Bridgewater is not a client so the idea of some offer is not even plausible. It is one thing to take in a partner, it’s something entirely different to sell everything to some private firm which would then have exclusive use. That is not my goal and I would not live long enough to spend some mythical billion-dollar sell-out. Sorry, that is not my agenda. I would like to see Socrates help to better manage the world economy, not make money for a bank or hedge fund exclusively.
Quebec Issued the First Paper Money in the New World
Armstrong Economic Blog/America’s Economic History
Re-Posted Feb 6, 2020 by Martin Armstrong
QUESTION: Mr. Armstrong, a goldbug told me you were wrong that paper currency did not begin with the Civil War. I told him you have written plenty of times about the continential currency. I believe you said somewhere that paper currency did begin in America. Am I correct in that statement?
PC
ANSWER: Ironically, the very first paper money in America was issued in Canada. In 1685, the colonial authorities in New France (Quebec) had no coin. A military expedition against the Iroquois, allies of the English, had failed and tax revenues were down as traders circumvented the taxes by dealing with the English. This predates the official first paper money issue of February 3, 1690, by the Massachusetts Bay Colony. This paper money issue was used to pay for its war in 1689 when the British demanded that Americans fight the French in Canada. Lacking coinage to pay the troops, the government issued certificates to the troops in lieu of paying them with coins.
Lacking coins, New France printed various face values on playing cards and affixed a seal to them. When the king’s ship arrived, they redeemed this “playing card money” in cash. This system was brought to an end after 1686, but it was necessary to return to it during the period 1689-1719. In 1714, card money equivalent to a value of 2 million livres was in circulation. Some cards were worth as much as 100 livres.
The king later returned to using playing card money in 1729 when the merchants demanded it due to the shortage of money. This issue of playing card money used white cards without colors. They cut or had their corners removed according to a fixed table. The whole card was worth 24 livres, which was the highest sum in playing card money. Depending on the number of corners that had been cut off, this is what determined the face value.
The first paper currency in what is now the United States was issued in 1690 in Massachusetts Bay. Because of the collapse of the Continental Currency, the United States did not issue any paper money until the Civil War. There were private bank issues which are known as broken bank note era from the 1840s. But the federal government did not issue paper money until the Civil War to fund its expenses
Rep. Jim Jordan Discusses Impeachment Acquittal and Director Wray Testimony…
February 5, 2020
A member of President Trump’s legislative defense team, Jim Jordan, appears with Lou Dobbs to discuss the Senate impeachment acquittal and other DC business.
Additionally, Mr. Jordan also had the opportunity to question FBI Director Chris Wray earlier today, and provides his perspectives on the very serious issues with the FBI.
More Manipulation – National DNC (Club) Takes Over Iowa Caucus Accounting From Iowa Democrat Party…
February 5, 2020
Honest question for Democrat voters: Can’t you see how the national DNC is controlling the outcomes of your elections? As we have repeated for years, the DNC and RNC are private clubs with complete control over the processes, rules and application of standards within the political races they convene. [Go Deep] There is no oversight over the Club.
By now everyone knows the Club agenda: •Eliminate Sanders; •support a Never Bernie alternative; •stop any hostile takeover of the Club; •hide the previous manipulation of Joe Biden’s candidacy; and, •in case of emergency – Bloomberg. As we noted yesterday, the National DNC (Club) has taken control of the results from the Iowa Democrat Party.
Here’s the latest results:
Bernie Sanders is winning the popular vote (both rounds); however, Pete Buttigieg holds the most State Delegate Equivalents (SDE’s). Elizabeth Warren has only won 1 county.
NOTE: There are 41 state delegates available and the New York Times has dropped their delegate distribution graphic. This appears to be an intentional decision to hide a reality that Biden may receive ZERO delegates.
The Des Moines Register shows the delegate distribution with 92% Reporting:
Also note how the DMR manipulates the graphic below making Biden, Buttigieg, and Warren have almost the identical shade of blue. By making the three look the same, this makes it look like Bernie Sanders was massively defeated.
Again, this is by design. Look:
Des Moines Register Results HERE
New York Times Results HERE
CNN Iowa Election Results HERE
Senators Grassley and Johnson Requesting Hunter Biden Travel Records From Secret Service…
February 5, 2020
Immediately after the impeachment acquittal vote, senators Chuck Grassley and Ron Johnson send a letter [pdf link here] to the Director of the Secret Service, James Murray, seeking travel records for Hunter Biden.
It appears the senators are looking into the background of Biden surrounding business dealings with China and Ukraine: ““We write to request information about whether Hunter Biden used government-sponsored travel to help conduct private business, to include his work for Rosemont Seneca and related entities in China and Ukraine.”…
What makes this approach interesting is the questioning earlier today by House Judiciary Chairman Jerry Nadler toward FBI Director Chris Wray. Nadler asked several pointed questions to Wray about whether any FBI investigation of the Bidens was requested by the White House or Congress…. Perhaps Nadler expected some inquiries to start.
UPDATE: Acquitted – Final Senate Vote on Impeachment – 4:00pm Livestream…
February 5, 2020
At 4:00pm today the U.S. Senate returns to trial phase. Supreme court Chief Justice John Roberts will return to the Senate, and the chamber will be voting on two articles of impeachment. The Each senator will be called individually and will cast their vote guilty or not guilty accordingly.
UPDATE:
♦ Article One ‘Abuse of Power’: Guilty 48 / Not Guilty 52
♦ Article Two ‘Obstruction of Congress’: Guilty 47 / Not Guilty 53
Fox News Livestream – CSPAN Livestream Link – Fox Business Livestream Link
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Day Three – Iowa Caucus Results Still Stuck in Propaganda Mode – Club Engineers in Holding Pattern…
February 5, 2020
Today is the third day since the Iowa caucuses took place and still the results are not announced. The current status is 71 percent reported and the Democrat narrative engineers are in a holding pattern. [New York Times Election Results]:
Bernie Sanders is leading in the popular vote, but Pete Buttigieg is leading in State Delegate Equivalents (SDE’s); each has received 11 delegates so far.
Obviously the DNC club wants to extend the amount of time Buttigieg can use to claim victory and simultaneously diminish support for Bernie Sanders. In the only update since the original release at 62 percent, media engineered candidate Joe Biden has dropped below the 15 percent threshold for delegates. It is quite possible, despite the media polling prior to the caucus, that Joe Biden will not get any delegates at all.
If I had to guess I’d say the results will be released after the impeachment acquittal vote. Overall Democrat turnout in Iowa was terrible; the complete opposite of the preceding media narrative.
FBI Director Chris Wray Testifies to House Judiciary Committee – 10:00am Livestream…
February 5, 2020
FBI Director Chris Wray is testifying to the House Judiciary Committee today and will likely receive questions about the FISA abuse issue. Chairman Nadler scheduled the hearing today in a transparent effort to avoid publicity on the content.
Fox News Livestream Link – House Judiciary Link
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