Category Economic Subjects

Mar 3 2020

Why Goldbugs Get Crushed


Armstrong Economics Blog/Gold

Re-Posted Mar 3, 2020 by Martin Armstrong

QUESTION: This is what infuriates those that like gold. All of the shorting. Why? No other sector looks like this. So how is it that gold miners are restricted but no other sector sees shorting to the extent that restrictions are in place??? Gold is $1600 and these stocks traded double this price in 2008 with gold at $800. You ask why “goldbugs” are so angry, this is your answer.

S

ANSWER: For decades, I have watched “The Club” rally the metals and then crash them because the goldbugs treat it as a religion rather than a market. Every rally is touted as, here we go, the world will crash and only gold will survive. The Club uses that sentiment against them all the time for they know it is easy money. When they step back and look at the metals as markets, then they will win. Many other markets have made long-term profits but they are always demonized by the goldbugs. Why? I believe that some of the people promoting gold are the very ones involved in selling it to them. Everything has a cycle. It goes up and goes down. These chants from the goldbugs are not realistic and they cost countless people their life savings as they get sucked in by people who act like used car salesmen.

Short sale restriction is a rule that came out in 2010 and it’s also referred to as the alternate uptick rule, which means that you can only short a stock on an uptick. You will note that there is no such thing as a long buy restriction where you can’t buy a stock as it’s going up.

Inevitably, the goldbugs blame shorts. That is NEVER the case in any crash. The real cause is that you have exhausted the buying. When you run out of buyers, that is when markets become vulnerable. The smart do not short, they sell to take profits. That starts the decline and the hated short-player is blamed but never found.

The short selling rule came in only because of shorting Lehman Brothers. When the shorts turned on Goldman Sachs, they pulled the strings. But those were shorts looking at reality, not speculative. There has NEVER been a discovered mythical short position that causes the entire market to collapse.

I have stated countless times that gold will rally ONLY when the general public perceives there is a crisis with the government. Forget deficits, quantitative easing, and fiat currency. They will never convince the average person to take gold seriously. When you begin to look at the market without emotions and trade them up and down, then you will see the light.

Mar 2 2020

A Bear Market is Not Likely in the Most Hated Bull Market in History?


Armstrong Economics Blog/Armstrong in the Media

Re-Posted Mar 2, 2020 by Martin Armstrong

Well here we go again. These people who claim to be experts are warning that it is the fallout from the global coronavirus outbreak that has caused the crash and one says this could be “worse than the financial crisis” of 2008. Another claims to have forecast the 2008 Financial Crisis is now saying the idea of a major global recession “doesn’t sound too farfetched.” These people who always claim the market will crash then claim to have forecast the crash but only one out of 50 such forecasts are ever correct. They then also market themselves to please buy their newsletter because they were right.

The German top newspaper, Die Welt, commented on the stock market decline mentioning our perspective correctly February 28, 2020:

The crucial question for investors is now whether the stock market is drifting into a bear market, whether it is losing 20 percent or more, or whether there is a quick and strong recovery. Martin Armstrong currently believes a bear market is unlikely: “The rally that started in 2009 was the most hated rally in stock market history,” says the capital market expert from independent research firm Armstrong Economics.
Yes, I have forecast all the great crashes. That was actually the easy part. The difference in such forecasts sometimes go over everyone’s head. The 1987 Crash I forecast even that the market would fall basis the S&P500 futures from 286 to 181 in two days. True, that impressed even me. But the fact that the crash came on October 19th, 1987 which was the very day of the Economic Confidence Model confirmed what all my other models were screaming – we would make new highs by the peak of the ECM in December 1989. Both the NewYorker and even Bloomberg News had to admit that we correctly forecast the 1987 Crash.
That forecast may have impressed me, but what impressed the entire world was not forecasting the crash, but that the market would then make NEW HIGHS by 1989. Then what impressed our clients even more, was the fact that the December 1989 high not merely forecast that Japanese Bubble top, but that market would NOT make new real value highs, which was SUBSTANTIALLY a different forecast from the 1987 Crash.
As far as the 2007-2009 Financial Crisis, Barron’s commented on my forecast that the market would move back into a long-term bull market. They reported that ONLYbecause they thought it was nuts. Not a single US major financial newspaper would ever report this forecast, because they too filter the news. Overseas press will report, but not the American press. They prefer to put forth the fake forecasts for they are giving them the news they want to print.
So to all the people who ask why the press will never report our forecasts, all I can say is that it would upset the apple-cart. They are only selling media. They need people willing to talk all the time so they are usually the people who do not really have a serious business and are in constant search for new clients.
Categories: Armstrong in the Media
Mar 2 2020

World Share Markets & the Mother of All Financial Crises


Armstrong Economics Blog/Stock Indicies

Re-Posted Mar 2, 2020 by Martin Armstrong

QUESTION: Marty,
Socrates has really been off the charts. I moved 401k and Roth money to cash in mid January and can not thank you enough!
In a private blog post in October, you showed the quarterly S&P with a possible high in Q1, and decline thereafter. Is it now possible that, given the directional changes this coming week, and in March, that the share markets could rise from here into 2021? That would also fit the quarterly array as well I believe. There are no other monthly directional changes after March on the array, and I think if this virus is overblown I don’t see how we go lower for a year from here unless this is truly end of days stuff. Can you ‘forecast’ 😉 what comes next?
Once again, thank you for your advice!
RK

ANSWER: I want to thank all the emails coming in with thanks for calling this correction, correctly. I am writing now the report on all the world share markets to provide the outlook into 2021. We are staring in the face the Mother of All Financial Crises and you always need the move in the opposite direction before pulling off what is the true direction of the markets.

What I hope to do is to prove to the world that this is not some random walk nor is the economy and markets play-things for economists and politicians. This is our future people are toying with. The negative interest rates have destroyed the central banks and nobody seems to have even figured that one out yet.

This is not some experiment to to allow people to try theories that are unsound. It is not just finances and money that is on the table of life. Everything flows from this right down to revolutions and war. As I have said, Marx’s theory to create Utopia, the cornerstone of socialism today, has been responsible for over 200 million deaths and counting.

While if I fail to wake up one morning, I would be relieved that I do not have to watch what these fools do and how history repeats without society ever learning a single damn thing. But I too have a family, an I fear for their future. I get to depart before so I have hope I can escape this madness. I would like to leave behind something to give them hope. Just maybe one day society will wake up and see the light at the end of the tunnel and understand that we have become addicted to repeating history and war.

When will we ever learn that we are all connected? Perhaps that is what the coronavirus will teach everyone how the global economy is interdependent

Mar 2 2020

Will There be Coordinated Central Bank Action This Week?


Armstrong Economics Blog/Interest Rates

Re-Posted Mar 1, 2020 by Martin Armstrong

The Coronavirus has been exploited by the press to unbelievable levels. Even hop on a domestic flight in the USA and the majority of people are wearing masks. Fed is being pressured to do a coordinated rate cut this week. We should see rate cuts in China and Hong Kong where the economy has been complete decimated. Our target weeks for action by central banks will be this coming week of March 2nd and March 23rd. Based on information and belief, the press has been told to knock this off. They are creating a global panic without justification just as they created the Spanish American War.

Categories: Interest Rates
Feb 29 2020

Corporate Profits to Decline into 2021?


Armstrong Economics Blog/Economics

Re-Posted Feb 27, 2020 by Martin Armstrong

QUESTION: You posted that there should be a recessionary trend starting here in 2020 even in the United States. Does that mean corporate profits will decline which impacts the stock market?

JB

ANSWER: Yes. I warned at the WEC that we were approaching a point where we could see a correction unfold in US equities. Corporate earnings should have peaked after a 19-year rally in 2019. There was a major spike rally into 2018-2019 that has been impacted by the Trump tax cuts and the corporate buy-backs so earnings rise in proportion to outstanding shares. There should be a two-year correction into 2021.

Our correlation models show that since we actually have global cooling, despite all the desperate manipulation of the data to create an average that is rising, temperatures have been declining where people actually live. This is serious for as the real temperature declines, the flu season gets worse. The last major flu epidemic was 1968 and that became a pandemic that killed more than 1 million people. The overreaction to this coronavirus may be an intentional manipulation of the economy as it undermining the economy. Cyclically, this is right on target. We have a Directional Change in 2021 and that is the next turning point. so I would expect we have seen the high in corporate profits and we have that correction unfolding into 2021

Feb 26 2020

Fake News – Coronavirus & the Dow


Armstrong Economics Blog/Understanding Cycles

Re-Posted Feb 26, 2020 by Martin Armstrong

COMMENT #1: Marty, you are the only person who tells the truth in markets. If the coronavirus is spreading everywhere outside the USA, then why is money fleeing from the US stock market to run to places where there is the virus? This is fake news at its best. You are right. This is the “Bernie Effect” as you say.

Please live forever! Buck the cycle!

DF

COMMENT #2: Marty,
Even us small time retail investors see the writing all the wall.
…
Today’s headline…
“ Wall Street plunges as coronavirus spread sends investors fleeing”
Common sense asks…
Where are they fleeing to, if there are very little cases of coronavirus here in the USA?
You my good sir are spot on, they are afraid of a Bernie Sanders win and more importantly what’s really going on with the “Repo Crisis”. Honestly, for years I’ve tried to explain to people that markets never lie, people do.
I have some great books from the early 1900’s and those investors as well talked about how the media manipulates everything including the markets. Yet, most still believe, go figure.
Keep up the great work and I hope to make it this year to Florida for the WEC, still waiting for the 3rd edition of “Manipulating the world economy” to hit Amazon.
SR

COMMENT #3: Marty,
Thanks for all that you and your team do! I have been a long time reader and I am a subscriber to Socrates. I must admit the call on the collapse this week was amazing (yet not surprising Socrates was right).
I came across this article today where the Bank of Canada has acknowledged that it is working on its own cryptocurrency. Consistent with your messaging, governments will never allow the private crypto’s to take the lion’s share or surrender control.
Some notables from the article are:
“The Bank sees two main scenarios where the central bank could see the need to issue its own digital currency: firstly, if the use of cash is restricted or eliminated, and second, if private cryptocurrencies were to make serious inroads.” “In both scenarios, there would be an argument for the Bank of Canada to step in.”
“If one or more alternative digital currencies threatened to become used widely as an alternative to the Canadian dollar” then a central bank issued digital currency could be used to defend monetary sovereignty, the Bank said.
Thanks for all that you do!
RA

COMMENT #4: You have too much influence. You posted on the weekend the market would crash on Monday. It did. You posted that gold would peak on Monday. It did. Nobody can forecast markets like you which means you are too influential which is why you tend to be always right.

VE

REPLY: The people who write these stories are not analysts and are probably not even investors. There are pretend analysts who have no idea what is taking place and they just make up nonsense. They use the press to try to sell their analysis for they have no real client base.

Not just me, but all of the key people in the company have REAL LIVE experience. I often joke that we should change the name to Over the Hill Crowd. People on board have worked for banks even setting up dealing desks or have been brokers. They know what really goes on behind the scenes.

The governments are going broke. Cryptocurrencies will be their next solution. Be wise – not foolish.

Ans as to influence, just maybe the people who are in the press all the time are there because they are trying to find clients. They seem to have more influence since the majority is always wrong. I am very tired of this argument. When you have traded all your life, sometimes you can just smell the blood pouring out with the quotes. You sound like one of the bankers who bribe everyone and loses and then blames me for their own loss and corruption.

Feb 26 2020

Half-Billion $ Pandemic Derivatives


Armstrong Economics Blog/Disease

Re-Posted Feb 25, 2020 by Martin Armstrong

QUESTION: Mr. Armstrong; Have you been called in by the World Bank because of the coronavirus? The rumor is you are advising on this pandemic from a financial crisis perspective. Yes or no? Some say you have a financial interest in not calling this a pandemic. Care to comment?

JV

ANSWER: Yes, we have been called in to do studies and forecasts based on the coronavirus. No, we have no financial interest either way. That makes a really stupid rumor. We do not do such projects on some sort of a contingency basis. I am not at liberty to say by who. However, if there is a pandemic, the World Health Organisation gets to keep money and the bondholders lose. You figure out who would be asking for help.

For those who are not part of the conspiracy networks, this is related to the outstanding World Bank Pandemic Bonds which will come due for expiration this July here in 2020. This will be in the neighborhood of $500 million which is perhaps a structured derivative time bomb that most people have never heard of.

These pandemic bonds were sold to investors as a giant gamble in the global financial casino. The World Bank sold “pandemic bonds” which were a scheme like no other. In 2017, these bonds were sold to private investors on the premise that they would lose their money if any of six deadly pandemics hit. They did not pay out in 2019 when the Ebola virus broke out in Africa. The World Bank announced the creation of these structured bonds in May 2016 at the G7 Finance Ministers and Central Governors meeting in Sendai, Japan.

The World Health Organisation will keep the money and will use it to fight the outbreak. Investors bought the bonds and received regular coupon payments in return, which were substantial in this world of negative interest rates. If there is an outbreak of disease turned into a pandemic, then investors don’t get their initial money back. There are two varieties of debt that are scheduled to mature in July 2020.

The first bond issue raised $225 million and features an interest rate of around 7%! That was substantial. Payout on the bond is to be suspended if there is an outbreak of new influenza viruses or coronavirus. The second type of bond was even riskier which raised $95 million with an interest rate of more than 11%. This second type of bond keeps investors’ money if there is an outbreak of Filovirus, Coronavirus, Lassa Fever, Rift Valley Fever, and/or Crimean Congo Hemorrhagic Fever.

Then the World Bank issued $105 million derivative that works in a similar way.

Obviously, we have cyclical models that also cover disease. It does not take much to figure out that we would be called in to project the risk. It would be in the interest of the World Health Organisation to declare this coronavirus a pandemic. They would benefit from the cash. The bondholders will lose. We have NOT been called in by the World Bank. That much I can say

Feb 26 2020

Internet Frauds From Hacking Emails to Dating Site Frauds


Armstrong Economics Blog/Corruption

Posted Feb 25, 2020 by Martin Armstrong

The amount of fraud taking place on the internet is in the billions. They will hack your email and then have money wired to Hong Kong. That is a popular destination. One guy lost $450,000 in three days. Then there are the fake nurses who claim to be working for the United Nations seeking love on dating sites. They are naturally on their way home, targeting lonely old men. At the last minute, they get robbed or lose their wallet and ask for hundreds to a couple of thousands to be wired, of course, to Africa. The money probably goes into the vault where some guy in Nigeria has hundreds of millions of dollars, and nobody to leave it to unless you give him your bank details.

The more common frauds on dating sites are girls looking to shake down lonely old men with promises of love. They are ready to hop on a plane at a moment’s notice provided you send them the money to buy the ticket. Others have a broken phone and need you to buy a new iPhone so they can tell you how much they love you. There are also guys conning windows with a whole host of excuses to clean out their bank accounts.

We are all aware of credit card fraud. I had it done to me once in an airport about 20 years ago. A legit company wanted me to read my credit card number over the phone and the guy in the next booth was writing it down. Obviously, I will never read my card over the phone again. The other time, I have no idea how someone was using my card to download music from iTunes. When I called the credit card company, they first tried say I had to call iTunes to have them change my account. I had to get angry and explain I did not have an account at iTunes. They finally reversed three months of charges.

Things have changed and they will change even more. We have to realize that we are moving to digital currencies and the unusual hype that has been spun around this coronavirus is very suspicious. A virus can live on paper for some time. China is disinfecting its paper currency. I would not be surprised that the West are hyping this virus to insane levels to use it as an excuse to eliminate paper currency that will aid tax collections.

If you have a family member, tell them to require approval for any wire from their account. Bank of America has a secure pass where they send an authorization to your phone with a number you must type in to send any wire. If your bank does not have something similar, it may be time to switch. As for those with lonely relatives trying out the internet, tell them to NEVER send money to anyone you have never met face to face. Those two precautions are vital in this new world of online fraud. Use some common sense. If some girl is a nurse working for the UN and everything is stolen, the UN will help her — not you.