Why I Look at the Dow First

Armstrong Economics Blog/Economics Re-Posted Nov 28, 2022 by Martin Armstrong

COMMENT: Why do you focus on the Dow over the S&P 500 and others?

ANSWER: New analysts claim that the S&P 500 provides a better picture of the markets compared to the Dow. Although the S&P 500 obviously has a larger catalog, the Dow is a direct reflection of international capital flows. Look toward the Dow to see where big money is moving.

The S&P 500 is domestic-oriented, and fund managers and institutions tend to focus on this index. The NASDAQ typically reflects retail, often tech-heavy, and usually does not peak at the same time. Each index offers a completely different perspective. The Dow Jones Industrials is the big money. You will notice that this index leads the way. It is the first out of a key low because it is typically the foreign capital based on currency. You will also notice the Dow tends to top out first because the big money tends to pull out first also due to currency.

Capital is flowing like never before, and the smart money is on the move. Socrates users have access to our capital flow heat map that shows where money is moving in real time. The USD remains the last safe haven, and money is pouring into the US. Look to the Dow for the best international perspective.

2022 WEC: In the Dollar We Trust

Armstrong Economics Blog/World Economic Conference Re-Posted Nov 8, 2022 by Martin Armstrong

At the World Economic Conference in 2021, the Armstrong Socrates model predicted that 2022 was going to be volatile and chaotic featuring a strong US dollar, a huge move in interest rates, a major bond market decline, fertilizer and food shortages, as well as escalating geopolitical tensions in Ukraine.

What now? Socrates forecast that 2023 will be more volatile and chaotic, featuring violent moves across all markets as monetary and geopolitical tensions and debt problems intensify.

At this year’s World Economic Conference, November 11-13, Martin Armstrong will talk about what’s next for the US dollar and other currencies, the liquidity/credit crisis, as well as price targets for oil, gold, stocks, bonds/interest rates, and stocks.

Give yourself an “unfair” advantage over the markets by joining us at this year’s conference remotely or in person. Meet Martin Armstrong – have your questions answered and get the best roadmap for 2023 and beyond in the investment business.

TIR Introduction 1988 London

Armstrong Economics Blog/Armstrong in the Media Re-Posted Sep 24, 2022 by Martin Armstrong

Capital Flows Confirm War is Coming!

Armstrong Economics Blog/Capital Flow Re-Posted Mar 26, 2022 by Martin Armstrong

Our models have confirmed that Biden’s sanctions against all Russians have undeniably destroyed the global economy unfortunately precisely on time from its birth in 1950. Our capital flow models have confirmed that there has been an unprecedented cash outflow from China following Biden’s sanctions. Not only are we witnessing a withdrawal of Western capital from China realizing that the US has no interest in peace and China will be next, but we are also looking at collapsing confidence in globalization continuing from here on out.

Our models have confirmed a highly unusual change in direction of the global capital flows which is even showing up in the emerging markets. China saw investors pull out from its share markets over concerns that we are clearly headed into World War III. Historically, the capital flows to the dollar during world war under the assumption that tanks will not be landing on the beaches of Virginia or California. This will tend to support the dollar, but not long-term. Biden’s sanctions attacking individual Russians have turned into a nightmare. Besides the Czech Republic seizing ALL assets of any Russian based upon their ethnicity as they were doing to the Japanese during World War II in the United States, now even Switzerland is doing the same thing.

These sanctions are not going to cause regime change and the overthrow of Putin with Russians running into the arms of the West. This is outright hatred of Russians as a people and they will have no choice but bond with China in an all-out war against this outrageous tyranny. I seriously doubt that Biden even understands what he is doing at the directions of these Neocons who have infiltrated the White House.

These Neocons are bringing the entire world to destruction which some argue is all part of their plan to enable the world to BUILD BACK BETTER which necessitates the destruction of the current energy system and reduction of population to make Bill Gates sleep easy at night. So the next season of BUILD BACK BETTER may be the climax.

Our model has ALWAYS picked up the shifts in capital flows that precede war. This time we are witnessing outflows not just from China, but also from ALL emerging markets on a scale that is simply unprecedented. The timing of outflows is clearly linked to Biden’s unprecedented sanctions against the Russian people – not just Russia itself as a political state. This has NEVER taken place in history before with the single exception of the US sanctions imposed on Japan and the freezing of all their assets in the United States which preceded Pearl Harbor.

It pains me to have to even write this today. But clearly, those who understand where this is going is to World War III and make no mistake about it – this is INTENTIONAL! Even the official data has revealed that foreign investors have sold a net $5.5 billion of Chinese government bonds in the last few weeks. Biden stupidly threatened China that if they support Russia, they will suffer the same sanctions. This is just insane and it is DELIBERATELY trying to destroy the entire world economy.

Even from NATO, Secretary-General Jens Stoltenberg said at a press conference on March 24, “China must not provide economic or military support for the Russian invasion.” The previous day he accused Beijing of spreading “blatant lies and misinformation.” What they are calling “misinformation” is anything that challenges the West’s own propaganda. They want WAR for the demands of Putin are reasonable – Ukraine remains neutral, surrender Donbas and Crimea which are all ethnic Russians when Zelensky passed the language law that Russian is no longer to be an official language in Ukraine. That is the same as telling all Spanish if you do not speak English – get out.

All we can do is write to every political leader and DEMAND accountability for the Biden Administration is out to BUILD BACK BETTER, but that requires total destruction first.

An Interview with Martin Armstrong

Armstrong Economics Blog/The Forecaster Re-Posted Mar 24, 2022 by Martin Armstrong

The Crisis in Europe – Robbing Pension Funds to Replace QE

Armstrong Economics Blog/European Union Re-Posted Mar 18, 2022 by Martin Armstrong

While in Britain Johnson was pushing for a law that allows the government to confiscate private assets of those who resist the government under the pretense of Russian Sanctions, the EU Superfund is robbing people pensions for (1) climate, (2) energy, and (3) defense which is to be funded by private pensions. This move is being defended as necessary to protect politicians against the rise of populism (anti-career politicians), deepening the commitment to slowing climate change, and now defending its borders as the US security umbrella recedes.

The EU will launch a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes. So they will rob the future of people, especially over 40 who have been working all their lives for political objectives to save the careers of politicians. They argue that the security umbrella provided by the US during the Cold War is declining rapidly and this introduces new threats as they continue to agitate Russia and constantly push NATO eastward. The argument is that the US will be more concerned with China than Russia. That does not seem to be the case given all the rhetoric concerning Ukraine, but it is a handy excuse to rob the pensions in the face of a collapsing bond market.

The AUKUS submarine deal brought France’s attempt to sell new submarines to Australia in confrontation with the US. This has been argued that the US became very cold toward Western Europe. In the face of Ukraine, the EU knows it needs to move rapidly on all fronts to bolster its defenses.

French President Macron, backed by Italian Prime Minister Draghi who created the negative interest rates nightmare, argued to move swiftly to defend against Italy’s own rise of populism. Hence, they argue to push this “EU Superfund” will address all of these three-fold priorities that are urgent. The European civil unrest is rising in the fact of total fiscal mismanagement.

It appears that the politicians WANT war with Russia as a diversion. They desperately need an excuse in the face of a crumbling monetary system where especially the EU is in trouble unable to sell bonds to fund itself or the future. The solution is to rob the pension funds and that will eliminate the need to issue bonds to cover expenses. That move will only undermine the confidence in the EU and result in further civil unrest. The negative interest rates have robbed savers of income since 2014.

The EU is struggling with declining birth rates and an aging population that is enduring already very heavy tax burdens. They cannot throw the cost of climate change and defense on top of the current levels of taxation without a popular uprising to overthrow the present governments. They cannot possibly finance the Superfund with higher taxes even on the claimed higher incomes. They have threatened tax havens and hunted the rich worldwide. They are now using Ukraine as the excuse to confiscate private Russian assets that will NEVER be returned.

France is moving to overhaul its pension system and is looking at Europe’s enormous pensions as the source of revenue. The scheme is that all pensions for all workers above the age of 40 must allocate a progressively larger portion of their pension assets into Superfund bonds as they age. This is how they will create new levels of fiscal stimulus in the EU when negative interest rates have failed. The pensions will now be replacing Quantitative Easing as the entire system is collapsing. With rising inflation thanks to the mismanagement of COVID and now promoting a much-needed war against Russia the hope to keep just conventional, this level of spending everyone else’ savings they hope will replace the impossibility of selling negative interest rate bonds that NY banks now view as junk.

Welcome to the collapse of Keynesian Economics. As I have been warning – the European Central Banks is trapped and QE no longer works.