Chaos & the Secret Order to Everything


Armstrong Economics Blog/ECM Re-Posted Mar 18, 2023 by Martin Armstrong

Economics is the ONLY field where cycles are denied. Moreover, people do not even comprehend how COMPLEXITY emerges. Alan Turing was a brilliant mathematician who is probably the father of computers for he built the really first computer to break the German Enigma Machine. The man was Alan Turing. He invented the computer and broke the German Enigma Code. You can watch the movie The Imitation Game to get a general idea of his achievement.

But Turing did something even far more astonishing. He had a theory that within nature, what appears to be chaos was just a mask that hides a natural order. He was the first to think that there might be a mathematical order that defines nature. There is a mysterious aspect of Morphogenesis. All the cells in an embryo are identical. Then the cells begin to clump together and actually become different from each other. The mystery was how identical cells know to form different things such as skin, eyes, brain, or bone. There is no central command center.

Turing 1952 Morphogenesis

The phenomenon of Morphogenesis is what is the essence of mystery. This process becomes self-organization. Before Turning, absolutely nobody had any idea of how this process even worked. It was also a great mystery of life itself. It was Turning who published on March 15th, 1952, the Ides of March 3.14, his mathematical explanation of Morphogenesis. Turning’s formula was revealing for it uncovered a secret order behind the mask of chaos. Despite being one of the most brilliant minds ever and all his contributions even breaking the German code, because he was a homosexual, a judge order him to prison or subject him to hormone injections to cure him. He committed suicide on June 7th, 1954 because of the abuse of the government which ignored all his contributions.

What Turning discovered in nature, was that there is a hidden order in which identical cells then change and become specific parts of the end result without any specific coding. What would appear to be simplistic formulas, suddenly emerged into a complexity that baffled the human mind. This is what I discovered in economics. A secret cycle that defines the complexity which we also cannot see with the naked eye.

This is why different cycles unfold in all the sectors such as metals, commodities, share markets, currency, bonds, etc, and when they align that is when we get the superposition events. I will explain more in my forthcoming book on the Economic Confidence Model. One bubble will be in the real estate markets, such as 1792 and 2007-2009. Other bubbles took place in commodities such as in 1919. Still, others took place in currency markets and capital concentration such as the 1989 peak in the Nikkei in Japan or the 1929 bubble in the USA.

In 2020, we warned that this cycle would be a debt crisis wave, but also a commodity wave with rising inflation and interest rates into 2024. We must understand that each bubble is different for it all depends upon the cyclical aspect of that particular sector and does that line up with others to produce a super-wave that becomes the bubble.

Right now, we have a crisis in banking because far too many banks have just listened to the mainstream media and failed to understand that interest rates would be rising – not declining. Since 2020 we have been warning that interest rates were at a 5,000-year low. A simple bounce to just 5% would be devastating. Many banks attend our conferences because they are sophisticated and do not make hedging decisions based on the latest headline on MSNBC.

I am working hard on having Socrates articulate the complexity. I hope to roll this out this year – ASAP. My personal interpretation is generally on point, but not always. What looked to be dominated by geopolitical events in April, appears to be combined with the banking crisis, and in all honestly, I could not imagine that the FDIC even considered not covering 85% of the deposits. I should not have had to even explain that doing that would mean that small businesses have systemic risk in all banks. I actually had to explain there would be a major banking crisis in April that would make the Great Depression appear like a dress rehearsal.

As such, this banking crisis does not appear to be finished. It will still move into April 10th or so. Then the ICC issued a criminal indictment for Putin when they have no such jurisdiction by their own authority. They have become yet another political tool of the Neocons determined to create World War III.

We have entered the period of COMPLEXITY where we are not looking at a single sector in a bubble. We are looking at a really dangerous contagion of COMPLEXITY and the Neocons could care less about the economics. They have control of the White House and this is their chance and they are NOT backing down.

God help humanity!

2032 & the Real Great Reset


Armstrong Economics Blog/ECM Re-Posted Mar 3, 2023 by Martin Armstrong

COMMENT: Marty; A lot of people are concerned that you may just say the hell with it all and move to your island in the Caribbean. A lot of us always stood by you and many more are joining the ranks. There are so many who claim to be brilliant analysts but it is just their opinion. Following their work does not help clarify anything and many have been touting the rise of gold and the demise of the dollar for years like a broken record. It is incomprehensible how they are still in business. This is the time you were born for. Your analysis is not opinion and we can all look at the arrays and see what is coming.

As you always say, we are all in this together. That also means we need you now more than ever to sort out the truth from fiction. Don’t lose your faith. After 2032, the world will open its eyes to all your forecasts and listen for the real great reset. So many people plagiarize your work pretending it is theirs. Schwab is just another such lowlife. A blind man can see his Great Reset is your 2032.

Jim

ANSWER: I appreciate what you say. It is hard at times to have been looking at the model all these years staring at these forecasts for a war that would begin in 2014 and then living through them. Never in my wildest dreams did I ever expect personally that the West would be the aggressor. Now I can see Neocons, who I even personally have known, are really in control of the Biden Administration.

It has been a serious problem with forecasting from a personal opinion perspective – it is impossible! Thankfully, we have Socrates and its impartiality has guided us through these times. Personally, I would never have expected any American administration to surrender our foreign policy to these Neocons who want nothing but war. Kennedy, Nic, and even Reagan all stood tall against them. Biden is just a corrupt politician who is senile on top of it.

Throughout the mid-Nineties, I confess I helped Bill Kristol launch his Weekly Standard. It became the most influential magazine in Washington. It was funded initially by Murdock. I took the back cover all the time during at least 1996 and ran a series of advertisements pushing serious economic questions to the forefront. I had even testified before the House Ways & Means Committee on taxation. I shuttled back and forth between the Chairman of that committee, Bill Archer, and the Majority Leader Dick Army who was supporting the Flat Tax. I even debated Steve Forbes at Princeton University on the subject of taxation. I also would write OpEds for the Wall Street Journal. I was asked to redesign Social Security. I worked on transforming Social Security into a wealth fund for the nation. I tried very hard to defeat my own model. I always lost. I could not prevent what it has been forecasting these decades.

I know people have plagiarized our reports and forecasts pretending it has been their opinions. The problem that will expose them will emerge when the unexpected unfolds as Socrates has been forecasting. Only Socrates forecast in 2013, one year in advance, that Ukraine would be the hot spot. We have warned this was where World War III would begin. I warned in 2014 that Ukraine should have been divided according to language. The Minsk Agreement of 2015 was a step in the right direction to avoid war. Only Socrates has forecast this war and the duplicity of Merkel and others has placed the fate of the world in crisis mode. I have put forth a way to avoid this, but I could not make that happen – so much for the influence the bankers have attributed to me.

During the 14th century, there were warnings in the form of rumors that told of a great plague in China and India that killed most of the populations there. The plague made its way to Europe when the Kipchak forces were besieging the Genoese trading post in Crimea. The Kipchaks began to catapult plague-infested corpses over the walls and into the trading post. The disease spread quickly and the Genoese abandoned the outpost. They sailed back to Europe stopping in Sicily in 1347 taking the Black Death with them.

Crimea has been the center of historical events for centuries, yet nobody seems to pay much attention to it. It has been settled, resettled, occupied, defended, and invaded perhaps more times than most countries and over a far greater period of time than most countries have ever existed. Coinage in Crimea predates even Russia and Ukraine never existed as a country before it broke away from the USSR in 1991.

So from a pure data perspective, what is taking place is nothing new to history. This is all in a database that monitors one action and works out the path of reaction, kind of like plotting the path of a hurricane. When you have a long historical database, that is the ONLY way to forecast that Ukraine would be the place where World War III begins. Such things can not be accomplished from a personal “opinion” perspective years in advance even before the 2014 Revolution in Ukraine.

I know Schwab’s Great Reset is our 2032. He is just trying to push the collapse in his direction of totalitarianism. He too will fail just as I have failed to prevent this forecast from unfolding. At the very least, everyone understands, this is NOT my personal opinion or forecast. This is Socrates’ – not me!

Model & the 1991 Collapse of USSR


Armstrong Economics Blog/Understanding Cycles Re-Posted Feb 28, 2023 by Martin Armstrong

COMMENT: Marty, I remember your 1991 conference when you said Russia looked like it would collapse by the end of the year. I think it was December 31st when Gorbachev resigned. But I also remember how we were talking about how key reversals were still reappearing but migrating to different time levels. You never talk about that today. You had said that the migration of reversals would often hint at the next crash or slingshot. That was what we got in 1991 when Russia collapsed. Do you see anything like that again?

I am glad you are still at this. You have great insight as a trader.

If Scotty wants to beam you up, please say not yet!

DZ

ANSWER: Only for you Dave. Your memory is better than an elephant’s. OMG, how black was my beard. I also had some hair back then. Yes, you are right. I probably have not written here about the strange manner in which markets do move. Yes, the USSR collapse by the end of that year. There was the August 1991 coup against Gorbachev.

The Quarterly Array back then picked the 4th quarter of 1991 and the 4th quarter of 1992. The first was a Panic breakout to the upside and the second was a Panic to the downside making the reaction low the week of October 10th, 1992. The reversals were clearly fractal in nature and key reversals will reappear and migrate through the various time levels. That was something which was very fascinating. I promise I will find the time to express more detail on that phenomenon. It was indeed another aspect that the model revealed that I never expected. There is such a hidden order that lies behind the mask of randomness.

People who talk about random walks are simply incapable of forecasting for they cannot see the order behind what they think is chaos. Just as Einstein said, he cannot believe that God plays dice with the universe. I discovered the same thing when it comes to market activity. There is no such thing as random walks. There is a secret order to everything.

When I went to economics class, they said there was a business cycle but it is not regular and cannot be predicted because it was random. Then I went to physics class and they said nothing is random. I came to the conclusion someone was lying. It turned out to be the economics professor. Larry Summers still maintains that view. Hence, economists can manipulate society if it is random – not predetermined.

In plotting what Lorenz thought was random weather data, what emerged was a hidden order that we could not see otherwise. This even disproves the entire nonsense of Climate Change. It has always changed and there is a pattern to the movement – it is not random and we have not altered the climate cycle. Again, it is the same type of people who cannot see the patterns in markets so they say it is a random walk.

I ran markets through our Chaos models and patterns of regularity emerged – not random walks. Again, there is far more order to markets and that is why personal opinions will never cut it when we are trying to forecast the future.

I have on my bucket list to do the next book on the ECM – my gift to posterity. Hopefully, one-day people will wake up and understand that there is a hidden order to everything – NOTHING is ever random. When the USSR collapsed, the capital again fled to the USA in the face of a new level of uncertainty. The New Yorker ran the article on me in 2009 and called it  – The Secret Cycle.

JFK, Nixon & Trump


Armstrong Economics Blog/Conspiracy Re-Posted Feb 16, 2023 by Martin Armstrong

Despite the hatred that many pour all over Trump, they really should stop and think for a moment, that they have been subjected to brainwashing. I have stated before that I was invited to a dinner in March of 2020 at Mara largo where I was actually impressed by then-President Trump. He said he wanted to bring the troops home from Afghanistan because he was sick and tired of having to write letters to the parents of solider’s killed over there. He bluntly stated that he had no idea why were there. They were fighting over borders for 1,000 years. “What difference will we make?”

There is a common thread between JFK, Richard Nixon, and Donald Trump – all three stood against the Deep State. The first was assassinated, the second was set up with CIA operatives getting “caught” breaking ton the Watergate building, and the third was probably removed from office by rigged elections and now desperately trying to accuse him of anything to prevent him from running against in 2024.

John Bolton was against withdrawing troops from Afghanistan. Bolton has been a hardnosed Neocon and then lied to the people not disclosing that Trump had a whole team to figure out how to exit Afghanistan that Biden dismissed and then claimed the same end result would have happened under Donald Trump. I really do not know how these people can look at themselves in the mirror.

JFK and Trump were both against war. Both were conveniently removed from office. In the case of Kennedy, they put forth Oswald and linked him to Russia, but then conveniently had him assassinated to prevent any trial when today everyone knows that the CIA was behind it. The recent tapes have revealed that Richard Nixon bluntly said to the head of the CIA, I know who killed John. The CIA used Watergate to discredit Nixon and drive him from office also because he wanted to end the Vietnam War and understood the CIA’s role.

Then Trump wanted to exist in Afghanistan. But Iran shot down an unmanned drone and Bolton wanted Trump to launch an attack on Iran. Trump refused to retaliate for an unmanned drone. The CIA asked Trump to extend the deadline for their release of the Kenndy assassination files until after the election. He agreed, and they knew Trump would lose the election. Biden then granted them the right to withhold the most critical files that expose the real source – the CIA.

The Deep Stated wanted to kill Americans and blame Cuba to justify an invasion. Kennedy rejected that proposal. This, he had to go. How dare he think he can tell the Deep State what to do!

All three presidents posed a serious threat to the Deep State. Forget the hatred of Trump that they have drummed into the heads of so many. Open your eyes. This is biggest that Trump and your hatred blinds you to what is really going on.

Forecasting the Future


Armstrong Economics Blog/AI Computers Re-Posted Jan 27, 2023 by Martin Armstrong

QUESTION: So if I read you right, you never anticipated that your computer would also forecast war and geopolitical events. ChatGPT seems to be able to find things and answer questions. But it cannot forecast the future by itself. So what did you do that is even more impressive than ChatGPT?

DW

ANSWER: Being a programmer since my teens, was the key. Being a trader, I had experience in both fields, which enabled me to TEACH my system how to analyze. So Socrates is not going out to the web and collecting what everyone has to say. It is analyzing the data all on its own.

Because I was also a history buff, I saw how civilization rose and fell. There was obviously a  cycle to absolutely everything. Since even taking energy, we use to just burn wood, then oils, then whale oil, and then oil. There is a cycle to innovation. Not personally knowing if that will change to something else, I had to construct my system with my experience and then allow it to discover entirely on its own.

I have explained at conferences that we had a client, the Universal Bank of Lebanon, who found a ledger recording the daily prices of their currency back decades. They asked if we could create a model. The data was input and the system forecasted that their country would go into chaos in 8 days. I thought something was wrong with the data. They calmly asked – What currency would be best? They saw themselves the crisis coming and in 8 days the civil war began. The same took place with a Sausi client who was a big shipper. He wanted to know what gold was going to do for Iran was going to start attacking shipping in the Gulf the next day. I asked: Are you telling me a war will start tomorrow? Oh yes, he replied. So by 1998, it was clear that the computer was capable of projecting wars. That is when I stood up in our London WEC in June 1998 and warned that Russia was about to collapse in 30 days. That became the Long-Term Capital Management collapse with the Russian bond market.

So ChatGPT is cool and it will dazzle everyone. I wrote such a program during the early ’80s to teach my computer how to use natural language to communicate. I used my children as the input. The program I wrote was designed to have a conversation. It would retain a database of who you were so if it asked if you had a dog and you said yes, it would ask you its name and remember that. So the next time you came back it would ask you how is your dog. It had so impressed my daughter should bring all her friends over. I was working with Dragon Systems back then when it was hardware. So the computer would talk verbally to them and they thought it was alive.

We will release a portal where you can ask Socrates questions and it will respond. But this is focused on the economy, not the name of Lady Gaga’s dog. Socrates is totally different from ChatGPT.