The Future & the Destruction of Capital Formation


QUESTION:  Hi Martin – I have followed your blog for a long-time now. I enjoy reading a different viewpoint and somebody pointing out problems that don’t have a motive to take advantage of the “problems”. I find it deeply troubling that the US does not have a valid large news outlet anymore – no matter what side you are on – all are deeply motivated by ulterior motives. Anyways – my question is regarding the Fed’s unlimited supply of stimulus and its impact? I know the Fed is more capable than Europe which is limited by the EU set-up but trillions are being thrown around every other week and I don’t see anybody questioning the “other side” of this money creation. Are we printing money for inflation – are we just creating money so the stock market can keep paying dividends and push the impact out 10 years again? I don’t understand how we can just keep throwing out trillion after trillion?

EH

ANSWER: At this point, this not about stimulating the economy, helping the stock market, or even creating inflation. This is about trying to save the economy with the complete destruction of our capital formation. I have been deeply concerned about what is coming in 2021-2022. This is an array of the Euro. We have 2021 as a Panic Cycle Year no less. This array was published back in 2017.

The Fed is trying to save the economy while people like Gates and Fauci are trying to destroy it while claiming they care about people which they do not. The massive economic destruction that has unleashed upon our society I am sad to say will not be recovered any time soon. They are unleashing civil unrest that will explode. You cannot imprison the population in this manner for a virus with a death rate of 10% of that as the annual flu. This has been a political coup and is intent upon subjecting us to the theories that have been behind this Climate Change movement.

The value of assets is just a paper chase. They have destroyed Capital Formation so trying to print trillions to offset the destruction of trillions is not inflationary. The inflation will come with people losing confidence in governments. Already we are witnessing a food panic in China. People are running out and hoarding food even though the virus has subsided. The confidence in governments is collapsing. This will lead to civil unrest, authoritarianism, and ultimately war. The War Cycle is alive and well.

The Cabal is Oppressing Climate Dissent & COVID-19 Dissent


COMMENT: Dear Mr. Armstrong,
I am a regular reader of your blog from Poland and I highly value your opinions that spring from exceptional intelligence and experience. I’d like to contribute a few words to the discussion on the ideas of the “green movement”. When I listen to some of those people I have the impression that they consider humanity as some kind of disease that has befallen our planet, and if we all died out the planet would breathe a sigh of relief and life would thrive undisturbed for countless of billions of years. Yet it doesn’t seem it would. According to scientists, the Earth will probably become unsupportive for life within the next billion years because of increased solar radiation. Interestingly, the gradual process of atrophy of life will begin much sooner due to a dearth of carbon dioxide! If life on our planet can somehow be protected and prolonged, or perhaps spread across the Universe, it can only be done by some intelligent beings with great technological capabilities. If we fail, then perhaps some other intelligent creatures will evolve, but there is no guarantee of that as intelligence seems to be a unique feature that does not appear all that often among living organisms.
Therefore, I believe that far from being a disease, we are the planet’s hope!
Best wishes,
RR

ANSWER: Their agenda is really Marxism. They are using the environment to pitch their economic agenda. Their push is to seize the industry and control it. This agenda is really quite serious. They exaggerate everything and refuse to address any criticism. They have indoctrinated the education system. In Canada, they were actually teaching kids that because of global warming, Russia would be able to invade Canada. They refuse to even consider that solar energy fluctuates. They act as if the planet has warmed from the Little Ice Age solely because of CO2. They will not allow anyone to challenge them and now they have Wikipedia removing dissent. When any movement must try to shut down dissent, it ceases to be a basic movement for the people and becomes a dictatorial movement that destroys human rights. They act like they never heard of solar panels.

Now we see the very same power trying to suppress any medical comment that COVID-19 is now justified for this level of hysteria.

Influence by a Cabal of Evil People Bring Us to Where We are Now!


COMMENT: Dear Mr. Armstrong,
I don’t mean this against you specifically, but your latest post reminded me of It. I am in my 40s now. Ever since 9/11 I have been hearing older people say, ‘I’m just glad I’m not 18 today.’ Everyone knew this was coming. All the old people in America could have been spending the last 20 years of abundant free time trying to make the future -better- for all the young people coming up behind them. Instead, they were on cruises, playing golf, bingo, going to Florida, getting early-bird dinners, etc. And then they just sit there and say, ‘Boy your lives are going to be terrible.’ Well, thanks.
– JM

 

REPLY: You are absolutely right, but the average person also does not know where to start. The system is so corrupt at every level it does feel like resistance is futile. When I was young, I tried to make a difference. I quickly learned that trying to work from within government was indeed futile. You have people who try so hard to smear me by saying I’m a fraud, but why? It is because they also know that we have probably the largest institutional base of anyone. They fear, as always, I am too influential. But the truth is we are not influential enough to prevent this crash and burn.

My personal goal was to create Socrates in the hope that people will look at this and understand when it is time to rebuild, let’s do it the right way. I think Socrates has done an outstanding job. I have not personally been able to articulate its forecasts because I am just human. It has projected this crash, and the dramatic rise in unemployment that I fundamentally could not rationalize based on history. It projected years in advance that this 8.6-year wave would be a commodity boom, built upon shortages and NOT demand. That much I have been able to articulate. My job is to reveal its forecasts. As I have said, I was at a loss to comprehend how unemployment could possibly rise so fast. That has NEVER taken place even in times of war, no less the Great Depression.

We can see that unemployment even during the Great Depression took three years to reach the 25% level. Even by 1930, unemployment had risen from the 3% level to about 8.5% in a year. Socrates forecast something that NEVER took place in history. That to me was very impressive.

They may hate me and claim I have too much influence, but that is always when they are going against the trend. This a cabal, a coordinated attack using so many fronts it is just beyond contemplation. It has been well organized. The WHO, which is part of this conspiracy, is now stating the world must remain locked down.

The untold story is of the farm workers who pick crops in Europe migrate from Poland south. This lockdown is causing a serious shortage in food which will lead to starvation and a real rise in disease, which our computer is projecting in 2022. This conspiracy to further political change is threatening civilization, national security, and inviting war.

Martin Armstrong Answers Questions — Q&A 4-7-2020


QUESTION #1: Marty, you always said that gold and the dollar would rise during the monetary crisis cycle. I must admit, the fundamentals always seem to unfold to support your forecast. The article on the dollar shortage is really enlightening. The gold bugs hate you because you do not support their hatred for the dollar. You have taught me to see the world from a real hedge fund manager’s eyes. So do you see this dollar crisis taking down the IMF?

Thank you

DF

QUESTION #2: Martin, Why do you seem so surprised about the chaos Soros and Gates are creating? Didn’t your (ECM) model predict it? Some events or Some person(s) needed to be the catalyst. Change is inevitable.

Resistance is futile.

JC

QUESTION #3: What do you think of Icke saying there is no virus?

HS

COMMENT #4: Even if Dow briefly touchs 28K I am done for the year:) 35% up in dollar terms , who cares what happens next:)) On a different note if the dollar shortage is as large as you have been writing I think Fed has done a decent job and kept DXY at 100 (so far) .

SM

ANSWER: There is a serious risk that like the ECB, the IMF is stepping into something they have no clue what is going on. The total outstanding private corporate debt from emerging markets is more than $2 trillion in size and denominated in US dollars. However, the total market is $15 trillion. This is astonishing and the goldbugs harp on the dollar debt and hyperinflation and the dollar must turn to dust. They remain clueless that ONLY a rise in the dollar will blow-up the world economy unleashing massive sovereign debt defaults.

Yes, the ECM has been projecting this would be a commodity wave of inflation, but I have stressed many times, this is not the traditional boom inflation. It is inflation on the back of a SHORTAGE, not speculative demand.

I appreciate the line from the Borg, “Resistance is Futile.” I think if we do not resist, I hate to see the world we leave behind. As I have also said many times, I thank God I am not 18 years old. The youth will never know the freedoms of the prior generations.

As far as claims there is no virus, sorry I do not buy that. My cousin is a nurse who has been attending to these people. She has been infected and was nowhere near 5G. The virus exists. We have many doctors who are readers and they share information. They are not the propaganda machine.

Do Tall Buildings Signal a Recession or Depression?


Madison Square Garden was constructed in New York City and was opened on September 29, 1891. The 304-foot (92.66 m) building had been completed a year earlier and was the second-tallest in New York City, just in time for the Panic of 1893. It was named after James Madison, the fourth president of the United States. The first garden, leased to P. T. Barnum, had no roof and was inconvenient to use during winter.

It was demolished after 11 years and a new Madison Square Garden was designed by noted architect Stanford White. It was constructed by a syndicate which included J. P. Morgan, Andrew Carnegie, P. T. Barnum, Darius Mills, James Stillman, and W. W. Astor. The third version began construction in 1925 after it was demolished and that lasted until 1968. The fourth version began construction in 1968 and was completed in 1969. That too was timed with the Panic of 1968.

The Flatiron Building marked the Panic of 1903. This was a triangular 22-story building that became the landmark building at the time. Construction was completed in 1902, and it was one of the tallest buildings in the city at 20 floors high. For the Panic of 1907, it was the Singer Tower on Broadway. With 47 stories, it was the tallest building in the world from 1908-1909.

There is the well-known story of how the Empire State Building, which was 102 stories, became the symbol of the Great Depression in the 1930s. The design for the Empire State Building was changed fifteen times to make it the world’s tallest building as a symbol of hope during the Great Depression. Construction began on March 17, 1930, and the building opened thirteen and a half months afterward on May 1, 1931. Despite the publicity surrounding the building’s construction, its owners failed to make a profit until the early 1950s.

As you can see from the chart above, after the 45% correction in the Dow, the market began to bounce. The project of the Empire State Building went ahead. Many assumed that the market was recovering and new highs would come again. Little did they know that most of Europe, South America, and Asia permanently defaulted on their debts in 1931.

The original World Trade Center destroyed in 2001 was a large complex of seven buildings in the Financial District of Lower Manhattan. It opened on April 4, 1973. This became the symbol of the 1974 Crash and the beginning of Stagflation. Likewise, the Aon Center in Los Angeles opened in 1973 which also marked a peak in the economy.

The 1987 Crash was marked by One Liberty Place in Philadelphia, and then the SEC later destroyed Drexel Burnham with Michael Milkin because of their competition with New York City. The SEC never has destroyed any firm in New York City as they have done in Philadelphia and Chicago.

Petronas Towers in Kuala Lumpur became the symbol of the 1997 Asian Currency Crisis and the 1998 Crash due to Long-Term Capital Management. That was the mass liquidity crisis from the emerging market collapsed that began in Russia.

In New York City, construction began on April 27, 2006, of the new One World Trade Center just in time for the Panic of 2007. It did not open until November 3, 2014.

The  Burj Khalifa, known as the Burj Dubai, also became the symbol of the 2007-2009 crash.

Like the wise tale that markets go up with women’s skirts and fall when then drop back to their ankles (i.e. Roaring 20s), the competition to create skyscrapers and always build the biggest in the world has also been an interesting correlation to major crashes in the world economy. The Jeddah Tower(Arabic: برج جدة‎), also known as the Mile-High Tower, was to begin construction in 2008. It was put on hold. This promised to be the tallest building in the entire world. It appears that plans for such buildings coincide with the boom days. All work was paused with the tower about one-third completed due to labor issues with a contractor following the 2017–19 Saudi Arabian purge. This too seems to be the symbol of this correction and the crisis in the Middle East.

Iran & War


QUESTION: Mr. Armstrong, your forecast for Iran back in 2012 has been correct. It picked 2016 which in January the International economic sanctions on Iran were lifted after UN said it was satisfied with progress on fulfilling the nuclear agreement. President Rouhani then embarked on the first European state visit of an Iranian president for 16 years. But that same month is when the serious rift in relations took place after Saudi Arabia executed a leading Shia cleric Nimr al-Nimr. During May 2017,  Hassan Rouhani won re-election as president.= and by June that is when there was a co-ordinated attack on parliament and the shrine of Ayatollah Khomeini. That is when the Islamic State group claimed responsibility. That sparked major protests in December 2017 over economic grievances. The next year in 2018, President Trump announced the US withdrawal from the 2015 international deal on Iran’s nuclear programme. Iran in turn warned that it will begin increasing its uranium enrichment capacity if the deal collapses as a result of the US move.

I have followed your report and it has been truly remarkable for someone that is covering the entire world. My question is now, your array showed the 2016 turning point which was amazing, but it also showed 2020. There are increasing tensions once again. Do you have an update on this forecast?

Thank you

ABSR

ANSWER: There is a rising tide in Iran toward a confrontation. In February 2020, the hardliners scored big wins in parliamentary elections, but this was with a record low turnout of only 42.6% while any moderate would-be candidates were barred from running for not meeting strict eligibility criteria.

Back in 2013, the State Department blew everyone away after admitting that they officially and intentionally deleted several minutes of video footage from a 2013 press briefing to mislead the press over the Iranian nuclear deal under the Obama Administration. Then in 2o16, Iran also tried to sell oil in euros in a futile attempt to end oil’s link to the dollar. They clearly failed to understand this was not a SERIOUS blow to the USA, but in fact, they took on the currency risk of the euro and lost.

It appears that 2020 is the low for oil and we should see tension rise sharply with Iran which will help oil into 2024.

Socrates & the Whole


COMMENT: Mr. Armstrong – as a subscriber to Socrates, I find it remarkable how prescient its analyses have been. (Wish I were a better trader to benefit more financially! But that’s another story – live & learn. At least Socrates has kept me out of trouble, so far.)

My observation/question is, now that Vermont has gone full-on Politburo, directing retailers to “CEASE IN-PERSON SALES OF NON-ESSENTIAL ITEMS”:  I wonder if the timeline for the dissolution of the Union has accelerated? When Government decides what is essential, we’re all in trouble.

Thank you again for your work.
N.A.

REPLY: Yes, Socrates has done something that no human could have ever foreseen. Even its forecast that unemployment would be like a slingshot I questioned myself since that has never taken place in history. Only something that can analyze and do so without passion, bias, or conflicts of interest would survive such an event. Not even during the Great Depression did we see unemployment rise so fast.

This has NOT been about merely forecast the collapse of the stock market. This is far greater than any single market forecast. If you cannot see the whole, you will never understand what is taking place within a single market.

Just so everyone understands, Socrates is not even in one location. It is monitoring the world from multiple locations around the globe to prevent it from being blocked at least by a single governmen

Manipulating the World Economy Update


The books we listed on eBay are delayed in being mailed out because they are being printed in Pennsylvania. Our printer is located there but actually does print for hospitals so he is designated essential. So the problem was not the printing. The problem became that we cannot hire some temp workers up there to mail out the books. So they will be delayed probably for another week until the chaos clears and the governor of Pennsylvania comes to his senses. I have been told that some are selling the Second Edition on eBay. I presume they are not in Pennsylvania.

We are ordering more books since they keep selling out. I support this is a sign of the time – sheer chaos.

 

Proposal for a One World Government Being Floated


The former Prime Minister Gordon Brown has urged world leaders to create a temporary form of global government to tackle the twin medical and economic crises caused by the Coronavirus. He is no fool. He knows once there is the formation of anything pretended to be “temporary” it exists forever. Why are these people so intent upon trashing our freedoms and converting the world into an authoritarian paradise for them?

Keynesian Economics is collapsing. They will all be thrown out on the street if not dragged out and hanged when hoards of people who counted on these social programs realize they have been played for fools.

Since the coronavirus model of Neil Ferguson has been shown to be wrong, they will NEVERrelinquish the emergency powers that have seized already. When Ferguson appeared before the British Parliament, they never once criticized him and simply said thank you for your efforts. Why is there no recognition of this?

The stay-at-home should be immediately revoked and businesses should be restored. The fact that this is NOT being done has shown precisely what I was getting from my sources that this was (1) bogus, and (2) there were elites who sold in January everything, including bonds. This is the first collapse where the flight to quality was NOT to bonds, but to cash.

As they say, this ain’t over until the fat lady sings. This is a coup against our freedom because socialism is on the verge of collapse. Yet in Asia, they are trying to resume to normal ASAP unlike what we see in Europe in particular.

 

Sorting the Nonsense & Prejudices from the Truth of Reality


COMMENT #1: Mr. Armstrong; I want to say thank you so much. I am not sure you are even aware of how right you have been during this entire debacle and I am not referring to just your forecast of the decline in the stock market which saved my future. While everyone was regurgitating the worst scenarios and how this disease was going to kill so many you stood your ground against the world. The conspiracy theories were this was a biological weapon, but you said no. Some claimed the government was hiding how bad it would get and others were predicting we would be segregated into internment camps. You alone said these were exaggerated and that your models showed that the real disease would be in 2022 not now. I read even __ which gathers all the newsletters but interestingly avoids you because you are different and are not a gold bug that they only quote and this doomsday prophecy we were all going to die from a disease. They only aided the panic and never once would report what you had to say proving they too are just fake news.

Your computer has proven to be reliable, dispassionate, and the only such model that has ever been correct on a consistent basis. You deserve more than the Nobel Prize because I question if that is even prestigious enough. They hand it out to like candy and then their accomplishment proves to be fake like Black and Scholes or just political Obama getting the peace prize when he wanted to invade Syria.

The contribution to humanity you try so hard to accomplish is having an impact.

Thank you so much. I cannot express how much of a difference you have made during this entire crisis.

BH

COMMENT #2: Hi Marty
thanks for keeping us informed to whats really happening in the world. You are the only person I actually read and listen to concerning this sham.
You said that the Uk Government has downgraded the threat of the virus. That hasn’t been announced in the UK or in Scotland where I am. Any idea why they are still keeping people in lock down when they know this isnt dangerous at all.
All the best to you
maria

COMMENT #3: Hi Martin, I wanted to share something: this is not socialism coming. It is totalitarianism. What we have had so far is not Capitalism, it’s Cartelism. This is now a bloodless international coup taking place to centralize all power, to reduce the world’s masses to total utter dependency on the global elite technocrats, with a militarized police state protecting the elites from civil unrest. Small businesses are NEVER coming back. Mark my words.
Thank you for all your work!
SP

COMMENT #4 HI Marty
I was aware of the virus downgrade report on the UK Govt health website. It’s been there for about a week. And, if you do a search, there is …… s i l e n c e …. [sound of crickets chirping]….. No major media outlet has reported it.
An email to the BBC, politely asking where they have reported it, remains unanswered.
Power grab coup – all govts being sat on from above.
JF – Liverpool, UK

REPLY: Thank you. I hope one day we can show the world there is a better way to manage our economy instead of trying to manipulate it for political gain. It is interesting why governments are not reversing themselves in like of the bogus studies. This smells like indeed a convenient opportunity for power. Just can’t hand it back now.

Life is a quest for knowledge. When there is nothing left to explore, it is time to die. Being an international adviser and hedge fund manager, I had a front-row seat in the world economy. I have been taught by my clients. I observed that the sum of the whole was indeed made up of the parts. Tracking the movement of money for investment flows showed the ebb and flow of global confidence. While others created indexed based on trade, like the dollar index, I found such presumptions ludicrous. Trade is such a small portion of capital flows that such biases cloud our judgment and blinds us to the trend.

In studying history I came to realize that there was a cycle to innovation as well. I agreed with Schumpeter‘s view of Creative Destruction. I set out to construct a model that was free to explore the world and to return like a dog in a game of go fetch. It proved to me it was making some profound discoveries that people are too prejudiced to ever see.

I appeared with Walter Bressert I believe in 1982 or 1983 on Financial News Network in California which began in 1981 and became CNBC in 1991. I gave the forecast on the British pound that it would fall from $240 to par by 1985. The host turned to Walt and asked about that outrageous forecast. Walt said he would never bet against my computer.

I had to develop speech capability back then just to be able to communicate because it was making what I thought were impossible forecasts. I worked with Dragon Systems in the ’80s when the speech was all hardware. I needed to be able to inquire how it came up with such a forecast as it did on the British pound. For it has also projected that the politics would flip (i.e. Margaret Thatcher) and that the British economy would invert and align more with the USA against continental Europe. That prediction seemed to be really off-the-wall. I inquired: why?

Socrates showed a correlation with the discovery of North Sea Oil. In 1970, British Petroleum made its first discovery of commercial oil in the large Forties Field, although oil was not produced until 1976. By 1974, it was apparent that North Sea oil could provide a massive source of energy, and also revenue. The computer picked up the capital flows and determined that the British economy would align with the United States as it was becoming a commodity-linked economy.

The success of Socrates is entirely based upon the fact that it is NOT dependent upon human assumptions for as this crisis has proven, a faulty assumption produces serious mistakes coming out – Garbage in – Garbage out. You cannot create a model that starts with a human presumption or bias. Create a model that is hard-wired that assumes interest rates up and the stock will crash will never work. That is not a mode, it is a flawed program that just repeats human mistakes and prejudices.

Real Artificial Intelligence is not an expert system where it simply looks up human conclusions. So many pretend to have AI but all they do is simply look up predetermined conclusions. True AI must explore and reason for itself. Only then can we rely upon such computer programs.

I have never seen any Neural Network accomplish actually work nor any Expert System which is just looking up the answers in a list created by humans. The Neural Network simply tried to mimic the construction of the human brain and assumes that if you throw in enough data it will learn. Even IBM’s Watson failed. Socrates is the ONLY fully functioning Artificial Intelligence system in the world that is monitoring the entire global economy and all its components – PERIOD!

Money cannot buy everything in life. I turned down $500 million for Socrates where it would have just provided analysis for a single user. I rejected the request of the CIA to build a version for the US government. I offered to run any study they asked and was told they “had to own it.”

I do not need money. I suppose because I have had that luxury in life of having a talent to be a trader it has allowed me to be independent. Sure there are people who hate my guts because they cling to old theories like the Austrian-School of Economics and refuse to review the fact that the world economy is not determined by the simple Quantity Theory of Money (QTM). That is what Keynesian Economics is based on and how central banks operate.

This entire QTM is just a fool’s game for they just ignore the fact that China, Japan, and Germany all rose without gold. Under their theory, Russia should be the leading world economy having gold, silver, diamonds, and energy. Their minds are closed and they would persecute anyone who disagreed just as those who rejected the idea that the earth was not flat or that the Wright Brothers could fly even after they were doing it for 2 years preferring to call them frauds.  Heinrich Schliemann who discovered Troy, Mycenae and many other places mentioned in Homer they also called a fraud because he proved they too were wrong. The academics also declared Historia Augusta to be fake because it mentioned Roman emperors they never heard of during the 3rd century. When two gold coins were discovered in Egypt of Saturninus, the book they called a fraud showed it was the academics who were wrong again just as we have witnessed with the virus.

So I believe I am in good company.

The dark side of humanity is the prejudices we harbor. We have to surrender that to the universe and be willing to follow the logic and the facts. Until then, humans are incapable of emotionally evolving. This is why history repeats because the passions of humankind never change through the centuries. Those who are the naysayers will cling to their prejudices and they would love to burn me at the stake as they did to Bruno. I really do not care because I know they will leave nothing behind but the obstruction of knowledge and are incapable of ever having an original thought.