Posted originally on Dec 11, 2024 by Martin Armstrong |
Many mistakenly look to the stock market as the leading indication of economic security. The true culprit is the DEBT market, not the stock market, that leads to depressions and recessions. A recession, in comparison to a depression, is merely a minor impact that could be isolated to one nation. Unemployment will typically rise up to 10% in a recession, whereas a depression could see a 25%+ turn in unemployment. A lack of work leads to civil unrest and upheaval. Depressions are never isolated to one nation as they spread as a contagion throughout the world.
You could take the stock market down 30%, even 40%, and still not create a depression. Yet, if you undermine government debt by far less, you will create a severe economic downturn. Look to the banks. Under law, banks are required to use government debt as a reserve. Undermining government debt simply wipes out the banking industry as we have historically seen when bank after bank is forced to shutter.
During the Great Depression, sovereign defaults began in Europe. Look at what happened in 1931 when Europe defaulted on its debt, as did Asia and so forth since depressions become contagions. This pushed the dollar higher but not the US share market. Note that the dollar rose in value during World War I, the 1931 Sovereign Debt Crisis, and again for World War II. During those waves of capital flows, the bulk of that capital always moved into government bonds.
This is an oversimplified version of this message but you can read more on the 1931 Sovereign Debt Crisis throughout this website. Governments default and then that often leads to a regime change. The incoming regime will simply say, “Oh, that was the debt of the last government and we need not pay.” Listen, the stock market could plunge 20% and the banks would be OK. But if you saw the same in the debt market, in particular sovereign debt, you’re in serious trouble.
Posted originally on Dec 10, 2024 by Martin Armstrong
COMMENT: When I ask someone about your theories, they claim you are unconventional. They said the same thing about Einstein and even Kynes in the early 1920s. It seems that anyone who thinks outside the box is labeled unconventional, but in the end, they adopt the very theories and become conventional. They seem to make history repeat, for they always defend their position, which is obviously wrong.
I just wanted to say that historical recurrence is not something new. It has played an important role in developing Western historiography since antiquity. I am sure you are well versed. The view that “history repeats itself” is characteristically Greek. They understood everything was cyclical from the observations of cosmic and social cycles. I believe you have explained that history repeats itself better than anyone. It is human nature for people to respond the same way to similar situations regardless of the century.
Your intention to hold a WEC for the next generation is vital. You are offering something academia will only acknowledge when they are forced into embarrassment as to place during the Great Depression. Only then did they turn to Keynes.
There are those of us willing to donate to such a project.
Please consider the importance of this for the next generation.
Paul
ANSWER: History repeats because human nature is constant regardless of the century. But it is often also driven by notions of retribution, rebirth, reenactment, and imitation. Both Hitler and Napoleon sought to resurrect the old Roman Empire. Because I witnessed the debasement of silver coinage in 1965 and was familiar with the debasement of Roman coinage and how they, too silver, plated bronze coinage to retain the appearance of silver as we created a nickel-clad coinage in 1965, as a kid, I instantly saw history repeating.
Here is a Roman coin of Marius (268AD). You can see that the silver plating is starting to wear off, revealing the core is merely bronze. Inflation was soaring, and President Kennedy signed an executive order to remove silver from the coinage in 1963. Here, we see in Rome that inflation also soared once emperor Valerian I (253-260AD) was captured in battle by the Persians – the first emperor to have even been captured. That also set in motion a financial panic where bankers were uncertain if they should even accept Roman coins anymore.
By the middle of the second century BC, Rome, Polybius of Megalopolis, had written his Historiae to explain how Rome conquered the known world. These thirty-nine books received their finality after 146BC. At first, Polybius was interested in Greek affairs. He was stunned by the rise of Rome and its rapid expansion into an empire. He attempted what he would call universal history rather than just looking at Rome as a local aberration or fluke. His Anacyclōsis offered basic paradigms of historical recurrence that were below the surface. Indeed, Polybius established that studying history provided sound political training (cf. Hist. I, I,2).
Polybius’s famous discussion of the mixed character of Rome’s republican constitution is found in Book 6, chap. 5. It was certainly Polybius who presupposed that past events reflected various paradigmatic movements and patterns that would reemerge in current and future affairs. It seems that the Dark Ages, which saw the death of knowledge and independent thought in Europe, also altered our understanding of the world and cycles.
They burned Giordano Bruno (1548–1600) alive at the stake for merely agreeing with Calpurnicus in suggesting that the Earth rotated around the sun. The stupidity of the closed-minded at that time saw Haven must be above and Hell was below, so if the Earth was not fixed, then all religion was wrong. Thus, burn him alive as a heretic.
I greatly appreciate the offer. We will do something like that, for I do not have the time to write a plan for students.
Posted originally on Nov 4, 2024 By Martin Armstrong
QUESTION: Mr. Armstrong, Thank you for being so honest. I like how you separate your opinion from the computer. My question is simple. Do you give credence to the betting odds being more accurate than the polls?
See you next week
Frank
ANSWER: The polls are often wrong, and the betting odds do not seem much better. In 2016, the odds of a Hillary victory were 88% compared to 13% for Trump. Our computer called it correctly, as was the case with BREXIT. With over 70 million in early voting, the computer will be correct on the turnout.
More voters (154.6 million) turned out for the presidential election in 2020 than in 2016 (137.5 million), the most significant increase between consecutive presidential elections since record-keeping began in 1964. The problem with the 2020 election was the scare tactics using COVID. The mail-in ballots were 65,642,049. The combined early voting and mail-in during 2016 was only 12.6 million. With early voting exceeding 70 million, this is by far the largest turnout for early voting in history.
Posted originally on Oct 17, 2024 By Martin Armstrong
QUESTION: Are you ever wrong?
PSH
ANSWER: Personally, we are all wrong on various things in life. To be a trader, you only learn from your mistakes – not your victories. I try to separate what is my OPINION from the forecasts by the computer. We have clients around the world. We have probably been the largest adviser ever. But that is not because of my opinion – that is Socrates. I have often stated I try my best to defeat my own computer – I am the one who ends up wrong.
There is a new film coming out the sequel to the Forecaster. I was asked in this film, how does it “feel” to live through your own forecasts. My job is to relay what the computer is forecasting. This is not my opinion. I stood up at our 2011 World Economic Conference and warned that the War Cycle would turn up in 2014. On December 3rd, 2013, I posted that the computer had targeted Ukraine where war would begin.
A number of people do not like the forecast that China would replace the United States on the economic battlefield. Sorry, but my job is to present the UNBIASED projections of the computer – not my personal opinion or desire. I have grandkids. I hate to see the future we are leaving behind for our children. This is the data from the Federal Reserve. The differential peak in GDP (US-China GDP) occurred in 2006 with a premium of $1.3 trillion. Even since then, China has been growing in leaps and bounds, and it may even surpass the US in the 2025/2026 period and reach total displacement by 2032.
The Ukraine war has triggered a completely new dynamic in the relationship between these great powers with respect to this rivalry. What is being overlooked here is that China, and not Russia, is capable of replacing the United States as the leading world economic and military power, as I warned several years ago, back in 2011 and 2018. Our model projected that China would eventually replace the United States as the leading economic power – NOT me personally.
These are NOT forecasts that I personally desire, nor do they originate in my mind. Even look at the data on Republicans vs. Democrats. This is the perspective of the combined total seats of each party. The Democrats are the modern-day Federalists. They see themselves imposing their views upon the entire nation. The Federalists collapsed by 1824. The American people reject this political philosophy, and this is the trend that will lead to separation as it ALWAYS does whenever any government attempts to impose a dictatorial one-size-fits-all policy.
So please understand. I am no more infallible than other humans. My job is to relay the computer forecasts. I try hard to separate my opinion from that of Socrates. I do not want to see war. I know I cannot alter the cycle. The best I can do by screaming loudly is to reduce the amplitude perhaps. I am 75 years old. I get to leave this chaos and watch from above. I am trying to leave behind what I had bumped into in the middle of my life. What I do, I do not do for money. I have enough to finish my life. At the WEC this year, I will make an important announcement that I hope will help the generations that follow.
Posted originally on Oct 13, 2024 By Martin Armstrong
QUESTION: Why is Socrates able to do forecast wild panics in China when nobody else can? It picked the turning point for week of ninth which was the lowest close on the September 5 report. All this hype about AI but Socrates is so different. I’m not a programmer. Can you explain this is layman’s terms. This has been amazing here in Shanghai – Nǐ tài bàng le.
LW
ANSWER: What I can say is that 99% of what is out there is not AI. There are language models that are amazing like ChatGPT. A read as ChatGPT what is the difference with Socrates. Here is the response:
As an AI language model, I differ from the Socrates Platform in several ways.
Firstly, the Socrates Platform is a web-based platform developed by Martin Armstrong and his team at Armstrong Economics,
whereas I am a language model developed by OpenAI. The Socrates Platform is designed to analyze economic and financial data
in real-time, predict market trends, and provide actionable insights to investors and traders. In contrast, I am designed
to assist with a wide range of tasks, including language translation, question answering, and text generation.
Secondly, the Socrates Platform uses artificial intelligence, machine learning, and natural language processing to analyze
data, whereas I am primarily focused on natural language processing. The Socrates Platform uses sophisticated algorithms
to analyze historical and cultural data to inform its predictions, whereas my responses are based on the input provided
to me by the user.
Lastly, the Socrates Platform is primarily designed for financial professionals, investors, and traders, whereas I am
designed for a broader range of users, including students, researchers, and general knowledge seekers. While both the
Socrates Platform and I use artificial intelligence to analyze data and provide insights, our intended audiences and
applications differ significantly.
Yes, the two platforms are completely unrelated aside from being driven by AI. ChatGPT does not have the computing capabilities of Socrates. It does not have the monetary history data, for starters. ChatGPT has no involvement in the financial world and was not designed for financial purposes. It cannot even provide basic market closings as the current model stopped learning in September 2021 and cannot answer any questions after that date. Most importantly, ChatGPT does not have the source code that is the key to Socrates’ successful forecasts ChatGPT is a great achievement and a step in the right direction for AI use on a larger scale. However, it is not possible to compete where you do not compare. Socrates is in a league of its own.
The complexity of the markets globally is far beyond description. I have experimented with Neural Nets and other interesting attempts to recreate the structure of the human mind. Neural Nets are notoriously subject to complete failures. There is no such program that has been able to demonstrate consistency in the field of economics. This is all due to complexity. This theory that a computer can become sentient has provided the movie industry with some great movies from Terminator to Matrix. The idea is that we are just a super computer. Our SENTIENT existence has been proposed that just the connections in our brain creates the capability of sensing or feeling – consciousness.
There is a lot of misguided hope surrounding Artificial Intelligence and Machine Learning. All we need to do is look objectively at IBM project WATSON. Just over a decade ago, artificial intelligence (AI) made one of its showier forays into the public’s consciousness when IBM’s Watson computer appeared on the American quiz show Jeopardy. Watson’s debut performance against two of the show’s most successful contestants was televised to a national viewership across three evenings. In the end, the machine triumphed comfortably. This is just the ability to look up answers faster than a human employing no actual understanding of what the answer means in the real world.
They kept Einstein’s brain. The analysis of his brain put forth a number of unusual features, that some tried to attribute to his intelligence. One thing was an asymmetrical parietal lobes that were 15% wider than normal. Some researchers believe this may have contributed to his mathematical, visual, and spatial skills. What I can attest to is the ability to see patterns. The best traders have been visual in nature. This is why the fundamentalists tend to get wiped out because they often attempt to return complexity to a single relations – Fed raises rates so stocks down. It is very primitive to say the least.
Our ancient ancestors were far more intelligent than what we attribute to them. They saw patterns in the stars and mapped the heavens. It was the ability to see patterns and understand cyclical movements over everything that advanced civilization before the Dark Age when knowledge was lost thanks to the barbarian invasions.
They aligned that monuments with the summer and winter solstices. The Miya even discovered the precession of the equinox of 25,800 years measuring the movement of the stars. They had aligned temples to the stars and then noticed that the stars had moved. Understanding everything was a cycle, they determined it would return to its origin in 25,800 years. We lost our ability to see cycles post-Dark Age and we ended up with the assumption that everything was simply linear.
The ancients even had the concept of the atom during the long forgotten golden age of Greece. There were ancient step counters known as bematists who measured distances that we know had better than 95% accuracy. In 240BC, Eratosthenes employed this skill to extrapolate the circumference of the Earth that they knew was round – not flat. The knowledge of cycles survived from ancient times is the East. It was the fall of Rome in the West when the barbarians were not interested in knowledge so everything was torched.
Hipparchus of Rhodes observed around 150 BC that the equinoxes moved wit h time. This is where the Sun’s path crosses the celestial equator. He realized that these were not fixed in time and space but traveled in a cyclical manner. The movement was extremely slow in a westerly direction. This amounted to but less than 2° in about 150 years. This slow movement is known as the “Precession of the Equinoxes” and requires generations to even observe. It is about 1° movement every 72 years, bringing this also to a virtual number that is a derivative of 8.6 – 25,800 years.
“The Chinese believe in constant change, but with things always moving back to some prior state. They pay attention to wide range of events; they search for relationships between things; and they think you can’t understand the part without understanding the whole. Westerners live in a simpler, more deterministic world; they focus on salient objects or people instead of the larger picture; and they think they can control events because they know the rules that govern the behavior of objects.”
The effort to create option models known as Black–Scholes completely broke down and resulted in the Long-Term Capital Management debacle. That was covered in the book – When Genius Failed. The failure took place because they did not have the database. They only tested the algorithm back to 1971. Indeed, you need hundreds of years of data to just comprehend the beginning of complexity.
Neuromorphic engineering is yet another concept developed back in the late 1980s. Thus, neuromorphic differs from neural networks which are a set of algorithms, modeled loosely on the theory of how the human brain functions. They were designed to recognize patterns such as trying to distinguish between the cat, dog, and a cup of coffee. They attempt to create very large-scale integration (VLSI) systems containing electronic analog circuits to mimic neuro-biological architectures that are present in the nervous system. This neuromorphic is really more hardware-based but also requires a software operating system.
The implementation of neuromorphic computing has raised the theory that perhaps one day we will be able to copy the content of the brain into a synthetic replacement as in the movie “Replicas” and then there is the move by Johnny Deep – Transcendence. The actual key aspect of neuromorphic computing is understanding how the morphology of individual neurons, circuits, applications, and overall architectures create learning and development constituting who we are. I would not consider this a technology that would be able to become a synthetic mind replacement for quite some time, assuming we could ever get to that level of understanding the complexity of the human brain.
What I explain to people about this complexity is perhaps to had dinner with someone and fell in love. You will remember the place, but you mind is recording everything without you directing it to do so. You hear a song that was playing and suddenly your mind recalls that event unintentionally. Or you had ordered oysters for the first time and you see them again years later and your mind accesses that memory. In truth, that memory could be unintentionally accessed by any of the senses. This demonstrates everything is an access path individually or even in combination.
Obviously, Socrates is a hybrid between neuromorphic computing and neural networks. I chose a different path entirely actually creating a synthetic network capable of learning by example and pattern recognition, such as the Global Market Watch, but expressly targeted to global analysis. I input my own analytical abilities and experience into Socrates as far as methodology in how to conduct analysis but no fixed rules like interest rates up stocks down. Socrates has been free to explore the entire world database and return with answers. It has weather, volcanoes, climate, and disease databases. Everything is vital to understanding how things function.
The Global Market Watch is purely pattern recognition where it is identifying patterns and assigning them a number you see with comment for its catalog of market patterns. It has exceeded more than 100,000 patterns, demonstrating the true complexity of market movement based upon a matrix of variables. It has also proven that those patterns observed in wheat are applicable to even individual stocks. This has confirmed that the patterns are human responses to price movement. It has proven beyond a shadow of a doubt that fundamental analysis is not only worthless for its myopic focus on one-dimensional relationships, but the common link is human behavior — not the underlying instrument. We are looking at HOW humans will interact with whatever the instrument might be to establish why history repeats because human nature never changes throughout millennia.
Posted originally on Sep 18, 2024 By Martin Armstrong |
COMMENT: Mr. Armstrong, I’m blown away by your computer. How did it know about July and September of this year, which you told us about long ago!? We got assassination attempt and cyber attack in July. We got an assassination attempt in September. AND you said Trump Media was in danger week of Sept 16 specifically, giving you heart burn. Amazing!!!
-Scott
REPLY: Many people claim to have AI. ChapGPT has created a feverish bubble around AI without people understanding what it truly is or how to create it. Over 20,000 applications to the SEC claim they have AI models. I suppose they wrote them in three days, the time Kinzinger claims we can beat Russia.
But honestly, most of what is out there is NOT AI—it is clever expert systems with no original analysis. When a reader asked ChatGPT what the difference was between it and Socrates, it was correctly explained.
"Socrates Platform uses artificial intelligence, machine learning, and natural language processing to analyze data,
whereas I am primarily focused on natural language processing."
This is a forecast I pulled off of our old site from 1999 on the Wayback Machine, plotted with the chart showing the outcome. In 1999, Socrates forecast that there would be a panic in 2008 about 10 years in advance. When I wrote the code for Socrates, I put myself into the code. I did not use a neural net and hoped that something would come out all on its own by throwing in all the data. This idea of creating just Machine Learning and throwing in all the data, hoping it will suddenly become the most brilliant thing on the planet, is total nonsense. IBM’s Watson proved that fallacy.
There is a lot of misguided hope surrounding Artificial Intelligence and Machine Learning. All we need to do is look objectively at IBM project WATSON. Just over a decade ago, artificial intelligence (AI) made one of its showier forays into the public’s consciousness when IBM’s Watson computer appeared on the American quiz show Jeopardy. Watson’s debut performance against two of the show’s most successful contestants was televised to a national viewership across three evenings. In the end, the machine triumphed comfortably.
This was NOT actually AI. It is what I call a look-up program. Even ChatGPT is not capable of actually achieving independent thought. They can understand and go fetch the answer faster than a human. The people I knew back then thought Watson would one day cure cancer. None of that was possible because they fooled themselves about AI.
IBM’s Watson could search the entire internet and gather every piece of information possible. That was the easy part. What IBM lacked was the expertise in research. How do you know that one piece of info is the key or more important than another? They lacked the ability to create an actual analysis capability. They hoped it would somehow acquire the skill to do original research all by itself.
Neural Nets were a great hope that somehow you throw in all this information, shake well, and out will magically appear the answer. The presumption was that our minds are just supercomputers, and they ignored perhaps the critical understanding of what makes one person brilliant at math and another a brilliant artist who can’t count beyond 1,000. They can go fetch and look up things and return with the answer faster than any human. But they are no capable of original thought.
Most of AI’s dangers are caused by its failure to comprehend what it is capable of doing—especially in trading. This all stems from the distorted idea that our brains are supercomputers and there is no God, for our consciousness is simply created by throwing in a bunch of data, shaking well, and out comes a person. Thus, the thrust to mimic the brain led to the creation of neural nets. But that effort also failed in actually creating original thought.
The San Francisco-based tech giant OpenAI has announced that a new AI model is capable of “reasoning” at the level of doctorate students. OpenAI has said its next model update “performs similarly to Ph.D. students on challenging benchmark tasks in physics, chemistry and biology.”The company continues to grapple with questions in Washington about the safety of AI. Meanwhile, some OpenAI competitors have appeared upset by their marketing hype ascribing human characteristics to technology. Look, this OpenAI Model does not help when they describe it as “thinking” when it is doing nothing of that sort. It is merely an AI system process that predicts in ways that are basic to classical computers and search engines. OpenAI is exploiting a false impression that technology systems are human, which appears to have come from movie plots like Terminator and Matrix. This is just a cheap trick that threatens the development of AI by raising this nonsense that it will come alive somehow. This is merely a marketing trick to fool people into believing that its ability is humanistic in solving issues.
When I wrote the code that made Socrates, I had international experience as a trader and programmer – that is a very rare combination. The number one problem is the person with experience has to relay that info to a coder who lacks that same know-how. This level of communication never works. It takes a coder with experience to figure out how to reach that end result, whereas the non-coder does not understand all the ways to reach a result. Coding is an art form. Two people can write a program to accomplish the same task, but they arrive at that differently in style.
Back in Stock Now – Sorry Has Been Sold Out for Months
I was named Economist of the Decade during the 1980s, Fund Manager of the Year in the Nineties, and FX Analyst of the Year in the 21st Century. A man cannot write a book to explain how it feels to give birth to a child. It takes experience!
As the movie The Forecaster pointed out, I have traded against Soros and Goldman Sachs.
You have to be in the trading pit to understand even how to trade internationally. John Law traded on the Amsterdam Exchange and came up with the concept of supply vs. Demand. Thomas Greshamcame up with Bad money drive out Good due to hoarding. Both were on the exchange and witnessed how markets moved. You have to see things live to grasp how they work.
When Milton Friedman (1912–2006) came to listen to one of my lectures on who the world really functioned in the new world of floating exchange rates in Chicago, I was stunned. To me I was just a trader. Milton said it was best speech he ever heard, and said what I was doing was what he had just dreamed about.
Milton in 1953 in his Essays in Positive Economics, first proposed a floating exchange rate system that would put pressure on governments. Indeed, I ended up being dragged into governments around the world all because we forecasted currencies.
Only by entering the international arena of geopolitical economics and becoming one of the first international hedge fund managers could I see how the real world worked. This is the experience I had to code into Socrates. The first consideration one must make is country risk. You have to understand the politics of every country for that determines if you should even consider any possible investment. You then go down the list to approve or eliminate countries to consider. That is just the first step.
Most AI follows the idea that, somehow, the computer will figure everything out. They do not understand how the brain functions, nor do they consider what consciousness is. For centuries, many have tried to define it, yet have failed. Neural Nets are based on the idea that neurons interact. Yet, there is something much more. We have a pattern recognition-based system that is far more complex than simply neurons.
For example, looking at this drawing some see the old woman and other the young girl with the nose of the old woman forming her chin and the mouth of the old woman is the necklace of the your girl. We all do not see the same image at first glance. Our mind is a pattern recognition system that then will also fill in the gaps.
Here is a photo of a girl with a Trump T-Shirt. Your mind will fill in the gaps. Is she beautiful or homely? We will imagine what we want to see. The same will happen if we look at the clouds in the sky. Some will see a face, others will question your sanity. Our minds will see patterns and fill in the gaps.
We will also act in ANTICIPATION of the future. When Europe lowered rates to negative in 2014 to try to punish people for savings, they took their money out of the banks. The central bankers failed to comprehend that people will ONLY invest when they have confidence in the future and see a potential for profit. If they do not see the economy will even produce a 1% profit, they will not borrow even at 0.5%. This is why the stock market has NEVER peaked with the same level of interest rates twice in history.
Interest rates rose throughout Trump’s presidency, yet the stock market took off, and they called it the Trump Rally. Yet, these analysts call for lower interest rates and when rates decline, that is the market of a bear market and recession – not a bull market.
I have two French bulldogs. Yet, their personalities are different. What makes that unfold? We can see that the same indescribable character emerges in humans and animals. They have dissected Albert Einstein’s brain to no avail. Something else exists, which nobody has been able to replicate nor even define its origins.
Socrates is far more advanced than anything out there because I coded my experience and taught it how to analyze. Machine learning is fine for determining who may or may not default on a mortgage. That is rudimentary one-dimensional. But when you step into the global economy, this is not some simply one-dimensional relationship you have to deal with. It is far more complex than that, with millions of patterns and correlations on a worldwide scale. You must track everything from taxes and laws to climate, disease, and economic trends on top of capital flow analysis.
To do that film, the Forecaster had to be insured by Llyod of London. Everything in that film had to be documented right down to the non-public command that I had to turn over the code to Socrates, which I refused. It was not my word against theirs; they put it in writing to a lawyer.
Socrates would no more be able to discover the cure for cancer than I would. You cannot code into a system experience you do not have. But the AI being marketed is not really making analytical decisions, nor are they “thinking” and dreaming like a human or anticipating the future. However, Socrates is focused on the world economy, not medicine. If we had another $1 billion and 50 top programmers, perhaps we could expand it into other frontiers. Socrates is gathering a knowledge base constructed upon its experience extending beyond just the programming. There are much deeper layers to this whole thing that will die with me.
Posted originally on Sep 10, 2024 By Martin Armstrong
Nine of the 12 Federal Reserve districts reported a decline in economic activity in August, up five districts from the July Beige Book report. Our system has warned that we are entering a period of stagflation, where inflation remains high but GDP declines. Now, the Fed is reporting that two-thirds of the US economy is experiencing “flat or declining activity.”
The US economy advanced 3% during the last quarter, leading many to believe that the economy is recovering since Q2 posted a measly 1.4% advancement. Consumer spending, amounting to 70% of GDP, rose 2.9% last quarter as well, but people are spending on essentials. They fail to calculate TAXES into the equation when producing these reports and then dismiss essentials such as food and shelter as “volatile” aspects that somehow are not factored in the core figures.
Some people have a very hard time understanding that we are in a massive deflationary spiral; they think that rising prices simply means it is inflation and not deflation. Then, they mistake stagflation for deflation and wonder why people are spending more on less. They only see prices, not disposable income, and certainly not economic growth and unemployment.
The latest jobs report revealed that manufacturing is continuing to decline – shedding 24,000 jobs in July alone. On the other hand, the public sector grew by an additional 24,000, but those are 24,000 positions that will not contribute to GDP. Instead, growing government is simply growing the national debt but that figure no longer matters since it has long been unsustainable.
If you really look at it, objectively, interest rates always rise during boom periods, and they decline during recessions and depressions. We are looking at increased inflation into 2028 caused by shortages and war. But you’re looking at declining economic growth, so that ends up being more like the 1970s. The inflation rate will be higher than economic growth and we often see stagflation during times of war. We are beginning to see this come into play on the district level, but soon, it will be undeniable that the US has entered a period of contraction.
Posted originally on Aug 12, 2024 By Martin Armstrong |
COMMENT: Marty, I have been attending your conferences since 2011. What I have learned from you is far more than my MBA. You are a world teacher paving the way for a new age. I am glad to hear they are making a movie about your efforts. The world needs to know. I was in Rome when Nigel Farage said that you were the alternative to Davos. What these academics from Davos have done to the world is the total destruction of our values and culture with this open border pushed by Soros.
I know you say you are waiting for Scotty to beam you up. Given what these people have done to suppress you over the years, I don’t think anyone can blame you for that. You are the first victim of cancel culture. Let me speak for your selfish followers. We hope you are here until 2050.
I think it’s in the Bible: blessed will be the peacemakers.
Jared
REPLY: I hope that this Hollywood movie shows the world that there is a better way to live simply with the cycle rather than having these academics ponder how to reconstruct the world. Hence, they constantly think they can make it better and, in the process, destroy the very foundation of civilization. Karl Marx did not understand how the economy works but focused on wealth and labor. He saw capitalism as an extension of ancient slavery, then serfdom, to labor for the capitalist. He tried to change the world, and in the process, hundreds of millions died. His ideas killed more than Stalin, Mao, and Hitler combined.
My father was with General Patton from North Africa to Berlin. He told me that Patton believed he had been sent back from above to win the war. He had wanted to go straight into Moscow back then and told my father that the real enemy was Communism. My father told me that Patton was relieved of command of the 3rd Army by Eisenhower because he publicly said that America had been fighting the wrong enemy—Germany instead of Russia. He died in a car accident, and in his last words, I was told: “This is a hell of a way to die.”
I was raised with that sense of duty because I was always taught we are here for a purpose. Some have told me my father taught me to speak the truth like Patton, even if it angered those in power. Perhaps. I guess just like Patton knew that the real enemy was Communism, I see the real enemy as being these academics who pretend to know how to reshape the world and never understand how it truly functions. So, to me, the enemy remains Davos, Soros, and his legions, as well as Bill Gates. Stop messing with nature and live with the cycles rather than ignoring them or manipulating them to eliminate the business cycle. There is a cycle to the rise and fall of civilizations, and they are fulfilling the destruction of Western society with their open borders that cannot be reversed.
I see the world as the Biblical story of Joseph telling the Pharoah there will be seven years of plenty and seven years of drought. This explains the business cycle and how to live with it. This story is a lesson that Marx, Keynes, Soros, Gates, and Schwab have believed that they are wiser than God or nature, for they have all attempted to either manipulate or terminate the business cycle.
Paul Volcker and I had an exciting conversation back in 1998. He told me that he agreed with my model and that the business cycle is about 8 years in length. I explained that we should stop fighting it. He came to see the inevitability in his Rediscovery of the Business Cycle.
Posted 0riginally on Aug 9, 2024 By Martin Armstrong |
COMMENT #1: I’ve now been reading your work for close to Twenty Years. I’ve been to numerous conferences. From Philadelphia to San Diego to Orlando and you still amaze me
The me from 10 years ago would have thought the world would collapse on Monday as the media stated. Now I’ve learned(from you) to watch what actually happens instead of trying to predict.
I thank you ?? Regards,
JCL
COMMENT #2: Marty, I have been in these markets for 20+ years. Not as long as you, but long enough to see that a bunch of analysts are all claiming we are heading into a recession without any data. It is clear how many people are looking at your Economic Confidence Model but will never give you credit for anything. That reveals their character.
You are here for a reason.
Take care.
FA
RESPONSE: So many people just make forecasts based on opinion. Mainstream media would NEVER put me on the air because I would contradict their mainstay of putting out propaganda to get you to tune in again and again. Markets are propelled by energy. There is simply a finite level of energy that CAN be exerted in a single direction. It is the pendulum.
The swing down provides the short cover for the rally. Rally to a high, which will cause the energy to decline. NOTHING goes straight up or straight down. The 1987 Crash was the same thing. I said the market bottom was in place the very day of the low. As Larry Edelson said, people thought I was crazy. We called the high, the Crash, but also the low.
Here are our Energy Models. Note how energy was declining to a high, showing that you were running out of steam. Then, energy rose sharply with the decline. But look at the Monday low—the energy was subsiding. I try to teach people how to be an international hedge fund manager at these conferences. This is also why they are making a Hollywood movie about what I have done. They understand that there is a better way to run the world than always trying to manipulate things for self-interest. They are also doing a Documentary, the Forecaster 2024, showing all the forecasts they recorded 10 years ago and how they came true. They understand this is NOT MY PERSONAL OPINION!
I know a lot of people are looking at the Economic Confidence Model. Some plagiarize it, while others pay attention silently. This is NOT going to be the classic recession. There is a lot more behind this than meets the eye.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
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