Armstrong Economics Blog/Forecasts
Re-Posted Feb 14, 2020 by Martin Armstrong
Socrates writes over 1,000 reports e4ach day covering global stocks, bonds, commodities, real estate, and interest rates. These are ALL entirely written by the computer – NOT me. There is no human interaction. This is entirely Socrates. I find it so funny when people try to say of Armstrong will be wrong or whatever for they fail to understand this is the next evolution in the analysis. The greatest error in all analysis is human bias and the failure to see things from an objectives viewpoint.
Here is a Demo of Socrates so you can see – this is not me writing all of these reports.
Armstrong Economics Blog/Reports and DVDs
Re-Posted Feb 13, 2020 by Martin Armstrong
This is a special report which includes for the first time “The Dark Age Cycle” which looks into how do empires die. Sometimes they just collapse, yet at other times, civilization also collapses and moves into a Dark Age. This report distinguishes all the historical changes which have taken place and the rise and fall of Empires, Nations, and City-States. This dives into the monetary system and how it was reconstructed in order to ascertain the cycles that are so important to understand.
This report dives into global contagions and illustrates that while people have suddenly seen the economy as global today, it has always been that way. This analysis covers modern financial panics in addition to ancient and draws the analysis and common themes that undermine society. It would be nice if we learned as a society from past mistakes as most of us do on a personal level. Every parent warns their child not to touch the flame of a candle. No matter how often we are warned, everyone still was compelled to see for ourselves.
Society lacks that evolution from experience. Hence, collectively we keep sticking our finger into flame expecting somehow a different result. Worse yet, with every financial crisis, nobody ever asks has this taken place before? Was there a solution that previously worked?
Perhaps this is just why history must repeat. We can only learn from our past mistakes on a personal individual level. Society collectively seems incapable of ever retaining such knowledge. Thus, those of us who can see the trend is compelled to watch others repeat the same mistakes over and over again.
Re-Posted Feb 12, 2020 by Martin Armstrong
While we took the back cover of the Economist for 3 weeks during July 1985 to announce the beginning of the Private Wave stating that the dollar had peaked, the ECM has been remarked on around the world for its turning points. Money Week even got the forecast right that October 1st, 2015 would market the debt bubble in Europe. It was accelerated by the introduction of negative interest rates by the ECB and, of course, the very day of the Russian troops entering Syria and Merkel’s opening of the flood gates which unleashed the massive immigration into Europe which has been the very cause of BREXIT and the rising tensions amount member states.
This shift in trend is going to be profound for the pressure within the world economy has restarted and with a fervor. This has marked not just the very day of the Impeachment with Trump and BREXIT, but we are watching international capital flows intensify once again driving the US yield curve back toward an inverted position which has nothing to do with the recession. The confrontation that the Democrats have taken against Trump is really the total destruction of government and we can easily see what 2032 will be all about. There is no going back. With Bernie Sanders winning New Hampshire and the left rising within the Democratic Party, they knew well that they stand ZERO chance of beating Trump. Their strategy was to try to remove him to influence the 2020 election themselves doing the very thing they accused Trump about. The Democrats are desperate and the moderates fear their party is moving toward Marxism and thus the conspiracy builds to draft Hillary in hopes that the primaries will remain in chaos. With hindsight, we will look back upon this date as the day democracy truly died.
Meanwhile, the finances in Europe are beyond comprehension. The Euro has been in a free-fall despite the biased media all running headline that it is Britain who made the wrong decision. They are desperately trying to distract the people from the fall in the Euro and the capital flight which has been creating the drive into the US treasuries. On top of that, the REPO crisis has expanded as fear over European banks continues to escalate. So welcome to the new wave that began January 18, 2020.
Some people will ALWAYSdesperately try to paint the ECM as wrong or attack me personally when they cannot argue with the forecasts. This is simply the dark side of human nature which will always fight against the light. They are of the same character who killed people for arguing the world was round and not flat. They burned Bruno alive and rejoiced in his pain.
Why these types of people will always try to prevent any advancement in understanding anything is truly astonishing. It is hard to comprehend why they refuse to ever listen. What do they have to gain other than refusing to believe something?
There always must be a dark v light confrontation for that is the very essence of what makes the cycle function. So when they cannot challenge the message, they turn to hatred of the messenger.
Armstrong Economics Blog/Understanding Cycles
Re-Posted Feb 10, 2020 by Martin Armstrong
QUESTION: Good Day, have you ever checked for cyclicity in scientific discovery and/or invention? if so, does your computer suggest anything about the next physics or mathematical breakthrough and what technological development might come of that?
thank you for all you do.
ANSWER: Yes, it appears to be a cycle of 51.6 years. Schumpeter called them waves of innovation that result in waves of creative destruction. Each wave of new innovation destroys the last. Cars wiped out horse & buggies. The internet is wiping out local stores, and technology has introduced streaming that has wiped out VCRs and DVDs.
Armstrong Economics Blog/Ancient Economies
Re-Posted Feb 7, 2020 by Martin Armstrong
QUESTION: Angkor Wat was abandoned and the whole society seems to have vanished. I saw somewhere that this was due to climate change and the drying up of their canal system. Is this something that shows in Socrates?
ANSWER: The fall of Angkor Wat was attributed to climate and abuse, but that is just wrong. The real story about the Angkor civilization primarily involves religion and the shift from a Private to a Public Wave marking its collapse. The Angkor civilization was established in 802 AD, which interestingly came at the beginning of the third wave in the current group of 309.6-year intervals. That wave group will ultimately peak in 2032, bringing major change to the world economy, which may even involve religion as well.
The Angkor civilization’s heartland and capital city was on the banks of the Tonle Sap Lake in northwest Cambodia. The Angkorian state was founded and grew during a period of favorable climate with abundant rainfall. This much is true as with most civilizations during warming periods. At its height, Angkorian rulers probably controlled a large portion of mainland Southeast Asia.
The Angkor civilization peaked the early 1100s, completing one wave of 309.6-years in 1104 AD. This was when the construction began on the Angkor Wat temple site. But we must look closely here for religion also came into play. The temple was constructed as a re-creation of the Hindu universe. There were five sandstone towers that rose above the four temple enclosures. This represented the peaks of Mount Meru, the center of the universe. The temple complex is surrounded by a very large moat which symbolizes the Sea of Milk from which “amrita,” an elixir of immortality, was created.
The peak in the culture took place around 1104 in conjunction with the peaks of the Economic Confidence Model. That is when there was a shift in culture. Indeed, by the end of the 13th century, numerous changes were taking place. The last Sanskrit inscription dates to 1295. The last inscription in Khmer, the language of Cambodia, appears a few decades later in 1327. As the ECM shifted from a Private to a Public wave, not only did society become more regimented, but the religion began to change as well. There was a shift from Hinduism, which was the theme of the Temple, to the region-wide adoption of Theravada Buddhism.
Buddhism and Hinduism agree on karma, dharma, moksha, and reincarnation. They are different in that Buddhism rejects the priests of Hinduism, the formal rituals, and the caste system. Buddha urged people to seek enlightenment through meditation. Therefore, this religious shift brought the caste system to an end. The Private Wave represented the rise in individualism and the anti-government sentiment we see even today. The priests of Hinduism were overthrown, which interestingly corresponded with the shift in the ECM.
This religious shift had a profound disruption on the culture and included political changes. No longer was there state-sponsored stone temples nor was there a royal bureaucracy. This was all rejected and overthrown. Everything shifted to community-based Buddhist pagodas that were now constructed from wood. Part of this religious shift to Buddhism took place simultaneously with an increase in maritime trade with China. This shift in the economic structure combined with the religious shift from Hinduism to Buddhism meant that the entire facade of Angkor Wat was no longer religiously acceptable.
With trading shifting to maritime, the capital was relocated further south, near the modern capital of Phnom Penh. With international trade becoming more important, moving the capital to the south allowed rulers to expand their economic powers. Clearly, the abandonment of Angkor Wat was primarily due to religion and the expansion of international trade.
Insofar as climate is concerned, claims that global warming destroyed the city are not valid. The Paleoclimate research in the region clearly reveals that there was a region-wide environmental change in climate because climate is always changing. There was a series of decades-long droughts, but these were also interspersed with heavy monsoons. The impact of this in agriculture no doubt sparked the development of international trade.
Other claims that the Thai invaded and sacked the city of Angkor Wat by the 15th century. The capital had already been moved which meant that Angkor Wat was easy prey and no longer economically important in Cambodia.
Therefore, the shift that truly undermined Angkor Wat was the one which saw Buddhism rise, making the entire complex an antiquated religious place that was no longer respecte
Armstrong Economics Blog/Real Estate
Re-Posted Feb 5, 2020 by Martin Armstrong
QUESTION: Your real estate model which peaked in 2007 was the broad crazy speculative market you explained in the low end of the market. Then there was a rally back into 2015 which you said would be mainly in Europe and the high end of the market. I am in France and there an uptick in some prices. But I can see, as you taught us, this appears to coincide with the decline in the euro. What actually comes after all of this? I subscribe to the Pro version and you have all the real estate index there covering around the world. Can you provide an update?
Thank you so much
ANSWER: The 2007 high was the low-end of the market which became the bubble. That led to the massive decline in real estate where it became a bad word. I had a friend who bought a house at a public auction. The owner had bought it for $7 million at the peak in 2007. My friend bought the property in 2017 for $2.3 million.
Real estate is very hard to forecast because you have the broad market, the low, middle, and high ends of the market. Then you have niche areas that boom in the face of others doing nothing. The 2007 high is the peak in “real” terms. There are many homes in the low to middle-end that are still 30% to 50% below the bubble high in 2007.
The 2015.75 rally was more of the high-end and this was driven by international capital flows. Thus, it was primarily intensely felt in the main centers where international capital moved such as Vancouver, New York, Miami, Los Angeles, etc. You did not see major price advances in smaller regions of no interest to international capital.
Then you have the tax migrations. People are moving from the high tax states to the no or low taxed states in the USA. I had looked at buying a house for my family in Florida, and I had to do the Singapore conference in 2017. I said I would put in a bid upon my return. The house just went on the market. When I returned in a couple of weeks, it had sold. Then the house next door went up for sale and I had to do the Rome conference. I was going to put in a bid and by the time I returned, that had sold. Other areas in the high-taxed states can’t sell. So there are a lot of different outcomes depending on where you are looking.
You are correct, the record high in the French real estate market remains 2015. There was a three-year low in 2018, then a bounce. This is true of all the results of the decline in the euro which bottomed initially in 2017. You have to look at this from an international “real value” perspective. What a house sold for going into 2015 when the euro was on average $1.30 compared to the international value when the euro was $1.03 is a substantial difference.
You can always just buy the property and then hedge the interest rates and currency. We all need a place to live. In terms of “real value” in real estate, that should begin to rise again after 2032. Going into that period, real estate will rise in nominal terms on a very varied basis depending upon the attitude of the local government. In the USA, for example, do not expect property in Illinois to ever reach the value it was even in 2015 no less 2007. Local municipalities are going broke and they will become very abusive in taxation. This is when people just start to walk away from the property, as was the case with the fall of Rome.
Armstrong Economics Blog/Disease
Re-Posted Feb 5, 2020 by Martin Armstrong
QUESTION: Mr. Armstrong; Why is there such an exaggerated response to this Coronavirus when the death toll is far less than the flu each year? Both the Swine and the Bird flu are far more dangerous. Do you have any take on why the conspiracy contingency just loves such doom & gloom?
ANSWER: I do not know. The latest death toll in China has reached at least 490 people who have died out of 24,324 confirmed to be infected (about 2%). The 1918 flu pandemic, which lasted nearly two years, killed more than 500,000 Americans, historians estimate. The CDC estimates this year, 19,000,000 – 26,000,000 have been infected with the flu. They estimate 8,600,000 – 12,000,000 will seek flu medical visits of which 180,000 – 310,000 will be hospitalized and the death toll will be between 10,000 and 25,000. The number for just the normal flu season is far worse than this coronavirus. The Flu killed and hospitalized more people in the United States 2017/2018 winter than any seasonal influenza in decades since 1918. Some 80,000 people died in the United States alone.
If we assume that about 45% of those infected seek medical help using the standard flu numbers, then with 24,324 confirmed persons infected, that means there should be about 53,512 people infected so far. China has come down very hard trying to contain this outbreak. Chinese tourism has all but collapsed and we should see a very sharp decline in the economic output in China for the first quarter of 2020. They stopped flights to Hong Kong as well. China has been clamping down aggressively. We were planning a Shanghai WEC in May. The hotel is closed right now and so far it does not look good. The government has directed employees to remain home for 10 days. It looks like we will be doing Frankfurt and Orlando.
Nevertheless, while this may become a pandemic since it spreads like influenza each year, we still need to be concerned about the Bird Flu and Swine flu for if they cross to humans, the death toll will not be a mere 2%. Definitely, don’t eat any bat-burgers this year. Maybe beef is better this year. (I know the vegetarians will write in, I respect that. I have even tried the charcoal ice cream. I still like a good burger).
So why are people exaggerating this coronavirus? Good question! People have been feeling like the world is ending for thousands of years. Aethelred II took his portrait off the coinage for the year 1000 believing the world was coming to an end and Christ would make his second coming. When that did not happen, he promptly put his portrait back on the coinage.
Re-Posted Feb 2, 2020 by Martin Armstrong
COMMENT: Marty, I have to respectfully disagree with the comment made by CR in the last blog, “The Dow & the Economic Confidence Model”. In the email he said, “Marty, I have to laugh. Only those who have followed you more 20 years understand you have discovered the hidden order behind the facade.” Not all of us that know have been around that long nor did it take us long to figure out.
I would say it would take one with their own mind, methods and models, and like you said someone willing to learn, that would be able to capture all of this and add what they already have to your model. There are those of us with a lot to bring to the game that haven’t been around that long but started to get it right away when we first started studying the model. I’m sure that was just a general statement focusing on themselves and their immediate group, but I found it inaccurate nonetheless.
Regardless, keep up the good work on your part.
REPLY: I think what he really means is that I have had similar comments from people who have been followers only since 2012. What they have expressed is watching geopolitical events but this time the Dow peaked on the very day. Just comments distinguishing events from markets.
The Wave #932 saw so much from the precise day of the low in the US share market April 1st, 1994 to the high on July 20th, intermixed with the move in the dollar when it made its low in June 1997 and the Asian currency crisis hit in July. Of course, there was the Russian bond collapse which then set off a contagion that resulted in a massive liquidity crisis. Global markets were all collapsing because the “club” lost a fortune on Russia and their bribes being paid to the IMF to keep the loans going. When that manipulation failed, they had to start selling everything everywhere to raise cash even the collapse in the Japanese yen.
The peak not only marked the beginning of the Long-Term Capital Management Crisis forcing the Federal Reserve to step in for the first time to bail out a hedge fund but it marked the start of the Euro which was officially set on January 1st, 1999 and then at the bottom in 2002, that was the introduction of euro paper currency.
The Pi target marked precisely 911 which changed our world dramatically tp the day, and then 2002 was the bottom of the share market again. There are just so many events that take place with this model that it proves people who refuse to accept it are predetermined like those who refused to ever accept that the earth was not flat. All they do is try to disparage the messenger because they cannot explain why the message is wrong.
It takes some convincing, but not necessarily 20 years. I think what he meant was that after 20 years, they just expect it to work in this fashion.