Tag Archives: Cycles

Mar 26 2019

Understanding Rogue Waves


Armstrong Economics Blog/Understanding Cycles

Re-Posted Mar 26, 2019 by Martin Armstrong

Over the centuries, sailors have told legends of monster waves that would appear out of nowhere in the middle of the open sea. Most scientists dismissed the stories as fabrications and legends. These stories were reported over the centuries by sailors who repeatedly saw these rogue waves of gigantic proportions rise up from nothing far above the surrounding waves in the middle of nowhere. In the 16th century when sailors began to venture past the Pillars of Hercules after Columbus, these stories began to commonly emerge. Many attributed them to the wake of some hidden sea monster. The ships that vanished were said to have been swallowed by these sea monsters they called the Kraken from Greek mythology.

What was missing were any reliable measurements until New Year’s afternoon in 1995. On that day,  there were between ten to twelve-meter high storm waves and a wave of almost 83 feet (26 meters) high under the oil drilling platform named Draupner. This was the very first time one of these rogue waves was actually measured by the sensors on the platform. Since then, what was once dismissed as legend has entered the field of reality.

Hundreds of such monster waves have since been documented and they occur in different forms. For example, the convergence of waves in a nonlinear process can cause single superwaves to result from otherwise ordinary waves. I have found this stunning for scientists have been baffled by these rogue waves when in fact the same exact thing takes place is wave analysis of even the economy.

The Draupner wave was one of those mysterious lone superwaves that appeared to tower over all other waves. They are strikingly different from a tidal wave, which is when energy is passing through the wave until it hits shore. One of these superwaves appear out of nowhere, but they also vanish and disappear without a trace. This is what the scientists have failed to comprehend.

 

Since the Draupner wave discovery, finally, research has been taking place to try to understand these interesting wave formations. Essentially, a normal wave that hits the shoreline is produced by a wave of energy that flows through the water which is the medium. Those are quite distinct whereas a rogue wave is produced by the cycle of several waves that suddenly sync and produce a combined wave which is a singularity. If you look at something floating just off the beach, you will notice it rises and falls with the waves for it is not actually the water which is moving, rather it is the energy passing through the water. It is similar to what would occur if you received an electric shock; your flesh is not moving, it is the electricity passing through your flesh.

Essentially, everything in the universe is subject to cyclical theory. These rogue waves are no different from a market that suddenly erupts, crashes, and in the end, wipes out economies and investors. Politicians then respond with laws and investigations to try to blame the event on some human cause and effect.

Now, look at Bitcoin. The computer pinpointed the high in Bitcoin to the day. It understands these rogue waves, how they form, and how they will quickly vanish. We heard nothing but scenarios of the new age of knowledge and how Bitcoin would become the new reserve currency. So many people lost their shirt because they wanted to believe the hype and they ignored the reality of what takes place in a rogue wave.

Categories
Mar 14 2019

India v Pakistan & the 2019/2020 Turning Point


Armstrong Economics Blog/India

Re-Posted Mar 14, 2019 by Martin Armstrong

The last time that Indian and Pakistan were at war was back in 1971. Our War Model turned up in 1964 and indeed it marked the beginning of the US Vietnam War. In reality, the separation or the partition of India took place in 1947 based upon religion. The British created two independent dominions, India and Pakistan. India became the Republic of India in 1950, and in 1957 the Dominion of Pakistan became the Islamic Republic of Pakistan. In 1971, the People’s Republic of Bangladesh came into being. On March 25, 1971, there was also the Bangladesh War of Independence against Pakistan. Bangladesh was a Sunni Muslim state as was the case with Pakistan.  The partition involved the division of three provinces — Assam, Bengal, and Punjab — based on separating Hindus from Muslim majorities.

Ironically, here we are at the 72-year mark from 1947 which equals 2019. This is PRECISELY on target for a confrontation. Back in 1971, neither side possessed nuclear weapons as both do today. Indian warplanes began bombing inside Pakistan’s on February 26, which was really the culmination of the most serious confrontation South Asia has seen in a long time.

The origins of India’s air raid can be traced to a suicide bombing on February 14th in the Pulwama district of the state of Jammu & Kashmir that killed 40 Indian policemen. That was by far the deadliest attack and the worst jihadist assault to date. Prime Minister Narendra Modi faces reelection. The Hindu hardliners argue he has been weak and thus the attacks are clearly because of the upcoming elections. Then there are those who believe his attempt to modernize India to bring jobs to his countrymen has also failed. Modi is in a place where personal power depends upon him appearing strong. Unfortunately, this is precisely on target for 2019 after 72 years.

Even the volatility model of the Economic Confidence Model component is 6 years. Where the 8.6-year wave builds into waves of 51.6 years, due to turn in January 2020, the major volatility wave coincides here as well — 72 years from 1947. It was also 1947 when the International Monetary Fund began. It was also 1947 when the Marshall Plan came into force.

Ironically, 2019-2020 is a very formidable turning point both in conflicts and war/civil unre

Mar 14 2019

When is Forecasting Not Forecasting?


Armstrong Economics Blog/Understanding Cycles

Re-Posted Mar 14, 2019 by Martin Armstrong

QUESTION: There are a number of people who claim to have called the 2008 crash. What I find absent is that there is no one who brags on calling the rallies and crashes as you have and I have witnessed from going to your WECs since 1985. I still remember you in 1985 standing up and showing us all the projections of so many economic indicators all point to the moon for the next 51.6 years. Your call on the Dow going from 1,000 to 6,000 was an eye-opener back then and to watch it unfold was unbelievable. Then at the bottom in 2009 you called for new record highs. I read Barrons even wrote on that as if it was just a foolish comment. That happened exactly the same way when you stood up at the 1987 WEC and said the same thing.

My question is this. I recently read where a value investor from Boston claimed that the stock market would produce 2% to 3% for the next 20 years not 6% to 8%. He claimed to have called the 2000 and 2008 crash. Why do these people only claim to forecast the crash and not the rally?

Your life long subscriber who has grown old with you in this journey for knowledge as you put it.

PG

ANSWER: Good to hear from you. Yes, it has been a long time. I believe your answer lies in the fact that so many analysts are focused on 1929 and constantly view the market in that light. Even Germany and its austerity policy that has devastated Europe is fixed on the hyperinflation of the 1920s. In both cases, they failed to ever do the research to comprehend the real reasons behind the events of the 1920s and 1930s. So you will always find people claiming to predict every crash. There is an absence of those who forecast rallies. This is the result of the very same reason. They are all focused only on the events of 1929. You even have the Goldbugs constantly telling people everything will collapse and only gold will rally based upon their understanding of the 1930s which again is completely wrong.

If you are going to forecast any market, you have to be UNBIASED and willing to forecast the rally and the decline or else it is not forecasting. All the pretend gold analysts who only constantly forecast rising prices are really preaching, not forecasting, and they typically have skin in the game and will never say down when they own gold or mining stakes. When I was called by the Brady Commission for the Crash of 1987, the investigation showed that the theory that computer trading caused the crash was proven wrong because most people did not follow the computers and unplugged them because they did not believe in them.

 

All you have to do is look at our Energy Models. They track the strength and weakness of a market and show you when the energy in a market is declining even though you may not see that in a chart pattern. Likewise, the energy was immediately making new record highs coming out of the major low.

You must also understand that the press needs content. They have their stable of people to put on and they prefer to show a consistent prediction. They do not want to put me on the air as I contradict everything they are putting out there. This immediate rally has been the most hated bull market in history. Every high there was someone forecasting the crash of all time. Even Goldman Sachs told everyone to sell 2019. Granted, at the Orlando WEC I stood up and said the market would make a correction and we should drop to retest the Monthly Bearish. We dropped to 21712 when the target was 21600.

But we have to look at this UNBIASED from every angle. You cannot forecast from a personal opinion perspective. I find it really funny when someone tries to argue against me and offers some logical fundamental, reducing everything to a single cause and effect. They fail to understand I am NOTmaking forecasts on what I “think” or my “opinion” personally I have been wrong and the model proves to always win if I dared to try to compete.

I suppose when you are always forecasting every high as the big one, then you can claim to call the crash. But nobody asks how many highs before then did they say the same thing. Markets are like the two sides to a coin. If you cannot forecast the rally and the decline, then you are not really forecasting

Feb 13 2019

Thailand and the Future


Armstrong Economics Blog/Southeast Asia

Re-Posted Feb 13, 2019 by Martin Armstrong

COMMENT: Hi Marty,

As with so many others, I am very appreciative of your writing and am seeing your predictions come true as chaos piles up. Most recently, here in Thailand! The sister of the king, Princess Ubolrat (sp?) announced she would contest the upcoming election as prime minister. This is not only unprecedented in Thailand but perhaps anywhere in the world. In Thailand, the monarchy is treated with reverence and there are very strict laws about criticizing the monarchy, using their names or images for commercial or political purposes. And up until now, the monarchy has been strictly non-political. But there is a new regime now…indeed the king’s coronation is due to take place less than two months after the election on March 24 (coronation May 4).

The sister claims she is no longer a royal as she was stripped of her titles by her father, the former king (who died two years ago) when she married an American, but after 20+ years she divorced her husband and came back from America where she had been living to Thailand where she resumed royal duties. Thai people are so respectful/afraid of the monarchy that the election result is now considered to be a done deal as no one will dare to contest in any meaningful way. The small party she will lead is backed by the former billionaire prime minister Thaksin Shinawatra who has been living in exile for many years after being dumped from power in a coup. He is the darling of the impoverished rural masses while the incumbent Prime Minister General Prayut, who deposed Thaksin’s sister Yinglak as prime minister in a second coup, has the support of the business elite. Thailand up to now has been a very traditional society resting on three solid foundations…the nation, religion, and monarchy. This, despite frequent coups and regular rewriting of constitutions, has given it stability. I wonder if one of these legs is about to be kicked away…with a member of the monarchy descending down to the political fray. Now we await the battle between the general and the princess….most bets, of course, are on the princess!

The king has now criticized the actions of his sister “inappropriate”. Since the king must approve the prime minister, it seems that her name can’t go forward. So the traditions still hold after all in Thailand.

Thank you

 

ANNONYMOUS

REPLY: I love Thailand. It is one of the real gems in the world. Despite all the political turmoil, the structure keeps going. To a large extent,  this demonstrates that the economy is self-sustaining and really does not require government in any country. People will interact with or without the presence of governments. Nevertheless, the beginning of the Chakri dynasty under King Rama I took place in 1782 in Thailand, which rules to this day. The country was then known as Siam and the new capital of Bangkok was found. It was during the reign of King Mongkut (Rama IV) (1804-1868), who embraced Western innovations and initiated Thailand’s modernization.

When we look at the broader picture, the 224-year cycle of political change came into play in Thailand as well and was due in 2006. Indeed, it was during April-May 2006, when a snap election was called by the PM amid mass rallies against him that were boycotted by the opposition and subsequently annulled. This resulted in a political vacuum. The PM took a seven-week break from politics. Then in August 2006, the Prime Minister Thaksin Shinawatra accused several army officers of plotting to kill him after police found a car containing bomb-making materials near his house. Then on September 19, 2006, military leaders staged a bloodless coup while Prime Minister Thaksin Shinawatra was at the UN General Assembly. Retired General Surayud Chulanont was appointed as interim prime minister during October 2006. Finally, in January 2007 martial law was lifted in more than half of the country. Therefore, 2006 was a major turning point in Thailand.

Ever since 2006, we have witnessed rising political change. Opposition protesters occupied Bangkok’s main government complex in 2008, and began a mass anti-government protest calling for the resignation of Prime Minister Samak Sundaravej. Eventually, Sundaravej was forced out of office by December that year. In March-May 2010, tens of thousands of Thaksin supporters emerged in their trademark red shirts. The major political change seems to be on schedule for 2032 into 2048.

Feb 4 2019

Superbowl LIII – A Historic Low Point & Low Viewership?


Armstrong Economics Blog/USA Current Events

Re-Posted Feb 3, 2019 by Martin Armstrong

The Patriots beat the Rams but only a score of 13-3. Superbowl LIII (53) at half-time was the second lowest scoring game in history. The first half of Sunday’s game between the Patriots and the Rams ended in the second lowest scoring first half in a Super Bowl at 3–0, New England. It was 44 years ago when the Steelers led the Vikings 2–0 at half time in Super Bowl IX back in 1975. About 103.4 million people watched Superbowl LII last year, which was the smallest audience for television’s biggest yearly event since 2009. Note the year – 2009. Interestingly enough, when the economy turns down, so do sports. The all-time record high for viewership was 114.4 million for the Patriots-Seahawks game back in 2015, peaking with the Economic Confidence Model. It is curious that in good-times, when everyone is fat and happy, we do not see wars and we see sports do well. The sharp decline post-2015 seems to be correlating with the economy. True, the US economy has been holding up the world. But its growth rates has been steadily declining.

Last year’s Super Bowl (LII) came down to the wire, with Nick Foles leading the Philadelphia Eagles to a 41-33 victory over the Tom Brady-led New England Patriots. That stunning victory for Philadelphia over the favorite, was down significantly in viewership. Last year, I noted that just looking at the risk analysis, it appeared that Tom Brady, New England’s quarterback, had peaked. He entered the NFL in 2000 and he is one of only two players to win five Super Bowls (the other being defensive player Charles Haley) and the only player to win them all playing for one team. Last year he lost to the Philadelphia Eagles. Cyclically reviewing the prospects, Tom Brady appeared to have peaked with his win in 2017 which was 17 years (2 * 8.6) from the beginning of his career. Here we have in Superbowl LIII, certainly a very low scoring game.

How do we measure this peak? Points, wins, or viewership?

From a point perspective, scoring 13 points compared to last year’s 33 points for Brady was a significant decline. So was this just a reaction rally within a broader declining trend? In case you were wondering, six points is the fewest scored through the first three quarters in Super Bowl history. When we get the final viewership numbers, I suspect we will see the bear market decline still in motion. Then there are the pundits that say the Patriots’ Super Bowl win warns of a bear market for the stock market. That is one of the popular myths as is the rise and fall of women’s skirts – very short like the Roaring ’20s = bull market; down to the ankles in the ’30s was the sign of depression.

Jan 29 2019

Our Traditions are Often those of the Roman Empire


Armstrong Economics Blog/Ancient History

Re-Posted Jan 29, 2019 by Martin Armstrong

QUESTION: Just curious. Did the Romans ever celebrate their founding of Rome like we celebrate the fourth of July?

ZT

ANSWER: Oh yes. We seem to have adopted whatever they did as traditions as well. For example, there are nuns in the Catholic Church who take vows of chastity and are in theory married to God. The Romans had the very same tradition known as Vestal Virgins. They kept the eternal flame burning, which we see at John F. Kennedy’s grave as well, symbolizing his memory will live on.

Pictured above is a silver Antoninianus issued during 248 AD by the then Emperor Philip I(244-249 AD) celebrating the 1,000th year anniversary of the founding of Rome.

We are still awaiting the final contract with the hotel in Rome for this year’s Spring WEC. Those attending will receive a guide to Rome where you can even find the original doors to the Roman Senate commission by Julius Caesar that is rarely mentioned in any guidebook.

Of course, I have probably been to Rome more than 100 times and I have still not visited everything. It really is the Eternal City. For the religious tourist, there is even the Scala Sancta, or Holy Stairs, that are a set of 28 white marble steps which were the steps leading up to the praetorium of Pontius Pilate in Jerusalem on where Jesus Christ walked on his way to trial. The stairs reputedly were brought to Rome by St. Helena, Constantine’s mother, during the fourth century

Jan 23 2019

Gann – Astrology – Reality


Armstrong Economics Blog/Understanding Cycles

Re-Posted Jan 23, 2019 by Martin Armstrong

QUESTION: Hi Mr. Armstrong,

Do you have any thoughts on Gann and his methods?   It seems his astrological approach provides an interesting insights into cycles as well and was curious on your thoughts about his approach

Thanks
BB

ANSWER: None of the models I have created are based upon any astrological approach or movement of the planets. There are times when our targets may align with Gann’s analysis. That is interesting. Nevertheless, I do not believe that astrology is the SOURCE of cycles in markets. All of my research has been from the perspective of studying the effects irrespective of trying to identify the source.

I have stated previously that I attended a lecture by Sallie Baliunas of Harvard on the results they discovered from ice core samples. She illustrated a chart which showed the 300-year cycle in the energy output of the sun. I was stunned. I then spoke to her and showed her my Economic Confidence Model and how her cycle closely tracked the ECM for the rise and fall of empires. That added some explanation behind mass migrations etc., which I picked up from the data and history. It made sense that weather would impact the economy, especially when employment was 70% agriculture before the 20th century. However, the weather cycles alone were not the answer either, for they would collapse an empire, nation, or city-state ONLY when it was already economically weak. Hence, it too was not possible to explain all of history and the ECM by a single one-dimensional focus.

Therefore, Gann’s work is merely a separate method or approach. It does not confirm WHY cycles exist and it may yet be a coincidence that the results I discovered may align with some astrological conjunctions.

What I believe is that we are all connected. Everything plays its part. It is like a rainforest. There are countless species of plants and insects up to mammals. Take one species out and you set off a chain reaction for something else that is dependent upon that species for fertilization or sustenance. So I am not concerned about trying to link a specific event with a single particular source. I see everything is connected. Lower the interest rates to “stimulate” the economy and you reduce the income of the elderly and set the stage for the failure of pension funds. The system is just so complex; I believe it to be a waste of time. It is absurd to think we can reduce this to a specific cause and effect that boils down to a single relationship.

Jan 9 2019

Rigging the Markets


Armstrong Economics Blog/Understanding Cycles

Re-Posted Jan 9, 2019 by Martin Armstrong

QUESTION: Mr. Armstrong; I really want to thank you. You have opened the door to show that there is a hidden order that the great unwashed are unable to see. Not only did you say the Dow was not breaking out at the October high, but you even got the day of the low on Dec 26 correct and called for a bounce into early January. Do we have to wait for the turn in the ECM now since the Dow did close below 23360 at year end?

JS

ANSWER: That was a minor signal at year end. It served to put us on notice that the slingshot to the upside will be extended. That is very good news for I was concerned that such a move would have peaked by 2020/2021. It appears we have been granted a huge reprieve in that regard and we will be looking at profound events unfolding ahead. I gave the Bullish Reversals for the bounce on the Private Blog. They are capping the market for just now.

I am preparing the 2019 Outlook Report now. We have to look at all the markets and how they closed to catch a glimmer of the future behind that door. The great unwashed, sadly to say, will wake up. We are beginning to see that with the Yellow Vest movement spreading worldwide. There will always be people you just hate me because they have been wrong. They prefer to blame me than open their eyes and actually see how everything is connected. They are idiots and exactly like the bankers who paid bribes to Russian officials to rig the markets and when they collapsed, they blamed me instead of admitting you cannot rig any market to move in only one direction. That is good when they hate me for forecasting. It demonstrates and proves that there is always two sides to a market so no worries about everyone following just one model – that will NEVER happen.