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?

Best regards

MU (Sweden)

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

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

HR

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.

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?

HC

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.

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.

EM

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.