Posted originally on May 20, 2024 By Martin Armstrong
It is crucial to understand correlations as EVERYTHING fluctuates! There is absolutely nothing that remains constant. You MUST understand that correlations are NOT one for one, and often show changes in advance of turns. It is a lot to keep track of but this is why I try to post a global view to help you see the world around you. It is a necessary way of thinking to survive the future of our own follies.
When I was trading going into the high in interest rates at the Fed in 1981, each time the Fed raised rates the markets reacted less and less. When the final rate hike came, the markets moved UP, not down, showing that the trend was over. Interest rates DO NOT peak and bottom with the markets. There are advances and lags.
It is very frustrating to always try to sort out misconceptions created by analysts and the talking heads on TV. Just do a simple correction by comparing two charts. The DOW bottomed in March 1980. Gold peaked on January 21, 1980. The Fed kept pushing rates higher into May 1981. The Dow rallied with the last year of rising interest rates.
I stated many years ago that real estate would RISE with the first uptick because people would ANTICIPATE rates rising so they better rush to lock it in now. The people with interest rates under 3% lucked out, but some simply understood the trend. They do not throw in the towel on the first uptick. They disregard the nonsense spouted out by the talking heads on TV that create false images of why markets are moving as they do.
I noted to pay attention to rates in Europe. Germany was able to sell short-term debt at NEGATIVE yields. Why? Because Europeans are moving money in preparation for the collapse in the debts of Southern Europe. Some think if the Euro cracks they will end up with Deutsche Marks or Swiss. This is the same driving force sending money to high end real estate and the Dow. It is the MOVEMENT of capital that causes these trends and each confirms the other. It cannot be one thing in isolation.
Corrections DO NOT work one-for-one. Here, we see the call money rates from the NYSE. It would be nice if it were as stupid as the talking heads make it sound. We have tested every possible relationship. We have employed more computing power and capital to figure out what makes the world tick than anyone ever. That is why the NY banks & government want us to shut up. Just look at this chart. The stock market DOES NOT even peak with the same empirical level of interest rates with each crisis. It would be nice to say if rates hit 8% the market will peak. Sorry – that will NEVER happen. It is the spread between expectations of profit and the empirical level of interest rates.
It is not that I manipulate the world economy. We just spent a great deal of money to deconstruct it. Guess what – the world is not flat. There is a whole new way of economics and looking at how the world actually functions. Eureka! Try observing instead of dictating how the world should operate to support some hair-brain theory. Those who want me to shut up because what we discovered does not fit with their theory or belief that the government can control the economy by regulation are no different than those who killed Bruno or imprisoned Galileo for life.
Knowledge advances by observation. Stagnation emerges when people try to suppress advances because they want to remain in control. The Goldbug press refuses to quote me just like the NY establishment press that supports the bankers. They both have self-interests to support and hate anyone who says they are wrong. There is no difference from the Pravada of the old Communist Party that never acknowledged opposition.
Posted originally on the CTH on May 18, 2024 | Sundance
On the issue of crypto currency, watch the DC voices very closely.
They are about to take up legislation on the topic of crypto currency, regulation and overall ramifications therein. Keeping in mind that a dollar-based Central Bank Digital Currency (CBDC) cannot and will not coexist within a financial system that permits the transition (the exchange) of dollars into crypto and vice-versa.
Put simply, in the Western financial system, crypto currency cannot exist with a CBDC. Duality of currency is possible outside the West, but not feasible, viable or possible given the political motivations behind the creation of the dollar-based CBDC.
First things first….. Remember just before Super Tuesday 2020 when all the Democrat candidates for the Dem nomination dropped out and fell in line behind China Joe? Do you remember Warren staying in to support Joe by splitting the Bernie vote and everyone wondered what her payment was going to be? Here’s your answer.
The holy grail for the progressive movement was formerly known as a “carbon trading” process or platform, where you would have to pay a fee for your specific life choices and human existence. That objective or goal never went away; it just modified into a process that would create the mechanism for the payment system – that’s the dollar-based CBDC.
Just like Obamacare, there is going to be a myriad of “If you like your doctor, you can keep your doctor” promises with CBDC. And there will be some “You have to pass the bill to see what is in the bill” later espousals to convolute the former promises as they conflict with the CBDC legislative outcomes that start to gain attention.
From the perspective of DC, control over us is the upside; however, their CBDC aspiration comes with a downside – direct bribery and money laundering for political benefit becomes harder. So, what we know they will try to achieve is something like they just did with FISA 702 renewal. Whereby everyone outside DC will be banned from crypto ownership, but everyone inside DC is exempt from the rule. [Remember, under their very specific FISA- 702 extension, DHS is not permitted to use electronic surveillance on federal politicians (without knowledge), only the proles.]
With the crypto currency issue, the ideological communists in DC (both Republican and Democrats alike) will demand legislation to block, ban and regulate the crypto exchange. The UniParty will not want a competing process for the exchange of value that subverts the control mechanism of the federal government.
(Washington DC) – Sen. Elizabeth Warren’s anti-cryptocurrency crusade is facing pressure from her own party.
Dozens of Democrats, including Senate Majority Leader Chuck Schumer, have broken with her in recent days and supported an effort to undo SEC guidelines that critics say discourage banks from holding digital assets. The Democrats defied not only Warren, but also President Joe Biden, who is threatening to veto the rollback. The rift may grow further next week when the House takes up sweeping, industry-backed legislation to incorporate crypto trading into federal financial regulations.
[…] The party’s Capitol Hill clash over crypto policy comes as the issue is becoming more prominent in the 2024 campaign. Former President Donald Trump is courting crypto fans, though they may represent a small minority of the electorate, and signaling that he’d rein in the SEC’s crackdown on the industry. Crypto super PACs are poised to spend more than $80 million to influence control of Congress and secure friendlier policy. It’s leaving Democrats at odds over whether to follow Warren’s push to clamp down on crypto firms or to take a friendlier approach. (read more)
The communists who are organizing the financial control system want to use the justification of war, North Korea, and a variety of foreign adversary arguments as well as drugs, criminal and human trafficking, as the manufactured crisis (scary shiny thing) not to be wasted. I mean if you like BitCoin, DC will claim you are a deviant predator of children who abuses drugs and loves some Kim Jong-Un dontchaknow.
The five major banks, all of whom gain maximum benefit from the CBDC as transfer brokers, will join Jamie Dimon (JPMorgan) and decry crypto as the planet harming, energy intense, earth polluting system that is currently melting the ice caps. Meanwhile Greta Thunberg and Taylor Swift will assemble their perpetually depressed Gen-Z forces against BitCoin et al.
Just watch, the seeds of the nonsense are already planted.
The Yellow Zone is specifically constructed to begin using a dollar-based CBDC likely sometime after the 2024 election, with open tests in 2025 depending on the election outcome. Even if Trump wins the ’24 U.S election, the bankers who control the rest of the yellow zone will continue implementation of the Dollar-Based Central Bank Digital Currency (DBCBDC) without direct USA participation (they will wait out Trump’s term).
Posted originally on May 17, 2024 By Martin Armstrong
Various cultures and religions have been concerned about the end of time looming throughout history. Aethelred II (978-1016 AD) was so convinced the world was about to end in 1000 AD that he removed his portrait from the coinage and placed the Christian symbol of the lamb on it. The world did not end, and he restored his portrait the year after. Why is there this need to constantly scream the end is near, which seems to plague Western society?
Turn the economy down, and you will find major upheavals in religion. To whatever extent our model may align with religion or even astrology, rest assured that neither are inputs into Socrates to make forecasts. So, I have found these prophecies of various religions interesting.
In our Western culture, we think everything is linear. I always found it interesting how Revelations 20, clearly lays out a cycle.
[7] And when the thousand years are expired, Satan shall be loosed out of his prison,
[8] And shall go out to deceive the nations which are in the four quarters of the earth, Gog and Magog, to gather them together to battle: the number of whom is as the sand of the sea.
The Bible describes a cycle. Some have interpreted this cycle as 6,000 years up, 1,000 down, and then it repeats. These are interesting times no doubt. Are they Biblical in proportion? No one knows the answer to that. But many always preach doom and gloom right down to Y2K and the Mayan calendar ending. They cling to the latest topic and go. It was the year 1,000 AD when the Last Judgment was to take place, according to popular conjecture. It did not. But it did start the pilgrimage movement from Europe to the Holy Land, and that led to the creation of the Knights Templar to protect the pilgrims. It ushered in a rebirth of trade that created merchant banking and then sovereign debt. This also sparked the Crusades. So, even wrong interpretations can have profound impacts.
One indeed begins to wonder what will happen to the human race. Technology keeps on advancing with greater and greater power, either for good or for destruction, as the government desires to eliminate all rights, privileges, and immunities. But this is part of a constantly repeating cycle.
Government is the enemy of the people. Historically, it has always been. They seek only one thing—power over others. They will do anything to retain that power. They cannot sleep at night worrying that someone has something they want or is doing something they do not approve of. This is part of a long cyclical process where government is always the great evil empire, for it ultimately always seeks to dominate the people regardless of what form it has taken.
If we take this 1000 years to be literal, this is by no means the end of the world. Yes, it may be a Great Reset, but our computer shows they will NOT win, and we are headed into the rising tide of civil unrest around the globe, which is revolutions and the prospects of international war.
Then there is the passage from Peter about a day being like 1,000 years. All I can say is the computer is non-biased and non-religious, and it simply looks at all the patterns throughout history. People will act the same way no matter what century they live in because human nature has never changed since Cain murdered Abel out of jealousy. We have advanced technologically but not emotionally.
Peter 3:8–9 reads:
“But do not forget this one thing, dear friends: With the Lord a day is like a thousand years, and a thousand years are like a day. The Lord is not slow in keeping his promise, as some understand slowness. He is patient with you, not wanting anyone to perish, but everyone to come to repentance.”
Even when we look at the Old Testament, we find cycles abound. Following the Ten Plagues to hit Egypt, Moses led the Exodus of the Israelites out across the Red Sea. However, After 40 years of wandering in the desert, Moses died within sight of the Promised Land on Mount Nebo. Moses did not make it to the promised land, so they wondered for about half the duration of an ECM wave. The fact that the prophets understood a year as 360 days is well established and can be seen in the prophecies of Daniel and Revelation as seen in the use of “time, times and half a time” (i.e. 1+2+0.5=3.5), “1,260 days” and “42 months.”
There is an agreement among Christianity and Islam that the end days will be similar. In Jewish eschatology, they are concerned with events that will happen at the end of the day. This includes the ingathering of the exiled diaspora, the coming of a Jewish Messiah, the afterlife, and the revival of the dead Tzadikim. Interestingly, on the slopes of the Mount of Olives, which I visited in the early ’80s, east of Jerusalem, and within sight of both the Temple Mount and the al-Aqsa Mosque, there lie about 150,000 Jewish graves dating from ancient times through today. Many of the bodies are buried with their feet toward the city, because ancient prophets declared that the resurrection would begin there, and the faithful would rise and follow the Messiah into the Holy City.
So, there is agreement among the main religions that the end of days or time awaits us. I do not know if this is the second coming. All I can do is provide the non-biased, non-religious forecasts of what is unfolding for the signs in the data. I do not dismiss that we will end up in World War III, but I also see that we should expect rising civil unrest and revolutions that will overthrow these pretend elected officials.
The computer agrees there is a great confrontation being thrust upon us as this Great Reset. Our computer shows that this is NOT the end of the world, but indeed a Great Reset where nations will fall but this is more like the final battle against communism. I am not a religious scholar and I am only trying to look at this and rationalize it with our computer forecasts which I do trust.
Posted originally on May 17, 2024 By Martin Armstrong
COMMENT: It is baffling why you are not on the front page of the WSJ, Barons, London FT, NY Times, and every financial newspaper claiming to be interested in markets. In the ’80s, when the Dow was 1,000, you forecast it would reach 6,000 by 1996. On the day of the 1987 low, you said the market would make new highs by 1989. You forecast the Nikkei high at 40,000 for 1980. Even after the 2007-2009 crash, you said the low would hold, and we would see new highs. In at least 2013, you said the Dow would test 40,000. You have correctly forecasted every crash and every high, yet the pretend main financial press will never report the truth.
You have shown the world that forecasting from a quantitative view rather than opinion is possible. My hat is off to you. You get standing ovations at conferences. You are a world teacher.
See you in London.
LS
REPLY: Thank you. I think the bias stems from what I experienced in school. The physics professor said nothing is random, and in economics class, they said it is random, like a drunk walking in the park staggering back and forth. So, we can follow Marx and Keynes and manipulate society to produce the perfect world.
Even in 2013, the first projection was 40,000. In 2018, I again warned that 40,000 was not the extreme target but the medium range. You have to comprehend that everything is connected. You cannot have the Dow going to 40,000 and nothing else happens. The question now is that with the Neocons pushing for World War III before the economy and Europe also in desperate straight needing war, we have a clash of trends converging where there is nearly $11 trillion in US debt maturing this year, which I warned about on Feb 18, 2024.
Do we get the knee-jerk reaction when people realize we have a DEBT CRISIS about to smack us in the face BEFORE the election? Or do we need war to get the foreigners to buy the debt that China will not? How long will it take people to figure out you need to hide in private assets – not public? That will dictate the length of a knee-jerk correction. This is why it takes a computer to make such projections – not personal opinions.
History dictates that they will only look at what I have done after Scotty has beamed me up – rarely ever before without a major crisis. That is just the way the prejudices and biases exist in human society. You will never extinguish them. Good and bad, that’s what makes us all human. Still, from time to time, there have been some who reported the forecasts.
Posted originally on May 16, 2024 By Martin Armstrong
The Dow surpassed 40,000 during midday trading for the very first time this Thursday. In a January 2020 interview with Andrew McCreath from BNN Bloomberg I explained that the Dow was heading up. The video was posted with the headline “DOW 40,000” and everyone dismissed my forecast as if it were my own personal opinion. I made similar statements in other interviews, such as my interview with Financial Sense five years ago in August 2019. I reiterated this forecast in a 2021 interview and continued to stick by the computer without relying on personal opinion.
I was asked how I knew then that we’d be where we were at now. My answer is the same — I just follow the models.
The Dow was 29240 on the day of the interview with BNN Bloomberg, and while many feared a correction was coming, I explained any dip was likely short-term in nature and that it would need to drop below 19000 to be truly considered a bear market – BUT that fell on deaf ears. Even with the notable COVID dip that soon followed this interview, the market bounced right back to new highs thereafter and the models stayed on track over the long term. We experienced one of the most HATED bull markets in history. Despite all of the turmoil over the years, The Dow consistently went up for over a decade but all the talking heads insisted it would go down.
So what’s next, as indicated by Socrates? The computer sees the Dow rising to 65,000 by 2032 when we are likely to see a change in not just the markets but governments worldwide. Governments throughout the world are still in trouble and the money remaining on the grid is fleeing into the US.
Watch the Dow for it will show you where the international money is flowing. The big players are not interested in small tech or companies that could go under. The S&P 500 is domestic-oriented, and fund managers and institutions tend to focus on this index. The NASDAQ typically reflects retail, often tech-heavy, and usually does not peak at the same time. Each index offers a completely different perspective. The Dow Jones Industrials is the big money. You will notice that this index leads the way. It is the first out of a key low because it is typically the foreign capital based on currency. You will also notice the Dow tends to top out first because the big money tends to pull out first also due to currency.
Capital is flowing like never before, and the smart money is on the move. Socratesusers have access to our capital flow heat map that shows where money is moving in real time. The USD remains the last safe haven, and money is pouring into the US.
Posted Originally on May 16, 2024 By Martin Armstrong
The New York Federal Reserve reported that American households set a new record after plummeting into $17.69 trillion of debt, a 1.1% ($184 billion) increase from Q4 2023. Worse, the number of delinquencies is rising as households struggle to make ends meet amid the cost of living crisis. Inflation is not waning, taxes are rising, and America’s debt burden has become utterly unmanageable.
Mortgage balances rose by $190 billion and reached $12.44 trillion by March. People are paying far more in interest alone than they have in recent years. Those who bought in the hopes of refinancing are not in a good position. Auto loan debt rose by $9 billion, reaching $1.62 trillion.
Americans have been attempting to pay off their credit card balances, with overall credit card debt declining by $14 billion to $1.12 trillion. Yet, that was close to a record-high for credit card debt and we tend to see balances lowered after the holiday retail spending spree ends. Consumers do not want to pay those 20%+ interest rates on cards but many are forced to do so simply to put food on the table.
Delinquencies are rising – this is a major issue. It is difficult to crawl out of debt once someone is deep within the cycle. “In the first quarter of 2024, credit card and auto loan transition rates into serious delinquency continued to rise across all age groups,” said Joelle Scally, regional economic principal within the Household and Public Policy Research Division at the New York Fed. “An increasing number of borrowers missed credit card payments, revealing worsening financial distress among some households.”
Credit card delinquencies have reached their highest levels since 2012 when America was recovering from the Great Recession. In fact, by the end of Q1 2024, around 3.2% of all outstanding debt was in delinquency. The New York Fed reported a rise in missed payments across all debts, including those 90 days past due.
No foreign nation is coming to offer America a bailout check. The Biden Administration has made it clear that American households are NOT Washington’s priority. We are to continue working and paying taxes in order to fund foreign wars and climate change packages. How else will we house those 7+ million illegal migrants and offer them free healthcare and shelter? How else will we pay off the student loans for millions? How else will we continue to grow the public sector and pay for countless new social programs? Americans are in serious debt, and Washington is all but ensuring this trend continues.
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