Tag Archives: LIBOR rates

Apr 3 2018

Is There a Cycle to Religion?


Armstrong Economics Blog/Religion

Re-Posted Apr 3, 2018 by Martin Armstrong

QUESTION:

Mr. Armstrong,

 With the rise and fall of civilizations comes the rise and fall of religion. Are we due for a new religion to be born, or to have a rapid growth of popularity? Christianity grew rapidly during the fall of the Roman empire, and with the persecution of believers, where are we today in this cycle?

Thank you for your education. I’ve read your blog since I was in high school and realize how life is governed by cycles. Some weeks are rough, some are fantastic, but it all regresses to the mean eventfully.

CO’C

ANSWER: Oh yes. There is a Cycle of Religion that prevails throughout all cultures. It is clearly tied to economics and the business cycle. I am sure some people will naturally disagree with that one, but it cannot be removed from the business cycle itself. Religion has so often inspired war with some even called Holy Wars. The dominance of a given religion has turned with the economy. The rise and fall of civilizations have been clearly linked to religion. Even if we go back to the Stone Age, we find graves with goods place in there with the deceased with obvious demonstrations of love as well as a belief in an after-life.  Burial rites characterize religion and extend back into the Middle Paleolithic, as early as 300,000 years ago, coinciding with the first appearance human communities.

Religion is an integral part of the entire human society. But keep in mind that this goes beyond the simple shifts from Paganism to Christianity and the rise of Islam. There are cycles within each as there are cycles in Asian cultures and religions all tied to the business cycle. The English Civil War was the Protestants against the Catholics which ended up beheading the King. The Puritans seized power under Oliver Cromwell who placed his own portrait on coins wearing a wreath as if he were a Roman Emperor. The Puritans outlawed kissing your wife in public, plays, all sports, and celebrating Christmas. They were so strict that the Protestants rebelled and overthrew the Puritans. It was the Puritans who infected the United States for they were the Pilgrims. This illustrates that there were subcycles within the same religion and the cycle does not always involve Christianity against Islam or Pagans.

During the 3rd Century, as the Roman Empire was economically imploding and the barbarians were at their gates, this is when the persecutions of the Christians became common. The Pagans believed Rome was being punished because the Christians were not worshiping the gods. When the Christians became the majority inspired by the economic collapse of Rome, then they turned against the Pagans and persecuted them. We see collections of ancient sculptures many are beheaded and defaced. This was the Christians assuming and sculpture was a god.

 

If we look at China, we can see quite easily how religion and the business cycle were interlinked even in Asia. The Chinese emperor was seen as being handed the Mandate of Heaven (天, Tian). The Chinese economic, political, and religious doctrine that supported the rule of the Emperor of China was a belief that heaven embodied the natural order and will of the universe. Therefore, it was this natural order that gave the mandate to the ruler of China for he was the “Heavenly Son” of above. In order to maintain that philosophy, if the emperor was overthrown, this was interpreted that the ruler was unworthy, offended the universe, and had therefore lost the mandate. They also believed that natural disasters from earthquakes, famine to floods were all signs from Heaven that the emperor wronged the Heavens and such disaster would often justify revolts of the people.

We see how this belief system interpreted the fall of China to the Mongolian invasion. Genghis Khan began the conquest of China with just raids in 1205 and 1207 across the border. However, by 1279, Kublai Khan had established the Yuan dynasty in China crushing all resistance, which was the first time in history that China came under the rule of a foreign or non-native power.

Most people in the West know little about the history of China. They saw the movie the Last Emperor and assumed that the Emperor ruled until the Communist Revolution in 1946. In reality, following the outbreak of the Wuchang Uprising against Qing Dynasty rule in 1911, the revolutionaries elected Sun Yat-sen as the “provisional president” of the transitional government, with the Republic of China officially established on January 1, 1912. More like the UK, the Chinese Emperor was not eliminated, just the political-economic power. It was against this republican form of government that the Chinese Communist Revolution was launched in 1946 following the beliefs of Karl Marx. Finally, on October 1st, 1949, Mao Zedong proclaimed the establishment of the People’s Republic of China ending the Emperor forever.

 

There is nothing that is exempt from cycles be it the economy, seasons or even religions. The Hindus believed their religion and gods are invincible not much different from the Romans. Hindus were prosperous, powerful, and became economically very rich and therefore known as was Rome or the United States. They believed that would last forever as every society does. They believed they are special, which is also a common theme. They believed that their gods were in charge of the world as well as the universe. Their culture and community also experienced a very difficult time adjusting to the reality of their collapse. Like the Romans, the Hindus also believed that their gods would bring all good things back and restore them to their former glory. Some resorted to extreme devotion and concluded the same as the Pagans of Rome that their fall was because there was not enough devotion.

In the United States, Rev Jerry Falwell and Pat Robertson came out and said that God was angry and punishing New York allowing the terrorists to succeed on 911. They said God allowed the attack because of “abortion, homosexuality, secular schools and courts, and the American civil liberties union.” (see Guardian). This is the standard reaction when fortune shifts. Many will blame some group that God is punishing the entire community because of these people. This human response was the same in the Hindus as it was among the ancient Romans and Greeks.

Socrates was sentenced to death for corrupting the youth and offending the gods. It is not clear whether he believed in just one God or many. The Greek word Plato used in the original text is “θεός” (theos) which is translated to “God” or “the deity”. Nevertheless, “θεοί” is the plural form of “θεός” and Plato also used this in sections of his Phaedo. Plato does indeed use both the singular and plural forms in the text.

 

Christianity went through dark periods of the cycle of religion. Because Roman bathhouses were communal and were places one went to even for prostitutes, when Roman fell, bathing was then connected with sin. Mathematics also became associated with the Devil. The entire idea that the Earth was flat and the center of the universe emerged from the idea of heaven and hell and there had to be an up and down. Bruno was burned alive for saying the Earth revolved again the Sun. The Church jailed Galileo (1564-1642) for believing the same concept. The knowledge that came from the fall of Constantinople in 1453 introducing schools brought the West out of the Dark Ages. But this took time. Christopher Columbus had maps that came from the East and set sail to discover America in 1492, about 40 years following the fall of Constantinople.

Every religion undergoes a cycle of change. It does not matter which religion we are talking about. Nonetheless, this is tied to the business cycle. When economic decline hits, we see rising civil unrest as one group blames the other for their ways and non-devotion.

Islam and Christianity preached a level of equality, which provided a flat social structure as distinguished from a class system. This was the foundation of capitalism for people were allowed to change their professions at will and new converts to their religions were welcome. Hinduism, on the other hand, has a rather strict ordered and hierarchical structure of society. This structure was flexible at the beginning and the ancient texts contain examples of people changing their castes. Over time, this flexibility was lost and the caste began to be decided at birth.

Islam regarded stealing severely where Christianity was more forgiving, but the government and Christain Fundamentalism turned to the unforgiving policies that have led the United States to have almost 25% of the total world prison population when it has only 4.4% of the world’s population. People are imprisoned for any offense whatsoever. If you drive on federal property and do not have your drivers license on you, you MUST go to jail and will be given typically a sentence of 30 days. When John Ashcroft was Attorney General under Bush, Jr., he imposed his unforgiving religious belief system upon the nation. Prosecutors would not get credit for a mere conviction. The defendant MUST do some jail time. It was Ashcroft who has turned the United States into the most anti-Liberty nation on the face of the Earth. Nobody imprisons people for every offense no matter how minor than the US Federal Government.

Islam and Christianity both demand absolute faith in their own version of God. Hindus are much more tolerant of what you should believe, but conversion to Hinduism is more difficult than that to Islam/Christianity. In polytheist Hindu system, if you want to bring in your god, then it is just one more idol in the already crowded temple of Gods. Hinduism offers a rich variety of texts and encourages debate as well as the pursuit of knowledge. Hinduism and most other Eastern religions, tend to believe that humans are part of the environment and that animals and plants should all be respected. Western religions, including Islam and Christianity, tend to accept the principle that humans are created in the image of God and are therefore a superior species on the planet which was created for humans.

So there are differences in philosophy between East and West. In the East, they tend to believe in cycles as part of nature where in the West the core starting point was linear. That said, there are cycles in the belief system but there are also cycles within each religion.

Apr 3 2018

Conservative v Trader


Armstrong Economics Blog/Training Tools

Re-Posted Apr 3, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; I know my friend sent an email to you and is finally listening only after racking up losses. I explained how I followed you since 2015 and bought the Dow back at the end of 2015. I made almost 10,000 points and paid off my house. My family toasts you every Thanksgiving around the table. I know you warned that April could make a new low in the Dow and the first half of this year would be a period of consolidation. The rally into March made new highs in the Nasdaq but the Dow failed. You have taught me to just follow the numbers and I appreciate your comments trying to explain events as they unfold. The Global Market Watch was fantastic. On the yearly level it said potential major high in January and then it flipped back and now says new highs remain possible. To watch how that sifts on the yearly level has been a tremendous indicator in itself. That gave me the confidence to sell the close of January. My question is simple. Do you see this as a major buying opportunity? How long should I keep the powder dry?

Thank you

SJ

ANSWER: This is a consolidation period and it will be difficult to guess where the market will go from one day to the next. Yes, the Global Market Watch has been fluctuating on the yearly level on the Dow and that is a reflection each day what the future would look like assuming that was the end of the year. It did by itself state potential major high and that confirmed the correction into February. Now it is saying new highs are possible which is reflecting that we are indeed in a consolidation mode.

This will provide a major buying opportunity. We needed this pause in trend to shift the majority back to bears. When the market rallies and breaks out again, they will fight it as they have all the way up. The biggest losers have been the asset allocation followers. They assume they cannot forecast the future so they spread their assets hoping that the traditional 60% equities will make up for the losses on the 40% bonds. That will bankrupt most people on this next move. It has failed to save pension funds.

Just remember. You MUST be disciplined. The hardest part of successful investing is to remove your emotions as much as possible from the decision process. This is why the decision must be on the NUMBERS and not even what I have to say. Nobody can forecast a market from a gut perspective. If they are looking for someone to be a guru, then kiss your portfolio goodbye right now.

I will be doing video updates for those who purchased the 2018 Share Market Report. We will be holding a WEC in Singapore in June. We will be opening up both Singapore and Orlando for general ticket sales shortly. Prior attendees get first dibs. We will be covering all of Asia in Singapore and the world in general. Orlando will be focused on Europe and North America with also a general overview of the world. That will be held after the 2018 US elections.

So follow the Reversals and the Timing. They will tell us when to ac

Apr 2 2018

Wheat & the Drought Cycle


Armstrong Economics Blog/Agriculture

Re-Posted Apr 2, 2018 by Martin Armstrong

QUESTION: Interesting that $1.3T US spending bill was enacted on March 23, 2018, exactly 31.459 years after passage of US Tax Reform Act of 1986:

Also, the 86 year cycle in drought conditions in the midwest US seems to approach – is this why Marty thinks wheat will bottom this year?

The below Wikipedia link mentions a “short drought” in 1890 in the US Great Plains, and then a dust storm on November 11, 1933, in South Dakota (43 years later). Wikipedia also mentions that the US Great Plains entered an unusually dry era in the summer of 1930 (a little more than 86 years ago), with droughts coming in 1934, 1936 and 1939-1940.

Kansas is having drought conditions currently:

Poor winter wheat condition worrying Kansas farmers

I wonder if this is the year to go long wheat, especially since Marty forecast a bottom for this year?

Best,
J

ANSWER: Here is a chart of Wheat from 1259 to 2017 with the currency converted to dollars from British pounds using the conversion rate at the beginning of the US dollar extending it back in time. Here we can see the overall trend. Yes, there is an influence with respect to weather. However, the Dust Bowl was a local event.

What our computer is warning about begins next year with a Directional Change in Wheat. This cycle appears to be impacted by (1) significant climate change, and (2) the War Cycle. The combination of both is pointing to a bull market in nominal dollar terms.

Apr 2 2018

Monetary Policy is a Complete Failure? Will Shutting Down the Fed Solve All the Problems?


Armstrong Economics Blog/Central Banks

Re-Posted Apr 2, 2018 by Martin Armstrong

I recently did an interview and was asked about the Federal Reserve. There is so much absolute nonsense sophistry that circulates where people think that ending the central bank will somehow cure everything. I really just laid it out plain and simple. The Fed’s balance sheet is a tiny fraction of the economy or the real money supply. Everyone blames the Fed for everything and they NEVER bother to look at (1) the fiscal policy of Congress, and (2) the banking system as a whole.

Even if you want to scream from the top of every hill that $4 trillion worth of Fed’s Quantitative Easing was pure evil and should have created hyperinflation (which it did not), the deficits created by Obama topped $1 trillion per year and those never die whereas the Fed’s QE evaporates as they do let the debt they bought mature and expire without rebuying it again, whereas Draghi and the ECB have conceded they will reinvest their holdings. Look at 2009-2012. Obama created $5.4 trillion that will never expire but will be rolled until there are no more buyers.

So let’s do the math. The entire Federal Reserve QE program was equal to 1/5th of the national debt. The ECB bought 40% of all public debt and the Bank of Japan bought 75% of new debt coming to the market. Yet all we get is dollar bashing and people actually have called the yen the safe-haven play. I really do not know if I am arguing is drunks, people with dementia, or just con-artists. All these people pushing the end of central banks because they are clueless about how the real world functions.

I have been trying to explain to the world that monetary policy using interest rates to impact the balance of payments is really voodo economics. The Australian even wrote an article back in 1989 about the advice I was given to governments. No matter how long I have been at this, trying to overcoming manipulating interest rates to try to control the economy is just totally insane. It reminds me of the skit in Blazing Saddles where the Black guy puts a gun to his own head and say if anybody moves, the black guy gets it. How can a central bank raise interest rates to fight inflation when the government is the biggest borrower in the system? The government deficits will rise because their interest expenditure will rise perpetually because they continuously roll their national debts and never pay anything off. The central banks have lost all control and the press is just too stupid to even understand the problem.

The Australian wrote about our recommendation: “He firmly believes the worldwide obsession with monetary policy, namely the use of interest rates to regulate inflation and demand, is misguided, and in a recent circular to clients described it as “voodoo” economics.”

 

We are hopelessly lost and the idiots who bash the Fed are doing so much harm to society it is not even funny. The bulk of the real world money supply is created by lending on a leveraged basis. It is not money created by the Fed and it goes well beyond that even created by the Congress.

AT the end of 2017, total household debt exceeded $13 trillion. Total non-financial business debt stood at $6.1 trillion at the end of 2017. The Fed’s balance sheet was $4.4 trillion of which $2.4 is US Treasuries. The national debt stood at $20.5 trillion at the end of 2017. If we look at this perspective, that means the money supply is $41.6 trillion just using the debt. If we then add M2 (all accounts _ money market accounts) which stood at $13.8 trillion at the end of 2017, this brings us to a liquid money supply of $55.4 trillion. The Fed’s balance sheet does not even reach 10% of that figure. Now let us add the stock market, which is liquid. That reached $30 trillion by the end of 2017. Therefore, the liquid assets/cash position stood at $85.4 trillion at the end of 2017. Now let us add total personal real estate (homes) in the United States which stood at $31.8 trillion. If we include illiquid real estate, now we are up to  $117.2 trillion. So how will shutting down the Fed and theoretically eliminate $4.4 trillion solve all the problems?

Apr 1 2018

Will Coins Survive The Monetary Crisis?


Armstrong Economics Blog/Monetary Reform

Re-Posted Apr 1, 2018 by Martin Armstrong

QUESTION:  Hi Armstrong,
I continue to read your blog for 2 years I say and find it educational.
I wanted to know what will happen to U.S. coins like pennies and nickels when the base metals are worth more than the coin value.
Will the U.S. allow hoarders/collectors to exchange them for spot metal value or melt value? either one would be of course more than 0.01 for the penny and more than 0.05 for the nickel.
I hope to hear my answer on the blog

A

ANSWER: When silver was removed from the coins after 1964, at first it was illegal to melt the coins down. The FBI were prosecuting people for melting the coins they called defacing. However, that quickly faded out as the law did not support their theory of defacement. $1,000 bags of US silver coin traded even on the futures market in New York.

This time around, it is not likely that we would see confiscation. We could once again see bags of coins trading as was the case even into the later 1970s.

Mar 31 2018

The Noah Coinage of Phrygia


Armstrong Economics Blog/Ancient Economies

RE-Posted Mar 31, 2018 by Martin Armstrong

QUESTION: Dear Mr. Armstrong,
I have a question please, taking the lead from your recent article in your blog “Noah’s Ark Commemorated on Roman Coins”
Question: Do you happen to have found a copy of the Apion Treatise (answers to Josephus) in your historical searches? (Apion — Historian from Alexandria)
Background: Titus Flavius Josephus, born in 37 AD in Jerulasem, 160 years before Septimus reign introduced to the Roman elite to the Jewish mythology of the Bible thru his writings. The historian Apion from Alexandria wrote a treatise answering to the historical claims of Josephus. Josephus also responded with his treatise – Against Apion, which has survived. Apion’s Treatise is not published or found (lost??), according to the results of my searches.
Can you please enlighten me.
Thank you Kindly,

DGP

ANSWER: Josephus has been a contemporary historical source with respect to the conquest of Judaea by the Romans under the command of Vespasian (69-79AD). It is also true that he became an adviser to Vespasian’s son Titus (79-81AD). However, most of his writings appear to be really trying to redeem himself among his fellow Jews. In the Preface to Jewish Wars, Josephus actually criticizes historians that misrepresented the events of Roman-Jewish War. He wrote: “they have a mind to demonstrate the greatness of the Romans, while they still diminish and lessen the actions of the Jews.”

The Jewish War was a very big and profound event. It came after the death of Nero (54-68AD) and the empire was plunged into civil war. Vespasian (69-79AD) was vying to be emperor and the Jews looked at this opportunity to seek independence from Rome. However, like Catalonia in Spain, if they are allowed to just leave, this threatens not just Spain but would encourage others to leave the EU. This is precisely the same set of facts that existed following the death of Nero in 68AD.

If Judaea was allowed to just leave, other provinces would have done the same. They even issued their own coinage. Thus, the punitive actions of Vespasian against the Jews must be understood within this context. We have the victory over the Jews appears on coins of Vespasian of every denomination.

It is highly unlikely that the other works of Josephus were widely read by Romans. Josephus’s Against Apion is a two-volume defense of Judaism as classical religion and philosophy. Josephus stressed its antiquity and suggested that the Greek religions lacked that ancient tradition and were more modern. Josephus attacks the Greek writer Apion and his anti-Judaic allegations. So once again, this appears to be a work that may be also out of guilt that he supported the Romans to pick the winning side.

The bronze coin pictured above of Apameia was struck for Septimius Severus (192-211AD). The reverse legend mentions the city’s AGONOTHETES (chief organizer of the games) or chief magistrate, ARTEMAS, who probably was Jewish. Noah’s name, given in Greek as NOE, which appears on the ark. The subject matter does appear to be very popular and it may be entirely attributed to Jewish magistrates. Apameia was a city in Phrygia, which during the 3rd century AD, was under Roman rule. The Noah coin design must have been very popular since it was struck for the emperors even after Septimius Severus such as Severus Alexander (222-235AD), Gordian III (238-244AD), Philip I (244-249AD), and Trebonianus Gallus (251-253AD), over the course of 61 years.

Apameia was a merchant city (today Dinar in western Turkey) whose ruins remain to this day. It was a very prosperous city during Roman times. It was a trade/commercial center that was connected to Asia by caravans carrying silks, spices, incense, perfumes, and medicines. The population of the city was very much like London and New York; very cosmopolitan with a mixture of Phrygians, Lydians, Cappadocians, Pisidians, Greeks, Romans and Jews. The common bond was mercantilism. They were a society composed of traders.

The origin of the city was founded by Phrygians prior to 1,000 BC and it was named Celaenae. It was located in a well-watered oasis at the source of the Meander River. Its coinage from the 2nd century BC shows an elephant head which is a clear symbol of its connection with Asia through trade. This city sat on the ancient old ‘Royal Road’ from the Middle East to the Aegean Sea that was originally constructed by the Persians some 500 years before this coin was struck. The location afforded Apameia control over all the caravan routes from Asia. Even when Alexander the Great invaded this region, he made the city one of his military bases.

Following the death of Alexander, it fell to the control of Antiochus I Soter (280-261BC)(meaning Savior) of the Syrian/Seleukid Empire. Antiochus I built a new city in 270BC below the citadel of Ceaenae and named it Apameia after his mother. Then Antiochus brought Babylonian Jews to serve as garrison soldiers, civil servants and royal administrators in his new city. This is most likely the connection why we ultimately find Noah coins being struck in this city. Some argue this was a punishment because the Jews had resisted Alexander’s conquest of Babylon where they lived at that point in history.

The Antiochus III (223-187BC), the Great, brought another large group of Persian Jews to Apameia in 188BC. Josephus in his work, ‘Antiquities of the Jews’ said that Antiochus III settled 2,000 Jewish families from Babylon in Lydia and Phrygia. Josephus goes on to say that these Jews were given special privileges including tax exemptions for ten years and were permitted to adhere to their own customs, laws, and religion. (Antiquities, Book XII, iii.4). These settlers may account for the large communities of Jews that suddenly emerged in the ancient Asian cities of Antioch, Apameia, Delos, Ephesus, and Sardes.

It is clear that by the time we reach Septimus Severus at the end of the 2nd century AD, the Jews had risen to high political positions in the city. Therefore, the Noah coins are unique to this city and are a reflection of the cosmopolitan culture that existed thanks to commerce. The ark is portrayed as a kibotos, which was an Apameian packing case used in trade with a lid. This is, therefore, blending the trade of the city with the Jewish parable.

 

Mar 30 2018

Our Proprietary US Share Market Index Measuring the degree of Overbought Securities


Armstrong Economics Blog/Dow Jones

Re-Posted Mar 30, 2018 by Martin Armstrong

QUESTION: Where does your overbought index stand on the stock market?

KL

 

ANSWER: This Index is proprietary. It peaked at 12.55 during October 1919 as capital had flowed to the United States due to World War I. The Index then declined thereafter into the August 1921 bottom at 10.40. From this point, the Index rallied into October 1925 peaking at 13.16, fell back for 15 months bottoming again in October 1927. The final rally lasted 14 months peaking at 12.95. The bottom came in July 1933 about 13 months after the actually low in nominal dollar terms during June 1932.

In nominal terms, the Dow tested the 1,000 level in 1966, 1968, and 1973 and again in 1980. We can see the shift in trend that came following the historical low in 1981. The core of this index is capital flows so it tends to reflect just how capital flees and concentrates moving relative to US assets. Looking at the most famous bull market of the Roaring ’20s, the duration was 97 months which we exceeded from the 2009 low in April 2017. The 2009 low was 6469.95 and the January high was 24,741.70. which was a rally of only 282% – not anywhere close to the Roaring ’20s.

This index is proprietary and it affords us a look at the asset class from a global perspective. This is part of the reason we have been warning that the bull market is by no means overbought and the bulk of forecasting out there has made this the most hated bull market in history because they look only at the nominal index without placing it within its global context.

 

Mar 29 2018

The Economic Confidence Model began with Recorded History


Armstrong Economics Blog/ECM

Posted Mar 29, 2018 by Martin Armstrong

QUESTION: How far back have you tested your Economic Confidence Model?

GP

ANSWER: To the start of recorded history. Each wave has been identified and numbered. It is very remarkable how history conforms cyclically to this frequency.

 

It has been tested on every culture and empire from Asia to Europe.

Here is a more modern perspective on the various events that took place.

Mar 28 2018

Will the Euro Survive by 2021?


Armstrong Economics Blog/Euro €

Re-Posted Mar 28, 2018 by Martin Armstrong

 

The results of the Italian election is just starting to sink in. The rise of comedian Beppo Grillo to Italy’s most successful politician, who won 32.7% of the popular voted compared to Merkel winning 32.8% in the German election.  Following the election on March 4th, Grillo’s “five-star” party took by far the first place. Brussels is still in shock and trembling as its mood has changed from he is just a joke to “OMG! This threatens the very existence of the EU”.

Grillo’s party sharply criticizes the EU, and above all, it questions the very purpose of Euro. The skepticism in the EU’s founding country Italy where they signed the Treaty of Rome, is rather amazing that those still focused on domestic issues in the USA are clueless about the threat to the Euro.

The threat Italy poses to the Euro stems from Brussels’ refusal to aid Italy with the refugee crisis and the outrageous demands that the increased expenditure for the refugees must be deducted from other expenditures to stay within the EU demanded guidelines, This has maintained a serious deflationary atmosphere in Italy and Brussels simply ignores the economic impact of what their policies have imposed. Italy’s public debt amounts to €2.2 trillion, and the risk of this debt going into crisis undermines the entire existence of the Euro. This is the direct result of the failed structure of the Euro I have warned about from the outset. (see 1996 reports)

Brussels tries to blame the misconduct of banks and takes no responsibility for the failed design of the Euro or for EU legislators and the European Central Bank, which have also played a profound role is turning Italy against Brussels. Swapping the old debt into Euro that then doubled in value, created a massive wave of deflation that 10 years of flooding the economy with money by the central bank has produced nothing but undermined then the pension system throughout Europe.

 

The world is lost, yet politicians fail to even understand that they are lost in their misconceptions of economics. The peak in the Euro came precisely in 2008 and ever since we have witnessed the erosion of economic confidence. The peak of the first 8.6-year wave into this new cycle for Europe came 2013.13 and then the low was 2017.43. We are now in a wave due for its peak in 2021.73 and by that turning point, we will see the Euro under tremendous pressure if it can even survive. There is no doubt that by 2030.33, that the Euro will probably not exist. The complete failure of the design is a profound mistake that is tearing Europe apart

Mar 28 2018

How Do We Really Forecast the Future?


Armstrong Economics Blog/AI Computers

Re-Posted Mar 28, 2018 by Martin Armstrong

QUESTION: Mr. Armstrong; It is obvious that you have indeed been behind the curtain for your knowledge of even global politics is amazing. Kim Jong Un is here in Beijing. You said he would back down. You said the risk of war lies in the Middle East, not Korea. Your model calls the markets. You said the Dow would bounce for two days and then turn down. Even that took place today. Where do you begin and the computer ends?

UGH

ANSWER: That is a hard question to answer. The computer can show me the region for conflict. That is determined by cyclical trends for each region yet at times it is augmented by a combination of capital flows. Picking things like the fall of communism back in 1989 and picking when the Berlin Wall would fall were based cyclically on the outcome of that trend. That was 72 years from the Russian Revolution of 1917. That was the perfect target for the volatility models within the ECM. Both converged so it made it really a piece of cake.

The collapse of the Soviet Union came in 1991, that was a simple 2-year reactionary process all within a cyclical forecast. Now, the collapse of the Russian bond market which set in motion a major contagion and the Long-Term Capital Management debacle was determined from a capital flow and cyclical perspective. That came 8.6 years following the fall of the Berlin Wall. When that forecast made the front page of the second section of the FT, that is when even the CIA came. They suddenly realized that our model could forecast the rise and fall of nations. But that is also when the bankers began to complain to the CFTC and SEC that I was “manipulating” the world economy because they were all long Russian bonds and blamed me for their losses using the FT article as proof. They said I had too much “influence” rather than consider the possibility that just maybe we were able to forecast events that they thought bribing politicians would prevent.

The above chart is calculated from the day the Berlin Wall fell – November 9th, 1989. Our forecast for the fall of the Russian financial system in 1998 was 8,6 years from the fall of the Berlin Wall. But look at the dates beyond that 2002 (low in the US market post-DOT.COM Bubble), 2007 (the peak in the world economy & start of real estate meltdown), 2015 (Russia invade Syria, Refugees welcomed into Europe by Merkel, start of the rise in interest rates at the Fed), and the dates to come are 2019, 2024, 2028, and 2037.

This is the collapse of socialism which is the collapse of pensions and will result in a new monetary system. We will see 2019 as a financial crisis and 2024 as a rise in commodity prices.

Each domino is set in motion by the previous. Yes, my experience behind the curtain allows me to understand the real risks, but the model defines where they are and the computer will continue to write reports when I am gone.