Are Cycle Inversions a Precursor to a Change in Trend

QUESTION: Dear Martin

In my own study of cycles, I have observed that cycle inversions occur more often than not at a time when the trend in that time frame is starting to change.

Have you observed the same?

I look forward to your trader service.

Best Regards

ANSWER: Correct. Cycle Inversions unfold routinely when trends are shifting. The fact that we are getting these cycle inversion now is definitely a precursor of what is coming between 2018 moving into 2021. When the same cycle has been producing alternate events and suddenly it begins to produce just highs, look out – for it is warning that the foundations are changing. This is what we are witnessing currently. We can taste it. With interest rates at historic lows, and you have the Japanese central bank buying 75% of the government bond market and the ECB owning 40%+ of all government debt, an uptick in interest rates is going to make the world economy simply go completely nuts

Is their a Social Cycle in Attitudes?

QUESTION: Mr. Armstrong; I read your article of the whole issue of prostitution. The entire problem is that some western women assume that all prostitutes engage in the profession unwillingly. That is just so biased. What about the women who marry not for love but for money. They are not forced. When the Iron Curtain fell, many Western European men married Eastern Europeans. They were shocked to realize that Eastern women saw life in a different culture. They looked for men who could support them and they saw this as a tradition they stayed home and raised the children. Their attitudes were pre-sixties. You are correct, culture is different around the world. It is stupid to judge everything by only your own standards. Indian and Thai food is spicier than European, American, and certainly Italian. Even food differs greatly around the world as do attitudes and culture. To a West European or American woman, staying at home is subservient. They have not been to the Middle East. I just read that Saudi Arabia is allowing women to drive for the first time.

I recall you even showing a Roman prostitute token used to circumvent laws back then. Have you ever investigated a cycle in attitudes in the battle of the sexes? It appears we seem to have emerged from the sixties with hippies, free love, and some women who just hate men blaming them for everything. I am not even sure where the whole virgin thing came from but assume that is probably in there as well. That was so obvious with Hillary thinking all women should vote for her just because she was a woman. That really offended the younger girls in our office. If there is a cycle in everything, then is there one in this battle as well?


Pompei-Lupanar Brothel

ANSWER: Yes there is a cycle to everything. Yes, the Emperor Tiberius (14-37AD) attempted to ban prostitution by making it illegal to pay a prostitute with a coin that had the emperor’s portrait of which they all did. The solution was to issue tokens (pictured above) you bought and paid the prostitute and she would redeem them later. These were widespread throughout the empire – not just Rome. One was recently found in the Thames River in London back in 2012. Here is a picture of the brothel in Pompeii. There were various prices that depended upon the sex act, but then there was also a two-tier price level over privacy. If you wanted a private room, that was the most expensive. If you wanted to save money, then you could have the room at street level where people could watch.

The Roman post-Civil War promiscuous period is very reminiscent of the 1960s with the whole free love and the women’s liberation movement. This trend in attitudes also appears throughout history on a cyclical basis. It is linked to the business cycle and as the economy booms, this trend will emerge coinciding with a decline in the birth rate. Perhaps the most famous period was the economic boom during the reign of Augustus (27BC-14AD) following the civil war that ended in 30BC with the deaths of Marc Antony and Cleopatra.

It was Augustus who passed his famous family laws that were designed to (1) ban intermarriages with none Latins, (2) compel men to be married. Augustus banished of Ovid (43 BC–17/18 AD) because he believed that his writings were creating an age of immorality. Augustus had his own daughter, Julia, banished for adultery. While her husband Tiberius was often away, Julia searched for love and sexual gratification outside her marriage and sex parties. Augustus heard of her infidelities, and he threatened her with death. Instead, he sent her to an island prison from which she was never to return, and he spoke of her as a disease of his flesh.

As far as the subject of virgins, in Western culture, this too can be traced to Rome. In ancient Rome, the Vestals or Vestal Virgins were priestesses of Vesta, goddess of the hearth. The historians Livy, Plutarch, and Aulus Gellius, all attribute the creation of the Vestals as a state-supported priestesshood to the beginning of the Roman Republic. The Vestals were regarded as fundamental to the continuance and security of Rome. They maintained the sacred fire that was not allowed to go out. This tradition to this day can be seen as the eternal flame at the grave of John F. Kenney. The Vestals were to take a vow of chastity in order to devote themselves to the study and correct observance of state rituals that were off-limits to the male colleges of priests. When Christianity began, the role of women serving God was taken from this Roman religious position and they too were to take a vow of chastity but were married to God.

The Romans were shocked by the roles of women outside their culture. When they were fighting the British, their leader was a woman named BoudicaIn the East, women were also rulers not just in Egypt. Septimia Zenobia (240–274AD) was Queen of Palmyria who rebelled and split the Roman Empire.

Romans definately held their women in high regard. The various Roman Emperors would routinely show their wives on coinage and some would even show their fathers, sons, daughters, as well as family portraits as did Septimius Severus.

The family seems to be sacred to the Romans. This idea of virgins in the West clearly shows the link back to ancient Roman. Where exactly it traces to in Asia culture I have not investigated. Nonetheless, there are distinct cycles in social attitude throughout time. Promiscuity rises with economic booms and declines with economic hard times. It seems to be linked in that manner to when you have no economic concerns about the future, then anything goes. When economic hard times take place, then the family unit returns and the birth rates rise because children are your retirement. When you think the state will take care of you, you need fewer children.

Why Are Dollar Bulls Almost Extinct?

Bloomberg has reported that dollar bulls are nearly extinct down to just 2.3 %. The majority, which is always wrong, are all focused on the nonsense of the budget and the current account deficits. The record high for the dollar was 1985 when even the British pound fell to $1.03. So the balance of payments went negative from 1980 to 1986 and the dollar rose. OMG! How was that possible? When you actually correlate the Balance of Payments with the dollar, something amazing emerged. The dollar rises with the balance of payments going negative. Gee whiz! That is against all perpetual bear’s reasoning.

Perhaps this magical logic is just sophistry because they use their theory and don’t bother to check if it holds up over the course of time. I have been warning countless times that the Balance of Payments is by no means simply TRADE. It includes all flows of capital outward. That includes interest. The biggest trade deficit of the USA is not with Europe, but China, who just so happens to be the LARGEST investor in US government bonds. That means they collect the lion share of interest expenditures. The days of buying just pick umbrella for your cocktail are long gone.

The Balance of Payments bottomed in 2006 and began to rise from that 3rd quarter low. When did the dollar bottom? In 2008 as the Balance of Payments was improving. Strange! Guess that logic does not hold up.

Most people look at the Dollar Index for a guide as to being bullish or bearish. What they do not realize is how it is constructed is not really relevant. Currently, the index is calculated by taking the exchange rates of six major world currencies the Euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc. Then they apply a weight which is arbitrary. The Euro, for example, has a weight factor of 58%. The Japanese yen has a weight of about 14%. From a trade flow and capital flow perspective China is at the top of the list. The trade deficit with China (with includes interest expenditures that flow to China) stands at 123,676 billion compared to 343,078 billion for the entire European Union with Germany coming in at 49,363 billion. Japan now is still more in capital flows than Germany coming in at 67,117 billion. The weights that make up the Dollar Index are not truly reflected in either trade or capital flows. Furthermore, the index was created only in 1973. It shows the high in 1985 and the low in 2008, which really does reflect Europe rather than trade or even capital investment flows.

When Timing is Everything – The Failed Graf Zeppelin Venture

Timing is everything. When an economy turns, big projects that looked like they were going to be winners suddenly lose big time. That was the case when a world tour had been planned for the world’s biggest airship, the Graf Zeppelin, in 1930 just months after the 1929 Crash. In May 1930, the Graf Zeppelin floated over the Cape Verde Islands and slowed down stopping at the Porto Praia post office. When the ship had maneuvered to just the right spot, its crew threw a big sack of mail. To fund the voyage, they struck a deal to carry mail around the world which would be the first international air mail.

Over the next several weeks, the 775 feet from nose to tail Graf Zeppelin completed its first Pan-American tour stopping in New Jersey, Ohio and flying to Rio de Janeiro and then back over the Atlantic to Spain and its home country, Germany. A lot of publicity and fanfare accompanied the airship’s journey which was funded by carrying sacks of mail. This was the largest flying machine the world had ever seen. Its operating costs were proportionate, clocking at about $4 per mile back then which was a lot of money. Passengers paid very high ticket prices, but the ship could only hold about 20 people at a time. Passenger travel was not a lucrative venture. The Hindenburg ticket prices across the Atlantic was the price of a car about US$400.00 one-way and a round trip was US$720.00.

They also tried to charge admission fees to view it on the ground. That did not prove to be a winner either. The timing was very bad for the Great Depression was just getting started.

Instead, the Graf’s parent company, German Zeppelin Airship Works, decided to recoup costs by commissioning special stamps from the countries on the tour route. Only letters with these stamps on them would be accepted onto the airship, or so they announced. They promised to deliver these letters to their destinations around the world.

This was the only commercial transatlantic airmail option available at the time and was days faster than sending a letter by boat. Brazil, Bolivia, Germany, and Spain all made the Zeppelin stamps, and 93% of the proceeds from each stamp was funneled back into German Zeppelin Airship Works. Finally, after considerable debate, the U.S. Post Office decided to get in on the hype. They assumed that stamp collectors would want the stamps and they would never be used so they would pocket a fortune. The agreed to proceed and they went to designing and printing a run of Graf Zeppelin stamps all in a matter of just weeks. They called this a gesture of goodwill toward Germany, which was the new Nazi government. The pledged to also contribute 93% of all the revenue collected on stamps “used” on the flight to the Airship Works. They cleverly qualified the agreement expecting American stamp collectors would buy up most of the stamps for collections and that would go to the Post Office.


So on April 19, 1930, the Post Office issued three stamps, The  65-cent stamp covered the cost of a postcard one-way. The $1.30 stamp covered the cost of a letter one-way. The final stamp, the $2.60, it covered the cost of a letter being postmark over to Europe and then back again. However, because of the deepening Great Depression, collectors could not afford the $4.55 when a loaf of bread sold for just 9 cents. The Post Office printed 1,000,000 sets of stamps expecting a mad rush. They sold only about 227,000 zeppelin stamps total, and most of that actually did end up on mail delivered by the Graf Zeppelin and the lost an expected big windfall.

The worsening Great Depression undermined the entire trip of the Graf Zeppelin. It was a fantastic idea and it was a show of power for Germany after the hyperinflation of the ’20s and losing World War I. Timing is everything. A great idea foiled by the business cycle.


Noah Ark Commemorated on Roman Coins

QUESTION: I found your article on Noah and the flood interesting. However, are there any other sources in the West besides Gilgamesh that it seems many sites point to for the same reason?


ANSWER: This story of Noah even appears on a Roman coin struck by Septimus Severus (193-211AD) long before Christianity became really a growing religion in Rome. The story is illustrated and even the name Noah appears on the Roman coin. This tends to verify that the story was well known outside of the Bible

The Way to Survive Hyperinflation

COMMENT: Mr. Armstrong; I just wanted to comment that I am from Venezuela. My father came here to visit me in Florida where I live with a Green Card. Everything he saved in life for his retirement is now worthless and it does not even pay to travel back to collect his pension. The hyperinflation is a collapse in the confidence of government as you have explained. Those who saved for their retirement and had pensions, lose everything. They will be paid the amount that they were promised, but it will not even buy a single night’s dinner and soon a beer.

Thank you for your contribution to society. I wish more people would listen to you. Experience is the root of knowledge. Opinion is the root of bias. You have proven that


REPLY: To survive hyperinflation requires the holding of tangible assets and never cash or pensions. The way pensions can be devalued is through inflation over the course of time and circumstance. What I paid into Social Security will never come back to me in terms of real purchasing power and that is without hyperinflation. I have stated before, I met with the Treasury back during the Reagan Administration and said these insane levels of interest rates will triple the national debt in less than 10 years. They simply responded; Yes but we will be paying back with cheaper dollars.

All promises of government are simply eroded with inflation. That is why Southern Europe fell into such chaos. The currency doubled instead of declining when they joined the Euro. That is why Europe has been a failure under this political-economic philosophy. The Euro first crashed, and then doubled in value. Southern Europe was used to inflation always reducing their debts. Suddenly, their debts doubled and deflation ruled. And people cannot figure out why the Euro is in such trouble?

I do like your saying though. It is spot on.


Texas Governor Greg Abbott Discusses Austin Bombings and Suspect Extermination…

Texas Governor Greg Abbott discusses the Austin bombings and how the suspect, 24-year-old Mark Anthony Conditt, was identified and eventually confronted.


Law enforcement officials identified the suspected Austin bomber — who blew himself up as police closed in on him — as 24-year-old Mark Anthony Conditt, who lived with two roommates in a city suburb. (read more)

Austin Bomber Mark Anthony Conditt pictured in 2013 after high school graduation.

Austin Serial Bomber Dead – Killed Self By Detonating Device After Engagement With Police Shortly After Manhunt Photos Released…

The serial bomber who was targeting the Austin Texas area is dead.   Less than an hour after CBS Austin released photographs of the suspect at a Fed-X facility, media began reporting of an officer-involved shooting on I-35 in Round Rock.  The officer shooting incident ended with the bomb suspect detonating a device to kill himself. (link)

Here’s the pictures of the suspect that were released by media moments before police moved in to capture the suspect:

(Source Link)

Punishing Traders for What Central Bankers Do All the Time

Bloomberg is reporting the fate of Christian Bittar who was the top trader at Deutsche Bank AG. He earned a bonus of $126 million in 2008 for betting that as the economy would melt down, banks would refuse to lend to each other until the dust settled so short-term rates would soar. While he is sitting now in prison as the UK went to find the banks in the interest rate rigging scandal, they pursued criminal charges against high-profile traders, unlike the direction that was taken in the USA.

The irony of this entire affair is that the government are criminally charging traders for manipulating interest rates, which is PRECISELY what they do all the time. Let us not forget Mario Draghi who when history is written about how the West Fell, his name will rank very high on the list. It was Drahi who have sought to push rates NEGATIVE to try to manipulate the economy to create inflation.

While traders go to prison for rigging front-running and trying to push trading levels to kick off stops, they have NOT put at risk the ENTIRE financial system. They have not even altered the trend of interest rates or markets. Compared to the deliberate manipulations by central banks, what is at risk now is the entire pension system and European banks are still sitting on the edge of a cliff with no hope of recovery so Draghi simply postpones the accounting to that be that final push. Unfortunately, central banks do not share the same fate as traders.