Today, President Donald Trump heads back to Michigan for a speech at the Detroit Economic Club. The keynote address is scheduled to start at 2:00pm EDT, with RSBN providing coverage starting around noon. Livestream Links Below:
UPDATE: VIDEO ADDED
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RSBN YouTube Livestream – RSBN Rumble Livestream
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COMMENT: Mr. Armstrong, I’m blown away by your computer. How did it know about July and September of this year, which you told us about long ago!? We got assassination attempt and cyber attack in July. We got an assassination attempt in September. AND you said Trump Media was in danger week of Sept 16 specifically, giving you heart burn. Amazing!!!
-Scott
REPLY: Many people claim to have AI. ChapGPT has created a feverish bubble around AI without people understanding what it truly is or how to create it. Over 20,000 applications to the SEC claim they have AI models. I suppose they wrote them in three days, the time Kinzinger claims we can beat Russia.
But honestly, most of what is out there is NOT AI—it is clever expert systems with no original analysis. When a reader asked ChatGPT what the difference was between it and Socrates, it was correctly explained.
"Socrates Platform uses artificial intelligence, machine learning, and natural language processing to analyze data, whereas I am primarily focused on natural language processing."
This is a forecast I pulled off of our old site from 1999 on the Wayback Machine, plotted with the chart showing the outcome. In 1999, Socrates forecast that there would be a panic in 2008 about 10 years in advance. When I wrote the code for Socrates, I put myself into the code. I did not use a neural net and hoped that something would come out all on its own by throwing in all the data. This idea of creating just Machine Learning and throwing in all the data, hoping it will suddenly become the most brilliant thing on the planet, is total nonsense. IBM’s Watson proved that fallacy.
There is a lot of misguided hope surrounding Artificial Intelligence and Machine Learning. All we need to do is look objectively at IBM project WATSON. Just over a decade ago, artificial intelligence (AI) made one of its showier forays into the public’s consciousness when IBM’s Watson computer appeared on the American quiz show Jeopardy. Watson’s debut performance against two of the show’s most successful contestants was televised to a national viewership across three evenings. In the end, the machine triumphed comfortably.
This was NOT actually AI. It is what I call a look-up program. Even ChatGPT is not capable of actually achieving independent thought. They can understand and go fetch the answer faster than a human. The people I knew back then thought Watson would one day cure cancer. None of that was possible because they fooled themselves about AI.
IBM’s Watson could search the entire internet and gather every piece of information possible. That was the easy part. What IBM lacked was the expertise in research. How do you know that one piece of info is the key or more important than another? They lacked the ability to create an actual analysis capability. They hoped it would somehow acquire the skill to do original research all by itself.
Neural Nets were a great hope that somehow you throw in all this information, shake well, and out will magically appear the answer. The presumption was that our minds are just supercomputers, and they ignored perhaps the critical understanding of what makes one person brilliant at math and another a brilliant artist who can’t count beyond 1,000. They can go fetch and look up things and return with the answer faster than any human. But they are no capable of original thought.
Most of AI’s dangers are caused by its failure to comprehend what it is capable of doing—especially in trading. This all stems from the distorted idea that our brains are supercomputers and there is no God, for our consciousness is simply created by throwing in a bunch of data, shaking well, and out comes a person. Thus, the thrust to mimic the brain led to the creation of neural nets. But that effort also failed in actually creating original thought.
The San Francisco-based tech giant OpenAI has announced that a new AI model is capable of “reasoning” at the level of doctorate students. OpenAI has said its next model update “performs similarly to Ph.D. students on challenging benchmark tasks in physics, chemistry and biology.” The company continues to grapple with questions in Washington about the safety of AI. Meanwhile, some OpenAI competitors have appeared upset by their marketing hype ascribing human characteristics to technology. Look, this OpenAI Model does not help when they describe it as “thinking” when it is doing nothing of that sort. It is merely an AI system process that predicts in ways that are basic to classical computers and search engines. OpenAI is exploiting a false impression that technology systems are human, which appears to have come from movie plots like Terminator and Matrix. This is just a cheap trick that threatens the development of AI by raising this nonsense that it will come alive somehow. This is merely a marketing trick to fool people into believing that its ability is humanistic in solving issues.
When I wrote the code that made Socrates, I had international experience as a trader and programmer – that is a very rare combination. The number one problem is the person with experience has to relay that info to a coder who lacks that same know-how. This level of communication never works. It takes a coder with experience to figure out how to reach that end result, whereas the non-coder does not understand all the ways to reach a result. Coding is an art form. Two people can write a program to accomplish the same task, but they arrive at that differently in style.
Back in Stock Now – Sorry Has Been Sold Out for Months
I was named Economist of the Decade during the 1980s, Fund Manager of the Year in the Nineties, and FX Analyst of the Year in the 21st Century. A man cannot write a book to explain how it feels to give birth to a child. It takes experience!
As the movie The Forecaster pointed out, I have traded against Soros and Goldman Sachs.
You have to be in the trading pit to understand even how to trade internationally. John Law traded on the Amsterdam Exchange and came up with the concept of supply vs. Demand. Thomas Gresham came up with Bad money drive out Good due to hoarding. Both were on the exchange and witnessed how markets moved. You have to see things live to grasp how they work.
When Milton Friedman (1912–2006) came to listen to one of my lectures on who the world really functioned in the new world of floating exchange rates in Chicago, I was stunned. To me I was just a trader. Milton said it was best speech he ever heard, and said what I was doing was what he had just dreamed about.
Milton in 1953 in his Essays in Positive Economics, first proposed a floating exchange rate system that would put pressure on governments. Indeed, I ended up being dragged into governments around the world all because we forecasted currencies.
Only by entering the international arena of geopolitical economics and becoming one of the first international hedge fund managers could I see how the real world worked. This is the experience I had to code into Socrates. The first consideration one must make is country risk. You have to understand the politics of every country for that determines if you should even consider any possible investment. You then go down the list to approve or eliminate countries to consider. That is just the first step.
Most AI follows the idea that, somehow, the computer will figure everything out. They do not understand how the brain functions, nor do they consider what consciousness is. For centuries, many have tried to define it, yet have failed. Neural Nets are based on the idea that neurons interact. Yet, there is something much more. We have a pattern recognition-based system that is far more complex than simply neurons.
For example, looking at this drawing some see the old woman and other the young girl with the nose of the old woman forming her chin and the mouth of the old woman is the necklace of the your girl. We all do not see the same image at first glance. Our mind is a pattern recognition system that then will also fill in the gaps.
Here is a photo of a girl with a Trump T-Shirt. Your mind will fill in the gaps. Is she beautiful or homely? We will imagine what we want to see. The same will happen if we look at the clouds in the sky. Some will see a face, others will question your sanity. Our minds will see patterns and fill in the gaps.
We will also act in ANTICIPATION of the future. When Europe lowered rates to negative in 2014 to try to punish people for savings, they took their money out of the banks. The central bankers failed to comprehend that people will ONLY invest when they have confidence in the future and see a potential for profit. If they do not see the economy will even produce a 1% profit, they will not borrow even at 0.5%. This is why the stock market has NEVER peaked with the same level of interest rates twice in history.
Interest rates rose throughout Trump’s presidency, yet the stock market took off, and they called it the Trump Rally. Yet, these analysts call for lower interest rates and when rates decline, that is the market of a bear market and recession – not a bull market.
I have two French bulldogs. Yet, their personalities are different. What makes that unfold? We can see that the same indescribable character emerges in humans and animals. They have dissected Albert Einstein’s brain to no avail. Something else exists, which nobody has been able to replicate nor even define its origins.
Socrates is far more advanced than anything out there because I coded my experience and taught it how to analyze. Machine learning is fine for determining who may or may not default on a mortgage. That is rudimentary one-dimensional. But when you step into the global economy, this is not some simply one-dimensional relationship you have to deal with. It is far more complex than that, with millions of patterns and correlations on a worldwide scale. You must track everything from taxes and laws to climate, disease, and economic trends on top of capital flow analysis.
To do that film, the Forecaster had to be insured by Llyod of London. Everything in that film had to be documented right down to the non-public command that I had to turn over the code to Socrates, which I refused. It was not my word against theirs; they put it in writing to a lawyer.
Socrates would no more be able to discover the cure for cancer than I would. You cannot code into a system experience you do not have. But the AI being marketed is not really making analytical decisions, nor are they “thinking” and dreaming like a human or anticipating the future. However, Socrates is focused on the world economy, not medicine. If we had another $1 billion and 50 top programmers, perhaps we could expand it into other frontiers. Socrates is gathering a knowledge base constructed upon its experience extending beyond just the programming. There are much deeper layers to this whole thing that will die with me.
Nine of the 12 Federal Reserve districts reported a decline in economic activity in August, up five districts from the July Beige Book report. Our system has warned that we are entering a period of stagflation, where inflation remains high but GDP declines. Now, the Fed is reporting that two-thirds of the US economy is experiencing “flat or declining activity.”
The US economy advanced 3% during the last quarter, leading many to believe that the economy is recovering since Q2 posted a measly 1.4% advancement. Consumer spending, amounting to 70% of GDP, rose 2.9% last quarter as well, but people are spending on essentials. They fail to calculate TAXES into the equation when producing these reports and then dismiss essentials such as food and shelter as “volatile” aspects that somehow are not factored in the core figures.
Some people have a very hard time understanding that we are in a massive deflationary spiral; they think that rising prices simply means it is inflation and not deflation. Then, they mistake stagflation for deflation and wonder why people are spending more on less. They only see prices, not disposable income, and certainly not economic growth and unemployment.
The latest jobs report revealed that manufacturing is continuing to decline – shedding 24,000 jobs in July alone. On the other hand, the public sector grew by an additional 24,000, but those are 24,000 positions that will not contribute to GDP. Instead, growing government is simply growing the national debt but that figure no longer matters since it has long been unsustainable.
If you really look at it, objectively, interest rates always rise during boom periods, and they decline during recessions and depressions. We are looking at increased inflation into 2028 caused by shortages and war. But you’re looking at declining economic growth, so that ends up being more like the 1970s. The inflation rate will be higher than economic growth and we often see stagflation during times of war. We are beginning to see this come into play on the district level, but soon, it will be undeniable that the US has entered a period of contraction.
Categories:INFLATION
COMMENT: Mr. Armstrong, I find it incorrigible that everyone now claims recession when they have never predicted a recession before. That was clear from the video you had of Larry Summers, who admitted nobody could do that. It is very strange how you are the only person who has ever forecast recessions and new highs in markets when everyone was called the opposite. Even in August, you had these people clamoring for an emergency rate cut while you said it was a three-day plunge and a new high would follow.
I looked back, and even in your April 25, 2024 post, you said a recession would follow the ECM turn on May 7th. Nobody gives you credit. They all copy you. But without you, they have no forecast. They are stupid, for what you have done is essential for society. These people want to pretend they are something they are not.
They do not even understand what makes a recession unfold.
Thank you so much. I wish people would be honest and give you credit, for that is the only way to hope for what comes after 2032. All they do is plagiarize you.
Peter
REPLY: Sadly, what you are describing is human nature. We are a flawed species – tragic in so many ways, like a Greek play. We seem to cling to our expectations of a just and moral world when history records anything but morality. And Thraymachus basically said JUSTICE is always the same – the self-interest of those in power – JUST US is the real spelling.
We have Europe and South America censuring free speech because the LEFT does not believe in civilization; they only see their own self-interest. Their failure in life is caused by the success of others—never themselves. As a species, we seem to believe there is ethical meaning behind everything when we live in an unethical and meaningless world that bathes only in self-interest.
I understand what you mean. Only this model has projected booms, busts, and recessions decades in advance. We have to learn to live with the cycle. Pretending you called a recession from a gut feeling or just looking at US statistics is a joke. We are all in this together. The US cannot withstand a global recession. That is why I say we are all connected. When you have the Neocons threatening war on four fronts, China, Korea, Russia, and Iran, the future is colored with uncertainty. That results in the contraction of spending.
Then, inflation is set in motion by shortages and tax increases. Throw in Kamala’s taxation of unrealized gains and make it only the billionaires. They are then forced to see stock to pay the tax, and you create the biggest crash in history that wipes out people’s pensions. NOTHING takes place in isolation. NEVER do the Democrats ever once question their spending. They are Marxists and must constantly promise more, never less, and that necessitates endless tax increases that always reduce GDP.
When I was in high school history class, I had to read Galbraith’s The Great Crash. It was not until I came across a two-volume set of Herbert Hoover’s Memoirs that my eyes were pulled open. Nowhere in Galbraith’s book was there ever any mention of a 1931 Sovereign Debt Default because he was a Socialist, and the object of his book was to pin all the blame on corporations and the rich. He omitted everything that ever remotely pointed to the government as a cause. We should all own nothing, shut up, and be happy. Speak up, and today, you go to prison for Free Speech.
The conflict surfaced in my mind in high school. As I have said, in physics class they said nothing is random. Then in economics class, they said everything is random so government has the power to manipulate society and prevent recessions. That was a conflict to me that began my questioning of what I was being taught.
It is becoming painfully obvious schools are programming children for political agendas. This is very Stalinistic, for he, too, instructed children that the state was their parent and if their biological parents ever said anything against the state, they were to report them.
It has gotten far worse than when I was a kid. They were trying to brainwash us that the government is good and the corporate world is all evil. Today, that has gone into being gay, changing your gender, and not telling the parents like Stalin for the State is your parent. This is a movement to reduce the population to make Schwab, Gates, and Soros happy.
What does this all say? Today, if I had to start over, I would choose homeschooling.
(read Chapter on 1931)
COMMENT: Marty, I have been attending your conferences since 2011. What I have learned from you is far more than my MBA. You are a world teacher paving the way for a new age. I am glad to hear they are making a movie about your efforts. The world needs to know. I was in Rome when Nigel Farage said that you were the alternative to Davos. What these academics from Davos have done to the world is the total destruction of our values and culture with this open border pushed by Soros.
I know you say you are waiting for Scotty to beam you up. Given what these people have done to suppress you over the years, I don’t think anyone can blame you for that. You are the first victim of cancel culture. Let me speak for your selfish followers. We hope you are here until 2050.
I think it’s in the Bible: blessed will be the peacemakers.
Jared
REPLY: I hope that this Hollywood movie shows the world that there is a better way to live simply with the cycle rather than having these academics ponder how to reconstruct the world. Hence, they constantly think they can make it better and, in the process, destroy the very foundation of civilization. Karl Marx did not understand how the economy works but focused on wealth and labor. He saw capitalism as an extension of ancient slavery, then serfdom, to labor for the capitalist. He tried to change the world, and in the process, hundreds of millions died. His ideas killed more than Stalin, Mao, and Hitler combined.
My father was with General Patton from North Africa to Berlin. He told me that Patton believed he had been sent back from above to win the war. He had wanted to go straight into Moscow back then and told my father that the real enemy was Communism. My father told me that Patton was relieved of command of the 3rd Army by Eisenhower because he publicly said that America had been fighting the wrong enemy—Germany instead of Russia. He died in a car accident, and in his last words, I was told: “This is a hell of a way to die.”
I was raised with that sense of duty because I was always taught we are here for a purpose. Some have told me my father taught me to speak the truth like Patton, even if it angered those in power. Perhaps. I guess just like Patton knew that the real enemy was Communism, I see the real enemy as being these academics who pretend to know how to reshape the world and never understand how it truly functions. So, to me, the enemy remains Davos, Soros, and his legions, as well as Bill Gates. Stop messing with nature and live with the cycles rather than ignoring them or manipulating them to eliminate the business cycle. There is a cycle to the rise and fall of civilizations, and they are fulfilling the destruction of Western society with their open borders that cannot be reversed.
I see the world as the Biblical story of Joseph telling the Pharoah there will be seven years of plenty and seven years of drought. This explains the business cycle and how to live with it. This story is a lesson that Marx, Keynes, Soros, Gates, and Schwab have believed that they are wiser than God or nature, for they have all attempted to either manipulate or terminate the business cycle.
Paul Volcker and I had an exciting conversation back in 1998. He told me that he agreed with my model and that the business cycle is about 8 years in length. I explained that we should stop fighting it. He came to see the inevitability in his Rediscovery of the Business Cycle.
COMMENT #1: I’ve now been reading your work for close to Twenty Years. I’ve been to numerous conferences. From Philadelphia to San Diego to Orlando and you still amaze me
The me from 10 years ago would have thought the world would collapse on Monday as the media stated. Now I’ve learned(from you) to watch what actually happens instead of trying to predict.
I thank you ??
Regards,
JCL
COMMENT #2: Marty, I have been in these markets for 20+ years. Not as long as you, but long enough to see that a bunch of analysts are all claiming we are heading into a recession without any data. It is clear how many people are looking at your Economic Confidence Model but will never give you credit for anything. That reveals their character.
You are here for a reason.
Take care.
FA
RESPONSE: So many people just make forecasts based on opinion. Mainstream media would NEVER put me on the air because I would contradict their mainstay of putting out propaganda to get you to tune in again and again. Markets are propelled by energy. There is simply a finite level of energy that CAN be exerted in a single direction. It is the pendulum.
The swing down provides the short cover for the rally. Rally to a high, which will cause the energy to decline. NOTHING goes straight up or straight down. The 1987 Crash was the same thing. I said the market bottom was in place the very day of the low. As Larry Edelson said, people thought I was crazy. We called the high, the Crash, but also the low.
Here are our Energy Models. Note how energy was declining to a high, showing that you were running out of steam. Then, energy rose sharply with the decline. But look at the Monday low—the energy was subsiding. I try to teach people how to be an international hedge fund manager at these conferences. This is also why they are making a Hollywood movie about what I have done. They understand that there is a better way to run the world than always trying to manipulate things for self-interest. They are also doing a Documentary, the Forecaster 2024, showing all the forecasts they recorded 10 years ago and how they came true. They understand this is NOT MY PERSONAL OPINION!
I know a lot of people are looking at the Economic Confidence Model. Some plagiarize it, while others pay attention silently. This is NOT going to be the classic recession. There is a lot more behind this than meets the eye.
Confidence in the very structure of the nation has been shaken amid this private wave where all trust in the government has been lost. A new Pew Research Center poll found that 72% of Americans believe the United States – the land of the free – is no longer a good example of democracy.
Those 72% say that America was once a good example of a democracy for other nations to follow, with only 19% still trusting in its structure. Americans over 50 trust in democracy a bit more than younger generations (11% vs 4%) likely because they are less likely to face the new reality of our broken economy where the American Dream is no longer attainable.
Those most closely aligned to America in terms of economics are more likely to say the US is no longer a good example of democracy (Canada 67%, Japan 65%, UK 63%). Younger generations everywhere now believe America was never a good example of democracy as they have only seen the nation in a state of geopolitical upheaval.
A separate poll with information from Pew Research Center, National Election Studies, Gallup, ABC/Washington Post, CBS/New York Times, and CNN surveys, Americans were if they trust the government. Trust heightened, in line with the ECM, in 1964 under President Johnson with a trust rating of 77%. Trust plummeted when President Nixon became the first president to resign in 1974, with the moving average then standing at 36%. Individual polls then showed confidence moving to a new low of 25% by the end of President Carter’s administration, in line with the economy as always.
Trust in government then peaked at the beginning of George W. Bush’s term in office, with individual polls rising to 60% in 2001 and overall stats hitting 54%. Now, 2001 marked the 9/11 terrorist attack on the Twin Towers that shook the nation at its core, spreading a wave of patriotism across the United States. Everyone trusted that the government would seek revenge and keep the nation safe from future attacks. We permitted countless laws to pass, like the Patriot Act, because we trusted the government to protect us.
By the end of George W. Bush’s term, no one knew what we were doing in the Middle East and were questioning the “weapons of mass destruction” premise. Individual polls plummeted from 60% to a mere 17% in 2008, with overall sentiments not faring much better at 24%. Trust in government has never surpassed 30% on either poll since.
The moving average of trust in the US government now sits at 22%. Politics have never been more divided. The majority of the country questions in the president is mentally fit to serve. Congress is blatantly corrupt. The coronavirus pandemic changed everything and shook the nation as badly as 9/11, but the people ran from government rather than towards it.
Our computer indicates the American economy subtly slipped into a recession, and things will worsen until 2028. We find this same phenomenon of trust in government declining globally and it is all in line with the Economic Confidence Model. Distrust will only grow as economic conditions worsen. By 2032, as indicated by the models, we will have a chance to rebuild and regrow at the end of the Sixth Wave, which will be the equivalent to the fall of ancient Rome.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
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