COMMENT: Marty, I was cleaning out my office. I get around to once every 31.4 years, and I found your report that was controversial back in 1990 when you were at war against the fundamentalists who were always getting it wrong, as they still do today. I scanned it in and thought you should post this for the newcomers. You invented capital flow analysis, and you may not qualify for a Nobel Peace Prize since you advocate for peace rather than war, but you are in a category all by yourself. Being a trader rather than an academic who was in the trenches rather than in an ivory tower. People need to know that.
See you in London
SK
REPLY: Very interesting. Yes, they always use war to cover up something else. Hitler and Napoleon were trying to resurrect the old Roman Empire over all of Europe. The days of empire building inspired by the Physiocrats that the wealth of a nation was agriculture, so you conquered nation after nation are long gone. Adam Smith wrote his Wealth of Nations to challenge the French Physiocrats and their view that only agriculture was wealth. He argued that it was the total productivity of a nation that constituted its wealth.
Then along came Marx, and the wealth became labor, and he tore apart the economy out of jealousy. He attributed nothing to human imagination, the source of all economic advancement. Communism proved that the government was incompetent in regulating or developing the economy.
Smith was NOT an academic. He went out to observe how everything truly functioned. The socialists hate Smith because they follow Marx and want to force the economy to function the way they think it should. They reject any concept of a business cycle and come up with stupid theories like Random Walks, for that means that they can then manipulate society because it is all just random.
They are now all in a tissy. The government wants to REGULATE AI, and Biden put our illustrious VP in charge. There is a real threat that they will regulate what they do not understand and, in the process, destroy the industry, as they did with investment advice and force people offshore, giving birth to the Hedge Fund Industry.
Posted originally on Mar 11, 2024 By Martin Armstrong
In law, it has been a maxim that bad facts make bad law. Every lawyer knows that. That is why the government will seek the worst case to expand the law and apply it to others. This legal maxim is certainly not new. All of those who go to law school are never taught that this maxim was, according to my research, first stated by Julius Caesar in 63BC during the trial of the Cataline Conspiracy, which was the alleged scheme to over through the government no so different from the allegations against Trump in the January 6th event they have called an “INSURRECTION” to desperately try to apply the 14th Amendment that was written concerning the American Civil War.
In 63 BC, Julius Caesar delivered a speech to the Roman Senate where they had to protect him from corrupt senators like Cicero. This alleged conspiracy was led by the patrician Catiline, whom Cicero set out to prosecute because he was of the opposition. The allegation was that he intended to overthrow the Roman government. Cicero did his best to deny Catline every right a Roman would have in a legal constitutional sense. Cicero whipped up the mob, demanding their execution against the law. When the Roman Senate convened, Cicero stood up and asked what should be done to them, and his co-conspirators shouted out death.
The historian Sallust recorded the incident and tells us that Gaius Julius Caesar stood up and explained that Roman law forbids the execution of Roman citizens even for heinous crimes. He argued that executing the conspirators would thus require the creation of a radical and dangerous precedent in and of itself that would really overthrow the legal foundation of the government. Caesar argued:
“Whatever befalls these prisoners will be well deserved; but you, Fathers of the Senate, are called upon to consider how your action will affect other criminals. All bad precedents have originated in cases which were good; but when the control of the government falls into the hands of men who are incompetent or bad, your new precedent is transferred from those who well deserve and merit such punishment to the undeserving and blameless.”
I have explained that we have entered very dangerous times. Most historians have concluded that the entire conspiracy was invented by Cicero for his own political advantage. The fact did not add up to any true plot that would have even been remotely successful. They were summarily executed after a fierce senate debate without any constitutional rights on December 5th merely on the fake evidence of Cicero.
What they have unleashed against Trump is EXTREMELY dangerous. The allegations and summary execution of the fake Cataline Conspiracy by Cicero was a turning point that ultimately led to the Civil War and the collapse of the Roman Republic 13 years later. When we reach 2032, it will be also about 13 years from the entire conspiracy that began in 2019 to overthrow the United States as we have known it.
These prosecutions of Trump have done the same damage as the Catline Conspiracy – bad facts make bad precedent. They subjected Trump to two impeachments, and naturally that only provides an incentive to the Republicans to do the same to Biden. We now have confirmation that Fani Willis met with Kamala Harris BEFORE Trump was indicted. In New York, the courts are so corrupt that they are desperately trying to use legal persecution to bankrupt Trump. Even a $91 million award to this politically motivated E Jean Carroll or anyone else with such an absurd judgment would be dismissed by a real judge. There is no relation to any economic loss; she would never have earned that kind of money in her entire lifetime.
New York City should be kicked out of the United States because, like California, it opposes Due Process and everything that the Founding Fathers ever intended. The Rule of Law has collapsed, and with it, our nation, just as the Catline Conspiracy tore the soul out of the rights of Roman citizens. This was just one reason why Caesar crossed the Rubicon. It was the Senate that fled because the people never saw them as worthwhile—just corrupt political to rig the game.
History Repeats because Human Nature Never Changes
Posted originally on Mar 11, 2024 By Martin Armstrong
My January 2020 interview with Andrew McCreath from BNN Bloomberg came up in recent conversation, and 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. Some unfamiliar with my work merely looked at the headline “DOW 40,000” and dismissed my forecast as if it were my personal opinion. The Dow was 29240 on the day of the interview and while many feared a correction was coming I explained any dip was likely short-term in nature that that it would need to drop below 19000 to be truly considered a bear market and – 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.
Now, those same analysts are mad that they missed the entire bull market. The short-term forecast called for a dip in 2020 and a chance to get in on the action (and COVID provided that dip in spades), but I explained that there would not be a change in the long-term trend as my computer indicated we would enter a private wave that would peak in 2024 and go off into a half-8.6-year cycle into 2028. This was all indicated by the computer system as no individual could have foreseen the events that have unfolded over the past four years.
All of the models were heating up for 2024. This is why we focus primarily on the long-term, and closely monitor capital concentration – follow the money. There was trouble in Europe and Asia, so the capital needed to flee, and that safe haven happened to be the US. It is America’s final years as the leading financial capital of the world as historically it always changes. America dethroned Britain after World War II and China is on it’s way to dethrone America after 2032.
I also pointed out that inflation would be the focal point for 2024, leading to interest rates changing and becoming a key factor for central banks globally. Volatility paired with the private wave, where capital must escape the public sector, would also lead to an uptick in the commodity cycle.
The business cycle cannot be manipulated, but it can be analyzed. However, that’s not how most market analysts work. Long-term, macro requires looking at every market throughout the globe, studying past behavior through historical patterns in price and time. The models do a tremendous job doing this.
Now, everyone is praising the rising Dow that will touch the 40,000 level. Of course, it is easier to say that now that we are almost there. Again, few believed me back in 2020, but here we are. Governments throughout the world are still in trouble and the money remaining on the grid is fleeing into the US. This is another reason why I watch the Dow a bit more closely than the S&P 500, as it provides a more accurate indicator of the big foreign money piling in from throughout the world.
For those who wrote in asking if I still stand by my claims – yes, the computer is still indicating that we are looking at a Dow that could rise to 65,000 by 2032, when we are likely to see a change in not just the markets but governments worldwide. I wish I could tell you something different.
Posted originally on Feb 29, 2024 By Martin Armstrong
The Dow exceeded the January high and closed February at 38,996.39. The NASDAQ composite has yet to exceed the 2021 high despite the AI Bubble. This still reflects the international capital flows, and our Chaos Models show there will be a trend emerging with a gap between the main turning points ahead. The atmosphere of WAR is impacting the market and the capital flows. Comments from Macron calling to send in troops to Ukraine to prevent somehow its fall, which is inevitable, has only led Putin to say that then opens the door to nuclear warfare.
They are determined to start a war this summer before the 2024 US elections. Both European leaders, NATO, and the Neocons are living in sheer terror of a Trump victory, for he is anti-war, CBDCs, and climate change. If they cannot prevent Trump from taking the White House, I fear they will assassinate him, for there is way too much at stake for these people. I would be very concerned about July, for things appear to be heating up and going into Panic Cycles in many markets come August/September.
We have reached our target of 40,000 we set back in 2011. Our resistance now in the Dow, given a continued rally, is forming at the 42,000-43,000 area. Exceeding that overhead barrier opens the door to a test of 50,000.
Posted originally on Feb 26, 2024 By Martin Armstrong
COMMENT #1: I was there at your 2011 WEC. I was dragged along by a friend. I remember well your forecast for war starting in 2014 and your forecast that the Dow would go to 40,000. I thought you were crazy. I bet my friend $100 you would be wrong. I had to pay up. Here we are at 40,000 and the Ukraine war started in 2014. I have to admit, I now see why institutions line up at your door and the government wanted your model.
You are a gift to mankind when we need clarity more than ever.
Thank you. It was the best bet I ever lost.
EP
COMMENT #2: everyone thought you were crazy years ago when you said dow 40000–here we are. it all came true.
ok see you soon
Brent
COMMENT #3: You are the only analyst who is consistent. I appreciate it is not your personal opinion like everyone else. That forecast the Dow would reach 40,000 is here and so is the war.
Stay safe. My whole family now listens to you.
HW
REPLY: Because my father was a lawyer who always hoped he would put “and son” on the door, I disappointed him in that regard. For whatever reason, I was always fascinated by what made the rise and fall of markets as well as empires, nations, and city-states. He did teach me about law from probably 7 years old. He handed me Aristotle to read for one summer. I handed that to my son in the family tradition when he became a teenager. Yet he also instilled an interest in history. I bought my first Roman coin for $10, probably when I was 10 to 12 years old. I could hold history in the palm of my hand. I saw the US take silver out of the coins in 1965, and I saw the parallel to Rome and how the same pattern emerged.
I also have to thank him for seeing the future of computers and pushing me into computer engineering, where in the ’60s, we had to study hardware design as well as software. I learned to code in machine language and connected the dots between programming and trading in the ’70s. Taking the family to Europe for the summer of 1964 opened my eyes to the world of currencies since we traveled all over from Sweden to Italy and everything in between.
That all set the stage for this journey I have been on, which I never set out to accomplish. Nevertheless, because of that worldview instilled in me by my father, I saw the world of finance, and that 1964 trip taught me, moving from one current to the next, that my home currency was really a mental language of value. I would have to listen to the price in whatever currency and then convert that in my head back to dollars. Only then could I rationalize if it was a fair price or not.
Visiting jail cell of Athens
Thus, I designed Socrates to look at the world and determine who will do what, for everyone will make a judgment call based upon their home currency, which is a language of value in their head. Here, you can see how the same market appears differently depending on your currency. I chose the name Socrates because he was really accused of knowing too much. They put him on trial for influencing the youth and executed him for sharing that knowledge.
All of that set me on the path to where I am today, but it also taught me a lesson that opinions are not the way to forecast. I probably have more experience than most. I have been to White House dinners, been on a board of a bank, met with board members of IMF and heads of state, addressed boards of the largest banks internationally, been an international hedge fund manager, and been called in by so many central banks as well as testified before Congress and been called in for just about every financial crisis around the world. That’s just the shortlist.
Because I specialized in currency, that has put me in the middle of almost everything since the 1970s. Currency was the mover and shakers behind the politics of the world. It was far more than simply trading buy here and sell there. It is why the CFTC had even subpoenaed me, demanding a list of all my clients worldwide so they could prove I manipulated the world because I was too influential in their view. I defended in court and won. They were always seeking to shut down the forecasting.
History repeats because humanity never learns. These people who push for war have no end game. Nobody ever seems to ask – what comes next. They took down Saddam Hussein and never once asked: What would happen if you overthrew a government?
They are doing that again with Russia. Victoria Nuland is highly dangerous. She personally hates Russians, and nobody has a view of what would happen if you overthrew the Russian government. Would you then have nukes for sale on the black market?
I have been behind the curtain. I have never witnessed such evil and incompetent people in charge. I suppose this is necessary as we head into 2032. I want to stress that these forecasts are NOT my opinion. They are not based on anything other than the raw economics and capital flows. They are not based on religious philosophy, nor did I introduce astrology. They are the objective view of the computer, the ONLY fully functioning AI system in the world monitoring the global economy with a track record of nearly 50 years.
Yes, people are saying I should float it now. It would be worth hundreds of billions. I don’t have the time or the energy to take that on now, and I have more than enough to support me until Scotty beams me up. Nobody respectful has been beating down my door who would maintain my dream to ensure it helps the world – not a small WEF billionaire click.
Posted originally on Feb 19, 2024 By Martin Armstrong
Germany has overtaken Japanto become the world’s third-largest economy behind the US and China. Japan’s economy contracted by 0.4% in Q4 after a 3.3% decline in Q3. GDP hit $4.2 trillion in Japan in 2023 compared to Germany’s $4.4 trillion.
Japan’s economy is expected to grow by 1.4% this year. Still, Bank of Japan governor Kazuo Ueda held rates negative and warned that the future policy presented an “even more challenging year” ahead. The current interest rate in Japan is -0.10%, as the central bank falsely believed lowered rates would attract investment and stimulate the economy. The Bank of Japan has maintained a negative interest rate policy since 2016 without success.
Japanese public debt is a serious issue and now stands around $9.2 trillion (1.30 quadrillion yen), or 263% of GDP, and is the highest of any developed nation in relation to GDP. Around 43% of that debt is held by the Bank of Japan, and they have been unable to attract investors.
Inflation is gradually easing in Japan, with December producing a 2.6% figure in contrast to October’s 3.3% posting. However, Japan is becoming increasingly involved in overseas battles and recently sent another aid package to Ukraine in solidarity with the West. North Korea is constantly provoking the nation, and the situation in Taiwan is scaring away would-be foreign investors.
This shift in rank is not due to the German economy growing stronger. Germany is in a tough situation thanks to those in Brussels who eliminated its energy independence and implemented harsh regulations on every sector. There was once a time when people referred to Asia’s market as “Asia and Japan,” as Japan was the top runner for the continent. Various factors are contributing to Japan’s decline. I discuss this topic in further detail in the report “The Last Days of Japan.”
Posted originally on Jan 31, 2024 By Martin Armstrong
Join Kerry Lutz and renowned economist Martin Armstrong for a captivating discussion centered around the Socrates computer model’s uncanny accuracy in predicting political and market trends since 1985. Discover the model’s compelling projection of a 61% chance for a Republican victory in the upcoming 2024 election and its implications for the political landscape.
Delve into the erosion of confidence in government, potential election irregularities, and the profound impact of deviations from historical election norms. Gain insights into the influence of various political agendas, including discussions about veiled threats and the involvement of influential figures like Klaus Schwab and George Soros in funding Democratic elections.
Transitioning to market forecasts, Martin Armstrong reaffirms his earlier prediction regarding the crucial turning point in January. Explore the far-reaching effects of global capital trends on stock markets, with a focus on how geopolitical events shape investment decisions and influence various stock market indexes.
The conversation also tackles pressing economic issues, such as the potential consequences of increased taxes and selective debt default, the dollar’s reserve currency status, and the challenges faced by farmers and migration trends within the United States. Despite technical challenges, Kerry Lutz and Martin Armstrong exhibit adaptability and resilience, making this discussion a must-watch for those seeking insights into the ever-evolving world of politics and finance.
Posted originally on Jan 14, 2024 By Martin Armstrong
QUESTION: Mr. Armstrong, My wife insists that I write to thank you for making me invest in stocks rather than gold. We split the money, and my wife invested in the Dow with your 2015 ECM turn, and I kept the gold. She beat me on the Dow since it closed in 2023, up about 250%. After reading your input into history, am I correct that this argument of fiat currency is erroneous? It seems like civilizations have risen and fallen, no matter the money system at the time. Could you elaborate on whether this is true or false?
Disappointed goldbug.
ANSWER: Not many men would admit their wives beat them in investments. Many things have been used for money, from bronze and clam shells to emergency paper currency. Those who insist that somehow gold is the only thing that is money do not know their history, and in the process, they have been misled seriously, which actually prevents them from seeing the real problem. Bitcoin is not money nor a medium of exchange because not everyone will accept it. A medium of exchange has to be something that everyone accepts.
There is a common theme that runs through ALL forms of money, and it has NOTHING to do with what is being used as the medium of exchange.
If we are objective, even metal has varied. Bronze was valuable because it could be used to make a tool or a weapon – hence the Bronze Age. It was first used in an ingot form. However, it was cast in the shape of an earlier form of money – sheepskins. Thus, the story of Jason is in search of the golden fleece.
The Romans cast bronze into ingots, and the value was equal to one head of cattle. The first coins of Rome are also bronze, beginning with just lumps and then taking the standardized weight and shape. In Turkey, they began with what was known as electrum, which was a natural alloy mixture of gold and silver found in the riverbeds.
The official first coins were struck in Lydia, modern-day Turkey. This was the first “fiat” money since it was declared a standard value by the king, who applied the image of a lion. This was his badge, certifying its value and weight.
For example, there was a metal that was second to gold, which was really just brass. Orichalcum was the legendary metal of Atlantis, whose buildings were said to have been clad in this rare metal that looked similar to gold. Orichalcum was mined in Atlantis in ancient times, but by the time of Plato, this metal was unknown. Orichalcum was a legend by Plato’s time when he mentioned it in his story of Atlantis in the Critas of Plato. Critias (460–403 BC) says that Orichalcum had been considered second only to gold in value and had been found and mined in many parts of
Nero also experimented with issuing the traditional bronze coinage in Orichalcum (brass). In order to render the Dupondius distinguishable from its half-denomination, Roman As a radiate crown was added to this denomination, leaving the traditional laurel wreath style portrait for the Roman As. The Dupondius reform prevailed until the end of Dupondius’s regular issues, while the experiment in brass died out following Hadrian (117-138AD).
A gold standard will not solve the problem because it is NOT what is being used as money but the system. If governments issued platinum coins and claimed these are worth $100,000 each, that is also fiat, where the government decrees the value. This common thread that runs through everything is the trustworthiness of the government. As long as we have socialism, where politicians promise things, they will always create more money to accomplish that. DEBT = MONEY that pays interest. People also point to the Fed and overlook the fact that it is Congress that creates the money by issuing debt that can be used as an asset in a loan.
Gold will not solve the problem. We need political reform FIRST and then worry about constraining government thereafter.
Posted originally on Jan 10, 2024 By Martin Armstrong
According to a recent survey by theNew York Federal Reserve, Americans’ inflation expectations have dropped to the lowest level in three years. “How much worse could it get?” the average person assumes. The median expectation is that the inflation rate will be up 3% one year from now, down from a high of 7.1% recorded in June 2022. The survey found that Americans anticipate wages rising by 3% to meet their inflation expectations. Consumers have not been this optimistic since January 2021.
However, the people still anticipate that inflation will remain above the Fed’s 2% target in the longer term, with projections of around 2.6% three years from now and 2.5% five years from now. The Federal Reserve’s last forecast states inflation will decline to 2.2% in 2025 before reaching its lofty 2% target in 2026.
The year began with a massive disruption in the global supply chain and increased cargo costs. There are countless protests occurring among farmers across the world who disagree about the future of crops and food price stability. The leading driver that is not discussed – WAR! America is funding two major conflicts at the moment and sinking deeper into debt. The extreme geopolitical uncertainty and risks associated with war always lead to higher energy prices, increased production costs, and massive government spending, further fueling inflation.
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