Tag Archives: Waterfall event

Sep 13 2019

Stocks rise with Rising Interest Rates & Falls with Lower Rates


Armstrong Economics Blog/Basic Concepts

Re-Posted Sep 13, 2019 by Martin Armstrong

QUESTION: I mentioned that you said the stock market rallies with rising rates and declines with lower rates to an analyst. He said you were wrong and everyone knows that is not true and President Trump just came out calling on the Fed to lower rates to zero of negative.

You have only showed 1929 as your example. Can you support your argument otherwise?

Skeptical

REPLY: Well skeptical, we need people like you on the opposite side. It is not my job to convince you. Trump is a borrower and only sees the world through his personal experience. The people with savings and pension funds are being wiped out. That is a statement he has made which is HIGHLYdangerous and proves I do not advise Trump which seems to be a Democratic accusation running around.

 

I do not care what period you look at. This notorious group of “everyone” illustrates that if you tell a lie long enough, you yourself will believe what you are saying. These people constituting everyone just repeat what others say without any verification whatsoever. They even teach this nonsense in school. I had one student who said his professor was teaching the same nonsense.

I fully understand that the talking heads on TV also portray the stock market from the borrower’s viewpoint just as Trump has done. Not everyone borrows and the big money does not. So if people believe what they want to believe. I prefer to assemble the largest possible database, correlate everything, and see how the world REALLY ticks. So believe what you want. There are always two-sides to a market so I fully respect that it is ABSOLUTELY vital that the major be on the wrong side for that is what makes the markets move.

Categories: Basic Concepts
Sep 11 2019

Japan Still Declining into 2021


Armstrong Economics Blog/Japan

Re-Posted Sep 11, 2019 by Martin Armstrong

QUESTION: When I saw your blog saying 2019 will be really crazy and chaotic year for Japan (Feb 2019), I was curious how bad it could be. It is always amazing to see how you and your Socrates turning point manifest in the real world. I was astonished when Japan restricted exports of critical materials used in South Korea’s high-tech semiconductor industry right after G20 Osaka Summit. A trade war is generally initiated by a deficit country. This decision was not only opposite but might lead to devastate their own industry and disrupt the world IT markets. It seems to be a political stance for the upcoming Japan Upper House election but connects further deep into friction between Korea and Japan history. Insane year for Japan indeed, thank you for your great work and efforts providing new perspectives to the world.

Q: With all that sovereign debt how do you see the future of Japan will be?

HJ Kim

 

ANSWER: Our forecast was covering economics, which then causes political responses. As I previously reported, the Bank of Japan (BOJ) Governor Haruhiko Kuroda publicly stated that it may maintain ultra-low rates for a further period of well over a year. However, he also warned against the idea of propping up the economy through unlimited money or printing to finance government spending.

The Bank of Japan is trapped. Its holdings of the national debt have reached nearly 50%. The BOJ modified its forward guidance or pledge on how it will guide future monetary policy. It stated that current very low interest rates will continue at least until the spring of 2020. Without the BOJ buying government debt, there is ZERO hope that interest rates will rise dramatically and a financial crisis will be in the making. The BOJ will keep rates low for an extended period of time for they have no choice. There is no way out of this nightmare and the real inflationary cycle comes when the majority wake up and realize that the emperor has no clothes, and that means the central bankers worldwide.

There remains a capital flight from Japan and the more they keep these policies up, our model does not show that their economy will recover. We are looking at the absolute low perhaps forming as early and the middle of 2020 but more likely into mid-2021. This will prompt the Monetary Crisis to spark political change.

Sep 10 2019

Can AI Think?


Armstrong Economics Blog/AI Computers

Re-Posted Sep 10, 2019 by Martin Armstrong

QUESTION: In George Gilder’s book “Life after Google” he states:
“AI cannot compete with the human intelligence that connects symbols and objects. AI cannot do without the human minds that provide it with symbols systems and language; programs it; structures the information it absorbs in training, whether word patterns or pixels; provides and formulates the big data in which it finds numerical correlations; and sets up the goals and reward schemes and target sequences that allow it to iterate, optimize, and converge on a solution. Consisting of inputs cascading through complex set of algorithms to produce outputs. AI cannot think at all.”

As someone who has developed Socrates I was wondering what your thoughts are as to the future of AI?

CSK

ANSWER: George Gilder is not a programmer. His comment is just skimming the surface. There is no complex set of algorithms that will stand the test of time. A computer cannot think, which is correct. That does not mean it is impossible to beat humans. Even Big Blue defeated the best chess player. A computer can analyze every possible strategy and select the best one whereas a human cannot.

When I designed Socrates, I fully understood that there could be no fixed algorithm that would work because the world was all connected and moving dynamically. After all, no empire ever lasted. Everything rises and then falls.

Feeding everything into the system and designing it to investigate, as I would in the human world, allows AI to make decisions based upon those investigations. It does mimic my thinking process, but it is not a biological entity so it has no soul and cannot think.

I taught it language and how to speak back in the 1980s because it would come up with conclusions that baffled me. I had to devise a way to communicate with it to understand how it reached certain conclusions.
Categories
Sep 8 2019

Fixed Exchange Rates Have Always Caused Major Financial Crises


Armstrong Economics Blog/Economics

Re-Posted Sep 8, 2019 by Martin Armstrong

Margaret Thatcher on the ERM Crisis & why even the euro will f

Sep 7 2019

All Bob’s Money


Armstrong Economics Blog/Politics

Re-Posted Sep 7, 2019 by Martin Armstrong

 

Sep 6 2019

Currency Which Expires – That’s the Solution – Or Just Cancel it all?


Armstrong Economics Blog/Economics

Re-Posted Sep 6, 2019 by Martin Armstrong

Back during the Great Depression, there were people who theorized that gold hoarding was preventing economic recovery. There is always this same theory that people who save hoarding their money and are not spending it results in the lack of a recovery suppressing demand. This theory has been around for a very long time. It assumes a recovery is always blocked by people hoarding their money and saving for a rainy day.

Back during the American Civil War, the federal government issued paper currency for the first time after the Revolution. Much of this currency paid interest. Some were in the form of virtually circulating bonds with coupons for the interest payments. Some were backed by gold. Others offered a table on the reverse providing a schedule. The interest baring notes remained valid currency, but the interest expired within a specific time period. Hence, one would redeem the note since it would no longer pay interest beyond a specific date.

The rumbling behind the curtain I am hearing is a growing idea of making the currency in Europe simply expire. I have explained before that in Europe currency routinely expires – even in Britain. The United States has never canceled its currency so a note from the Civil War is still legal tender. But that is not the case in Europe.

Europeans are accustomed to having their money simply expire. This is not limited to paper currency. They also cancel the coins. The proposal being whispered in the dark halls of Europe is that perhaps the way to impose negative rates to force people to spend is to just cancel all the currency and authorize only small notes for pocket change. They want everyone to be forced to use bank cards and this is the new theory to revitalize the economy.

The chart patterns for the Euro are about as long-term bearish as one can imagine. The problem facing the world economy is this idea that they can even FORCE people to spend their savings recklessly as the government does. Canceling the euro may be a drastic and desperate step, but it is being proposed as an alternative to deep negative interest rates which have failed to work for more than 10 years. The middle ground proposes a paper currency with expiration dates.

Either way, the risk of a profound dollar rally remains in the wings. The powers behind the curtain desperately want to defeat Trump for they know he would NEVER cancel the American currency. To pull that off, they need a career politician. Joe Biden would be perfect. He might just sign whatever bill is put before him and then take a nap. It is ironic, but there would be a lot of Americans who would wake up and want Trump bank after that one. Joe would be too tired to tweet.

 

 

Sep 6 2019

The Club & Why the Majority Must be Always Wrong


Armstrong Economics Blog/Training Tools

Re-Posted Sep 6, 2019 by Martin Armstrong

QUESTION: Mr. Armstrong; I did my own research on the 1998 Russian collapse. All the big names lost billions. Even the New York Times reported that George Soros lost $2 billion. You were the only one who made money so it made sense that you were named hedge fund manager of the year in 1998. My question is this. Since all the big names were involved in the Russia trade which took down Long-Term Capital Management, is this why you call them the “club” for they all do seem to be involved in the same trade?

DU

ANSWER: Correct. This is also why they try to prevent people from listening to me. They are convinced that the reason they lost was that I was too influential and had too many institutions listening to me. That absurdity is what they ran to the government with, so I was then accused of “manipulating” the world economy. They all lost after I warned them and refused to join in their takeover of Russia I believe I was given the nod by the Clintons. They told me they had the IMF in their back pocket and they would continue to fund Russia. I warned them that the IMF got their funding from governments and they were not going to back it.

The Russian financial crisis hit Russia on the 17th of August 1998. Our World Economic Conference was held in London that June. Our forecast was then published by the London Financial Times on the front page of the second section.

They did not give up. After they got the Federal Reserve to bail them out, they then focused on setting up Yeltsin and got him to divert $7 billion in IMF loans. Even CNN reported the money was stolen from the IMF.

CNN Theft of IMF Money – Sep. 1, 1999

Edmond Safra’s Republic National Bank ran to the Department of Justice and then reported that a $7 billion money laundering scheme just went through Bank of New York. They attempted to blackmail Yeltsin to step down and appoint their guy; Yeltsin then turned to Putin. It was the US bankers, with the support of the Clintons, who first tried to interfere into Russian elections. This is why Putin was not friendly to Clinton and said Mueller could come to question anyone in Russia he liked, provided Russia could question Americans including Bill Browder who was Safra’s partner in Hermitage Capital.

While “The Forecaster” was shown even on TV throughout Europe, Canada, and Asia, the question is WHY was it banned in the United States? If it was just a conspiracy theory, they could care less. When something strikes closer to home, they ban it.

Sep 6 2019

The World through Everyone’s Eyes


Armstrong Economics Blog/Basic Concepts

Re-Posted Sep 6, 2019 by Martin Armstrong

COMMENT: Sir,

I appreciate that I may not always agree with what you write but I listen and examine and respect your viewpoint. You, in turn, have answered my many questions and discussed my comments with respect in return.

This makes me worry that the ability to discuss problems in a straightforward and thoughtful way may not be possible in the future.

Keep up the good work

F

REPLY: In order to be an international adviser, the very first lessons I learned was (1) listen to everyone, and (2) view the world through their eyes.

I was giving a lecture in Geneva to a small group of institutions back in 1982 but some had flown in from other countries. One was from Canada and the exchange was quite interesting. I had provided the forecasts on the individual currencies and then I moved to the commodities. The Canadian asked so he should be a buyer of gold and I said yes. The on Swiss institution said yes but your forecast on the Swiss franc would mean I would lose money.

When I looked at it in terms of each perspective it was clear. The rally in gold would be impressive only in US$ and CD$ so it was a buy for the Canadian and a sell for the Swiss. Indeed, the rally into 1983 was a strong rally for gold in US$ and CD$, but not in Swiss.

We all have a view and money to each of us is still a mental calculation based upon our home currency. To even do my job, I have to be able to see the world from all perspectives. We are all human and we will all act in our own self-interest.

My clients have trained me. Having to deal with many crises around the world forced me to see the world through global eyes. This is why MY DEFINITION of what constitutes a bull market is something which rises in ALL CURRENCIES!!!!! 

We will all never agree for we will always see things through our own pair of glasses. Never forget, others will respond in the same way.

My philosophy is very simple. There should be no law which compels others to act in a way I believe if correct provided their actions do not harm anyone else. I leave you alone and you leave me alone and we can all get along. I object to politics that seeks to exploit class warfare for historically that has ALWAYS, and without exception, led to civil wa

Sep 3 2019

Lebanon Declares State of Economic Emergency


Armstrong Economics Blog/Economics

Re-Posted Sep 3, 2019 by Martin Armstrong

Lebanon has maintained a peg to the US dollar for about two decades and as all pegs go, this one is under pressure as the rise in the dollar imports deflation. The central bank has declared an economic emergency as it attempts to reassure people it will hold the peg. Lebanon is one of the world’s most indebted nations and it maintains its pound to a peg of around 1,507.5 to the dollar. This attempt to reassure investors about the country’s ability to repay its debt and strengthen its currency is not being considered reliable as the start of Sovereign Defaults is underway on an economic pressure. Countries have been borrowing year after year with no intention of paying off their national debts. It has been a fool’s game and we are starting to see this pressure build as it will FIRST on the currency pegs, and then on the inability to meet debt payments.

Welcome to Big Bang (2015.75-2022). We begin with peripherals and state/provincial level as well as municipal

Sep 3 2019

Only a Computer can Forecast What no Human Has witnessed in Modern Times


Armstrong Economics Blog/AI Computers

Re-Posted Sep 3, 2019 by Martin Armstrong

COMMENT: Marty; I found my ticket to your Japanese session from March 1999 when you warned the audience the club was targeting the yen for March-end. You told everyone how to defeat their manipulation and that was just great. You saved everyone billions that day. They called you Mr. Yen for that one. The club didn’t appreciate that call. I heard that on the phones. I remember the yen went from 117 to 122. They lost a lot that week.

I am coming to this 2019 WEC. For someone who has been following you for decades, I understand what you mean that this is an event that has never taken place before in modern market history so we will really need Socrates this time.

May I suggest that you give a quick demo on how to use Socrates to its fullest for this event. I think it would be really helpful this year.

Cheers;

GC

REPLY: Nice to hear from you. Wow, you still have a ticket from Tokyo. That is an excellent suggestion. You are correct. I will do a demo and show how to look for the indicators because it will indeed take a computer to do what no human has ever seen before in modern times.

All the best