Tag Archives: world bank

Jan 13 2023

Our Extreme Long-Term Model Forecasting Tools


Armstrong Economics Blog/Training Tools Re-Posted Jan 13, 2023 by Martin Armstrong

QUESTION: Mr. Armstrong, Your reputation precedes you. They call you the legend because you have been the only analyst who forecasts events years in advance. Throughout the rise and fall the stock market, you called for only 2 year correction from 2000 and 2008 and the market would remain in a bullish trend. I read that Barrows piece on you where it seemed they laughed at your forecast I think in 2010 when you said the market would rally and make new highs. You did the same in 1987. My question is, do you have a particular indicator that allows you to see the long-term like that in the stock market?

PE

ANSWER: This is why I stress that to be a successful trader, you have to conquer your emotions. I was always institutional. Our reports were too expensive for the retail world for they use to go out over telex, which would cost $75 alone per transmission back then. That is why we opened offices around the world to reduce delivery costs. We would send one transmission to that office and they would redistribute it to the clients in that region. We are gathering all our old forecasts that were in storage and will try to assemble them on annual basis for reference.

When FAX became common, we moved to that delivery system and that brought the costs down dramatically. Today, it is email and that is all free. So that is why we became the largest institutional adviser. However, because our clients were institutional, we had to specialize in reliable long-term forecasting. Day traders were not our focus.

We developed our Extreme Long-term trend indicator. This has successfully calculated that these corrections where everyone calls will be the next Depression were only short-term corrections. The calculations are extensive, but this indicator has been used by our Institutional Clients to provide underlying confidence in what is REALLY unfolding in the markets on a broader basis.

These are the charts I was showing at our institutional sessions around the world going into 1985. This indicator was starting to take off on the Quarterly level in 1982. It was fully outright bullish in 1984 on the Yearly Level one year before the ECM turned in 1985. This is why I ended up advising a few of the takeover players back then who they ended up making the movie Wall Street about with Michael Douglas and his famous speech on greed.  What the movie did not explain was that the book value declined so much that we could buy companies, sell their assets, and double or even triple our money. I was warned that we were entering a takeover boom.

We took out the back cover of the Economist in July 1985 to forecast that the deflation was ending and a new Private Wave was beginning that would eventually peak in 2032.

The ECM even picked the high in the interest rates at the Fed. Our long-term forecasts have been amazing. They even impressed me. As I said at the last WEC, nobody has tried to defeat these models more than me. True, I do not like their project into 2032. But that is my personal opinion which is not something clients rely on. We all know that the forecasts can only come from Socrates. These indicators have been reliable and you cannot forecast the future from a personal gut feeling.

Jan 12 2023

Russian Black Fleet Heads to Sea


Armstrong Economics Blog/Russia Re-Posted Jan 12, 2023 by Martin Armstrong

Russian Navy ships and submarines have suddenly left their base at Novorossiysk, in the Black Sea, en-masse. This is highly unusual and many fear that this is a change in tactics. The Western Press keeps trying to paint Russia as losing the war so, quite frankly, they can get more people to volunteer to join the military if they think they are on the winning side.  There is no question that the US and Russia are waging the most intense confrontation since the 1962 Cuban Missile Crisis. Our model on that confrontation aligned with our major war model showing that 2014 was the end of that period and the beginning of this new period as we head into World War III.

The hardliners are not happy in Russia and President Vladimir Putin is being pushed into a corner. Either he gets more aggressive, or they could be a coup. The hardliners are using nuclear threats and other escalations in what they know is now really a proxy war of the USA and NATO against Russia using Ukraine as the pawn they are willing to sacrifice.

Washington is wielding its own array of pressures to paint Putin as a loser. The good news is that, so far, both strategies have been fairly carefully calibrated. The bad news is that America and Russia are still on a collision course because the end goal is actually to conquer Russia.

Sweden has now instituted a draft. Poland is building its army of up to 250,000 men. All of this is based on the expectation that Ukraine can reduce the Russian army and that will make it a cakewalk to invade and drive tanks from Poland right into Moscow.

Sweden will boost military spending by around 40% over the next five years from 2016 and double the numbers conscripted into the armed forces as it looks to beef up its defence amid growing tensions with Russia post-2014. Meanwhile, France, Italy, Latvia and Lithuania scrapped conscription as they concluded that large-scale defence was no longer necessary before 2014, but now they have all reversed policies.

The Joe Biden administration pledged to defend “every inch” of Nato territory. That has complicated matters for Putin to interfere with Ukraine’s supply lines through Romania and Poland. The Western Press keeps pitching the same propaganda that Putin is spiralling toward defeat in Ukraine and may not survive that outcome politically. Yet I know that the hardliners are there and if Putin does not become more aggressive, they may indeed replace him by May and then holy hell will break loose.

Putin is warning Washington as well as Kyiv that attacks on those territories are tantamount to attacks on Russia itself. The Biden administration has opted not to listen to anything from Putin and only seeks war instructing Zelensky to sacrifice his own people and to reject any peace talks whatsoever. If the US hands Zelensky long-range missiles, he will use them to attack mainland Russia and that will begin World War III.

EVERY President throughout my entire life has always sought peace. The Biden Administration and NATO only talk about pushing war. NEVER have I ever witnessed such irresponsible leadership for this is really about Climate Change.

Jan 12 2023

The Real-World


Armstrong Economics Blog/Forecasts Re-Posted Jan 12, 2023 by Martin Armstrong

COMMENT: Marty,

Your point about foreign money buying US assets and then adding back money to domestic circulation is quite profound. The inflows from Asia, the Middle East, and Europe are enormous. These monies had to come from somewhere. They were a result of globalization, accumulating dollar assets offshore, or having to convert their currencies into US dollar assets. This was never taught in any of my economics, trade, or finance classes back in the 1970’s. Then, the US economy was still a manufacturing-based one and the concept of money taught then was still the Fed and how it conducted OPEN MARKET OPERATIONS. Today, the Fed competes with so many forces it can’t possibly do the job it was designed to do, which was to make the money supply elastic across the US…forget about international money flows, which today are so large, their vast team of financial experts can’t possibly measure much less track them.

The money supply and what is taught in schools are the problem. They have these terms for it: M1, M2, and M3…when in fact in a debt-based economy, money is debt, not paper. What gives it utility is the ability to facilitate exchange, But at its core, the key is confidence in the country that issues it and the citizens who produce the wealth that backs it.  The politicians in the US have worked to destroy the currency by consistently abusing it, by spending money without limit, and by convincing people, there is no cost in doing so as long as the US fights every war and defends open markets.

I agree with you that the US dollar will be the last man standing. Because every other country’s currency is simply inferior and the countries that issue it don’t produce enough wealth to consistently make it competitive in world markets.

MS

REPLY: I know. People want to argue with me based on what they read in school or what the press reports. I have been taught by my clients. Being called in to solve problems around the world, I have been fortunate to see how capital really moves. I have met with many central banks, and the IMF, testify before Congress on these subjects, and even attended an OPEC meeting and was called into China for the Asian Currency Crisis. I have been called in by heads of state and summoned by Presidential Commission investigating Crashes. I was even asked if I would teach at one of the most prestigious universities in the world and when I asked why I was told that they “know what they teach doesn’t work.”

Our major clients know this. It takes perhaps someone with experience like you to grasp the reality of the world economy and how it truly functions. We are plagued by Marxist ideas for every economist then thinks that their job is to manipulate society to create the perfect world. Here is Larry Summers saying you cannot predict the economy and if you could, then everyone would follow it and make it so. This is the problem with academics. It is all theory and no real-world experience. This is why they have accused me of manipulating the world because if the forecast is correct, then it’s because I influenced it with our clients. That is why the bankers told the CFTC I had to be silenced. They wanted to manipulate the world, and when they lost, it was always my fault.

Jan 11 2023

The War on Populism


Glenn Greenwald Streamed on: Jan 10, 7:00 pm EST

Elitist Corporate Media Attacks Populism, Briahna Joy Gray on Dem v. GOP Dissent | SYSTEM UPDATE #19

Jan 11 2023

Gold v Dollar


Armstrong Economics Blog/Gold Re-Posted Jan 11, 2023 by Martin Armstrong

QUESTION #1:  Marty,
Thanks for your interesting post about gold and China.
Which do you think will perform better this year, gold or the dollar?
Thank you.

DM

QUESTION #2: Marty, obviously the motive behind China buying gold is critical. I tried to explain that to a goldbug. It went in one ear and out the other.  Russia and China have separate motives from the rest of the world. Correct?

Lee

ANSWER: Absolutely. Only a goldbug thinks motives are irrelevant as long as gold rises. Short-covering is not buying buy squaring off positions. Then you have retail buying and institutional buying. I was helping the Japanese circumvent the US trade sanction threats by purchasing gold on COMEX and then selling it back in London. It did not matter what you bought. The trade statistics only measure money flows – not goods. So, I was using gold to reduce the trade surplus of Japan buying gold in NYC (as it it was a product) and shipping it out to London. The buying was irrelevant to the trend. Just because someone buys gold does not make them bullish at all.

What you need to understand is that China is not buying gold because they are bullish on gold. They cannot hold US or EU debt and therefore you will continue to see them liquidating Western sovereign assets. That will not be the case for others inside the West. They will remain holding debt that pays interest where gold does not. Those who have been brainwashed about fiat and gold and inflation are so entrenched in their thinking, they will never see that the difference in motive has nothing to do with gold at all, but geopolitical events as we head into 2032. So they keep looking at balance sheets at the Fed and inflation and miss the real trend altogether.

We have private interests that do NOT have the same motives as China or Russia. Those are high net-worth individuals and institutions who will prefer the more liquid assets of equities and short-term debt like T-Bills. We have NOT reached the point where there is a total collapse in the faith of the dollar or the US government as of yet. Keep in mind that 50% of Americans still believe in Biden somehow and are consumed with their hate of Trump which prevents them from seeing the real trend.

Society is being so dumbed-down by the media that we are sleepwalking into WWIII and cheering it at the same time. They think war is a video game. We bomb and kill people elsewhere and it never affects us at home.

The dollar is not finished. It is the most hated currency perhaps in history. But that is also because people have been manipulated into thinking that money is fiat and keep preaching the days of returning to some sort of gold standard. The problem with that theory is it demands fiscal responsibility and you will NEVER sell that idea to politicians. They cannot survive without bribing people for votes. That means they MUST end Democracy and that is the main objective of Schwab and the WEF.

The backing of the dollar has NOTHING to do with commodities. If that were the case, Japan and Germany should never have risen to the top tier in the world economy. I am NOT an academic. I have worked on every continent and actually visited more central banks than probably any analyst ever. What I have seen is how things work, not theory. That is why some people hate my guts. The TRUE wealth of every nation is its people and their productive ability. The more leftist the government, the worse the economic growth and the lower the standard of living. That is the power behind the dollar and it has NOTHING to do even with the quantity because 70% of paper dollars reside outside the USA.

Remember the Money Plane. Skids of $100 bills were being sent to Russia every week to satisfy the demand. When the new $100 bill took place, anyone flying internationally saw videos on planes telling them that the old $100 bills were still valid and were NOT canceled as they do in Europe.

Perhaps by 2028, you will see the dollar fade away into the sunset. But for now! These insane world leaders are pushing for war. Sweden has just announced a military draft. Europe is not going to survive this one.

Jan 11 2023

Hoards in History


Armstrong Economics Blog/Hoards Re-Posted Jan 11, 2023 by Martin Armstrong

QUESTION: I find it fascinating how you bring much more detail to life in your work. I have read your latest book Plot to Seize Russia. I knew many of those events took place but never the background. What an excellent job. You have to get this out in paperback for the world to see.

My question is about hoards of ancient coins. What was the biggest hoard ever discovered?

PH

REPLY: The First Edition is sold out. We are rushing the Second Edition to our publisher and it will be on a less expensive paper to try to bring down the cost. It will then be available on Amazon and Barnes and Noble, etc. Probably the most famous was the Boscorelli Hoard.

The biggest hoard of Roman gold coins ever discovered was the Hoxne Hoard is the largest cache of late Roman gold found anywhere in the Roman Empire. It was discovered by a metal detectorist in Hoxne in Suffolk, England, in the east of England in 1992 containing 14,865 late-4th and early-5th century AD Roman gold, silver, and bronze coins. There were also 200 items of silver tableware and gold jewelry items. The hoard amounts to a total of 7.7lb of gold and 52.4 lb of silver. He reported his discovery immediately and the cache was professionally excavated by archaeologists and conserved soon afterward so the vital context of the objects and their condition were preserved. The coins were the source to date the hoard to the early 5th century AD in the aftermath of the end of the Roman occupation of Britain. Hence, the political chaos inspired the owner to stash his fortunes. Obviously, he did not survive.

Perhaps one of the most famous discoveries from Pompeii is known as the Boscoreale Treasure. This discovery came to light in 1895, when the treasure was uncovered among volcanic ash from the eruption of Mount Vesuvius on August 24, 79 AD. In 1895, excavations at a Roman villa at Boscoreale on the slopes of Vesuvius unearthed a remarkable hoard of coins, 109 items of silverware, and over 1,000 gold aurei, the latest of which dates to 78 AD with many pieces dating back decades prior, such as the gold aureus of Nero (54-68 AD). The villa that held the coins lay undisturbed until 1876, yet the coin hoard lay undiscovered for almost another 30 years. The original owner hid the treasure in a wine tank prior to the eruption, so it was not immediately discovered.

Unfortunately, there was never a formal study of the Boscoreale coins prior to being dispersed into the market. Consequently, we do not know the full extent of the find. Nevertheless, the coins are easily identifiable for a distinctive feature of this hoard from Boscoreale is their deep red toning, and the term “Boscoreale” is now used in auction catalogs to describe similar discoloration on any Roman gold. The coinage of Boscoreale does tend to be well preserved.

Boscoreale Cups

The Boscoreale treasure included a remarkable set of tableware reflecting the quality of Roman silverwork in the 1st century AD. The decoration on these two cups illustrates a most curious theme. There are Epicurean maxims (engraved in dots) and the skeletons of poets and Greek philosophers, representing an invitation to enjoy the present for death comes to us all.

These two silver cups pictured here, are famous for their strange decoration. A Latin inscription on the base of one of the cups gives their weight and the name of their owner, Gavia.

The ring of skeletons depicted on these two cups has similar and complementary decorations depicting tragic and comic poets, as well as famous Greek philosophers, beneath a garland of roses. Greek inscriptions engraved in dots form captions and are accompanied by Epicurean maxims such as, “Enjoy life while you can, for tomorrow is uncertain.” Clotho, one of the Fates, looks on as Menander, Euripides, Archilochus, Monimus the Cynic, Demetrius of Phalera, Sophocles, and Moschion provide a caustic and ironic illustration of the fragility and vanity of the human condition. But the main message of the cups’ decoration is that life should be enjoyed to the fullest. Zeno and Epicurus, the founders of the Stoic and Epicurean philosophies in the 4th century BC, confront each other before two mating dogs — a detail of some significance, as it represents the triumph of Epicureanism.

Silver and gold coins from ancient times have survived, as well as bronze. Silver can be affected by the sea and at times when it is debased. Bronze requires certain conditions to survive in good form. So if you intend to bury your gold and silver in the backyard, keep in mind that humanity has been doing this in times of trouble since before recorded history.

Jan 11 2023

The Fed & the Misinformation


Armstrong Economics Blog/Central Banks Re-Posted Jan 11, 2023 by Martin Armstrong

QUESTION: Marty, I was there at your Berlin conference when one of the attendees openly admitted he was from the Bundesbank. He was very open about it. There have been other central bankers at your WEC. I suppose they have to attend just to get a whiff of the trend. Powell has come out and asserted the Fed’s independence and it will not make policy based on climate change. That was very refreshing.  The bulk of analysts still cry about the creation of money at the Fed are insisting that a recession is coming because when the Fed stops printing, we will see a correction worse than 2008. Some call this a confetti party. Many claims to be fed watchers, but have never stepped inside their door. Meeting the people I have at your WEC events, you are always in the center and I can see it is not your opinion but Socrates that they want to listen to for an unbiased view. So will there be a huge correction when this party is over or have the fed watches been talking sophistry with no real insight?

HD

PS: What about a Dubai WEC because the world imposes vaccine passports?

ANSWER: I know, This is the typical myopic domestic view that the Fed is in a very dangerous situation and a wrong move in any direction could cause a financial system meltdown worse than 2008. The argument is that since we have a debt-based monetary system if the Fed stops increasing the money supply this will lead to an economic withdrawal process that will be worse than 2008-2009. Once more, this is only looking at the domestic economy. They live with blinders on and do not see the world around us with respect to the globalization policies that are all in chaos.

Even at Davos in 2003, Alejandro Toledo, then President of Peru, urged the participants to listen to the voices of those protesting outside and to build a bridge with the participants of the Porto Alegre anti-globalization conference. “We must give a human face to the global economy and globalization,” he said. “Managing the economy is not an end in itself, but a means to improve the quality of life. Globalization is meaningless if it does not contribute to reducing poverty all over the world. “ Schwab preaches equality but at the price of Authoritarianism and the loss of individual rights.

The Fed is not between a rock and a hard place domestically. It just made it clear that it is not like the ECB and is not in the climate change business. The Fed is INDEPENDENT and will not be bullied by Biden. The Fed understands that it has become the world’s central bank and its actions in raising rates have had a far greater impact externally particularly in emerging markets because so many other nations issue their debt in US dollars.

The focus is not entirely on the nonsense of the domestic number of the money supply. If a foreigner buys property in the United States, they convert their currency to dollars, and in effect that increases the domestic money supply for that capital now free up cash domestically. The Fed has no control over that aspect and central banks have become aware of this effect which is not taught in economics class and not factored into the doomsday forecasts all based on the same reasoning forever.

All the analysis is constantly based on the Quantity Theory of Money which no longer works in our global economy. That was the foundation of the money theory that emerged with Sir Tomas Greshan who was the agent for the British crown. He saw that when Henry VIII debased the coinage, the value declined in Amsterdam when the exchange rate was solely based upon the metal content of the currency.

All we have ever heard is that the Fed has the power to create money out of thin air. They never explain why the Fed was given that power. You cannot have a fixed money supply as the population increases, then you end up with DEFLATION which is the rise in the value of money. They are married to the argument and nothing you can do will deter them from that saying. During the Great Depression, people hoard their money and do not spend it. That was why the ECB went to negative to try to force people to spend money. You can DOUBLE the money supply but if the people hoard it, you will never create inflation.

Because people hoard their cash, there was a huge contraction in the velocity of money. This resulted in massive shortages and it led to over 200 cities issuing their own money to try to enable a local economy to still function for there was not enough cash to even pay anyone for services.

INFLATION is actually the decline in the purchasing power of the currency as measured against assets. DEFLATION is the rise in the value of money and the decline in the value of assets. The way the term “inflation” is handled today, the government puts the blame on the private sector. During DEFLATION we are blamed for not spending our money.

All this talk about bail-ins and bail-outs misses the point. They act as if they in the end really matter. HYPERINFLATION will never arrive based on increasing the money supply. It arrives with the collapse of CONFIDENCE in the government. Germany imposed a forced loan and confiscated 10% of everyone’s assets in December 1922. Germany lost the war and in 1918 there was a Communist Revolution that led to the creation of the Weimar Republic. The money supply increased 10 fold during 1922 when they were struggling to meet the reparation payments. That undermined the confidence in the government. But it was December 1922 when they confiscated  Note that the hyperinflation took off in 1923 after that forced loan. It was no longer safe to have assets in banks.

This idea that we are headed into so black hole all because the Fed creates money is insane. That misinformation that the German Hyperinflation was all because of printing money was totally absurd and a lie. Once the government stole 10% of everyone’s assets, that was the final straw. They then had to print just to try to cover costs and meet reparation payments.

The Lesson of Germany is seriously distorted and has inflected the view of money supply and inflation which ignores the actions of the government. That is the real issue.

Jan 10 2023

Brazil Election Fraud


Armstrong Economics Blog/South America Re-Posted Jan 10, 2023 by Martin Armstrong

The riots in Brazil over the rigging of the election are on point. You cannot allow a razor-thin pretend majority to completely go against the opposite and inflict a leftist agenda. This is the abuse of our election process of a worldwide basis. Governments no long represent ALL the people, but one group violently against another. This same process is undermining both the United States, Canada as well as Europe. This leftist agenda is destroying our civilization and this is right on schedule – 34 years from the collapse of communism. It is now our turn for this abuse of government to divide the people and the nation and ONLY will lead to civil war.

Bolsonaro 2019 WEC & Why He Had to be Removed as President

Bolsonaro was targeted by the WEF and their consortium. The Brazilian elections were rigged. They had to remove Bolsonaro at all costs and now we will witness the price for those corrupt elections. The violence is likely to escalate into March.

Jan 10 2023

What’s Going on with Gold?


Armstrong Economics Blog/Gold Re-Posted Jan 10, 2023 by Martin Armstrong

The goldbugs are cheering that there has been a central bank buying of gold. They think somehow that this is because they are bullish on gold. What seems to be going over their heads is what I warned before – when China starts to sell US debt, war is coming.  I have made it very clear that the precursor to war is always capital flows. That will be on steroids this year.

My clients taught me how capital and war move. At conferences, I stated that we were advising the Universal Bank of Lebanon. They found a ledger in the basement where someone wrote down the price of the Lebanese pound every day into the 19th century. They asked if we could build a model. I said sure! Here is a chart from back then. Our model warned that their currency would drop dramatically in 8 days. I thought there was something wrong with the data. Needless to say, I formed the client what the computer said and I commented that something had to be wrong. Very calmly, they asked what currency would be best. I said the Swiss franc. 8 days later the civil war began. The computer was correct. Then the same thing happened with the Iraq-Iran war.

By 1998, I understood the model’s ability to forecast war. I have never created a model to do that. It figured it out all on its lonesome. I stood up in June 1998 in our London WEC and warned that Russia would collapse in about 30 days. The London Financial Times reported that forecast and that became the collapse of the Russian debt market and Long-Term Capital Management debacle.

I have warned that if China was preparing to invade Taiwan, then they would start to sell off all US government debt. They would not risk owning US government bonds and watch Biden freeze it all and then claim it will be used to rebuild Taiwan as they are doing to Russia. So China began selling off US debt at the end of 2021. They have been buying gold because they cannot hold US or EU debt in time of war. It is as simple as that. The gold is simply neutrality, for it also does not pay interest. – So much for the inflation nonsense.