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Armstrong Economics: Entering Phase II of The Debt Crisis
In succinct synopsis of what lays just over the horizon ~ "the cycle of economic implosion" ~ for the ill-conceived amalgam known *today* as the European Union, phinance's phavorite political prisoner, Martin Armstrong, cautions that:
- "the EU is in dire position", on the precipice of shattering into default and civil unrest;
- the sovereign debt crisis materializing across Europe will soon reach US shores;
- the CFTC will curtail currency speculation by slashing leverage from 100:1 to 10:1, which "can cause a liquidity crisis that backfires, magnifying everything."
Since "debts will never be paid and interest expenditures are the greatest transfer of wealth in history", Armstrong suggests:
- freezing all national debt;
- issuing coupons whereby the debt is redeemable for local currency, which may then be invested in domestic debt or equity;
- each European nation establish an independent currency pegged to the Euro;
- swapping US debt to coupons that may be spent domestically.
Seeking to impart light from within the dark seclusion of maximum security solitary confinement, Armstrong concludes his (relatively minuscule by Armstrong standards) missive with stern warning.
" Western society is falling apart .... If we do not act, civil unrest will explode. The current choice is DEFAULT or HIGHER TAXES & CIVIL UNREST .... Someone has to step forward to save us or we may be doomed. It's time to wake up for this is the future of our children and their children at stake. "
http://www.martinarmstrong.org/files/Armstrong-From-the-Hole-3910-1-from-the-Hole.pdf
Just one note of caution for those who may be emotionally inclined to move all-in on gold here because they think 'the dollar be dead': any way ya slice it, the United States remains the lender of last resort (at least when the IMF isn't told to stand in) ... and while everyone "knows" that gold is the clear beneficiary of sovereign default concerns, please realize that Uncle Buck ($) sits alone at the head of the table. Worries of US hyperinflation and the death of the dollar are each absurdly premature at this juvenile juncture of the sovereign default crisis; each may occur, in due time, but certainly not before Uncle Sam has finished picking up everyone else's tab.
Euro Valuation ~ Fail
Until the deflationary spectre of sovereign default runs its coarse course over the next depressionary decade (what inning could this even be ?), those who want to become millionaires rooting for regicide of King Dollar ought study Patricia Heaton's method for valuing the Euro's "worth" ... just take a deep breath (c. 8 yrs), recheck your mental abacus and, eventually, you'll get there.
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I think we will see that commodities zooming situation again in the next year...
But how will the Fed respond this time? I bet they are more careful not to cause a wanton deleveraging again, after seeing the deflationary impulse that resulted last time.
*****What exactly DID the Fed DO to cause the deleveraging, anyway?*****
I don't recall any overt Fed moves as per se, but yet all of a sudden all of the hedge funds were panicked out of EVERYTHING!
Why did the banks all pull the credit lines all of a sudden? Or better yet, what in the hell were they doing lending to hedge funds at all in the first place, with 20 or 30 to 1 leverage?
Odd... Why don't we read these kinds of discussions in the Fed meeting minutes?
Gold investments may really get hammered when the bell tolls for China. This is an interesting viewpoint to watch. The US dollar is not quite dead yet.
http://watch.bnn.ca/trading-day/march-2010/trading-day-march-18-2010/#cl...
Really? China and India are competing for all the IMF gold before it reaches market. Are you aware the Chinese government is massively accumulating gold and other precious and base metals, and hogging rare earth metals? Are you aware the Chinese government instructed its billion plus citizens to personally begin to buy and save physical gold when it was $1,000? Westerners don't seem to grasp that China has a one hundred year plan. Most Westerners don't think past next month.
"are you aware the Chinese government instructed its billion plus citizens to personally begin to buy and save gold when it was $1000?"
Geez, they didn't tell me. Also, it seems the message did not get through to a whole lot of those billions who have been selling their gold like crazy since $1000 and buying land. Either the Chinese control over its billions is waning, or your information is worng.
End of the Western Civilization... Skynet being built... Run for the tunnels.
Sometimes it is helpful to go back to those folks who are on the brink---Greece---and remember the advice about moderation in all things.
In this world today, one is safer drawing caricatures of a certain Prophet (yes, that one) than saying anything negative about gold. Or Martin Armstrong. Or the "truth" about 9-11.
I admit to not knowing the truth, though in a varied life I have had contact with many things and guess I know more than most. I wish I knew the truth about Armstrong, because his is an interesting man, albeit a touch odd. I've read all of his writings, plus most of what has been written about him, and all I am left with is a "he said, she said" kind of thing. In his case I am no more privy to the truth than anyone else who writes on this blog. I just hope justice would be served.
Gold? Pretty. I have made my own opinions and experience known on far too many occasions, so I will not repeat what I see happening in Asia with regard to both production and sales by the general public. Suffice it to say gold ain't no magic metal in Asia, and at present cannot hold a candle to real estate in the minds of most of the 2 billion newly enriched.
I am neither a bull nor bear on gold. For the time being, it's just a trade. I loaded up in 1999, and sold out almost all in the last year, most between 1100 and 1200. Damn long trade. I went long dollars, and am watching 1.35 Euro for my next move. Maybe I am dancing on a razor's edge, but I think I have time. Long term, of course I see a dollar collapse, but I may already be dead by then. The market is the masses, and the masses don't not get up to speed as quickly as one might hope. That is what a career as a trader taught me. I remember in 1980 everyone was calling for $5000 gold. I suspect that in the 1930's there was plenty written about the inevitable collapse of fiat money. Eighty years later I can still pay for my meal with paper. I can use dollars in places as far from Washington as this planet allows. It might continue longer than any of us imagine. Early is wrong. Yes, late might be dead, but early is definitely wrong.
Regarding gold in the days of Mad Max, I have had some experience in societal collapse. It ain't pretty, it moves like lightning, and it takes no prisoners. Some folks lose their minds, others are jumping at the chance to escape the boredom of everyday life, and a few others are committed to a cause. It is mayhem. I laugh when I read folks who think they'll be able to go down to Safeway and pick up their groceries by taking a coping saw to a Krugerand and lopping of a piece. If society collapses, folks are going to rip the gold out of your hands faster than you can blink. Most people have little to no experience playing "street tough", and thinking they can carry a stash across town and trade it to some broker for other goods is fantasy. Similarly, going to the range and popping off a few clips from a Beretta does not qualify one for combat either. Other people will have guns, too, and they'll be shooting back. Whole different ballgame. Anyone who has smuggled, or paid their way across the border of an unfriendly nation...you can talk. Everybody else, you are just dreaming. Pardon me for saying it, but you are not anywhere near as tough as you need to be. Also, you won't know how good or bad you are until tested. It's like that.
For the average gold bug, your best scenario is that we have high inflation without a societal collapse. That is the scenario where your accumulated gold might pay off. Beyond that point, I think your security is false. You may end up with something of value, but you'll be too damn scared to try to cash it out, which effectively makes it useless.
Go ahead and junk this; it's your butt on the line, not mine. I'm prepared to admit I don't know it all, and try to never get complacent.
i love and enjoy reading your stories and about you. no more fantasy, fascinating. i named my daughter Asia, she is 30. loved the arts. saw the most unbelievable ceramic collection in forbidden city.
laughing at myself about my latest gold purchase. the dealer wouldn't even give me possession for 21 days. finally told him to give me back my $30,000. nope, never even took possession and lost $5000. boom. even had to give them the $1000. city tax i had to pay. when do you have to pay tax on money? no more gold, gold men or gold handiers.
by chindit13
on Sun, 03/21/2010 - 09:34
#271344
For the average gold bug, your best scenario is that we have high inflation without a societal collapse. That is the scenario where your accumulated gold might pay off. Beyond that point, I think your security is false. You may end up with something of value, but you'll be too damn scared to try to cash it out, which effectively makes it useless.
**************************
I see this same mistake repeated over and over on this board--
"Gold is only good if we have Inflation"
What bullshit--
Gold-"never" does well in inflation--
Why would you want Gold-other then in savings?
Assets outperform Gold in every instance of inflation--
Note--Gold price from 1980-2001--in a down to flat bear market-inflation-every step of the way--
The only time Gold performs is during Deflation or Hyper-Inflation (currency collapse)
Well--we had our Hyper-inflation from 2001-2008 in our credit money system and Gold went from a 20 year bear market to a 10 year bull market-despite all the manipulation--
Now-we are in Deflation and Gold is still performing--
Coincidence?
People who buy Gold for Inflation--simply don't get it--
Inflation play--buy a house-no brainer--
And the part about Asians--not being hot on Gold--is also wrong--
Viet Nam currency devaluing (crashing) where did they run to?
Same place as we are--to Gold--like we always have--like we always will--
I wish people that post their "theorys" about Gold-actually knew something about it-
"China and India are the world's two largest consumers of gold - and the former is the world's largest gold miner. To many the future path of the gold price is inextricably related to the world's two most highly populated nations, both of which are undergoing internal growth at a phenomenal rate in comparison with anything Western nations are able to achieve - even in a major turn round"
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=98598&sn=Detail
http://globaleconomicanalysis.blogspot.com/2008/06/vietnam-suspends-gold...
all those junk tags are really annoying
grow the fuck up
Oh,boy. So much info to consume. The truth and final say on this matter, will come out over the next decade. No matter what our opinions are, the only true measure of our current thoughts on the economic system and state of world affairs can only be graded at a later date.
Buy Gold and Silver, and own some paper/equities to help keep your physical esscense alive. Diversify. (Note: This will not help with your happines or even help you ascend spirtually). Most off all ,become self reliant. Do not depend on the system to supply substitence for you . If you think buying a fairly remote piece of farm land, is for tin foil hat wearers, so be it. But remember the pain of losing illusionary wealth is far less painful than sowly starving to death and having what little you will left over have stolen from you by the starving masses.
I wonder if Armstrong is someones bitch in jail.
Oh,boy. So much info to consume. The truth and final say on this matter, will come out over the next decade. No matter what our opinions are, the only true measure of our current thoughts on the economic system and state of world affairs can only be graded at a later date.
Buy Gold and Silver, and own some paper/equities to help keep your physical esscense alive. Diversify. (Note: This will not help with your happines or even help you ascend spirtually). Most off all ,become self reliant. Do not depend on the system to supply substitence for you . If you think buying a fairly remote piece of farm land, is for tin foil hat wearers, so be it. But remember the pain of losing illusionary wealth is far less painful than sowly starving to death and having what little you have from the starving masses.
I wonder if Armstrong is someones bitch in jail.
interesting new fofoa post:
Synthesis
This is your last chance to buy gold and silver!! I'm tired of telling you idiots!
some need to find a job first ,,,
The Euro has now resumed it's downtrend on the daily chart and a US dollar rally is coming.
Equity markets can't ignore this for long.
From mid 2009 onwards I warned of an impending USD rally and Euro weakness.
http://www.zerohedge.com/forum/latest-market-outlook-0
on Sat, 03/20/2010 - 20:42
#271092
Gold has made highs in sterling and Euro as sovereign spasms occur over there. I actually see another instance where gold and fiatscos move in tandem as people pile into both. This was predicted in the late '90s, and we have seen a few glimpses of this behavior against the grain. The final divergence will be unmistakable however, and having already procured your insurance is the only safe play.
*************************
Mostly agree with this--
I think gold 'might" sell off on the next leg down-when/if that happens--
I also think that it will diverge at some point--as low as 900 maybe-and compete with the USD as a safehaven-then decouple as the $ heads south--
"If" that happens-it will mean a currency collapse is underway-and this is when CB's are forced into the gold market-in a panic-squeezing the commercial shorts-who will be bidding against CB's--
This is when gold will spike hard--
Sell a bit then--jmo
Armstrong whether guilty or not didn't recieve a fair trial or justice just read the court transcripts.
As for gold well IMO it should be at 2000 oz. minimum. The problem is as long as their is a need for dollars in the international market and we can print as much as we want this facade will continue. When all the other countries are made to look worse off than us then the dollar will be a haven. When the dollar isn't the reserve currency and there are better alternatives then look for the crash. IMO
He's trying to climb into the head of power. Good for him. But he needn't go there alone. It's really a cri de coeur, saying, "I really don't know what power is or where it goes." But we do know what liquidation is, and where it goes, and that's where we are now: Mellonesque liquidation.
It's really too bad there aren't more people who study liquidation: it's a complex phenomenon, witness Armstrong's remarks, to the effect that he doesn't know where power is going to go next, what it is going to tout next: strong dollar? weak dollar? cartelization? monetization?
Pretty clearly deflation is both the result of liquidation and its cause: bad things happened before it, and bad things will happen because of it.
But I don't think he's right about what's going to happen next.
I think the next power move is in the way of demagoguery. Look for Obama to start talking about the need to put "the national interest before personal interest." This is a lead up to the idea that all property really belongs to the nation (where have you heard this before??).
That's leading up to the government seizing control of all property. For example, the "annuity" proposal for 401K plans. Next the mutual funds.
But propaganda will next follow, and Obama will avoid "austerity" for a while. But ultimately it too will be sold to the public.
But once that happens, American homeowners, sell!! That's because it will mean power has completely washed its hands of suburbia. A losing proposition.
So get your money out while you can.
very thought provoking thoughts. agreed that the mellon 90% off clearance sale is going on behind the curtain. for Andrew's Club members only of course. (witness the farce that is GGP for example)
"I think the next power move is in the way of demagoguery"
yes, that thought came to mind to me today as well when i saw the pro-healthscare rally signs sponsored by healthcare.barackobama.com (wondered who paid the printing costs for those?)
for some reason, that song by Living Colour keeps popping in my head every time i hear our fair leader's voice or see his mug.
http://www.youtube.com/watch?v=7xxgRUyzgs0
wonder why
"So get your money out while you can."
yup
So I am to get investment advice from those in prison? Do they have access to real time info there? The FT? WSJ? Just what? Maybe I should go there too. It maybe the only source of unpolluted, nonfiltered info there is. Pure speculation.
most come in to the dance after the intermission
think they have a handle on things , spot read,, during the commercials of poof the magic financial networks..
never picked up a book on mises, never before had a clue about what is constitutional money..
believe the fed is a Santa in red robes of gimme this gimme that ,
still breathing orwellian magic air. moving this way and that to the sound of Pavlovian super fiat bell,,
Spot on. It seems few have even heard of the genius of Martin Armstrong, and fewer have read his treatises that span centuries of monetary policy, much of the research he presents from prison was undertaken while he was at Princeton at the cost of millions of dollars. Nor are people aware of his former position at the Department of Economics at Princeton University. And fewer seem to have a tiny grasp of the power of the state to wrongfully and politically incarcerate people — in prison, not jail. You're right, some read Wikepedia for the official version of 9/11 then spew that trash here.
Well, that makes it two for the weekend.
Armstrong's commentary.
And David Tice's prediction of SPY of 400.
http://www.businessweek.com/news/2010-03-19/tice-sees-s-p-500-falling-to-400-saying-credit-bubble-persists.html
I guess that means retail stocks, banks, and REITs are going to keep going up.
LOL....
Read more of Armstrong to see this is an ongoing commentary. His treatises can be found on scribe and he is very bullish on gold. He was warning near term speculators.
Where's Prechter? Oh, he's crawled back into his deflationary rat-hole where he came from - right, I forgot.
Gordon you were a much more pleasant person when gold was free falling and you had stopped screaming at the top of your lungs to "buy gold NOW, or else.." like you were as gold passed $1200
Was I? LOL! Funny, I remember screaming at 1000 (when many were convinced it was going to 800, I might add) and 1050 last year (check ZH comment archives) and being absolutely silent at 1200. And what about now (considering you think I am "screaming" now)? Gold isn't anywhere near 1200 - in fact the thing dropped 20 bucks on Friday to 1100.
listened to him on King World news, same kinda usual crap
The genius Martin Armstrong is America's number one political prisoner. The responsible party is none other than the Jekyll Island crowd.
I believe the CFTC move to limit currency margin from 100:1 to 10:1 is a ploy to get the retail speculator out of the market so "they" can hog trade the markets with more clout. "They" get clout by limiting public clout.
Totally agree there may be a huge push into the USD to 85 or higher and gold to 983.10. Near term of course. Then the collapse will happen as faith in the USD continues to erode while gaining momentum to the downside. The fifth pillar to the collapse (per JS) is the loss of confidence in the USD and with the bankers being exposed and even tried for criminal misconduct (Milan) and with China announcing they will not honor the US bank derivitives, and a Ron Paul, Marc Faber and others of note whose "predictions" of years are now manifesting for all to see so they are gaining credibility when they were once the freaky fringe pied pippers for the tin foil hat wearers — and more by the hour — including BB's arrogance at hiding the banks that benefited from taxpayer bailout — many events converging to further destroy credibility in the USD, longer term. Short/near term there could be a rush to the dollar and since the USDX is heavily weighted with imploding junk currencies (not money) the weight goes to the dollar.
Armstrong has asserted through his cycles studies some very interesting but unpleasant theories that are now taking shape.
"I believe the CFTC move to limit currency margin from 100:1 to 10:1 is a ploy to get the retail speculator out of the market so "they" can hog trade the markets with more clout. "They" get clout by limiting public clout."
was thinking the same exact thing. always nice to reserve the right for selective enforcement yes?
=
The story of M.A. reads like a hollywood movie, and I am not sure if he is just propaganda or a real politicial prisoner that didn't turn over his stash of precious metals or was manipulating the market by positioning and then influencing (newsletter pump & dump or reverse).
The fact that he implicates Goldman in stealing his cycles data makes it more believable, and the information he shares on the club and the captured judicial system is both eye opening and disconcerting when you are educated to believe in a fair justice system. It was interesting to see how quickly the russian programmer that stole the code that could "manipulate the market" was secured.
This is my take on the letter:
His point on interest is extremely important, for those that didn't look at the letter he stated that the national debt from 1986-2006 would have only grown $300 billion without all the interest charges. The bankers love STUPID FINANCIALLY UNEDUCATED politicians that run up deficits from the club credit card. The best example of how interest grows over time is the parable about the request for one grain of rice on a chess board and doubling it every square - no problem for the first half of the chess board, but by the last square the one grain of rice would multiply to more than all the grains of rice in the world.
The idea of interest makes sense because it should theoretically limit the deficit spending under the theory that interest would grow and need to be paid back with taxes. Under the scenario that an individual invests their hard earned surplus money into treasuries, it is completely legitimate.
You can get into a chicken and the egg logic with who is to blame, the bankers with the interest and their forced system (assasinations for presidents that wanted a free system) or the politicians for deficit spending (no deficit spending and living within your means without wars = no interest). If there was no interest funds would be unlimited, paper would lose all value, and you would have Zimbabwe.
Under the scenario where there are no reserves (loans are no longer based on deposits!) and the politicians and bankers conspire to print or conjure up surplus digital funds, the value of surplus labor (savings) goes down (inflation). The bankers give those funds to their cronies first who go and buy up cheap physical assets (important to have liens on physical assets to convert paper or digits to something real), and then flood liquidity to outside parties who come late to the party (but their late buying drives up prices more and the club can then book profits).
How much of the stock market does the club own through their shell corporations? If you own, you can influence corporations that are more powerful than some smaller countries. This is why I have said on a number of occasions that it is a take over, the SEC is not enforcing the law as evidenced by eight years of shielding Madoff so how do we know they are enforcing the % ownership disclosure requirements?
Now, the club is looking at all the debt and knows it will collapse and the interest and debt will not be paid. I am sure they would like to convert it to something that will have value, which is Armstrong's #2 point that he wants to give the bankers coupons. #3 Each nation establishes a peg to the Euro - not sure if he is promoting a one world currency with the Euro at the helm or if this is for Euro countries only.
If he is promoting a one world currency, he is just a shill for the IMF. His desire to convert US debt to coupons is an attempt to trade US debt for something of value for the bankers. The system is set up to keep lending but they are seeing the potential for hyper-inflation due to deficits and want to protect the current value of the debt (that means that they can exchange X for physical commodities at the same rate in the future). They see this coming and would like to change the system to benefit...you guessed it, themselves.
Again, remember the central bankers are a franchise and work for their benefit without loyalty to country, sometimes to the disadvantage of countries. Our military is not completely under their control structure, so there is currently a mutual respect. Forget Forbes lists, they are the wealthiest and a strong military protects their investments world wide from nationalization.
#4 is all about a broader transition that has been agreed upon, transitioning from a consumption model around the world to a conservation model. Some of it has to do with peak oil, some of it has to do with population growth and resource struggles, and it also involves a sudden drop in global demand. Examples of population programming would include the green movement, Avatar, the global warming hoax, and the desire to bring in a global banking carbon credit tax.
The problem with governments around the world is that they are growing in size and expenditure while private business is shrinking. The bankers encourage this primarily because the deficit spending generates free profits for them (that's why they won't allow the Fed audit, there are no reserves it is just free profit). They lack the tax revenues to continue with the status quo including pensions.
With very little in income tax revenues they might be tempted to change to a sales tax model, this would then encourage them to continue to inflate because inflation would provide them with larger tax revenues. The total tax percentage of income is also becoming unsustainable as evidenced by tea party social movements (COGD is August 12th). Our problem is short term thinking versus long term and the focus should be to promote small and medium sized businesses through tax policies - not cronies that set up monopolies. Disposable income drops as taxes and interest rise.
Beware the sales tax unless all income and property taxes were cut - I could see a new sales tax being added to the existing taxes. We may have become too successful as a society, as evidenced by caloric availability and our obesity epidemic, and that is why conceptually a degree of restraint and conservation could be useful. I could see a dramatic increase in the price of goods to fund an out of control government (fiscal) under a sales tax that would look hyper-inflationary and it could grind luxury products to a halt.
#5 He is right on regarding a steady money supply growing at roughly the population growth (2-3% per year). We have had a problem with too much liquidity due to not maintaining the same money multiplier and financial innovation like CDS that did not require deposits. It was a slick way of getting around deposit requirements and growing the digital "money supply".
We saw prices rise dramatically in food, housing, and services (inflation). Credit creation is dropping and this is currently the only mechanism for capital allocation - the banks with their balance sheets trying to preserve asset values are creating a log jam or bottle neck in the economy.
The fed is tasked with price stability and full employment. I believe they should be taxed with price stability relative to average income levels, and "full" employment. Right now prices for homes are too expensive relative to incomes. That is how you can spot a bubble in any asset with a normal supply - the appreciation percentage should be similar to the average income rate increase.
I spent the last couple days reading Martin Armstrong's writings. Let me summarize and correct some comments in this thread. Please feel free to jump in and correct me, but here are my thoughts:
Hi Mikla-
I've read all of Martin's writings as well as posted on economicedge.blogspot.com. I recommend joining the positive Swarm movement (for debt reform) on the site.
I have always looked for your posts and find them to be insightful. I completely agree that the author of the writings is a genius able to blend in history, politics, philosophy, and economics. I have learned much from his writings, particularly on the political histories with financial crisis and debasement. Some of the best investors, Peter Lynch and Warren Buffet have stated that they were terrible market timers but still managed to have some of the highest returns over a long time period.
Cycles in nature are, well, natural and so it is tempting to apply the same to markets. Cycles in markets make sense especially if enough market participants reach a tipping point of following technical analysis or get stuck in repetitive behaviors, however in the last year both technical and fundamental analysts have had major troubles.
This could be because of government intervention and transition to a political market (re-election - "now would be a good time for long term investment"), unusual macro conditions with 0% interest rate yields driving investment into risk for yield, or perhaps more advanced computers pricing from a market maker order flow cost plus model (concentrated market maker with large markup), algos eating up stop limits and short squeezes (market makers closing out positions to book profit). Martin pegged the top of the market, but has changed subsequent market forecasts that had called for a major drop that would hit an intermediate bottom in 2011.
I agree with all of your points on his writings and don't take his imprisonment as a negative, I just don't know all the details although I have read all of his arguments. The way he emotionally recounts the story leads me to believe he is telling the truth. Just about everyone in prison states they are innocent, although I know some are wrongfully imprisoned. It is clear he was not given due process and being held indefinitely in contempt should not be allowed.
My concern is that they will stop him writing, and then "his writings" will come out as propaganda under his pen name for whatever agenda the club wants. The tone has changed slightly from his earlier writings. I am very surprised about his access to charts, ancient coin photos, and historical financial data that is not available for free on the internet - the quality of his writings and accompanying data/graphs is better than many newsletters from people that are not in prison?
Mikla and Apocalypse:
I have also read nearly all of his writings (or at least the 110 or so articles I've been able to locate on the internet since he starting posting). Quite a few articles I've read two or three times, and I thought "It's Just Time" was the single most interesting and insightful document I have ever read that was written in my lifetime. Thank you for summarizing his writings.
I have no way of knowing whether he is guilty or innocent of the charges against him. He makes a pretty good case for his innocence and the multi-layered conspiracy that resulted in his imprisonment. Regardless, I have found his ideas to be brilliant and extremely relevant to making sense of the current mess we are in.
One of the ideas the Armstrong has made me think about the most is how flawed every person's perception is of the world. You can see evidence of human mortality 100 times a day every day of your life, but no matter how early you intellectually know the "fact" of your eventual death, you are unlikely to truly confront your mortality until you reach a certain age. The debate regarding gold and fiat currency seems to be similar in some ways. No matter how much evidence is presented of the unsustainability the current situation, and what has been the outcome for every fiat currnecy in the past, the emotional reality of the current moment (when everything still feels normal and the same as the past 30 years) makes it very difficult to truly believe in the mortality of the fiat system. Armstrong has been very useful in presenting compelling data by which to believe and act on what is obvious to me intellectually, even if I still can not believe it emotionally.
Armstrong's theories regarding cycles, and the occurrence of economic turning points that will occur at points in the future that will sometimes be predictable to the day, are incredibly profound in their implications. I've spent a little time trying to back test his cycles, but haven't been able to do enough research to be feel satisfied that his theories are proven. Still, there's seems to be pretty good evidence of the cycles working for the past 25 years or so, and the key dates coinciding with what many educated people would agree were key economic turning points. How exactly one would profit from this knowledge is another question as Armstrong's cycles don't predict in which asset class the turning point will be focused or whether it will be a high or a low. Someone would actually still have to do some work on their own to profit from the cycles and turning points. Still it's the closest thing to a time machine that I've ever come across, and something I will continue to research until I am convinced that theories do not have useful predictive power. What is interesting it that I think the vast majority of people are emotionally incapable of accepting Armstrong's cycle theories. One of the most challenging ideas is that human beings as a whole behave in some previously unrecognized collective manner that expresses itself economic cycles, and that these cycles can be predicted decades or even hundreds of year in advance. This single concept challenges many widely held ideas about the nature of human life, human societies, and religious beliefs.
Hitman, and Milka, to the both of you I sincerely appreciate your thoughtful depthful grasp of Martin Armstrong's intelligence and teachings. I have read him for awhile but have never had the opportunity to discuss him with anyone, nor have I read commentary on his writings.
And thank you CHOPSHOP for posting his profound work.
+pi
I agree that many people (probably the majority) are, "emotionally incapable of accepting Arstrong's cycle theories". Further, I agree that it can be challenging, even regarding religious beliefs.
However, I don't see science as fundamentally a challenge to religion, as I don't see Armstrong's theories fundamentally a challenge to religion. If it's true we can predict cycles even hundreds of years in advance, that's merely because humans move in generational cycles (regarding risk, economics, corruption, etc). There is ample evidence to support this.
One of the recent examples is the recent attention on "The Fourth Turning", authored in the ?70's/80's, then re-released in 1997, that talks about these historical cycles. Summary: Societal cycles repeat, they take hundreds of years, and we're moving into a volatile destruction/re-creation period.
More info at: http://www.fourthturning.com/html/history___turnings.html
So, this isn't magic, and need not threaten religious beliefs. Rather, each generation has attributes associated with their formative years, and society will change as these generations relieve each other of command.
That's a good site -- I've read some really neat stuff there, and I really like the quite telling analysis with great charts.
I followed the links on the right to the "Swarm" movement, but I didn't see anything to join? Further, is there a way to subscribe to the site (for updates)? I didn't see that ...
We *are* in interesting times, as both technicals and fundamentals have broken down. Of course, in time, the fundamentals will re-assert themselves. (Japan doesn't own the Yen carry trade as much as it owns them.)
Steve Keen comes at cycles from a totally different direction -- he talks about classical and keynsian economics where they *assume* that the market will "instantaneously" respond and move to equilibrium with no memory and no lag, while in reality, the debt cycle drives (it takes time to leverage, and it takes time to de-leverage, and people burned through speculation have institutional memory not to speculate like that again). These "no memory" and "no lag" assumptions is one of the biggest problems in those economic theories, and is completely anti-thetical to cycles (the way the world really works). This maps with Martin Armstrong's computed periods of various cycle lengths, which happen to coincide with human professional lives, and human lifetimes. (We can only repeat the Great Depression when all the people from that era are dead or written off as kooks, so we can be just as stupid as the instigators of that tragedy.)
So, while I agree that cycles exist, I'm absolutely astounded at the level of government and international "central planning" taking place today, such that it seems that any of these cycles could/would shift a year or two in any direction (we could blow this year, or 2015, but there's no way to push it out to 2020). I have my sights set on 2011 (Euro implosion) and 2012 (US REIT crash, and US implosion). The numbers are just too big.
Armstrong is right that there will be civil unrest.
That is a serious concern. I share it also. My best hope is that he makes it out of prison alive.
"I am very surprised about his access to charts, ancient coin photos, and historical financial data that is not available for free on the internet."
he is allowed to get books & newspapers sent to him, colonel. (or was allowed) the fact that he's not on the internet is probably an advantage to be able to see the signal through the noise.
personally, i most love the handmade mimeographed cover art. the collected works are like reading the dark 'zine of high finance. both your & mikla's summations do his writings great justice.
methinks MA is the 'anti-Summers' and am willing to bet a silver dollar that fat larry secretly reads every piece that marty puts out...and then eats it.
"His point on interest is extremely important, for those that didn't look at the letter he stated that the national debt from 1986-2006 would have only grown $300 billion without all the interest charges. The bankers love STUPID FINANCIALLY UNEDUCATED politicians that run up deficits from the club credit card. The best example of how interest grows over time is the parable about the request for one grain of rice on a chess board and doubling it every square - no problem for the first half of the chess board, but by the last square the one grain of rice would multiply to more than all the grains of rice in the world."
Reply:
Exactly. That's the advantage of paying politicians to deficit spend, to increase the interest revenue of the private Federal Reserve. That's the game, and the dumbed down educational system (continuing with the no child left behind means no child advances program) and social engineering of protracted assault on personal responsibility ensures the entitlement bums feel entitled to more more more of the taxpayers money and more more more votes for the sold out politicians and it continues to balloon until it collapses, and collapse it will.
Perhaps we could counter "paying politicians to deficit spend" with a Constitutional amendment I call the Responsibility Amendment:
Suppose the Congress and the President reduced government spending by 25 billion dollars every year. Then, at the end of every year, the savings over the previous four years will have been 100 billion dollars. One percent of 100 billion dollars is one billion dollars, which would therefore be evenly divided among the President and the 535 members of Congress each year. Each would receive a bonus of nearly two million dollars each year.
Suppose inflation were 10% per year. After four years, the bonus could buy about half of what it would have bought, and thus politicians would have an incentive to not cause inflation.
As soon as the Responsibility Amendment passed, wouldn't the US credit rating instantly improve, and wouldn't the US dollar be the most stable and valued currency compared to all others, thus increasing the buying power of all Americans?
The Fed isn't really tasked with price stability and full employment. They are tasked with money and credit growth. Price stability and full employment are afterthoughts.
http://www.federalreserve.gov/aboutthefed/section2a.htm
"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."
Sorry Hansel, you or the fed may have your cause and effect mixed.
Tasked is the same as the goal, the objective.
The stated goal/objective is maximum employment and stable prices. Stable long-term interest rates along with growth of the monetary & credit aggregates naturally support both maximum employment and stable prices. They are variables to accomplish the goal of maximum employment and stable prices.
As you may have noticed, the playbook has been thrown out and the fed has involved itself in many activities outside of the narrow variable definition including foreign swaps and most likely bailing out their other franchises with loans to foreign countries (this means bailing out their affiliated banks). The country bailouts we hear about like Greece are often primarily bank bailouts of the bankers that extended the loans. The bankers lean on the governments of various countries to bail them out and then they call it the "Greece bailout". Accounting rules were changed so that bank B/S house assets could be maintained despite falling aggregates (stable prices).
Hopefully we can agree that they have failed on all accounts as credit and monetary aggregates have dropped, prices are not stable, and we do not have maximum employment.
It really depends if you're in for the long haul for gold and silver.
Both will drop in price as Euro has problems but this should be considered an opportunity to continue to buy gold and silver.
When the collapse comes to the US, all assets prices in US dollars will increase and so will a lot of people move into gold and silver.
You don't want to buy with the crowd when shit hits the fan, you want to buy it before hand when the crowd is still selling it.
I agree with your analysis.
If you're going to buy gold on the premise that it will rise... it's best to do it now while the markets are 'relatively' calm.
As for me... I'm taking a slightly different approach. I'm buying silver. The Silver/Gold ratio is way out of whack. If gold is going to rise... silver will have to rise as well (I think).
A penny for someone's thoughts in this regard.
Agree that by historical gold/silver ratios, silver is currently undervalued. Silver plays a more industrial role and is not always favored as a store of wealth as is gold. Gold is used in industry as well, and in "safe" times is viewed as a commodity but in uncertain times gold moves into a pure monetary play. Some experts say percentage wise, silver holds the advantage. I think it's a personal preference, and mine is to gold, in part because of the ability to have larger reserves of wealth weighing less than silver, and in part because gold is preferred money (to silver) in most of the world. Other reasons as well.
Is silver undervalued, or is gold overvalued? That's the real question.
Maybe gold has just been run up in price by the tin foil hatters out there, and silver has been relatively neglected by said tin foil hatters and Glenn Beck junkies.
I think that the gold is overvalued, and the silver is fairly valued, but that's just me.
Gold has made highs in sterling and Euro as sovereign spasms occur over there. I actually see another instance where gold and fiatscos move in tandem as people pile into both. This was predicted in the late '90s, and we have seen a few glimpses of this behavior against the grain. The final divergence will be unmistakable however, and having already procured your insurance is the only safe play.
Having read Armstrong for some time now, I can see he is referring to the near term, months, not years or decades or millinneum. Read "How All Systems Can Collapse Overnight, “The 3rd Century economic collapse. Are there lessons from the past ."