A couple of days ago a Café member sent me some of the latest commentary by Martin Armstrong of Armstrong Economics, formally of Princeton Economics International. As you will read, he continues his rant against "the gold promoters," a rant that seemed more than vaguely familiar.
What an understatement!
The Café opened on September 3, 1998 with the price of gold at $285 and the price of silver at $4.93. The internet as a form of communication was just coming into its own back then and many of the commentators you read about today were nowhere to be found in those days. Martin Armstrong was an exception.
By September 23 of that year he already was made mention of in this column. In 1999 he was brought to Café member’s attention 4 times in headline form and around 30 times overall. All this can be checked out by doing a Café search on Le Menu.
Here you go with one of them…
Gold: Manipulation or Exaggeration?
By Martin A. Armstrong
Copyright 1999 / Princeton Economics International
June 10, 1999
A two-man army calling itself GATA has begun to besiege the media attempting to gain a lot of press on the platform that gold is being "manipulated" by a cartel of investment banks. They constantly point to what they call the huge "carry trade" in gold were there is far more gold sold than exists…
I thought it might be interesting to get into our differences and bring them your way. However, I soon realized a book could be written on the prevailing material and the fascinating intrigue of it all. So for now, will keep it as simple and short as possible, starting with Martin A’s latest that includes some of his follower’s comments. Normally I edit swearing 99% of the time. However, this is not our commentary and I have left them in to capture the true vitriolic feelings of some of his followers, as a result of what their man has to say…
The comments have been pouring in on gold. To say they are interesting is to put it mildly. It is funny how both the gold promoters and the mainstream press actually respond in the same manner. Both desperately try to ignore the fact that our models just may have been an important advancement in the study of time and how things really function. It does not appear that either are ever really interested in helping anyone or advance one step in the game. They seem to both operate in the same manner to force their way of thing upon everyone else regardless if it is correct 0 they are both only drive by their self-interest.
The computer picked the gold pop for January targeting the week and the day of the high. You would think people might come to the conclusion that just maybe this model could have stumbled upon something since this is not an opinion. However, it just seems that it is far easier to assume the world is flat than to try to set sail around a sphere they cannot grasp even exists.
The implication of just the correct forecasts like this on gold go far beyond merely gold. What this demonstrates is that everything is truly connected. That means, if our computer models are correct, then a politician cannot actually run for office proclaiming vote for them and they will change everything. We are all just pieces of an interconnected world. That is the real implications of this forecast in gold. The sooner we realize that what Socrates has accomplished is the revelation that absolutely everything is connected. There is nothing that ever takes place in absolute isolation.
OMG – the most feared of all aspects C H A N G E!
I could have run to a beach and hide from the world. I was not looking to get back into hedge fund management or analysis. I held the 2011 Conference simply because they wanted to make this movie. So I agreed to do a conference. A former employee told me the industry changed. I would be lucky if 25 people would show up. Well we filled the Westin Hotel with just over 300 people and had to turn away over 300. It has been my loyal clients over the many years who have convinced me to come back. These forecasts are NOT my personal OPINION. They are not even my invention. They are the product of my DISCOVERY of time. For that reason only, my goal is to take this system public so that it survives me and from there perhaps knowledge will advance in a new direction. I promised our clients will get the first shot at the IPO. I will keep that promise when it is time.
If the gold devotees are sure that you manipulate the gold market (if not also the whole markets and the world and its surroundings), why didn’t they shorted it when you said it is time for a decline to possibly 950$ ? They would have already made a fortune. Unless they shorted it or bought put options and made tons of money but don’t want to acknowledge it.
I bet anything, a pack of chewing gum for example, that they are going to be your first subscribers to the trading signals in november. Of course they will only consider the buy signals and discard the sell signals. But they are going to make money from them and stay hypocrits.
In 1971 (end of the gold standard), the world population was less than 3.5 billions; it is now 7.1 billions and the trend is upward. How is it possible to have enough gold for every country? Let’s suppose the USA adopt a gold standard ALONE (because they are the only ones on Earth who unserstand gold, helped by the gold promoters), then the whole world would be happy to send/sell its gold to Americans and the USA will end up quickly with massive inflation, this same inflation that the gold standard is supposed to eliminate.
Now the gold adorers don’t trust the government in managing the paper money. But it is more arduous to manage money when it is gold, because it is a natural ressources, It is like agriculture: we are never sure in advance of the quantity we are going to obtain. And who is going to manage this? The government! So the gold adorers are the cousins of the government devotees (the keynesians/interventionists).
COMMENT #2: Hey Marty,
I just wanted to say thanks for being the only one who has the balls to take on these scumbag gold promoters. They had me sucked in for a while until I could see something was wrong. So I sold my silver when it was $27 a few years ago.
It was not until I discovered you that I truly understood that selling my silver was the right thing to do.
These pricks make me sick and I chuckle to myself every time you give them shit in your blog.
Keep up the great work mate.
The folks who are mad at you or the "manipulators" are completely schitzo. First, they should be upset with themselves, which I am. But then they should be pissed at the gold promoters and I won’t mention any names. I follow these gold sites just to gauge the interest and I will say that the interest
in gold is waning quickly.
This gold essay was written when he was in prison.
I think it’s his best gold essay in an unbiased way.
Look at the graph where 1980 is the peak and 2016 is the bottom of gold.
He says ,"The next target happens to be 2016 that lines up with the purchasing power of the dollar. When we look at GOLD, hopefully you are starting to see, this is a very critical market to understand."
I used to be a gold bug, thank you for your blog.
Remember that immature girl in high school, how every little thing that happened to her meant that someone either hated her or was obsessed with her; who thought every teacher who ever gave her a bad grade was being totally unfair and everything good that happened to her was because of how amazing she was? Yeah, we’re that immature high school girl.
A great call by Marty. Not only did he pick the week of the high but also the day of the week of the high:
Can’t wait for this deal to go live.
And yes, Martin A did call the recent top in gold above $1300 and when it would do so. It was the right call, a good one. But, as you also know as highlighted here, most EVERYONE was bearish right then. Only the gold market does what the crowd expects. That said, it does not take away from the call.
Now, since you don’t want to read a book, here are some key points of interest over the years…
*From a Martin Armstrong email to my colleague Chris Powell…
May 14, 1999
I understand your frustration that gold has been perhaps the worst investment for the past 20 years. But to argue that it is being manipulated due to large short positions is not justified.
There is no interest in gold at this time and the central banks are all sellers. After they sell their gold, then we will see a bull market. Once those supplies are gone, no one will be able to lean on that supply and your bull market will begin.
I hate to tell you, but gold will drop to under $200 before it turns…
As you know now, gold never came close to taking out $200.
From CP’s response to Martin A…
May 14, 1999
…And I don't know what other than "manipulation" you can call it when the Bank of England announces its gold sales in advance even as it says it is selling gold because it wants a better return on its assets. If the Bank of England really wanted a better return on its assets, it would not announce its gold sales until they had been completed; it would not do anything to drive down the price of the asset yet to be sold.
Obviously the IMF and Bank of England gold sales have a primarily political purpose, a purpose other than the stated purposes. We believe that this purpose is to manipulate the price of gold, thus to tamper with this traditional gauge of the integrity of currencies.
We also think "manipulation" is fairly applied to the bailout by Wall Street, at the behest of the New York Federal Reserve Bank, of Long-Term Capital Management last summer. That bailout was ADMITTEDLY manipulation; the Fed believed, and the Wall Street investment houses were persuaded, that the free market could not be allowed to work in the ordinary way, which would have meant LTCM's bankruptcy and collapse and with great losses suffered by LTCM's counterparties. So these so- called capitalists were all bailed out under government sponsorship when their casino bets went against them and threatened to take them all down. GATA believes that LTCM and its counterparites had troublesome liabilities related to gold.
Contrary to your suggestion, GATA hasn't argued that central banks should not be allowed to sell their gold. We may not consider that a wise policy, but our objection is a matter of HOW they are handling their gold. Are they, for example, leasing it in circumstances that put its recovery at risk? GATA argues that so much of this gold has been leased, sold, and absorbed by the market that its recovery could prove impossible in a short squeeze when gold's price direction changes, and that many financial institutions are at serious risk because the "gold carry trade" has gone too far. Further, there's some reason to think that the Bank of England's gold sale -- or at least its announcement that it plans to sell its gold -- was meant largely to rescue one of the big shorts in the market, another financial institution that, like LTCM, is deemed "too big to fail."…
The Bank of England’s announcement to sell half their gold was only a week old and the egregious nature of it all attracted more adherents to the GATA camp than any other factor ever.
Martin Armstrong’s time was soon preoccupied with personal issues. However, the cordial, but contentious relationship between GATA and the brilliant Martin Armstrong was an ongoing one…
1/15/2000 Bill Murphy - Conversations With Marty Armstrong Before He Was Thrown In Jail
A week ago today I had a two-hour conversation over the phone with investment guru Martin Armstrong which was, in many ways, quite remarkable. It was only a couple of months ago we were almost at each other's throats about GATA.
For those of you new to this story, Armstrong presided over Princeton Economics International, a renowned investment research firm that was noted for its Japanese fixed-income clients.
Armstrong was invited all over the world as a guest speaker to comment about his views of the markets. To give you some idea of the scope of his firm's worldwide presence, I took the following off the www.princetoneconomics.com web site:
"PEI seminars are held around the world in Tokyo, Osaka, Hong Kong, London, Munich, Los Angeles, Princeton, Vancouver and Edinburgh, with normally annual events held in Beijing, Sydney and selected cities in Southeast Asia.
"All seminars are recorded and transcripts are normally available. Selected seminars are also available on video tape in NTSC or PAL. Audio tapes are available, as well, normally in English but also in Japanese for those held in Japan."
Before I get into the matter, here is the latest to bring you up-to-date about Martin Armstrong:
* * *
Armstrong jailed over allegedly missing assets
By Tony Hagen
Trenton (N.J.) Times
Saturday, January 15, 2000
NEW YORK -- Commodities guru Martin Armstrong was jailed last night after a federal judge ruled he willfully disobeyed a court order to turn over corporate records and millions in gold and antiquities.
Armstrong, who faces criminal securities fraud charges, was accused of concealing items belonging to Princeton Economics International and Princeton Economics Institute of Carnegie Center in West Windsor, N.J.
Armstrong, the head of the two companies, has pleaded innocent to charges he bilked Japanese investors out of $1 billion, and spent $16 million of their money to acquire gold, rare coins, and art work.
U.S. Magistrate Richard Owen ordered Armstrong held for 18 months or until he divulges the location of the missing assets. Armstrong was taken from the court to New York Metropolitan Correction Center.
Prosecutors said yesterday that Armstrong turned over a portion of the assets but destroyed corporate records they had demanded…
February 11, 2000 - Spot Gold $311 down $5 - Spot Silver $5.29 down 7 cents
…Chris Powell received a letter today from Martin Armstrong. He wrote that the government seized some of the tape recordings he had made describing market manipulations. He asked Chris to get a transcript of his appearance in court Feb. 7, which would have been just a few days ago. He said the transcript "may be of great interest to your members and your cause to unravel the organized crime ring that is controlling the markets."
Chris has contacted GATA's attorney, Merrill Davidoff, to find out if they are connected enough to get the transcript.
Lordy, lordy what are we getting into?…
*Chris made attempts to visit Martin A in jail, but was rebuffed by the authorities.
Then, things went quiet as Mr. MA spent more than a decade in jail, which seems outrageous, but he was not a popular man with the authorities. Finally,…
Ex-Adviser Out of Jail After 11 Years, Including 7 for Contempt
March 15, 2011 8:14 pm March 15, 2011 8:14 pm
Rick Maiman/Bloomberg News Martin A. Armstrong at the Metropolitan Correctional Center in New York in 2000.
Martin A. Armstrong, who prosecutors accused of running a $3 billion Ponzi scheme, is finally out of jail after 11 years, including a possible record seven years for contempt of court in a dispute over gold and antiquities.
Mr. Armstrong, a former financial adviser who once ran an investment firm called Princeton Economics International, will be held under house arrest until his federal custody ends in September, a spokesman for the Federal Bureau of Prisons, Chris Burke, told Bloomberg News.
Mr. Burke said Mr. Armstrong would be allowed to go to work and required to check in at a halfway house in the Philadelphia area. He was released last week, according to Bloomberg.
Mr. Armstrong spent seven years behind bars for contempt after he defied a federal judge’s order in January 2000 to turn over to the government about $15 million worth of gold bars, rare coins and antiquities including a bust of Julius Caesar. Normally, people held in contempt by a judge are jailed for no longer than 18 months.
Mr. Armstrong contended he did not have those assets.
As Mr. Armstrong sat in the Metropolitan Correctional Center in Manhattan, federal prosecutors tried to build a criminal case against him.
Ultimately, Mr. Armstrong was sentenced to five years in prison in April 2007 after he agreed to plea guilty the year before to one count of conspiracy to hide hundreds of millions of dollars in trading losses.
After seven long years, the judge in the case finally lifted the contempt sanction so Mr. Armstrong could begin his prison term. He received no time off his prison sentence for the time he spent in the Manhattan jail.
It did not take Mr. Armstrong very long to build quite a following again. What a story!
So, Armstrong is back and GATA is still at it all these years later. The evidence we have uncovered over all this time has bolstered our case 100 times over since those early days, but it won’t make a difference to him, not as stubborn as he is.
Chris mentioned LTCM, the famed hedge fund, whose demise was threatening the financial system at the end of 1998 into 1999. GATA was on their case too, as it was very clear the bullion banks (including the Fed) were coordinating their selling of gold to keep the price below $300 an ounce. Financial institutions were short an enormous amount of gold to finance their business operations and a spike in the price could have been devastating to many of the major financial institutions in the U.S and abroad.
GATA received information that LTCM was short up to 400 tonnes of gold on their books (perhaps for the Bank of Italy, as per Rob Kirby). That position was to be protected at all costs and we made our thoughts on that matter known.
GATA received an affidavit from Eric Rosenfeld, a principal of LTCM, and a letter from their senior counsel Jim Rickards, denying being short all that gold … which is another long story.
Why bring it up? In August of 2011 Jim Rickards was a featured speaker at our Gold Rush 2011 conference at The Savoy Hotel in London. Do you think Jim would have been a speaker at a GATA conference if we were really off base? If anyone knew how right GATA was about the suppression of the gold price, and what it involved, it is him!
So, all these years later Martin Armstrong is back in the limelight and making his own waves again ... and still a gold bear. On the other side of the aisle, Jim Rickards is one of the more vociferous gold bulls around, talking about a gold reset price, etc. And GATA is still plugging away, doing what we can to expose what will eventually be the greatest financial market scandal in U.S. history.