Is Commercial Real Estate in Trouble?

Posted Apr 2, 2020 by Martin Armstrong

COMMENT: Dear Marty,
I am located in the intermountain west where many national tech companies are re-locating. We are referred to as “Silicon Slopes” of the west. Since Covid-19 came to light and we have essentially a “stay at home” and work policy here in Utah, all the new beautiful office buildings packed with tech companies are now empty. I was joking with some of my co-workers that when the dust settles many of these companies may realize that they were nearly as efficient/ productive without having their employees all in the same room. I believe that the fallout to commercial real estate may be an unintended by-product that will come from all of this. In speaking with a couple of different business owners, their leases come up for renewal in August and both have already said they don’t need the space anymore. I just find it interesting that this virus is the gift that keeps on giving with so many unintended casualties. Thanks for keeping it real.
Sincerely,
SB

REPLY: Yes, commercial real estate is crashing. This may be an area of unexpected consequences. If they keep raising taxes on businesses, they will simply convert employees to contracted independents. That will eliminate the employer matching taxes. These people have not realized the damage they have done to the economy. This is not going to be back to normal. Many small businesses that were finding it hard to compete with online businesses will not reopen.

We do see a sharp spike low during the 2nd quarter 2020. That has been our target for an initial low since our forecast back in 2015. We will be looking at updating our real estate forecasts given the recent events.

Expansion of separatist movements and probably armed conflicts post-2020 into 2032.

Where to Go in the 12 Years Remaining for a Global Political Crisis

Posted Feb 27, 2020 by Martin Armstrong

QUESTION: Hi Martin
I’ve been following your blog for some years now, its the first thing i check why I wake up daily. I feel I get a better perspective of the world around me reading your blogs rather than browsing news sites. There are so many questions on which I would love to hear your opinion. I’m an IT consultant here in the UK and fed up of politicians going after hard working folks. Its always the middle class that gets squeezed between low and high income earners. My question is which country in your opinion is the best amongst the lot where you would move. UK, I feel, will get bad under Boris and taxes have already started to go up. Europe is clearly down and US would also follow suit once Trump is gone. If you had to pick one country in Asia, Europe and Americas and finally in any part of the world, which one would it be? I’m originally from India so would be easier for me to move there. Is it Australia, New Zealand, Switzerland? or there is no place to hide 
Thanks in advance.
R

ANSWER: All governments in the West are going to be raising taxes dramatically. They will NEVER reform and step back. That means they would have to change the very power structure of government. We are looking at the expansion of separatist movements and probably armed conflicts post-2020 into 2032. You will see separatist movements even in the United States. So you have to look at the region and be very specific.

It is very hard to pinpoint a place at this stage in the game. The USA will be better than the other Anglo-Saxon countries, but that may last only until 2024 at best. Southeast Asia will be OK, but keep in mind it has already seen protests against foreigners in places like Singapore.

Bottom line — this is not going well and we are looking at a global political crisis developing over the next 12 years

Agriculture Yield Elected Yearly Bearish Reversal

Posted Jan 18, 2020 by Martin Armstrong

At the end of 2019, we obtained Yearly Bearish Reversals on crop production in many areas. This is lining up with the ECM and it is warning that weather is turning against us for food production. The market tends to focus only on year/year numbers and ignore the trend on a broader perspective.

The USDA 2019 corn harvest had a total production of 13.692 billion bushels, with average yields of 168.0 bushels per acre across 81.5 million acres. This was slightly higher than analysts expected which was about 13.513 billion bushels, based on average yields of 166.2 bushels per acre across 81.350 million harvested acres. USDA’s prior tally was for 13.661 billion bushels, based on yields of 167.0 billion bushels across 81.815 million acres. Nevertheless, the broader trend elected a Yearly Bearish Reversal warning that we may indeed see lower yielding crops as we head into this new Solar Cycle which begins here in 2020 and appears to be poised to be the lowest sun cycle in more than 200 years.

We never elected a Yearly Bearish Reversal in wheat prices. Nevertheless, from the 2016 low, we have elected two Yearly Bullish Reversals. This perspective combined with our models of weather are pointing to higher prices in the years ahead.

There will be a steep economic decline for Europe in 2020

The 2020 Elections – Economics v Career Politicians.

Posted Sep 20, 2019 by Martin Armstrong

QUESTION: Hi Marty,
Been reading your blog for six years now and the clarity you have brought regarding cycles and predictability of human behavior is remarkable. My question is regarding the 2020 election. You have said economics drives politics and not the other way around. With the anticipated significant decline in the US economy in 2020, wouldn’t this normally make it more likely incumbents, including Mr. Trump will lose their seats based upon a declining economy? Or would the current voter trend of distrusting career politicians trump (no pun intended) the typical cycle of bad economic times ousting incumbents?
DJZ

ANSWER: Normally, a decline in the economy will often lead to a political change. In this case, our models DO NOT support the view that the US economy will be heading straight down into the elections of 2020. We see this as turning early in 2020.

However, this next wave will be a cost-push inflationary wave and we still see the economic decline in Europe and Asia continuing. There is dissent behind the curtain at the European Central Bank. There are those who have adopted our warnings and are voicing them in meetings that continually result in bond buying and negative interest rates. These policies are destructive to the economy and have failed to “stimulate” anything other than fiscal mismanagement among the political fiscal side of things.

There will be a steep economic decline for Europe in 2020, which will be its 13th year down from the 2007 high. There will be a continued flight of capital into the USA that will support the dollar and the underlying economy.

Turning to the political problem of career politicians v Trump, the Democrats seem to lack any candidate of substance. Elizabeth Warren’s advisors are the European team and they support Thomas Piketty who is a modern-day Marxist.

Even looking at AOC, she won, NOT because of her crazy ideas, but because, like Trump, she was not a career politician. Scherie Murray explains why she is challenging Rep. Alexandria Ocasio-Cortez (D-N.Y.). Our model on the 2020 election for the 14th district of New York shows this has had a run of 14 Democratic victories in a row since 1992 when the Democrat Carolyn Maloney first won. That means we could lose our most entertaining member of Congress this time around.

It will all depend on the closings for 2019

Prolonged economic recession in Europe since 2007 as we approach a 13-year decline in 2020

Gold Becoming Part of Money Laundering Laws

Posted Sep 17, 2019 by Martin Armstrong

The hunt for money is moving into high gear in Germany. Prior to 2017, it was possible to buy gold anonymously in quantities up to €15,000. In 2017, this limit was reduced to €10,000. Now, Merkel has drastically reduced this limit to just €2,000 beginning in 2020. Any transaction greater than that amount requires the buyer to prove their identity and give their data to the gold trader.

While Merkel has allowed the refugees to pour into Germany, denying there are terrorists hidden among them, she has justified this reduction in anonymous gold purchases by arguing against money laundering to stop terrorism. This means that terrorist would be buying gold inside Germany, which on the other hand she denies letting them in to start with.

Merkel is not satisfied with imposing just a price limitation. She also wants to introduce the 50-gram rule, which would apply regardless of price. For physical gold buyers, this means they will not be able to buy a 50-gram ingot (1.60754 troy ounces) without the gold trader taking personal data and saving it for five years. This certainly applies if you tried to buy just two one ounces coins.

Merkel has formally justified this change in the laws on gold as a step in the fight against money laundering and terrorist financing. The government studies show that out of 77,252 cases registered in 2018 that suspected terrorism financing, only 175 cases involved precious metals.

Terrorism has been a real windfall for governments since 9/11. They have increased their powers globally and probably send thank you cards to the terrorists for handing them the excuse to create total financial surveillance that they use in the hunt for taxes.

The Merkel government has been making a concerted effort to introduce a total surveillance state and track the finances of its citizens. There is chaos in Europe with negative and punitive interest rates, high bank charges, and a declining euro. All of this is mixed with a prolonged economic recession in Europe since 2007 as we approach a 13-year decline in 2020. More and more Europeans are looking for ways to safely and anonymously invest their savings, which have been under direct assault by the government. This has been leading to the hoarding of US dollars and now the change in legislation on gold is only going to increase the switch to dollars

Cycle of War & Religion -2021/2022

Posted May 31, 2019 by Martin Armstrong

QUESTION:

Hello Martin,
on Sept 12th 2013 you wrote about the ‘Return of the crusades’. Now, 6 years later, with the massive migrant crisis still ongoing, a lot of people consider leaving Western Europe bc Sharia law is looming everywhere. Mohammed takes the first place for baby names in many countries, sharia law spreads, kindergartens don’t serve pork anymore, Easter festivities in school get canceled bc of Ramadan, rapists and even murderers don’t go to jail bc neither the executive nor the judicative has capacities anymore to even open a trial and so on. At the moment, it looks as if Western Europe will become a caliphate within the next decade or two. With Migrants still flooding the continent and the birth jihad, it seems Europeans/Christians will vanish in the foreseeable future. I would like to know what Socrates has to say about this… will there be a counterstrike? Or a religious war? Right-wing parties rise everywhere, so the Europeans ARE fed up. But is there even enough TIME to turn things around…?

What do the cycles say?

Thx and cheers,

P

ANSWER: Unfortunately, the cycle of religious tension is also due in 2021/2022. The first recorded persecution of Christians took place under Emperor Nero who blamed them for setting the great fire in Rome. The base cycle on a major shift in religion turned up in 1990, which was 224 cycles of 8.6 from 64 AD. Add pi, 31.4 years, and we arrive at 2021/2022. Nevertheless, there was also rising tension with Islam itself. This I laid out in the 2015 Cycle of War report. When the economy turns down, that is when tensions rise. There was the religious war in Christianity known as the Byzantine Iconoclasm, which existed between about 726 and 787 AD. The peak before the war came 72 cycles of 8.6 from the Nero persecution of 64 AD. Then 96 cycles later we come to Martin Luther in 1517 when he posted 95 theses on the church door in the university town of Wittenberg. Cyclically right on time, in 1534 King Henry VIII declared himself to be supreme head of the Church of England. This resulted in a schism with the Papacy and began the events known as the English Reformation.

It appears we are building toward 2021/2022 when things are going to begin to get heated on a religious basis.

The risk for political change in North Korea comes into play as soon as 2019/2020

When will North Korea Rise to Overthrow Kim Jung Un?

Posted Mar 29, 2018 by Martin Armstrong

QUESTION: You said that Kim Jung Un was at risk of being overthrown and therefore he would have to shift direction or go to war. When do you see North Korea falling?

PP

ANSWER: When Korea was split in 1945 into communist North against the South, the terrain has always dictated the situation. About 65% of Korea’s heavy industry was located in the north, but, due to the harshness of the terrain, only 37% of its agriculture existed in the North. This is why the North often has bouts of famine.

I have warned that the Economic Confidence Model has three distinct components. There is the main wave frequency based upon Pi of 8.6 years which builds into 6 waves forming the major wave of 51.6 years which seems to be the generational shifting wave that manifests in political changes between public and private trends.

Then there is the Volatility Wave component. This is what causes one 8.6 year wave to be more pronounced than another. The volatility component has a frequency of 6 years which is a slower moving wave taking 12 unit waves to build into the ultimate volatility peaks of 72-year intervals.

The Schema Frequency I do not reveal. To put this in context, it is the DNA wave of a coded pattern throughout time. This will be the last thing I ever reveal if I decide to do so. The jury is still out. This is what everyone has tried to get from me for so long. It is the key to the interaction of waves.

On August 8th, 1945 (1945.602), the Soviet Union declared war on Japan. Soviet troops advanced and the US government feared Russia would occupy the whole of Korea. On August 10th, the US government proposed the 38th parallel division.

Therefore, the 72-year of volatility began during the summer of last year – 2017.602 (August 7th). Communism fell on its 72-year cycle (1917-1989). The Soviet Union broke up 2 years into that cyclical event. This places the same timing risk cor North Korea going into 2019-2020.

The 51.6-year cycle from 1945 (1997.202) marked the start of the 1997 Asian Currency Crisis. Kim Jung Un was conducting missile tests that began on February 12, 2017, last year, which was just a KN-15 Pukguksone type. Thereafter tests took place on March 6th, March 22nd, April 5th, April 16th, April 29th, May 14th, May 21st, May 29th, and June 8th. The intercontinental ballistic missile tests began with the Hwasong 14 on July 4th, probably because of the American Independence holiday. That is when the attention began to really turn to North Korea and that began almost to the day of the 72-year turning point.

The entire world is going to go nuts 2031/2032. There will not be a country that is spared from political and economic events. The risk a serious famine in North Korea which could result in the people rising up will arrive in 2023. That pressure will begin here this year 2018.70 – which will be September 13th, 2018. This appears to the turning point that is not just concerning North Korea. It is appearing around the world in many markets. The risk for political change in North Korea comes into play as soon as 2019/2020

South Africa - major economic crisis going into 2020

South Africa Expropriating White Farmer’s Property

Posted Mar 1, 2018 by Martin Armstrong

South Africa is turning extremely left-wing to the point that it is risking any viable economic future. The Parliament of South Africa on Tuesday voted to expropriate the majority white farmers of the country without compensation. This is how the Russian Revolution took place – the just took everyone’s property. The motion was submitted by the left-wing party Economic Freedom Fighters (EFF) and it was supported by the ruling party ANC (African National Congress). This maneuver is trying to change the constitution. All the work of Nelson Mandella is being gradually eliminated.

Clearly, the topic of land expropriation has been one of the most sensitive issues since the end of apartheid in South Africa. New President Cyril Ramaphosa, in his first major speech after taking office in mid-February, publicly stated that he supported the expropriation of white farmers without compensation. The excuse is that this will lead to increased food production. It has absolutely nothing to do with that. The majority of the agricultural land in South Africa still belongs to the white South Africans even 24 years after the end of apartheid. White ownership has declined slightly from 85% to 73%. However, the idea of a free market in South Africa does not truly survive. The rising chants assert that the “time for compensation is over; now is the time for justice!”

Parliament mandated the Constitutional Commission to report on the issue at the end of August. The ruling ANC party is under pressure before next year’s parliamentary elections, and land seizures of white South Africans could increase popular support in the poor black electorate. Of course economically, when a nation simply expropriates private property, thereafter, it becomes economically a high risk to do business with them.

The hyperinflation of Zimbabwe was in part set in motion by the violent expropriation of white farmers0. Zimbabwe saw a sharp decline in production of food plunging the country into chaos. Zimbabwe was formerly known as the breadbasket of southern Africa. Once it expropriated the farms of white farmers, the country fell into complete chaos. South Africa is risking the very same future. Inflicting vengeance upon the white farmers may make many feel better, but it risks sending the economy into total chaos.

Meanwhile, President Cyril Ramaphosa was part of the original movement in South Africa’s peaceful transition to democracy. However, he has also been criticized for his conduct dealing with firms such as his joint venture with Glencore and allegations of benefitting illegally from coal deals with Eskom. Glencore became a huge controversy because of its business activities involving Tony Blair, former Prime Minister of UK. There is a Directional Change due in 2020. The Apartheid era (1948-1994) lasted for 46 years. The current situation appears moving toward a major economic crisis going into 2020.

Collapse in confidence in government - Cycle should intensify starting in 2018 running head long into 2020

If US Election Were Held today – Trump Would Get More Votes Polls Show

Posted Apr 25, 2017 by Martin Armstrong

The latest polls show that most people who voted for Trump are satisfied. When the same questions have been asking about Hillary, the opposite response appears. The polls are actually showing that Trump would win a greater margin today than last year. This is interesting for it is confirming the collapse in government with Big Bang that began on October 1st, 2015.

Big Bang was the start of the collapse in confidence in government. This cycle should intensify starting in 2018 running head long into 2020. This is all good for the volatility in markets we see ahead. This is the same trend that produced BREXIT and just wiped out all mainstream parties in France

From Norway to India the year 2020 will mark the end of petrol or diesel vehicles.

sted May 5, 2016 by Martin Armstrong

Part of the global warming/climate change deals, many people do not realize that in Europe there will be no more gasoline and diesel cars on the streets come 2020. From Norway to India the year 2020 will mark the end of petrol or diesel vehicles. This is part of the long-term bear market in energy. Germany wants to bring at least million electric vehicles on the roads. However, this energy policy presents a crisis. They never realized that to prevent cars from using oil based energy, they have to get ready for a 25%-30%increase in power consumption. Shutting down nuclear power plants means you are transferring one pollution source for another.  Meanwhile, Germany was to shut down all nuclear power by 2022. Nobody seems to have figured out the coordination of these two trends.

Still see the Dow at 23,000 and exceeding that, the potential to reach 40,000 remains viable for 2020-2021.

Value Investing – Good or Bad?

Blog/Basic Concepts

Posted Feb 29, 2016 by Martin Armstrong

QUESTION: Do you think value investing is viable in today’s chaotic markets?

Much appreciated

KB

ANSWER: No. Value investing has been a recipe for wild swings and if you do not have the stomach for long-term, it is not something to get involved in. It should also be noted that it resulted in bankruptcy pre-World War II for it could not cope with the Great Depression. The town I grew up in had a main street. It was mostly owned by my father’s friend. Why? He had cash at the bottom of the Great Depression and bought it all up at distressed prices. With TIME, it was a great trade. But unless you buy the low, most people buy the high and cannot survive the swings. We are entering a period that is chaotic; the most in our lifetime. Surviving this is more than just putting gold coins in your sock drawer. The strategy has to be comprehensive and you MUST comprehend what is going on globally to come out the other end.

Here is the opening paragraph from a 1997 transcript of a conference:

“For most people the real issue at the moment is are the stock markets too high? How do we determine value? Back in 1994, I met a lot of value investors in Europe and said that our models were showing the market was bottoming and we were looking for the Dow to go to 6,000 by 1996 with an outside chance that it would go to 10,000 by 1998. They thought we were crazy and said the US markets were over-valued at their 1994 level. Some of them went into cheap assets in Russia and South East Asia and subsequently lost up to 70% of their portfolio. So the question of value appears very subjective but it is critical to understand. Really the question of value is defined by the monetary system within which we operate. Throughout history we have had broadly two types of system – a fixed exchange rate system and a floating rate system. The current floating rate system was born in 1971 but it is by no means the first time we have had such a system.  Gold bugs argue that the only way we will survive is to return to the gold standard but this has not prevented panics in the past. Money is really the language that allows the transfer of wealth back and forward through commerce. Value is more to do with the tangible assets.”

I seriously doubt that “value investing” will work for the average person in the period ahead. It has been part of the theory behind gold that it will rise with inflation when it does not (see also Forbes study).  

Do not get me wrong. Since the S&P 500 penetrated last year’s low, we are setting up for the Sling-Shot to the upside. 

The computer will pick the timing and the Global Market Watch may hit the pattern. Then it will be time to jump in for the ride. 

We still see the Dow at the 23,000 and exceeding that area the potential to reach 40,000 remains viable for 2020-2021. You must understand, however, for that to unfold, confidence collapses in government. We are witnessing this trend unfolding. I I posted, Forbes shows that people are starting to trust the private sector more than government. This is why Donald Trump is soaring in the polls. This is all about government losing credibility.

Categories: Basic Concepts 

Ebola will initially fade but be back in full force in 2016 going into 2020

Ebola Returning?

Posted on November 28, 2015 by Martin Armstrong

COMMENT:
Marty In your report on diseases you had mentioned that Ebola will initially fade but be back in full force in 2016 going into 2020 with devastating results. Looks like you are right again. Please see report from CNN about Ebola coming back to Liberia. http://www.cnn.com/2015/11/21/africa/liberia-ebola-return/index.html Would Ebola be restricted to Africa or are we going to see worldwide outbreak this time.
Thanks
SJ

REPLY: It is amazing to me how outside of physics, the world remains ignorant of cycles which control absolutely everything right down to the cycle of life. Ebola like everything else conforms to cycles. It will not stay confined to Africa. The importation of refugees into Europe will also provide a carrier for disease. Politicians are totally ignorant of life in general. It was Gaëtan Dugas (February 20, 1953 – March 30, 1984) who was a Canadian employee flight attendant of Air Canada who brough AIDS from Africa to North America. It was the Centers for Disease Control and Prevention who traced it all back to this one individual they called “patient zero”. Despite the fact this has been disputed, the point is that someone, if not Dugas, crossed borders transporting the disease with them.
Another tremendous risk is criminal prosecutions in the USA. Anyone charged with a crime takes precedent over anything else. There is no question that with all the cross-border connections taking place right now, it is impossible to contain any disease to one area.