Gold- weekly level the major barrier overhead remains at the 1420-1425 level.

Gold All Lathered Up – But Are We Ready to Go?

Posted on February 24, 2014 by Martin Armstrong

The key resistance in gold on a nearest futures basis stands at the 1400 zone on a technical basis the weekly level. On our model, A Daily Bullish Reversal stands at 1344 nearby while on the weekly level the major barrier overhead remains at the 1420-1425 level. Of course, the gold promoters always proclaim a bull market and quickly forget every decline. Often they seem just like politicians always preaching their own self-interests with little regard for the financial survival of their victims. They act as if you will miss the ENTIRE bull market unless you buy immediately today.

Timing wise, it still looks like the major SUSTAINABLE rally comes AFTER the turn in the ECM 2015.75. From a broader perspective, we really want to see a low with the top of the ECM into early 2016 for that would set the stage for a serious rally thereafter that may at last really breakout above the 1980 high in real terms – not simply nominal terms.

However, the gold promoters never look at the long-term and how the market plays a role within the entire global perspective. The crisis in Ukraine and the LIKELIHOOD that we will see Russian intervention can cause a spike rally in gold. We are not going to be out of the woods on this crisis at least until the after the week of April 7th. That seems to be the real target in time.

Gold will not look impressive unless we see it exceed the 1425 level on a Weekly Closing Basis. Remaining beneath that level into April only warns that we can still see new lows into next year before the whole thing goes nuts starting in 2016. Keep in mind that a crisis in Ukraine with a Russian invasion will send the dollar higher. Russia is already saying the overthrow of the Viktor Yanukovych was illegal despite the fact the people did so in great mass without ANY weapons from the West. The future rally we see for gold has NOTHING to do with hyperinflation, the Fed or other nonsense. This is now in the hands of geopolitical uncertainty and that is where gold comes in – it is as I have always stated – a hedge against governments not inflation as clearly demonstrated with the above chart.

Real Democracy

Posted on February 24, 2014 by Martin Armstrong

Ukraine stands at the threshold of showing the world a new way of government – Real Democracy where the PEOPLE rule over the Bureaucracy. The political body MUST rotate and that includes the head of state once a year elected from the people and they will then be the check and balance against REPRESENTATIVE government that masquerades as Democracy.  This is the ONLY form of government our research has demonstrated could last at least for a few hundred years. Human nature is such that history warns there are so few people who are honorable and once they get a taste of such power, they do everything to hold on to it. There are so few Cincinatius who would rise and accept the office of Dictator for one year and hand it back to return to his farm.

Corruption can only be reduced by eliminating taxes that eliminates most lobbying. Eliminate career politicians and you eliminate the taking of bribes and you will eliminate the corruption of human nature that will consume those in power as Yanukovych has displayed. What drives a man to throw everything away for such wealth as if it can be hidden for life? The documents demonstrate that the elections were rigged so Russia’s claim that only Yanukovych has a right to rule is insane. He gathered such wealth figuring he would just always rig the elections and stay in power. He two sons began a criminal extortion ring. You simply cannot have career politicians who never leave office. This is absolutely critical and it appears we are headed into a vortex of war from which who knows what will survive. Representative forms of government with lifetime career politicians are no different than monarchy led by kings.

Yanukovych Opens Fire of Civilians – the Trump Card is Always War, Dollar

 

Posted on February 20, 2014 by Martin Armstrong

Reply

Yanukovych will go down in history as a ruthless criminal. He has effectively ordered the massacre of civilians. Gun shots filled Independence Square and now more than 100 protesters have been murdered according to their reports. All out civil war is in motion and I fear that with this War Cycle turning up here in 2014, this incident will be the spark that ignites this cycle. Expect this to really escalate after the summer. This could result in the same shift in capital flows into the dollar that we saw during World War I and II.


The huge two spikes up in the dollar were caused by European War. The sharp rise against after World War II is the devaluations of currencies and the rise in the dollar with Bretton Woods. The pattern for the dollar does not show a long-term bear market. This pattern is indicative of a market that has yet to peak. The greatest spike rallies in the dollar are war driven.


The rise in the British Pound to all time record highs against the US dollar took place also during the US Civil War. So to all those dollar haters who harp about money supply, the Fed, and just about everything else imaginable as to why the dollar should be worthless, the trump card is ALWAYS war.

Dollar - China Russia versus Europe

US Dollar Holdings Rose in December to $5794.9 billion

Posted on February 18, 2014 by Martin Armstrong

Chinese holdings of US Treasurys declined in December by a modest $48 billion. China’s holdings of dollars dropped from $1,316.7 billion to $1,268.9 billion. The US Treasury holdings by foreign entities increased in December, from $5,716.9 billion to $5,794.9 billion. This is still showing the rising trend on a global basis for the dollar. 

The US claiming they will defend Japan against China has shifted China’s strategic reserve position as their economy declines while the increase in dollar holdings came from Europe for fear of the Euro and rising tensions of war and civil unrest. So far, this is a trend that is lining up with the Cycle of War. We would expect dollar holdings to decline among China and Russia while Europeans will be buying everything they can get their hands on as was the case during WWI and WWII.

Random Walk Theory

Global Warming & Random Walk Theory Have a Lot in Common – They are Both Nuts

Martin Armstrong

Global Warming is clearly a bunch of hot air. It seems to be a theory made up by a bunch of guys that got drunk one night and said – Hey man! It is warmer this season than last! Wow! We must have caused that man! Word! This is the coldest year day after day on a consistent basis I can remember in my life. Environmentalists and Democrats love to claim that there is a “97 percent” consensus among climate scientists about global warming. However, they choose to ignore the fact that 95 percent of those climate models predicting global temperature rises have been wrong.

This entire theory is nonsense and it arises from the same idiotic concept that fails to recognize that there is a cycle to everything from the way your thoughts are formed in your brain (brain waves), the beat of your heart, to the 4 seasons. This is up there on the list a really stupid ideas like the random walk hypothesis that was devised because the markets went up and down rather than in a straight line and people could not predict that.

The Random Walk Theory stating that stock market prices evolve according to a random walk like a drunk staggering down the street making them unpredictable was the theory to explain total failure to understand how the economy functions. The concept can be traced to French broker Jules Regnault who published a book in 1863, and then to French mathematician Louis Bachelier whose Ph.D. dissertation titled “The Theory of Speculation” (1900). These same ideas were later developed by MIT Sloan School of Management professor Paul Cootner in his 1964 book The Random Character of Stock Market Prices. The theory was then popularized by the 1973 book, A Random Walk Down Wall Street, by Burton Malkiel, who was a Professor of Economics at Princeton University. This was used earlier in Eugene Fama’s 1965 article “Random Walks In Stock Market Prices”, that was the foundation for his Ph.D. thesis. The theory that stock prices move randomly was earlier proposed by Maurice Kendall in his 1953 paper, The Analytics of Economic Time Series, Part 1: Prices

Both theories of Random Walk and Global Warming are failures to understand the cyclical nature of the universe and that we oscillate between two extremes in everything. We have even male and female. There are two opposites that make everything function right down to our concept of God and the Devil, good and evil, etc.. These crazy people actually proposed that the government spend money to create a machine to reverse global warming. Simply breathtakingly brilliant

Cycle of War & Political Economy. Political Model-51.6, Economic Model 72 , Real Estate 78 years

 

Martin Armstrong

Copyright Martin Armstrong all Rights Reserved January 8th, 2013

At our conferences around the world, we have discussed the Cycle of War and how this too has been incredibly accurate demonstrating that what may appear to be random, is really highly ordered chaos. This turns in 2014. To set the record straight, so far there appears to be no WORLD WAR that will begin. This appears to be separatism and civil unrest on the rise (see European Report $350). Nevertheless, there is a risk of international war but this comes from RUSSIA! The problem with Russia is that there is still the old way of thinking empire equals power. Given the chance, Putin would sweep into Europe in a heart beat. The KEY is always economics.


It has always been a debate about the chicken or the egg and who came first. In this case, the barbarian invasions really began at the peak of the Roman Empire where Marcus Aurelius (161-180AD) was fighting on the border with the Germans where he wrote his Meditations. That was the peak of the Roman Empire and the beginning of the decline and fall starts with his death. As the economy turns down, the barbarians began to smell blood. That is when the barbarians were at the gates. It is always the decline of the economy that opens the door for your enemies. How stupid the USA is relying on political foes to buy their dead is beyond brain-dead. Do you go to them and say, “Gee can I borrow a trillion to fund my army to defend against you?” The political risk we have is that Putin is still in the Empire Mindset. Even China has figured out that occupying your neighbor’s hill is not economically beneficial. So our risk of war lies with Russia – not China. That risk is dramatically increased with the Sovereign Debt Crisis for in the midst of that means the inability to fund an army. That is how Rome fell.

The barbarians sacked Rome in 410AD. The term “vandalize” refers to the Vandals of North Africa who sacked Rome. They tore even the copper off the roof of every temple. What they did to Rome was rape it of its value. This is where the term has survived centuries that people “vandalize” by destroying. The Vandals will always be remembered for what they did to Rome. However, what they did would NEVER have taken place but for the economic decline. This is the risk of history that somehow we just never learn. We can have homeland security harassing teenage girls and worried about hair gel in your bags getting on to a plane. All that is pure nonsense. It is the economy that poses the greatest risk for that opens the door to geopolitical risk. So forget the 19 guys and the camel. If we do not get our economy under control, they will be speaking Russian in a lot more places. For now, it appears that we will be facing rising civil unrest and separatism.

Many have written to ask where does the Political-Economy Model stand right now for the West. The answer to that question is the epic turn appears to be 2016. Bretton Woods took place in 1944. Adding 72 years brings us to 2016. This model has been uncanny in predicting political change incorporating the same frequency for volatility. The Russian Revolution of 1917 was right on target with the fall of the Berlin Wall 72 years later in 1989. This strongly warns that this wave in the Economic Confidence Model due to peak 2015.75, will be extremely important. This is the time frame we have been looking at for the past 30 years for the next Sovereign Debt Crisis. Certain trends simply cannot be sustained beyond 72 years without change. This time that change is coming by dragging the politicians by the hair cave-man style. How intelligent people just cannot see the problem with borrowing perpetually and never having any intention of paying off the debt, it’s simply unimaginable. The previous cycle turning in 1872 and that led to what is known as the “long depression” of the 19^th century everyone concedes lasted for 26 years. This is why the real estate model is 78 years. It too is closely aligned with political turmoil that always brings structural change.

Consequently, we are looking at 2014 for the beginning of a rise in separatism and civil unrest around the west. Then we see 2016 and the start of a nasty economic decline. We could see things get real bad during the 2016-2020 phase. That may actually be the bottom in the European economic meltdown. Here is a chart of the array for the German 10 year bond interest rates. It is lining up with the 23-26 year recession cycle from the start of the Euro. It does not matter. The politicians will not do what is best for the people. This is still about trying to retain power as is. Like Putin who cannot let go of Empire Building, Western Politicians cannot let go of Marxism. They do not understand how to run without saying “vote for me and I will give you this even if we do not have the money!”

Emerging markets

Economic Confidence Collapsing to new lows in Thailand

Posted on February 7, 2014 by Martin Armstrong

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The local press in Thailand are reporting the collapse in economic confidence among local Economists’ with respect to the overall economy in Thailand. This is the lowest it has ever been in the past three and a half years. Our models clearly demonstrate that we are looking at a continued economic slide especially among emerging markets that will put greater pressure behind a rising US dollar. The European banks have a total exposure of more than $3 trillion in emerging markets. The economic conditions are worsening and this will only increase the pressure on civil unrest against a government that is also seen as corrupt in Thailand.