Warren Buffett Loses Billions

Posted Feb 27, 2019 by Martin Armstrong

QUESTION: It is no secret that you went head to head against Warren Buffet in his silver manipulation. He is having a very bad year with his buy and hold value strategy. It looks like without making billions on the side manipulation of commodities, he is no better a fund manager than anyone else. Care to comment on his strategy?

WD

ANSWER: The Warren Buffet strategy of value investing and buy & hold is entirely dependent upon the direction of the market. The Warren Buffet strategy is a long-term value investing approach passed down from Benjamin Graham’s school of value. “Buffet is considered to be one of the greatest investors of all time. His investing strategy, value, and principles can be used to help investors make good investment decisions.” This is all the propaganda. It applies to an economy that is in a long-term inflationary trend that is really left over from the Great Depression days.

I was blamed for the takeover boom because I was advising a lot of the takeover players around the world. I simply showed clients the chart on the Dow in terms of book value and that the historic low that took place in 1977. I merely illustrated that you could buy a company, sell its assets, and double or triple your money because the market was so underpriced going into the end of a Public Wave. This Private Wave began in 1985 and that was the breakout of the market.

Anyone who simply bought stocks in 1985 made a fortune. Warren Buffet famously avoided investing in technology stocks. Nevertheless, he had bought Big Blue, then sold Apple and Oracle. He was so old school brick & mortar that he really missed the technology shift.

His buy & hold strategy fails because it ignores cycles. Anyone who bought stocks in 1985 and just held as the Dow rose from 1,000 to 21,000 beat even Warren Buffet. He takes positions in companies and cannot flip when the business cycle turns. He lost $4.3 billion in a single day. That is not a fund manager in my book.

Buffet did not believe the rally as most others going into 2018. For years, Buffet was building up its cash rather than investing. He began to invest during the third quarter, actually buying the high since the NASDAQ peaked in August, the S&P 500 in September, and then the Dow on October 3. He bought some banks like JP Morgan Chase and Oracle for the first time.

Obviously, his timing was not very good and his strategy of buy and hold does not fare very well in a decline

Capitalism – Oligarchies – Socialism

Posted Feb 24, 2019 by Martin Armstrong

COMMENT #1: Hey Marty, I’ve never written you in this vein, but (always extremely talented) rich guys saying “Let the chips fall, free market capitalism” are gonna get washed away by this wave and we both know it. When the mass of people don’t even own a vegetable plot despite working their rears off for the dream, you know socialism is here however bad (Marxist) it is. If “capitalism” can’t offer a life (a living wage and a damn plot to park your ass on, not mountains of debt and stress, unless you happen to be born with a certain set of Republican talents) then “capitalism” is out however great it really and truly is. I will never mention politics again but revert to philosophy which is where we really live, and the only thing I really know anyway.

RF

COMMENT#2: Are you blind, Mr. Armstrong?
Don’t you see, that wealth equality is going out of hands?
It cannot be, that a 8 people control (Oxfam 2017) as much wealth as 50% of earth’s population and it get’s more extreme each year. All life is one and it is a responsibility of the heart to share. Capitalism has failed as the majority is not benefitting anymore from it.

REPLY: You are confusing capitalism with oligarchies. Disposable income has been declining because of taxes. Under Marxism, we pay between 300 and 800 times more than previous historical periods of taxes. The Roman Empire had taxes that would rise from 1% to 7% — not 50%+. ALLRepublics collapse into oligarchies because once one person pretends to represent many, they will NEVER put the interests of the many before themself. The lack of term limits means these politicians need money to sustain their position and therein allows the oligarchy to grow with power and influence.

CAPITALISM is the freedom to decide your own fate — not that oligarchies get to own everything. Under a Greek Democracy, only the head of the household voted. They were the Congressman representing everyone in that house. Under SOCIALISM, income taxes were invented meaning every person had to account to the government for what they earned. Women, who didn’t previously vote, suddenly were entitled to vote because they were being held accountable for their individual earnings and government began passing laws to protect people which then dictated things such as abortion or whatever.

So do not confuse an oligarchy with capitalism. They’re on opposite sides of the table.

As for the disparity in wealth, I volunteered in Washington to convert Social Security to a wealth fund during the ’90s. The Democrats would not vote for it because they wanted to change the fund manager when they came into power. The wealth disparity is NOT created by income but by investment. The government regulations restrict investments for the private citizen. The reason there are hedge funds offshore is very simple. We are over-regulated, so a fund manager who complies with the SEC goes to jail with the CFTC. You cannot hire a fund manager to make the decisions for you, so you have to decide between all the various investments yourself. Hedge fund managers make all those decisions but they cannot raise money domestically.

There is no rule of law

Why a Judge Ruled the Police Have NO DUTY to Protect Citizens

Posted Feb 22, 2019 by Martin Armstrong

I have received a number of questions asking how the judge in the school shooting at Marjory Stoneman Douglas High School in Parkland, Florida, rule that the police had no duty to protect the children. The judge’s decision was legally correct. The sheriff’s office had no constitutional duty to protect the students there during the deadly February 2018 Valentine’s Day massacre. That decision nullified a lawsuit filed by 15 students who said they suffered trauma during the attack. A total of 17 students and staff members lost their lives and 17 others were injured.

The decision was legally correct, but it seems so strange that people are dumbfounded. The Constitution is actually NEGATIVE. It was never drafted with an intent to provide you with rights. That seems strange because people are held by judges all the time to waive their rights. It is those decisions that are unconstitutional. Why is it impossible to waive a right? Because the Constitution is NEGATIVE and that means it is a RESTRAINT upon government as opposed to being a list of positive rights you possess.

First Amendment

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Note the language. It does not bestow upon you the right to freedom of religion. Instead, it is a restraint upon the government that it “shall make no law” and in this manner, it is a deliberate NEGATIVE restraint upon government rather than being a POSITIVE right you possess.

Fifth Amendment

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Once again, judges have allowed people to be tortured and stripped of all rights, claiming they waived their rights. If the Constitution is negative and imposes no duty upon the government to provide you with any social program (e.g. it does not state that the police MUST come to your aid), then it also cannot be waived to allow you to be denied any right, for it is not your personal right. Waiving your right means you are constructively rewriting the Constitution so it applies differently for you than others.

The judge was correct in that decision that the police had NO duty to protect those children. Their actual legal duty is just to raise money for the government by giving you tickets. Therefore, it is not that the decision was wrong. Judges suddenly discovered the NEGATIVE aspect that occurs when you try to sue the government for failing to act. Yet, they flip it to a positive right that you can waive when it interferes with government’s pursuit of its citizens. Now you understand why I did not want to become a lawyer. There is no rule of law. He who sits on the bench makes the law at that instant and it will vary from one person to the next.

Republics always transform into oligarchies

Walter Jones – An Important Politician Who Was One of the Good-Guys

Posted Feb 14, 2019 by Martin Armstrong

I wanted to write an obituary fro a friend who I would go down to Capitol Hill to see – Water Jones. He was a Republican but someone who would vote based upon what he believed was right and not simply because of party politics. Walter died and it was really a great loss. He would cross the aisle and often worked with Democrats, and as a result, he won their respect. The same could not be said of some of the Republicans like Bonner.

Walter had served in the North Carolina General Assembly for 10 years as a Democrat. He was one of the Southern Democrats who switched to the Republican Party when he ran for Congress in 1994. As the Democrats turned left-wing and were actually manipulating minorities to gain power after the Democratic Party was originally founded by Andrew Jackson who was a slave owner, there was a movement against the Democrats internally that became really during the post-1968 period. Jones was one of many southern Democrats to make that switch, which was not easy. Jones’s father had been a longtime Democratic congressman. That switch demonstrated that Jones followed his conscious rather than party politics blindly.

The real battle Jones fought against the Republicans came when he supported Ron Paul and the rising tied of financial conservatives. I would even attend meetings there in his office on such matters and deeply appreciated the understanding that existed about the direction of the country.

John Boehner has been outrageous and retaliated against anyone who supported a fiscal conservative policy. Boehner purged all economic conservatives from the House Finance Committee which included Jones. Boehner went as far as to raise money for GOP candidates to run against anyone he wanted to remove. Boehner conspired to in 2014 to instigate the former Bush administration official Taylor Griffin to run against Jones in the GOP primary and backed him heavy financially from Washington Republicans. Boehner directed a million dollars of super PAC money to poured into the district that tried to paint Walter Jones as a liberal. Boehner became a ruthless dictator and demanded any Republican vote as he directed. It was business as usual for Boehner and why he was driven out by the Republicans for Boehner ended up causing the Republican Party may split. All the efforts of Boehner to defeat Jones failed. but it left a very bad taste in my mouth for Boehner.

Jones voted against Obamacare and the bailouts of the big banks, Wall Street and Detroit. He voted against cap and trade, and TARP, the trillion-dollar stimulus package. Boehner was furious with Jones. Jones voted against every increase in the debt ceiling in 10 years and refused to vote for any U.S. budget not in balance.

Walter Jones came to believe that voting to send Americans to fight and die in Iraq was the worst mistake of his career. Jones now spends hours each weekend writing personal letters to every family that lost a son or daughter in a war he wrongly supported. And he has resolved to oppose every idiotic war into which the country is being manipulated. Jones had at first supported the Iraq War in 2003, but was deeply bothered at the human cost of life. He was also one of President Donald Trump’s most outspoken critics within the GOP, but this was not because of party politics. Jones followed his beliefs in right and wrong. He had been deeply offended by the Iraq War. He admitted that he has supported the 2002 congressional resolution that gave President George W. Bush the authority to wage the war in Iraq following 911. As Jones told the Associated Press in 2017, he opened his eyes and his heart in 2003, attending the funeral of a marine in his district.

“I will never forget my mistake, because people died because of my mistake… I bought into believing that President Bush didn’t really want to go to war. That’s how naive I was at the time … I could have voted no, and I didn’t.”

The War Party front, the “Emergency Committee for Israel,” is chaired by Bill Kristol, who has become the cheerleader for war that has cost 4,500 American lives. Bill has funneled hundreds of thousands of dollars into attack ads to get rid of Jones because he would not support the war effort. Kristol wrote the War Over Iraq: Saddam’s Tyranny And America’s Mission with his co-author Lawrence F. Kaplan, which was published on February 1st, 2003, one month and change BEFORE the invasion. Note the timing. This was written to support Cheney. It takes time to publish this book.

Kristol’s book states that the rationale behind the preemptive strategy against Saddam Hussein is simply that he is a dictator who threatens both his own people and the world. That is sufficient to justify the United States invading another country before he does further harm. Kristol offered no evidence to support his case and he simply stated that “we do know that Saddam is a terrorist.”Kristol went as far as to criticize both the first Bush administration and the Clinton administration for allowing the Iraq threat to grow.

Based upon INSIDE White House sources, when someone first joined the staff in the White House under the new Bush Jr. Administration in 2001, at the very first meeting the focus was not on the prospects of a recession into 2002, but on invading Iraq from day one!!!!!!

Then there was the Ending Spending Action Fund, a super PAC led by billionaire Joe Ricketts and backed by the Macau-Vegas casino mogul Sheldon Adelson, dumped scores of thousands dollars into the 3rd District to deceive voters into believing that Walter Jones was a liberal. Again, one must question why Ricketts is against fiscal conservatism.

The behind the curtain antics of the Republican Party stands as evidence how Party Politics is doomed. These types of people are so establishment that they cannot see that they are seriously out of touch with America. They are placing the future at risk no different from the Democrats. What all of this proves is one stake thing – Republics always transform into oligarchies.

Walter Jones was a person I greatly respected. We have lost another person who stood his ground against the evil forces of darkness that are hell-bent on intolerance of any opposition

Drier summers, bigger droughts, and colder winters, warm AFTER the 2032 cycle ends

Did Aborigines Create Global Warming In Australia? Hello, Coming Ice Age?

Posted Feb 8, 2019 by Martin Armstrong

By cross-referencing tree-ring data and coral core samples, a team of researchers have revealed that Australia suffered the worst drought in history before the whites settled there from Britain.  There was virtually no rainfall and rivers simply ran dry. Much of the wildlife died and massive bushfires ravaged the landscape, as we see in California these days. The total devastation lasted for one cycle of a 23-year mega-drought that crippled Australia between 1500 and 1522. Since the global warming crowd insists that everything that takes place on the planet is caused by human activity, the only possible explanation means we have to blame the aborigines.

When we correlate that into our computer models, we come up with the mega-drought cycle as what takes place during an Ice Age. The winters are sharply colder and the summers are dry as well as shorter. This is also why we tend to be witnessing larger fires in California. We have to step back and look at it from a global perspective. There was also a clear volcanic origin for The Little Ice Age. The Little Ice Age was caused by the cooling effect of massive volcanic eruptions and sustained by changes in Arctic ice cover. There were a series of volcanic eruptions just before the year 1300 that lowered Arctic temperatures enough for ice sheets to expand.

During this Little Ice Age, glaciers advanced in mountain valleys and actually destroyed many European settlements. Paintings from the 1600s depict people ice skating on the Thames River in London like this one from showing the Frozen Thames in a painting by Abraham Hondius from 1677. Even the canals in Amsterdam were frozen. It remained cold for nearly 200 years. There were ice fairs into late 1600 as shown in this painting from 1683. However, the winters were brutal even into the late 17oos and early 1800s, although gradually warmer from the depths of the 1600 period.

Thank God, global warming began from about 1600 onward.  Places as far away as South America and China also saw much cooler temperatures. There are records that show it was cold even into northern Florida. On December 19, 1765, there was a historical report of a “white frost” that fell in the northern part of the British colony of East Florida “of short duration, and of no material detriment to the agricultural interests.” Then in 1774, there was a snowstorm that extended across much of the northern territory of Florida that they called an “extraordinary white rain” which corresponded to the severe winters that killed many soldiers during the American Revolution. I have also written about how the cold defeated Napoleon.

I have warned that volcanic activity correlates with solar minimum, in which we are headed since 2015. In fact, this has been the sharpest decline in the energy of the sun that we know of. It has been exceptionally declining since 2015, which was the peak of the Economic Confidence Model (ECM). Since the ECM was constructed from economic data, it is interesting how the cyclical nature of the economy aligns with Mother Nature herself.

When we correlate everything, our findings of what actually took place are most interesting. There appears to have been a cycle of Solar Minimum which set off an unusual 50-year-long episode of four massive tropical volcanic eruptions, which perhaps triggered the Little Ice Age between 1275 and 1300 AD. There is evidence of volcanic eruptions during this period that appear to have set in motion a chain reaction that created a trend of lowering temperatures in the oceans and atmosphere for centuries. There are different competing theories behind the Little Ice Age: (1) a volcanic winter, noted by author Gifford Miller of the University of Colorado Boulder, (2) a decreased radiation from the sun noted in a January 2012 scientific study that was published in Geophysical Research Letters.

When both of these are correlated, I do not see them as mutually exclusive. It appears that we enter Solar Minimum, which correlates to a rise in volcanic activity. The volcanoes throw up ash and block the sun which cools the oceans. Recent studies have shown that the process does take hundreds of years. In fact, Harvard has recently published that deep regions of the oceans are STILL getting colder to this day from The Little Ice Age.

The bottom line simply implies that we will see drier summers, bigger droughts, and colder winters. The temperature rise post-Little Ice Age did NOT exceed the peak of the medieval warming period and it never came close to the peak in temperatures that aided the rise of the Roman Empire or the rise of Egypt. This strongly suggests that we are heading toward much colder years ahead, but it does not appear that we will make lower lows than The Little Ice Age. It appears that we will retest those lows and then finally begin to warm AFTER the 2032 cycle ends.

The Problem with Cold & Electric Cars

Posted Feb 3, 2019 by Martin Armstrong

Everyone who ran out and bought an electric car has suddenly discovered that when it get cold, the battery will lose on average 20-25% of its charge. The idea that electric cars will replace fossil fuels is really a dream. That will work in warm territories, but when it gets cold, they will require more energy production to service them. This comes at a time when power plants also have increased demand to keep people warm. Even a heat-pump, which runs on electric, will stop putting out heat when the temperature drops to 40f of lower.

If we are indeed going to move to electric cars, then with a new cold-age approaching, the need to generate more power in winter will present problems nobody considered on the planning board.

Categories: Climate, Technology