Economic Devastation

[iamback]

I edited my prior post. There is no doubt that Europe will be in severe crisis by 2017. If you can't hedge the decline in the value of the house, then don't dare do it unless you are sure you can sustain a multi-year (probably decades) waiting period for the value to come back up again (and that your income to pay the mortgage can't be in jeopardy when Europe collapses starting next year). That is what the Armstrong link I gave you said.

Right now the strongest economies of Europe are receiving an influx of capital because capital is fleeing the peripheral economies of the world which are already collapsing. But this contagion will spread to the core of Europe next year. Germany's DAX will peak Oct. 2015, then collapse into an abyss. Then capital will flee to the USA. Then the USA dollar and stock markets will peak in 2017, and then we collapse into war by 2017 or 2018.

[iamback]

...

http://armstrongeconomics.com/2015/03/02/consumer-credit-moving-higher-into-2015-75/

Consumer Credit Moving Higher into 2015.75

Subprime consumer borrowing — encompassing auto loans, credit card loans and personal loans — climbed to $189 billion in the first 11 months last year, the highest total since 2007, according to a study compiled for The Wall Street Journal by Equifax. This is precisely what I mean about living with the cycle. People will spend when they SEE everyone else spending. This provides the foundation to consumer confidence. This is why the rich are important. If they are driving around in flashy cars and going out to dinner, not only are they spending, they are creating the impression everything is OK and this becomes the contagion that spreads as consumer confidence. If they spend nothing and save, the rest of society will follow. It is an interesting leadership role.

This is right on time. We should see the peak in debt on a private level whereas when the economy turns down [after 2015.75], governments will be desperately trying to borrow more and more.

http://www.marketoracle.co.uk/Article49650.html

Student loan debt stood at $660 billion when Obama was sworn into office in 2009. The official reported default rate was 7.9%. Obama and his administration took complete control of the student loan market shortly after his inauguration. They have since handed out a staggering $500 billion of new loans (a 76% increase), and the official reported default rate has soared by 43% to 11.3%. Of course, the true default rate is much higher. The level of mal-investment and utter stupidity is astounding, even for the Federal government. Just some basic unequivocal facts can prove my case.

There were 1.67 million Class of 2014 students who took the SAT. Only 42.6% of those students met the minimum threshold of predicted success in college (a B minus average). That amounts to 711,000 high school seniors intellectually capable of succeeding in college. This level has been consistent for years. So over the last five years only 3.5 million high school seniors should have entered college based on their intellectual ability to succeed. Instead, undergraduate college enrollment stands at 19.5 million. Colleges in the U.S. are admitting approximately 4.5 million more students per year than are capable of earning a degree. This waste of time and money can be laid at the feet of the Federal government. Obama and his minions believe everyone deserves a college degree, even if they aren’t intellectually capable of earning it, because it’s only fair. No teenager left behind, without un-payable debt.

Yellen, Draghi, and Kuroda speak as if they know what they are doing, perform confidently when on stage, but continue to act in desperate manner five years into a supposed economic recovery. The emergency measures they continue to employ and expand upon reveal their angst and inability to implement a monetary solution. Their only tool is the printing press and when confidence in their infallibility dissipates, the system will fail. The stench of fraud, cronyism, corruption, and hypocrisy of the moneyed interests permeates our degraded culture of materialism, greed and criminality. The party was fun while it lasted, but it is reaching its sordid drunken climax in the near future. There is no means of avoiding the final collapse of this Federal Reserve created boom.

http://www.marketoracle.co.uk/Article49635.html

If prices had fallen to the $100,000 to $150,000 level, based on the historical correlation, first time home buyers would be buying hand over foot. But the Federal Reserve, their Wall Street owners, connected hedge funds, and the Federal government has created an artificial price bubble with 0% interest rates and trillions of QE heroin. The 1% can still afford to buy overpriced McMansions, but the young are left saddled with student loan debt, low paying service jobs, and no chance at ever owning a home.

[iamback]

Socialism in the USA (and watch this soar when the economy turns down in 2016 and especially 2017):

[allbits]

As I said you are a socialist pig

Good luck with your world-changing threads

[iamback]

Black Swans, by definition, cannot be predicted.

Yogi Berra himself said that we could not predict the future, especially because it has not happened yet...

There are too many factors even for Armstrong's supercomputer(s) to deal with.  If M.A. could predict the future with anything much better than average, he would be VERY RICH...

Martin Armstrong is very rich and does not need money. He has stated numerous times he is doing this now for mankind, for the challenge, and his loyalty to his long-term clients. And also because for a man of his drive and intellect, he would be bored to tears sitting on a island. Cripes the man was isolated in prison for a decade and wants to cover lost time on his productivity (similar to myself with a lost decade due to chronic illness and now very eager to be productive).

http://armstrongeconomics.com/2015/02/18/what-makes-me-tick-good-question/
http://armstrongeconomics.com/1113-2/

I will demonstrate to you my long-term memory (it is a vague memory, so I must rely on Google to locate the url for the underlined phrase I remembered):

http://armstrongeconomics.com/2013/12/15/gold-promoters-are-part-of-the-manipulation-against-investors/

I have been forced to come out in front of the curtain. I can retire and go off to some island and wait it out until I die. But I too have family and what kind of a future they face because of all this nonsense does not let me sleep beyond 3 hours at night. What I have been put through was for a reason and those who try to ignore me are only exposing their own lack of integrity or bias. I really do not care what they think of me. It means nothing to me. I just consider the source. They will one day wake up and see while they are fighting with their own egos, they risk losing all liberty because the real battle is not with me, it is the man with the tanks and guns. That will start to become very clear in 2014. All they are interested in is filling their pockets and forgetting they are playing with the risk of war and a Dark Age unless we steer this ship through the treacherous waters ahead.

Sorry there are no blackswans, in the sense of truly random events. They are long tail distributions (actually a multi-dimensional pattern). Remember that randomness is intimately related to the entropy. If one can sample all of the entropy, the randomness can be modeled. Armstrong input extensive data since 6000 B.C.

http://armstrongeconomics.com/2015/03/02/27739/

When I wrote the Global Market Watch, which is a pattern recognition AI model, I allowed the computer to explore on its own and report back to me the results. This REQUIRED tons of data. It cannot be achieve on databases only back 50 years. You need hundreds of years so the computer can learn form every instance. It is calculating patterns with unbelievable complexity of variables.

All of this said, the key to any model is the UNDERSTANDING of its functionality. So what you are doing may not be able to achieve what our system does, but you are on the road to knowledge and that leads to CONFIDENCE in your decision.

When this model has made some of its most outstanding calls at the most extreme points in a panic, it is hard to retain that CONFIDENCE to do what it says. At the collapse of the markets in 1998, the New Yorker Magazine reported that I covered my shorts announcing that to our trading room and walked out and went to the beach. Some read that as arrogant or rejoicing I made more money than anyone in the shortest amount of time. In truth, it was discipline. It was knowing that my inner self was saying are your crazy? Over time, I came to realize when the computer would put out a forecast and it could make me say OMG is this crazy, it was 100% spot on. For if it could invoke that emotion within me, it must be devastating the majority in which case it was ripe for the change.

So NEVER give up on your quest to understand. That is what life is all about. Trying to use fundamentals to forecast is hopeless. A good trader uses them in the opposite manner – buy the rumor and sell the news of the fundamental. This model and watching how it functions has taught me a lot. Plus having clients everywhere has forced me to open my eyes and see the world through everyone’s perspective.

I am vaguely familiar with Taleb's math on modeling systemic responses to long tail events:

http://unheresy.com/Information%20Is%20Alive.html#Knowledge_Anneals

Top-down systems are inherently fragile because they overcommit to egregious error (link to Taleb's simplest summary of the math).

Note Taleb was working closely with Benoit Mandelbrot, the father of fractals before the latter's death. Note also Armstrong's comments about the fractal nature (hidden order) of time and events.

http://armstrongeconomics.com/2014/11/29/chaos-theory-you-can-map-any-market-to-reveal-the-hidden-order/ http://armstrongeconomics.com/2015/03/02/cyclical-techical-fundamental-analysis/ http://armstrongeconomics.com/wp-content/uploads/2010/11/armstrongeconomics-the-fractal-nature-of-markets-11-1-10.pdf http://armstrongeconomics.com/research/economic-thought/by-topic/chaos-theory/ http://armstrongeconomics.com/2014/03/09/research-shocking-there-is-order-in-the-chaos/ http://armstrongeconomics.com/2015/02/23/fundamentals-fractals/ http://armstrongeconomics.com/2013/11/20/it-it-alive/ http://armstrongeconomics.com/2013/05/31/understanding-cycles-the-two-extremes-why-we-must-crash-burn/ http://armstrongeconomics.com/2015/02/16/time-the-fourth-dimension/ If the entropy (a.k.a. disorder, i.e. distribution of probabilities) was infinite (or above our precision of perception), we would see nothing but noise in the image to the left, instead of a recognisable structure or pattern. Blackswans are predictable events whose order was hidden from the perception of the system in which they appear to be random.

[iamback]

http://armstrongeconomics.com/2015/03/03/us-v-europe-the-divergence/

QUESTION: ... Usually these people only talk about P/E, Debt to GDP etc etc however this time cycles were mentioned and how everything was revolving around 8+ years, boom and bust!! I have been attending these meetings for over 8 years and not once has a bicycle been mentioned let alone a cycle.

I was speechless and these so called economists started to talk about the EU and the USA. The error they made was they said the USA would rally along with Germany(DAX) into 2017! It was just one day later when you released your post on how the USA may rally into 2017 but Germany(Dax) may top in 2015.75(ecm). I laughed to myself when I read your post as clearly these fools read your blog and then try their very best to somehow pass it off as their own work.
I think that the DAX topping in 2015.75 and the USA markets rally for a further 18 months or so is something that has caught everyone by surprise ...

ANSWER: ... The divergence was rather significant. They closed the US stock market in July 1914 at the start of the war assuming stocks would collapse. They were under pressure to open the market and you can see there was the initial panic selling that formed the low. The US share market rallied from there on during the war. Capital fled to the USA and this created the huge divergence.

If we see the DAX form a high here in 2015 and it FAILS to press higher following the USA, this would be indicative of war. This is my concern given our Energy Model showing a spike high in the DAX but not the USA.

[BitMos]

just a quick comment that I have to agree, I am not a slave of the private central banks of the USA (aka the FED), for historical reason this word "slave" is dear to some... like saying that I was holocausted by the CB (there is some truth too, because if you don't get ctrl+p... blah blah) so I decided to coin a new term :

I am exploited. (multimeaning, don't get stop at you first interpretation)

that's said hf.

[najzenmajsen]

Socialism: a system of collective control especially over production and distribution in an economy.

The United States has no collective control over production and distribution.  The government is completely captured and under the control of a very narrow group of private interests.  Anyone can see that.

In a socialist economy the government controls the means of production

Using this definition, a feudal system is socialism!

Which is why the world needs bitcoin , and bitcoin needs the world to realise how awesome it is. Together we shall fight  ; )

[iamback]

Cross-posting from rpietila's speculation thread...

Edit: http://www.nestmann.com/why-the-feds-wont-confiscate-your-retirement-plan-but-they-will-do-this

Nestmann's logic appears to be flawed, because:

http://www.epi.org/publication/retirement-inequality-chartbook/

In 2010, households in the top income-fifth accounted for 72 percent of total savings in retirement accounts (Figure 19).

72% of 4.4 trillion is a significant amount for the government to expropriate and if it will only affect roughly 63/5 = 13 million voters (actually probably less voters because wealth is non-linearly power law distributed not uniform).

So IMO you don't want to get rich in Bitcoin in a Roth. Don't forget about clawbacks. Withdrawing before a change might not exempt you, as clawbacks can be politically justified as going after the rich who were trying to front run the law in order to avoid paying their fair share of the burden.

The key to sliding into the abyss is as the 80% of the people are bankrupted by the deflation, then there is no hope for the remaining 20% as the rabid masses go for the "tax the rich". But then there is nothing left to tax because taxing the rich implodes the economy and then the cancer turns on the masses and culls them (gas chambers, wars, etc).

It seems to me, since the Roth IRA funds have already been taxed they are at less risk as compared to traditional IRAs which haven't been taxed yet.

Governments typically force all retirement funds to invest in sovereign bonds during a sovereign bond or fiscal crisis, e.g. afair Poland and Argentina have already nationalized the pensions.

http://armstrongeconomics.com/2014/09/18/pending-pension-crisis-they-are-only-a-promise/
http://armstrongeconomics.com/2014/09/22/pension-funds-being-taken-to-fund-infrastructure/
http://armstrongeconomics.com/2014/01/29/cycles-obamas-tax-free-bonds/
http://armstrongeconomics.com/2014/12/14/the-three-bombshells-tucked-inside-the-continuing-resolution-to-fund-the-govt/
http://armstrongeconomics.com/693-2/2012-2/obamacare-the-investment-tax/

The only shelter will be tangible assets for long-term capital. Forget buying and selling. They will take 50% of that very soon. The strategy is to realize we are looking at the collapse of government by implosion as has been the case with every major core economy in history. So hang on – this will be an interesting ride.

[iamback]

The wounded Godzilla is much more dangerous (threat from government) than the rest of the world[1].

No doubt taxes will be higher. But you also have the very real risk of a meltdown of law and order and thus Roth terms will not be honored everything will be taken from you. I truly believe we are heading off the rails entirely (2018ish).

Is this not enough hard evidence for you of what we are up against (make sure you note the image of the SEC letter admitting what was destroyed in the WTC twin towers on 9/11).

http://armstrongeconomics.com/2015/03/04/cia-whistleblower-face-100-years-for-exposing-govt-lies/

CIA whistleblower, Jeffrey Sterling, now faces up to 100 years in prison and a fine of $2.25 million for blowing the whistle on the CIA planting false evidence of nuclear weapons in Iran. This demonstrates how corrupt the government is. They will start wars for personal gain and lie to the people each and every time. Obama promised he would be honorable and “protect” whistleblowers from prosecution and punishment, Just another crock of bullshit. He is due in court April 24th.

http://armstrongeconomics.com/2015/03/04/the-london-debut-of-the-forecaster-movie-sorry-americans-will-not-see-the-film-in-usa/

Well it is very interesting how the FORECASTER will be shown all around the world. It has appeared to sold-out audiences from Netherlands to Croatia. BUT this United States the land of the free where those in NYC and Washington intimidate others FREELY to get their way to destroy out future. Even distributors from Canada are on board but not a single distributor in the USA will show the film so far. Just astonishing the censorship.

You can see the full schedule as it appears at The Forecaster-Movie.COM. I met with someone from Hollywood. I was told that there is a sort of “self-censorship” in the industry that they are afraid to get behind something the bankers and government do not want the American people to know, read, or see. Even though the film got a good review from Hollywood*, you can count on not a single New York Newspaper will ever say it is worthwhile. The mainstream media is run by the bankers for what major press will ever expose them beyond what is already out there.

The American press in NYC will most DEFINITIVELY tell people NOT to go see the film. For the film to even enter the OSCAR awards consideration, it must be shown 10 times in NYC and 10 times in LA. If not, it will never be eligible for the competition. NO OTHER CITY COUNTS. Obviously, refusing to show the film in NYC will prevent it from ever being considered for any award. It is a shame for all the people behind the film (since it is a documentary I am not eligible for any award at all. It is all about the makers not the participants).
Why should we expect anything different when not ONE New York Newspaper would ever report that Federal Judges change the words spoken in court even with a published appellate decision admitting the practice is “unique” to New York City. I even wrote a letter to the SEC and said let’s just get this over with since you people make up transcripts anyhow, just go ahead and claim I said whatever it is you want. Nothing is real in NYC – it’s all a sham. The total lack of integrity in the mainstream press dominated by NYC threatens the nation as a whole for with all the finger-pointing at Putin, can the USA really pretend to be that different? They say Putin killed his opposition. Well, we also imprison or kill ours and scheme to silence them at every possible moment.

So far, Americans will NOT be allowed to see the film. Just unbelievable! So who do we thank? GS or the Government or is it both in union?

[1]  (that is not to say other places in the world won't become more dangerous due to non-government threats, e.g. ISIS in the Middle East or rise in violence and muggings in the third world as the global economy implodes)

[iamback]

I admit my Ebola could kill half the world and increase the price of Bitcoin theory did not come to fruition. Ah Well, better luck next outbreak I guess.

Armstrong had clearly stated it would die down, then the pandemic would rise again in 2017. I am thinking it will be an H?N? influenza strain.

[okthen]

I admit my Ebola could kill half the world and increase the price of Bitcoin theory did not come to fruition. Ah Well, better luck next outbreak I guess.

What happened to Ebola?
Outbreak slowed down or are the media tired of covering it?

[kitarohotono]

I admit my Ebola could kill half the world and increase the price of Bitcoin theory did not come to fruition. Ah Well, better luck next outbreak I guess.

Armstrong had clearly stated it would die down, then the pandemic would rise again in 2017. I am thinking it will be an H?N? influenza strain.

Armstrong also said that coca cola will go to the moon but before that euro goes down against corn, after that us debt goes to venus  

[iamback]

Armstrong also said that coca cola will go to the moon but before that euro goes down against corn, after that us debt goes to venus  

Since you are into spreading blatant lies, then I will up the ante on considerations of which countries to migrate to (backed by a clinical study of course).

http://healthland.time.com/2011/07/06/penis-size-it-may-be-written-in-the-length-of-his-fingers/
http://www.dailymail.co.uk/health/article-1335155/What-length-index-finger-says-you.html
https://en.wikipedia.org/wiki/Digit_ratio#Digit_ratio_distribution

My ratio is 0.916.

[okthen]

Armstrong also said that coca cola will go to the moon but before that euro goes down against corn, after that us debt goes to venus  

Since you are into spreading blatant lies, then I will up the ante on considerations of which countries to migrate to (backed by a clinical study of course).

http://healthland.time.com/2011/07/06/penis-size-it-may-be-written-in-the-length-of-his-fingers/
http://www.dailymail.co.uk/health/article-1335155/What-length-index-finger-says-you.html
https://en.wikipedia.org/wiki/Digit_ratio#Digit_ratio_distribution

My ratio is 0.916.

Congo wins!

[CoinCube]

Armstrong had clearly stated it would die down, then the pandemic would rise again in 2017. I am thinking it will be an H?N? influenza strain.

iamback we do not see eye to eye on Mr. Armstrong. As I argued earlier.

Armstrong does not disclose his methods. It is easy to claim you have a superior computer model that tracks 32,000 variables. It is far harder to actually develop such a thing. Armstrong is also selling a product (investment advice) so there is a potential financial motive for convincing others he has something that does not necessarily exist.

When I try to find actual documented predictions from 1985 I can't find anything independent ie not published by Armstrong himself.
...
Extraordinary claims require extraordinary evidence. I just don't see it here.

To the above criticism I would add that I have personally seen Armstrong significantly edit his old writings when his initial writing made him look bad. Specifically he erroneous reported as fact that Citigroup was moving its headquarters from New York to the U.S. Capitol building.

This is just jumping off the cliff. Not only did these people grease enough palms to repeal Dodd Frank, they are now leasing space right in the Capital Building and managed to increase the donation limitation from $32,400 to $324,000.

Looks like the clouds are starting to gather for 2015.75 in a very dramatic way. Maybe it is just time to leave. Oh ya. This is fulfilling the lyrics of the Eagle’s song Hotel California – where you can check out any time you like, but you can never leave.

He later significantly revised that post
http://armstrongeconomics.com/2014/12/14/are-you-really-ready-for-the-world-to-be-ruled-by-bankers/
I do not know the extent to which Armstrong changes his prior writings to "improve" things.

In regards to Armstrong's claims of predicting pandemic in 2018 I would restate my prior arguments that I believe accurate prediction of such an event is impossible.

Most pandemics occur when a pathogen jumps a species barrier to a new host (humans) that are not adapted to it. Such a process should be random and follow a Poisson distribution. The expected time between pandemics should therefore follow an exponential distribution. I am skeptical of the validity of a cyclical model predicting a definitive pandemic date.

I agree that that economic collapse and overpopulation could lead to worsening squalor increased contact with infected animals and increased chance of a pathogen jumping the species barrier. If economic collapse and downturns occurred cyclically that could introduce a cyclic increase in jump probability and the Poisson distribution would not hold.

However, all that would mean is that there would be times of increased risk of a pandemic and times of lesser risk. A higher probability is no guarantee that such a pathogen will jump. The Jump itself would still be a random process. It seems ridiculous to me for anyone to claim there is definitively going to be a pandemic in 2018. The only way to know that with certainly would be if you were the one introducing the pandemic.  

My genuine impression of Mr. Armstrong is that he is someone who has predicted, probably correctly, that 2015-2016 is the date when the central banks finally start to lose control and that he is planning to leverage that prediction into $$$ by selling terrified investors (very expensive) investment advice.

However, I am keeping an eye on his predictions.
1) Economy turning down at the end of 2015 and
2) Pandemic in 2018
3) Any others?

I think he is right about #1 and I do not believe #2 is possible to predict unless you are directly involved or communicating with individuals introducing a pandemic. If both predictions #1 and #2 happen on schedule I will revise my opinion accordingly.

[CoinCube]

Note Taleb was working closely with Benoit Mandelbrot, the father of fractals before the latter's death. Note also Armstrong's comments about the fractal nature (hidden order) of time and events.

http://armstrongeconomics.com/2014/11/29/chaos-theory-you-can-map-any-market-to-reveal-the-hidden-order/ http://armstrongeconomics.com/2015/03/02/cyclical-techical-fundamental-analysis/ http://armstrongeconomics.com/wp-content/uploads/2010/11/armstrongeconomics-the-fractal-nature-of-markets-11-1-10.pdf http://armstrongeconomics.com/research/economic-thought/by-topic/chaos-theory/ http://armstrongeconomics.com/2014/03/09/research-shocking-there-is-order-in-the-chaos/ http://armstrongeconomics.com/2015/02/23/fundamentals-fractals/ http://armstrongeconomics.com/2013/11/20/it-it-alive/ http://armstrongeconomics.com/2013/05/31/understanding-cycles-the-two-extremes-why-we-must-crash-burn/ http://armstrongeconomics.com/2015/02/16/time-the-fourth-dimension/ Blackswans are predictable events whose order was hidden from the perception of the system in which they appear to be random.

From one of your Armstrong links above specifically
http://armstrongeconomics.com/2013/05/31/understanding-cycles-the-two-extremes-why-we-must-crash-burn/

This fall, we will see more chaos in weather. We are headed into a period of wild weather that will be marked by extreme swings....

Our correlation models indicate that whenever we get a cold spring then we move to a violent storm like hurricanes in the fall. It is like a pendulum. The more you swing to the extreme on one side the more you will move to the extreme in the opposite side. Markets function in the same identical manner.

So how did that prediction turn out?
http://www.climatedepot.com/2013/12/27/2013-shatters-the-record-for-fewest-tornadoes-15-lower-than-previous-record/

Least extreme U.S. weather year ever?’ 2013 shatters the record for fewest U.S. tornadoes — 15% lower than previous record — 2013 also had the fewest U.S. forest fires since 1984

The 2013 Atlantic hurricane season was the first since 1994 with no major hurricanes,and the first since 1968 with no storms of at least Category 2 intensity on the Saffir–Simpson hurricane wind scale.

Bottom line is that some Armstrong predictions have been wrong.

[OROBTC]

...

iamback and CoinCube

Armstrong could be among the very best of guys who predict, but even with 30,000 + variables in his supercomputers, that will not cover all facors "out there", nor (especially) some of the connections and influences among them.

Weather is a great example.  Much more complex than the actual average TV viewer could imagine.

OTOH, if I were any of you, if I had to bet, I would bet with Armstrong vs. a Bearing Buyer.

I got out of the prediction game long ago, except for noticing important trends, like "Economic Devastation".  Devastation, likely to hit a country near yours soon.  When?  Ahh..., beats me!  But, the end feels near, it certainly gets nearer each new day.

[mikelitoris]

amazing thread, has disturbed my sleep for a few days now..

[bigtimespaghetti]

amazing thread, has disturbed my sleep for a few days now..

I always come back to read the fascinating discussion. There are some great conversations going on.

As I was researching Armstrong- I am neither convinced nor entirely skeptical of him at this point (I do agree with him on many things) I did come across this article (I only share it as I know that some people may be interested in the other side of the argument) I'm actually thinking of buying his latest DVD, as it could be interesting to actually see him present in-depth and make some notes and witness the unfolding of the predictions one way or another myself.

CXO Advisory on Martin Armstrong