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Martin Armstrong: The Coming Great Depression


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#11 Russ

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Posted 12 January 2009 - 12:08 AM

>Armstrong predicted this mess<......like all stopped clocks.......tell it to the japanese he bankrupted........and btw....what mess.......the list of messes over the last 100 years has been nothing but fodder for worriers to chew one.......just another chuck hole on the road to happiness.......


That is not fair or accurate, Armstrong predicted dow 6000 in the early part of the decade by 1996 and then dow 10,000 by 1998. He was a super bull back when the precter's of the world were predicting doom. He did not bankrupt the japanese they got all their money paid back to them by HSBC after they took over republic bank. The reason the japanese placed their trust in him was because he predicted the high of the nikkei in 1989 and it subsequent loss of 10,000 point within a few months.

i don't know if there will be a great depression, i hope not, but i respect amrstrong, just reporting what he says.
"Nulla tenaci invia est via" - Latin for "For the tenacious, no road is impossible".
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong



http://marketvisions.blogspot.com/

#12 Russ

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Posted 12 January 2009 - 02:09 AM

Russ,

Thanks for the post. Does he have any projections on where
housing prices are headed ?


Here is a chart I found, looks like we might have another 50% to go.

Link



I have not seen any projections on housing from Martin, but given his view on the dow, i don't think we can expect a turn-around in housing very soon.
"Nulla tenaci invia est via" - Latin for "For the tenacious, no road is impossible".
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong



http://marketvisions.blogspot.com/

#13 linrom1

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Posted 12 January 2009 - 02:16 AM

OMG. What outstanding analysis. This is only the second person who clearly points out that Paul Volcker's FED bears responsibility for today's debt catharsis along with Bankers over leverage and false derivative positions.

There were, once upon a time, usury laws that generally held any interest rate greater than 10% was illegal. The Federal Reserve under Paul Volker believed that interest rates needed to be raised to insane levels to stop the runaway inflation, which was the first stone that hit the water sending the shock waves that we are having to pay for today. Once the usury laws were altered so the Fed could fight inflation, it set in motion the doubling of household debt, not to mention the national debt. At 8%, the principle is doubled through interest in less than 10 years. The national debt exploded from $1 to about $10 trillion in 25 years and household debt has doubled. Some states now consider usury to be 26%. Historically, these are the interest rates paid by the very worst of all debtors - the bankrupts. In fact, in China, the worst creditors historically paid at best 10%. What we have done is the lifting of usury to fight inflation back in 1980, has resulted in usury now being so high, a larger portion of income of the common worker is spent on interest, not buying goods & services that even create jobs. This is one primary reason why jobs have been leaving as well. The consumer needs the lowest possible price and labor wants the highest wages, and to stay competitive, producers leave taking manufacturing jobs as well as service jobs. The extraordinary rise in interest rates that are historical highs since at least pre-Roman times, could not have been possible but for the lifting of usury laws back in 1980 to fight inflation. This amounted to setting a fire to try to stop a brush fire that failed. Consumers pay the highest rates in thousands of years that feed the banks at the expense of economic growth. Even the National Debt rose from $2. 1 to $8.5 trillion between 1 986 and 2006 with $6. 1 trillion being interest. We are funding the nation on a credit card and destroying the economy simultaneously.


Banks even pushed through the Bankruptcy changes in 2005 to make it even more difficult to reduce debt levels.

Martin Armstrong's thesis is supported by other social economists who look at wealth inequality. For example, Michael Hudson points out that the the top 10% owns 90% of all wealth---clearly, the consumer is not going to be able to support the economy while on road to debt peonage.

Edited by linrom1, 12 January 2009 - 02:18 AM.

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#14 relax

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Posted 12 January 2009 - 05:15 AM

russ, thanks for the interesting update from armstrong "The ideal lows on a timing basis for the stock market will be as soon as April 2009" i find this interesting as he opens for the possibility of an opposite outcome of the original business model, which predicts a top in april 2009 what are your thoughts on this should his dates simply be considered as turning points by the way, when did he write it and is he out of jail thanks!

#15 Russ

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Posted 12 January 2009 - 06:36 AM

russ, thanks for the interesting update from armstrong

"The ideal lows on a timing basis for the stock market will be as soon as April 2009"

i find this interesting as he opens for the possibility of an opposite outcome of the original business model, which predicts a top in april 2009

what are your thoughts on this

should his dates simply be considered as turning points

by the way, when did he write it and is he out of jail

thanks!


The extreme points on the model have been highs and lows since the eighties but the inner oscillations can be highs or lows has been my observation, they are just turning points. He was originally looking for April to be a reaction high to the slaughter last fall but appears to have changed his mind. Since he no longer has his 32,000 variable super computer model running it seems to me that his forcasts have got to be lesser animals than before but since he programmed the thing he must still remember a great deal of it, especially the major factors. It also looks like he must have access to major newspapers since he is able to keep up with complex details on debt structures etc.

As far as I know he is still in prison but since he now has a google email you can write to him on, it sounds like the prison is letting him access an internet computer.

But hey...according to da cheif he is just a cheap dime store hood that deserves to be in prison because he ripped of some japanese business men...even though as Armstrong has stated, 'strangely not one wire transfer of princeton economics money held in trust was transferred to his personal accounts'. Add to that the fact which I have documented on my printoneconomics blog that google and wikipedia appear to have been manipulated. Something terribly wrong in what has happened to the man in my opinion.

Edited by Russ, 12 January 2009 - 06:37 AM.

"Nulla tenaci invia est via" - Latin for "For the tenacious, no road is impossible".
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong



http://marketvisions.blogspot.com/

#16 salsabob

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Posted 12 January 2009 - 08:20 AM

On the pessimistic side - The word 'crisis' is derived from the same Latin root as 'century.' It was observed that a new 'crisis' emerged about the time of the death of the last person in the village who could remember, as a young adult, the last crisis - about 80 years. Be a little wary of those who compare our current situation in terms of the past when they predicate their observations with "since 1945" - the end of the last Foruth Turning (4T) crisis. ;) On the optimistic side (sort of) - Each of the four Turnings last around 20 years. If we start with 9/11, that would bring our current predicament to 2021. The markets will see this coming far in advance with their early (but bumpy (yea!)) rise being a near prerequisite for the beginning of the end of a 4T crisis. Markets should begin a bull run no later than 2016 that will take us to at least Dow 50K by the end of the 2020s. However, the early take-off of this huge bull market will be ignored, or discounted as real, by nearly everyone. That is because one purpose of a 4T crisis is to clear out nearly all investors and traders. The initial set of those abandoning the markets are the buy-and-hold investors that get killed by the huge initial declines of a Fourth Turning crisis. But it is the grinding stupefaction of multi-year basing periods that follow those initial huge declines where most TA tools become nothing more than a source of major frustration (if not ruin) that kills off any enthusiasm for market participation by former fearless traders who had previously thought of themselves as very clever in the earlier Third Turning. Stand by for a lot more market 'fun' to come. ;)
John Galt shrugged, outsourced to Red China and opened a hedge fund for unregulated securitized credit derivatives.

If the world didn't suck, wouldn't we all just fly off?

#17 Russ

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Posted 12 January 2009 - 08:34 AM

On the pessimistic side -

The word 'crisis' is derived from the same Latin root as 'century.' It was observed that a new 'crisis' emerged about the time of the death of the last person in the village who could remember, as a young adult, the last crisis - about 80 years. Be a little wary of those who compare our current situation in terms of the past when they predicate their observations with "since 1945" - the end of the last Foruth Turning (4T) crisis. ;)

On the optimistic side (sort of) -

Each of the four Turnings last around 20 years. If we start with 9/11, that would bring our current predicament to 2021. The markets will see this coming far in advance with their early (but bumpy (yea!)) rise being a near prerequisite for the beginning of the end of a 4T crisis. Markets should begin a bull run no later than 2016 that will take us to at least Dow 50K by the end of the 2020s. However, the early take-off of this huge bull market will be ignored, or discounted as real, by nearly everyone. That is because one purpose of a 4T crisis is to clear out nearly all investors and traders. The initial set of those abandoning the markets are the buy-and-hold investors that get killed by the huge initial declines of a Fourth Turning crisis. But it is the grinding stupefaction of multi-year basing periods that follow those initial huge declines where most TA tools become nothing more than a source of major frustration (if not ruin) that kills off any enthusiasm for market participation by former fearless traders who had previously thought of themselves as very clever in the earlier Third Turning.

Stand by for a lot more market 'fun' to come. ;)


I think that the main point Armstrong is making in the article and some others on the contra site, is that this is a banking/debt crisis created by bankster's using huge leverage to get what they thought was a risk free trade, this combined with Volker letting the interest rates go up to userous levels not seen for thousands of years which then increased the burden on the average american worker and got the federal debt going dramatically through what albert einstein called the eighth wonder of the world... compounding interest. i appears we are totally screwed, the meltdown does not look like it is stoppable. a hyper-inflation is an outcome that is quite real as has been mentioned by armstrong.
"Nulla tenaci invia est via" - Latin for "For the tenacious, no road is impossible".
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong



http://marketvisions.blogspot.com/

#18 Cirrus

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Posted 12 January 2009 - 08:55 AM

Money is a charge on a microchip. Don't be seduced...we will only get a depression if the world's CBs want one. There are numerous 'new' ways to put money into the system and peoples pockets without debt.

#19 salsabob

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Posted 12 January 2009 - 10:38 AM

Money is a charge on a microchip. Don't be seduced...we will only get a depression if the world's CBs want one. There are numerous 'new' ways to put money into the system and peoples pockets without debt.


If skillful, and lucky, the CBs will avoid a depression ala 1930s. However, to keep their 'solutions' from eventually creating hyper-inflation, they will keep us in something more than just your 'normal recession' - let's call it, "protracted economic despondency" (since Jimmy C already used 'malaise' ;)). It will necessarily last several years, and the markets will be about as exciting to traders as watching paint peel off the walls.

Starting around 2016, the exponential part of Schumpeter's sigmoid curve for several technologies (e.g. electric cars) will begin to take off. By 2020, the growing concern will be not enough dollars floating around the world to sufficiently meet the highly competitive cash needs of PRODUCTIVE assets begging for investment dollars. 'Traders' will look inefficient and 'investors' will rule.

-- One may have to live until after 2050 to ever see another asset inflation bubble again. I plan to, how about you? ;)
John Galt shrugged, outsourced to Red China and opened a hedge fund for unregulated securitized credit derivatives.

If the world didn't suck, wouldn't we all just fly off?

#20 Russ

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Posted 12 January 2009 - 12:10 PM

Money is a charge on a microchip. Don't be seduced...we will only get a depression if the world's CBs want one. There are numerous 'new' ways to put money into the system and peoples pockets without debt.



That is just wishful thinking divorced from reality. The debts (bonds) are real, they represent CONFIDENCE that the governments will stand by their obligations, when the spreadsheets start to become impossible to balance there is going to be a paradigm shift, the 50% or so of the debt that foreigner's hold could be dumped once they realize they are not going to get paid their interest and then interest rates would sky-rocket which would cause a loss of confidence and a collapse of the system that would not be possible to right. Humty Dumpty would be irrepairable.
"Nulla tenaci invia est via" - Latin for "For the tenacious, no road is impossible".
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong



http://marketvisions.blogspot.com/