Are-We-Running-Out-of-Other-People-Money-What-Happens-Now-6-20-10

Are-We-Running-Out-of-Other-People-Money-What-Happens-Now-6-20-10

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: f I A1,...... , ._ ...._.. .. “Ham. W “mi _.—...aw h...” _.-. c mv raw—r—g—y-urw.—‘.M._1.- N-r 'r'w—H’ -~ .WW . .. .m. u. v“ wu- Please REGISTER f0 S ecial U dates __ma_a_———+_*———-*~JL——~——~R——_.c ‘ Martin A. Armstrong FOP Fort Dix Camp ' ‘ #12518e050 ArmStrongEconomics.COM PO Box 2000 Fort Dix, NJ 08640 _ Co ri ht Martin A. Armstron All Ki hts Reserved This Report may be.foruarded as you like without charge-to individhals_or governments around the I world. It is provided as a Public_5ervice at this'time without cost because of the critical facts - that we now faced economically. The contents and designs of the systans are in fact copyrighted. " ‘ _ 7 L7 __ . . H ACKNOWLEDGEMENTS I would like to thank all the former employees, associates, sources, and contacts for their ongoiqg support'and efforts to contribute-to the writings I have been able to continue through their great efforts. I would also like.to thank those who have looked after not just myself, but my family, and shown them support and kindness. 1 ' ' The purpose of these reports is to broden the understanding that is so vital to our personal survival. Government cannot save us, and will only assisttthe very economic disaster We_face. This is a Sovereign Debt Crisis that threatens our core Survival. There is no plan to ever pay off debts..The majority of debt increase.is paying interest perpetually to roll over without any long-term plan. What you see in Greece and in the States, we have run out of other people's money. The socialists keep pointing to the rich. But to fund the deficits, we need to borrow now from foreign lands. We ran out of money domestically'and to support the current system like Greece, we need foreign capital. But all gOVernments are facing the same crisis and we are on the verge of another widespread government default. Adam Smith warned ‘in his wealth of Nations that in 1776, no government paid off their debt and had always defaulted. We will have no choice either. ' WThere is" o'fiapé that politicians will save-us, for'they only form committees' to:investigate after the shit—hits-the-fan. They will NOT risk their career for a future problem that may hit on someone else's watch. There was a politician and 8 average man standing on top of the Sears' Tower when a gust of wind blew them off. The average man being a realistic-pessimist, immediately sees he is about to die and begins praying. The politicians, the ultimate optimiSt, can be heard saying "Well so far so good!" as he passes the 4th floor. At Princeton Economics, our mission was simply to gather global data and to bring that tugether to create the world's largest and most comprehensive computer system and model that would monitor the world capital flows. By creating that model, all the fallaCies of market and economic theories Were revealed. The wofld is far more dynamic and every change even in a distant.land can-alter the course Of the global economy. Just as has been shown with the turmoil in Greece, 3 CONTAGION takes place and now capital begins to look around at all countries. We can no more comprehend the future but looking only at domestic issues today than we can do so in every other area, such as disease and the spread of flu. We live in a NEW DYNAMIC GLOBAL ECONOMY where capital rushes around fleeing political changes and taxes just as it is attracted by prosperity. All the people who migrated to the United States in the l9th and 20th Centuries, came for the same reasons as those still coming from Mexico - jobs and prosperity. In the 19th Century, -America was said to have so much-wealth, its streets were paved in gold. We must now “lock to both the past and the entire world to understand where we now are today, ..WWMWLW...‘.elitism._ ,.a-..-W-W.W.lwwWWWWWWW Armstrong ECdPOWiCS lflfllfififid ' " ' l Spsiélfumate Refine +4- The Dow Jones Indulgtrials (CASH) is 'showing that the big TURNING-POINT will be August. Thereafiter. it appears that the opposite trend should unfold _into Oct/Nov. The primary support lies at 9400 level and a monthly closing beneath 95375 will warn that the downtrend would become severe, but not new lows. kDow Jones Industrial Index Weekly — CASH There are two primary resolutions. There is the crowd that is calling for the Dow to collapse and a Great Depression as was the 19305. we most understand that all of the world defhul-ted on their debts with few exceptions (Boitain called for a suspension of debt payments) France the last maiden to cling to the gold- stand- ard even after the US devalued. the dollar finder 'Roo'Se-relt. The dollar rose because it was fince Roosevelt confiscated - gold, he introduced inflation and that sent stoclcs up between 1932 and 1937. Therefore. if the Depression were to repeat, the Doomsday Boys got it wrong! Capital flight was to the dollar. because it was GOLD! That's it! Therefore, it is GOLD, not the dollar, that would soar in price! ' In the book I am rushing to get done, I go over also forgotten Depressions of the 13405. and the Financial Crisis of 1557 to 16-747. Thieves the period of a series of sorereign debt Ldiafaultsifrom- Spain and France. In fact, it was s'o'b'ad',' France team not borrow a dime in 1571;. ‘ irman of Princeton Economies International, Ltdf E a _ . . g Short-term, there is a potential for E the Bow to :u'a‘ke a low in early June and then " .c m rally into-dilth with the traditional drop 45. in the Sept/Oct time frame. However, making a h new lows beyond the week of June 14th, will. 1 n g j ; gem of 3 August low. A key' week appears to _ n1 4 M1... ‘ ' 7. gig, By: Martin A. Armstrong'Copyright All Rights Reserved June 9th, 2010 Please Register EQLSpggigl Updates At Armstlfongficonomics.wfi -——e—4———em-————~—————~nf—————~—-fl———~—ua———w—————g——w—w—f—e———————+~_——#*————_—-——— ,. .7 _ SPECIKL.UPDATE'REPORT3 BY EMAIL . , ' . M Because of the dramatic increase in volatility, a SPECIAL UPDATE REPORT hes been created on a specific market outlook. As we head into the economic storm of Sovereign Debt Crisis that_is brewing around the world, it is going to be critical to be able to address key events on a more timely basis. Everyone is invited to Slgn up for thie FREE.serviee at; ArmstrongEconomics.COM This will cover the world markets and economies. Please sign up as soon as possible. The event horizon is coming in rapidly. We need to stay vigilant to SUFYiVe the Years ahead for g0vernment will only form committees AFTER-THEsFACT to inveStigate Why something happened. They will NEVER take steps to prevent an Obvious economic crisis. We are on our own. The best course of survival is to stay INFORMED and to understand the nature of what is taking place since_no one ShOUld euef fOIlOW anyone-blindly. This is all about educating whet'is the new reality. f _ Out Of — ' _' other onple " Money What happens now? * By: Martin A. Armstrong Former Chairman ongrinceton Economics International, Ltd. ' rand the Foundation For The Study 0f Cycles ii EVER.DOES HISTORY REPEAT PRECISEEY THE SAME WKY'TWICE! There is _ j always a differenCe because the global economy is truly a giant '3 Complex-Adaptive system that is forever changing. There are a set of LAWS that I intend to publish that are constant. Yet, even :though-there can be constant laws, they apply without regard to : culture, nations, or empires. It was Niccolo Machiavelli who at .. "wrote in his first Work: "The world has always been inhabited by human beings who have always had the same passions." Del modo di trattare i.sudditi ' della Val di Chiana rihellati, 1503. (He wrote the Prince in 1513). This phrase by in, [L Seer have-truly studied the past, come away with the same realization. For as much as thingscmange,they remain Very much the same; In other Words, who is the ruler and the ruled, oftEn change-places through revolution, but as John Quniey Adams oncesaid: We have conquered the enemy. we ocouPy their hill. We.have become the enemy. There are just laws governing human nature that are constant. What changes is merely superficial.insofar as which country is on top of the hill at that moment, and in what sector capital concentrates as the flavor of the time. But while the- instrument and nation-may change, our "passions" dictate the same outcome everytime- So will there be a Great Depression? The_ going to repeat exactly the same way. Those answer is YES & N0! What gibberish is this who simply pull out a chart of the Dow Jones you say! Some nations will suffer inflations are confusing a lot of things. Not merely ‘ and others deflations. This is a contest that was there a Sovereign Debt Crisis in 1931, is eternal and goes against the normal idea - but there was the advancement in technology of what is even a depression. For you see, _that was eliminating jobs in the agriculture there have been many depressions throughout .sector, the dust bowl, and the fact that the history, 1929 is by far not the worst nor-is dollar was NOT the dollar; but it was de facto it the standard. What took place then is not gold! Moat such events are NOT present today! Differential Betw'een Co'rp & Trees Yield (Mbody'sm «Treawv‘Bmdsj 0.5 ' nae“. is N ‘ I‘ . - we. we .' . . " _ \ ~ ’\ a " ' 6' Q4 ' - - . . '+‘.\.' ‘ ~ ‘ Is :0“ wow ow 0.3 ~ . . new “wipe ed M“ iv, ; dh -.§he5§§lsr e?‘°* .. “fit #{éfi ' v , I V. :' \ a .e no RE 1929 [933 1935 [$7 1m Because of the Sovereign Debt Crisis, the great fear back then was what would happen to the dollar. When all of-Europe defaulted_but France and the United States, it was assumed that the US would be next, eyen'though the issue was not DEBT, but whether or not the dollar would be convertible. The "flight to quality" was NOT to the dollar or to government bonds on a constant basis. It is.true that this was the first reaction between 1929 and 1932. Hewever, in 1932, that began to-change. The stock market began to rally going into 1937 because (1) devaluing the dollar relatiVe'toigold would canse those tangible assets held by the corporations to rise in value and thus the stocks were UNDERVALUED. Therefore, stocks rose in value as a hedge against the decline in the value of the dollar relative to gold. WWW,,,(2)the filight to quality now changed, because of the capital was NOT going into the dollar or to gOvernment bonds. Why would capital buy that which insexpected to drop? Thus, the studies we conducted at Princeton showed that‘the flight to quality post“1931 was to private assets and that meant even into corporate bonds. Pictured above, you will see a chart of the Differential Between corporate and US Treasury yields (Source Greatest Bull Market in History, 1986 by-Martin A. Arm— strong). You will notice that the spread rpeaked in 1932. Not merely did the Dow 7 Jones decline into 1932, but the full faith and confidence in corporate v.government debt also declined. However, in 1932, the "Flight to Quality" then flipped and now became public v private. awas,aeenvironmentalwcatastreehsgthetrifle, _U.S Unemployment as % CM: Work Force 26 mm - ISGJ amual mange me 7: 'As Johnny IEpp said in his latest ndhie finothing is permanent, not even death." At, least economically, he is very correct. Not a single aspect of anything is ever constant insofar as:a relationship of any instrument or performance of the political economy in any nation. It is-true thatunemploymentrose during the 19305 above 25%. But the cause of that trend was NOT the fall in stocks.'We can see that'the peak was in 1933 THE YEAR AFTER - Low IN JULY 193.2. Thus, we can sleep at night knowing that all the'big 'economio numbers can still get worse yet the stock market can rise. It's one giant act of balancing everything against everything else. So we.mnst investigate behind the_talking heads. When we do, we find that (1) there far beyond any politician's power to even investigate. What were they going to do? Subpoena God for withholding rain.creating the dust bowl? (2) there was the impact of the combustion engine. Now farms could just replace hundreds of workers with a tractor. The effect of the industrial revolution upon agriculture was monumental. In the mid 18003, 70% of the work force were agrarian. By 1930, it was 40% and by 1980 it was 3%. Both weather and technology conspired to deprive Workers of their jobs. The similarity of this Depression to the whopper of the 13405 is uncanny. Here too we have Sovereign Debt Defaults from England and Naples, Italy. This wiped out NeiofiLS.CapfiaékavecoounE 11+}: inflow bodice; .v 1‘0! 1'1 9 o I .9 a 0 Q, 6 .3 I. 3 lump—gm ‘c o I; 'l o f @- ,. 3? h u) x. g 2 u '5 u: E .9 E .E 3 I} 7 W a? b 9 v ‘o b g 6 gs 9". I. ALL three banking houses in Florence (Medici i- came to power picking up the pieces). This Sovereign Debt Crisis began.the move of the financial capitol of EurOpe from Italy to the North..The next Sovereign Debt Defaults were Spain and France in the 16th Century. They nearly destroyed the German banking house of the Fuggers. This Completed the; shift in the financial capitol to the Dutch. , ,th§,,,,Great- ,,D,,epressi,on, of, 13403;, ,, was made far worse for thereafter the attack 'on the Black sea colony of Genoa, catapulting dead bodies item a plague into the colony, caused the Genoese to flee and taking the new Black Plague with them‘back to Europe. About 50% of the population was killed. So much so that the strange event of plague is what gave birth to capitalism for now labor became a rare commodity. ' Just as it was World War II that indeed restarted the economy after the 19308, it was the Black Death that killed so many creating a labor shortage that rebooted the economy. Both then followed the same path with rising inflation that became wideSpread. But BOTH had the same effect, population reduction. 'In putting the World economy together over the centuries, certain cemmon trends emerge that become standard LAWS for it does not matter_the time period, the patterns are a". ' £5 ' ‘3 w ‘0 I 1 I A v a ) ’ a O f' .& d? A «- A +¢ u I v ,9 r O “I ’1” ‘5'} I o u: ‘w I r 4‘: o o “0‘ v . 4!! a 949:! min- ‘fl 2. z.’ :0 .o :fi fi_ .41 1‘43‘.‘ 1;. II I “s ’15 .. ‘3 is 55 {I o ‘ q 3 a» I. § «4.51 , - I!) r "o h”! v o ‘1 1 4 .a 6 -£ ’1 t 11 ,g V I“ o A. 'Q a ‘ 9. .- ‘c ~— 94» - V v . its: D A. A Q 25 o 3: .3 1 a. 9. cl 5’ a Q» ’o 9‘"; I.-. 3&3. ‘ I always the same. The commen-denominator is ‘human emotions/passion. we act the same way to similar events all the time. I find_it .startling that government.and economics aIWays try to_reinvent the same wheel. At‘ _ no time will anyone just ask: Has this been tried before? It so, what was the Outcome? The CIA'wanted Princeton Economics to constrHCt a model for them, they acknowledged ,thatlEapitalmFlow,Enalysis_waswinventedmhyr our firm. Above you will see a chart also from the 1986 Greatest Bull Market In History. This shows the flow of capital into and out of the United States between 1919-and 1940. Capital fled to the USA for World War I. After_it was oVer, capital began-to.return to Europe, but by far, it was still coming to Amerioa. That peaked at nearly World War I levels in 1927, Europeans were starting to sell US assets going into the-high for l929. It turned negative going into 1931 as gold Was recalled due to the crisis. AFTER the dollar devaluation in 1934, capital flows returned to positive and would continue into World war II. By Bretton Woods in 1944, the USA had 70% of all world gold reserves. Capital flows away from anticipated crisis economically. Capital ionflowing to the dollar right now. It is curiously going into PRlVATE assetS, bonds, and even mortgages Why? The EURO! If the Euro cracks, things are going to get really nuts. This could be very dramatic for gold and the dollar. Why? If a country wants to pull out or can no longer sell its debt for a default, what currency willtheythen use domestically if one does not exist? I suspect, they will use the Euro just asRussiansused the dollar in an underground sort of way, but if the Euro crumbles, we could see real chaos and a scrambling for dollars and gold. Will we end up With a ONE WORLD CURRENCY? Most likely. I would argue for a global type of reserve currency'used'among nations as gold ‘use to be under Bretton Woods. There is NOV _possible chance for a ONE WORLD CURRENCY that anyone would use in all nationsdto go to the store and shop. The'very reason Greece is in trouble as many other countries and states such as California, is they cannot devalues the Currency-(Partial bond‘default) for they 'have no control over it:€This implies that they have to default on theif internal-budgeti programs - MARXISMJ— Socialism will'die. There is'a risk that the dollar could 'rise extremely high back to 1985 levels and that would be deflationary. However, this would be a short-lived spike. The dollar would 7then crash and burn and we would swing very fast back toward very high inflation. UNEMPLOYMENT is likely to still rise but it will NOT come from-agriculture nor even from the menial job market of the private sectdr. Unemployment is likely to rise this istimelfromWGOYERHMENTWWORKERSLN,,Nfim- So if the question is: Will we,see a‘ Great Depression like the 19303? The answer is NO! Will_there be wild swings? Absolutely. The volatility is going to be very; very high! I try to stay as far away from personal opinion because this is stuff that cannot be left to personal visions. Opinions are nice. But everyone has one, as they say, just like assholes. We are in a VERY SERIOUS period of' change. It is NOT Capitalism that is dying, it is SocialiSm. As Margaret Thatcher said, Socialism works until you run out of someone else's money. Well, that day has arrived. The Government is stepping up its tax prosecutions confiscating eterything they can get their hands on. Sorry! You can declare all wealth belongs to the state as Roman minimise-.m--____..._,._...1..i_.. -i_s.m.__.--ss_.-.. Emperor Maximinus (235-238AD) tried. It did not Work. It killed_the economy driving cash Underground and reducing VEEOCITY that then -set in motion the collapsa of the entire Roman ec0nomy. The ANSWER is NOT harrassing the people. SocialiSm is DEAD! It is time -to embark upon a whole new monetary-system to save society, and we can still have the safEty net if the bullshit stops. Otherwise, this program_to pay 10% to anyone who turns 'in somebody else, is turninéfiman against his brother and will succeed in destroying ALL _Western civilization and culture. This is NOT EAST BERLIN. You cannot turn society into a bunch of_spies as did_Maximinus. ' Because government will NEVER even dare hold hearings to consider reform'bEfore the shit—hits-the—fan, there is a danger of a complete meltdown where what reamerges_is a_new age from-the ashes of destruction” We can avoid that outcome if we Stop the damn I corruption and clean house. That has been done throughout history that does not at all require a bloody revolution. If things are delayed and the habyboomers wake_up as See ' they have no future because the government _ cannot honor its promises, then_things can turn violent. These_are the patterns of, - history; They are driven by the passions of those effected. Stopping shy of the full scale-melt- down, is_possible if we-are practical and .reaSOHable. We have to stop this war between Demoerat and RePublicanu.BOTH are wrong! It must be a time now for the people to save ,Wthelfuture.,,,mw We will See high volatility that will take as in both directions. YOU MUST come to understand this. NEVER getgwed to one _direction. That will be your DOWNFALL. We are living in interesting times- So no. There will he no Great Depression. This is the dawn of a much more profound age. This-is the DECLINE AND FALL of socialism no different that the fall of communism. It is just our turn. The idea is not wrong that we have a charitable view toward others. But it is wrong to force that idea through law. Liberty must be preserved. We can fund the programs, but not.through borrowing. We now depend upon other nation's to fund the debt the same as Greeceo We have the same problem, Just.on a giant scale. VOLATILITY new rules! ...
View Full Document

Page1 / 7

Are-We-Running-Out-of-Other-People-Money-What-Happens-Now-6-20-10

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online