On Martin Armstrong's 'It's Just Time' 18 comments
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I have had the privilege of reviewing and sharing Martin Armstrong's new essay "It's Just Time," dated October 10th, 2008. As many of you know from last year's NY Times article by Gretchen Morgenson, Martin Armstrong has spent almost nine years in prison for contempt of court, more years than if he had been actually convicted of securities fraud. It's a disturbing tale of injustice involving one of the greatest economic and market minds of our time.
I ran across Martin's work in my original studies of market and economic cycles after the NASDAQ bubble began to burst. While I didn't know it at the time, his Economic Confidence Model encapsulated all the cycles from Kitchin's to Kondrateiff's and could predict market turns almost to the day. I was fascinated enough to cut and past a copy of his article, "The Business Cycle And The Future" from his Princeton Economics web site. Little did I know that nine years later, Martin would be in jail and my blog would be one of the last public sources of his Business Cycle essay.
Martin's economic work should have received a Nobel prize by now. Instead, the man is relegated to recording his thoughts on a single-spaced, IBM type writer from prison. His 77 page essay can be accessed here (pdf warning).
In the first part of his new essay, Martin provides a deeper explanation of his economic cycle theories. Traders and investors will be fascinated by his elaboration of the 8.6 month internal cycle, his 224 year political cycle and the 37.33 Month cycle frequency. He also explains the inter-relationship between the shorter 8.6 month cycle and the longer cycles which are currently dominating the economic and market landscape. Finally, Martin offers a brief glimpse into a previously undisclosed volatility cycle called the Schema Frequency.
The second part of the essay is wide ranging and sometimes difficult to comprehend. In it Martin makes references to his own plight while implicating numerous international political and financial figures in a grand conspiracy. I have no way of judging the veracity of Martin's theories as to why he has been jailed for nine years on contempt of court. His tale is a mix of "Three Days of the Condor" meets "The Man Who Knew Too Much." What I do know is that the facts surrounding his jailing are as unimaginable and unbelievable as the accuracy of his models and predictions. For the sake of the nation's economic well being, his thoughts should be heard by the new Administration not from behind a jail cell, but face to face in the Oval office.
Having been called on by heads of state and corporate CEOs, Martin follows through by offering his solution for the current financial crisis - a crisis he predicts will end the reign of the United States as the leading financial super power unless drastic action is taken.
We must come to face the real facts. Traditional old world economics is no longer applicable. The greatest error of the money supply being fixed to the gold standard, was that the discovery of gold determined the supply of money altering policies of government and subjecting the private sector to swings in the boom and bust sense that would be influenced with respect to amplitude increasing volatility. We can see such periods following the Gold Rush of 1849 in California and the consequence~ of the deliberate inflation created by the "Silver Democrats" that led to virtual bankruptcy requiring J.P. Morgan to bailout the government in 1896.
No doubt there will be those who would never consider deliberate inflation as fiscal irresponsibility. However, when Paul Volker was fighting the commodity boom into 1980 and raised short-term interest rates, we must realize that the biggest spendthrift within society is the government.
By deliberately raising interest rates to stop private sector spending, the national debt was put on an exponential growth path. The Government cannot be the stationary "disinterested" observer in Einstein's theory of relativity. It cannot see its own actions because it is so busy trying to attribute blame to everyone else. This is the fate of our nation at stake. This is the future of our children. Are we to be so irresponsible like a drug addict who steals today with no regard for the consequences just to obtain that quick fix?
If we merely borrow to fund the economic bailout, we have two major problems. The contraction of leverage far outnumbers the actual money supply even if we now count all cash and outstanding debt as money. Because there has been no regulation of the amount of leverage between banks as is done within the exchanges who raise and lower margin requirements in futures to manage the amount of leverage ("gearing”), we are looking at a contraction that could exceed the GDP in multiples. We must realize that borrowing to bailout the banks, is economically indistinguishable from moving money from your left pocket to your right. We are actually further adding to the economic contraction by soaking up cash in the system and redistributing. This is merely a form of Marxism. What we must to is to expand the sheer actual money supply to offset the contract in the "real" money supply created by the private sector in electronic format that is also indistinguishable from suddenly discovering gold in California back in 1849. The fiscal policy of the nation has been usurped by the bankers, who did not even understand what they were doing.
We need to review the Keynesian theory. Borrowing does not stimulate for it will not-increase the money-supply to compensate for the contraction. Even buying the debt from the banks by injecting more capital, is pouring bad money after even worse money. The Sub-Prime Mortgages 'should be purchased from the banks at current market value, placed in a public fund not managed by bankers, allow the mortgages to be renegotiated into a fixed rate, extending the time if necessary, but revaluing the property as Julius Caesar did, and setting up a reasonable payment schedule. If the homeowner cannot cope with the payments, then they lose the home. The bankers have to suffer their fate. Let the banks reorganize and consolidate, and there must be the survival of the fittest. That is not to say we should abandon FDIC. We must stand behind all bank deposits. That is the price we must pay as a nation' for the failure to regulate the "big" houses as we do the "small" players.
We must collect the Sub-Prime Mortgages into a single fund that should then allow private investment. Individuals could invest even their 40lKs in part, and we must curtail government borrowing at all costs. Those who do not want to see the "social" spending of the Democrats, we should realize that there would have been ' far more than a chicken in every pot had we not spent so much on interest. In fact, had there not been interest payments, we could have spent the same amount of money and there would be a national healthcare like that in England. We must confront what is going on. It is time we restructure Government itself. Locking up every person in Banking or Wall Street will not solve the problem. Capitalism is not at fault. The "club" seeks “riskless" trades and rely upon Government to cover losses so why bother worrying about risk? Long-Term Capital 'Management collapsed when the IMF could not continue to support Russia that the "club" was buying their paper at 50-100% rates of interest. This is the same problem. The Sub-Prime Mortgages displaced risk for they looked to the Government as a guaranteed trade. That is not capitalism -' that is plain old fashion corruption. Let us deal with the truth!
The bad portfolios in Japanese corporates were purchased with a note removing the problem allowing them to get back to business. Do not allow, the banks to work-out these problems and do not hire bankers to control the bailout. Hire qualified fund managers who will not protect the banks. A lawyer who represents "himself has a fool as a client. Bankers protect bankers. How can you prosecute the people in charge of the bailout? We need independent management and consolidation of SEC, CFTC and the Federal Reserve into one regulatory' body that protects the system, not individuals.
It is time for serious reorganization.
Stop the Marxism! We need to return to basics. End the income tax & replace it with a 10% National Sales Tax (excluding raw food & basic clothing) that also include real estate. China has boomed because it had no income tax! This is what the men who established this nation established until Marxism began with the passage of the income tax only for the rich in 1909, that now applies to everyone. Stop borrowing money from the poorest with no interest masking it as a "refund" check confusing them to make it appear as a gift. Do this, and we will reestablish jobs in America and
it will matter not if someone is an illegal alien or not for they will still pay their fair share. We are losing jobs because of high taxes and high heathcare costs that just make it cheaper to set up service oriented jobs in India, Philippines, or Mexico. It is time the BOO pound gorilla lost a little weight. This will create a offsetting economic boom that will save the nation. Marxism does not work. We cannot be a little-bit pregnant. The Constitution was established to preserve the "Blessings of Liberty" to all posterity, not depending upon race, creed, or class. Marxism was a disaster. It should offer no model for the future. Just look at Russia and China. If we do not reorganize, Ayn Rand will be correct!
We can still have the benefit of a collective society that affords common goals to secure the individual way of life. There must be the funded programs with the growth in spending limited to the GDP growth that must be set by a global 'economic independent organization not subject to the political pressures of one nation. The economic statistics are bogus. They are politically manipulated like inflation to reduce government "spending where many areas are indexed to CPI. Government will always corrupt itself. The reason we have the “Julian Callendar" is because the Romans knew the moon callendar was incorrect and that additional days had to be inserted to maintain the seasons. Thus, someone had to be given the job to decide how many days to insert and when. That Job was given to the High Priest ("Pontiff Max!!), who was routinely bribed to stall elections by inserting months at a time. When Julius Caesar walked in to government, he did massive reforms and thus he eliminated the corrupt job of managing the callendar. This illustrates that we must remove the temptation to manipulate economic statistics to effect certain policies. As they say, statistics can be made to ensure they do not tell the truth. Carrots are very dangerous, because everyone who has ever eaten one has eventually died! Every country calculates their statistics according to a unique formula. How can we even compare economic growth from one nation to another?
We can monetize part of the debt by redeeming a specific quantity with newly generated cash. There should be some controls on the quantity of dollars created internationally through regulation carried into place by the Federal Reserve. We must also reestablish the entire purpose of the numerous branches of the Fed. That was put in place after the San Francisco Earthquake and the Crash of 1907. It was understood that there was a problem of regional capital flows. To prevent a shortage of cash that led to bank failures in some regions, each branch was autonomous that allowed for interest rates to be higher in some regions. We-saw these problems in the 1980s, where a single national interest rates was used to stop stock market speculation that depressed farmers, because for World War II, all policy was usurped into Washington because there was to be a great expansion in debt. We need to stop using a giant club to stop one effect by punishing everyone. Do not forget, lower interest rate may not entice, investment (see Japan 0.1%), yet it will deprive the elderly who are one of the largest savers, from earning an income when they no longer can work.
Just like a company gone into distress, we just have to deal with the whole problem. If we think we can just have big public trials like Nero did with the Christians to cover-up the burning of Rome, then we are going to have no future. You can execute all those on Wall Street. It still will not help. We need real legal reform and stop the abuse of prosecutions for political purposes. The true wealth of a nation is its consistent Rule of Law that protects not merely the personal liberty of citizens, but their property. If the Rule of Law is not going to be upheld and can be even manipulated for religious purposes, then we are just reducing ourselves to a Banana Republic with nuclear weapons & capital will flee!
'We need serious reform of how government", operates. We need a single agency to regulate the financial markets and banking. We have to stop the buying-off of Government attorneys and if they are not interested in a career, then get your experience someplace else. We need integrity to be restored. We must stop the abuse of "big" firms instigating the government agencies to remove competitors. This is either going to be a nation of true liberty, or melt-down the statute of liberty and use it for handcuffs and stop the propaganda. We must realize that "real" capital will flee if we are not fair and consistent in our treatment of all those within our society. If we are so intolerant that the Calvinistic forces that seek to gain control of the law to effect religious objects, we are no better" than the Taliban in Afghanistan. True liberty and freedom is a given that is divine. Everyone has the free will to pray or to sin. A sin to one group is not a sin to another. There are a host of variations in Islam, Christianity, and Judaism. Who is "right and who is wrong is not for courts or government to legislate. We must defend the right to speak freely for everyone, or we will silence ourselves. It "was the " hatred of the Protestants against the Catholics that not only tore England and Ireland apart, but led to "prohibition " in the United States to create laws to imprison the catholic Irish and, Italians. That created the Mafia, was responsible for countless death, untold waste of national wealth, and was repealed in the end. No more!
As Margaret Thatcher once said, "It is just time.” She instinctively knew 'that cycles exist because people just get tired of the same old thing. We have an absolute right to good honest government. That: is the battle cry of every civil war known to history. Just as Julius Caesar was a man of the' people who was cheered when he crossed the Rubicon, we need someone of integrity so bad, unless we obtain honest reform, we are perhaps inviting the Gods of War to return. The people crave a fresh start, and they crave fiscal responsibility. Where are the aspirations, dreams and promises of Jefferson & Madison? Where have they' gone?
'Edward Gibbon (1737-1794) wrote a most notable epitaph in his celebrated' The Decline and Fall of the Roman Empire first published between 1776 and 1788. describing two men who ascended the Capitoline Hill in Rome to survey that which remained. One" remarks to the other:
"Her primeval state, such as she might: appear in a remote age, when Evander entertained the stranger of Troy, has been delineated by the fancy of Virgil. This Tarpeian 'rock was then a savage and, solitary thicket: in the time of the poet, it was crowned with the golden roofs of a temple; the temple is overthrown, the gold has been pillaged, the wheel of fortune has accomplished her revolution, and the sacred ground is again disfigured with thorns and brambles. The hill of the Capitol, on which we sit, was formerly the head of the Roman empire, the citadel of the earth, 'the terror of kings illustrated by the footsteps of so many triumphs, enriched with the spoils and tributes of so many nations. This spectacle of the world, how is it fallen! how changed! how defaced! The path of victory is obliterated by vines, and the beneches of the senators are concealed by a dunghill.”
Id./Chapter LXXI
We have a choice. Fix what is broken, or die leaving behind nothing of any significance as the dreams that once filled this land evaporate into oblivion. The impatience of capital will not long suffer the suspence of truth. Civil unrest and even war follow economic declines. The clock is ticking. The Civil War cycle' turned in 2002. The Clash of reason is on the horizon. It cannot be business as usual.
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This article has 18 comments:
Even at this late juncture in his career Armstrong is still failing to credit Samuel Benner's cycle book, which I own, for his own "Confidence" Model. My edition of "Benner's Prophecies of Future Ups and Downs in Prices" was published in 1879, and Armstrong had a copy of Benner's chart on his PEI website before it was disconnected. I managed to save some of his work, including the Benner chart, as the author of this article did.
A Benner chart was also included in my copy of Frost and Prechter's very famous "Elliott Wave Principles". The first edition of Frost and Prechter's book came out in 1978 and the second, which I have, in 1981. So Armstrong would have known full well from whence came the "mysterious" Benner chart he put on his PEI website in the late 1990's.
I truly feel very sorry for him wasting his life and considerable talent away in prison for a few more years still, and particularly I feel sorry for his family; but he has done it all to himself. I'd feel even sorrier if he had acknowledged his very large debt owed to Samuel Benner.
I have not notice the CIA demanding Tom Drakes work as they did Armstrong, nor have I notice the Chinese government asking Mr. Drake's advice.
If Drake would bother to read Armstrong's latest essay he would see that the government had to drop the original charges against Armstrong because they were false and so they too the easy route to get him contempt for which there is little defense. The government took the supercomputer that had the model but it had a virus on it that erased everything once it detected it had been moved (to the world trade center in this case). So even if Armstrong had decided to let them have it by then it was too late, the program was gone. Since the CIA was demanding to have the Crystal Ball why should he just hand it over to them. It is a huge conflict of interest on the part of the government, attempting to gain control of copywritten material by force. Where is the rule of law protecting peoples property? These are Nazi like strong arm tactics by the US government.
The government took away Armstrong's lawyers money that they had already been paid. He ended up with a lesser lawyer that his old mother hired for him. He never got a proper trial or the right to appeal, the US Supreme Court rejected the appeal.
On Nov 06 07:24 PM deuxsous wrote:
> Armstrong is still in prison because of losing several judicial appeals
> in Federal courts which never spoke to the evidence he was compelled
> to produce by the original judge in his case which would have proven
> whether he was guilty or innocent. All this can be found by intelligent
> web search along with a lot of misinformed opinion about Armstrong,
> including this article.
>
> Even at this late juncture in his career Armstrong is still failing
> to credit Samuel Benner's cycle book, which I own, for his own "Confidence"
> Model. My edition of "Benner's Prophecies of Future Ups and Downs
> in Prices" was published in 1879, and Armstrong had a copy of Benner's
> chart on his PEI website before it was disconnected. I managed to
> save some of his work, including the Benner chart, as the author
> of this article did.
>
> A Benner chart was also included in my copy of Frost and Prechter's
> very famous "Elliott Wave Principles". The first edition of Frost
> and Prechter's book came out in 1978 and the second, which I have,
> in 1981. So Armstrong would have known full well from whence came
> the "mysterious" Benner chart he put on his PEI website in the late
> 1990's.
>
> I truly feel very sorry for him wasting his life and considerable
> talent away in prison for a few more years still, and particularly
> I feel sorry for his family; but he has done it all to himself. I'd
> feel even sorrier if he had acknowledged his very large debt owed
> to Samuel Benner.
home.att.net/~fcwriter/news141.htm...
users.rcn.com/offshore...
www.derivativesstrateg...
search.japantimes.co.j...
www.gata.org/node/550
www.usagold.com/cpmfor.../
www.gold-eagle.com/gol...
www.independent.co.uk/...
www.derivativesstrateg...
You should not run your mouth on what you know nothing about.This man has been in prison for 8 years without a trial. The Fed's have never proved anything. They are in it "Just for the Money"
On Dec 24 07:58 PM deuxsous wrote:
> I'll bet that the people commenting here on "St. Martin Martyr" will
> say the same things about Madoff whom Martin resembles so much. Martin
> ran a very big scam bond deal in Japan which was what the court sought
> evidence about. He's still conning lots of people evidently. It's
> hilarious.
His assumption is that government is bad and social actions by government are bad and taxes are bad and so on. He has forgotten that business is bad too. Bankers have lost trillions of other peoples money, auto companies have been incompetent and a list of disastrous businesses goes on and on with incompetence, corruption and greed that devastates 10s of millions of real people.
In fact, Martin Armstrong was a very bad person/businessman that cheated investors. It was not a government agency we needed to fear but a businessman who ran a Ponzi scheme (comingling accounts to cover losses) and falsified records to investors.
Thanks for all the links. I've checked some of them out. GATA seems to be pro Martin. Perhaps you should check out your own links and also check this one out:
74.125.45.132/search?q...
If you do, you will read:
"The count of the indictment to which Armstrong pled guilty alleged, inter alia, that Armstrong defrauded investors and obtained money and property by means of materially false and misleading statements, that he used the United States mails to send false account statements, and that he caused commercial interstate carriers to deliver investors’ checks to him."
Notice the word "alleged?" Nothing was proven yet. If you are still in doubt as to whether his rights have been ignored, consider this:
. . .ordered him confined to coerce compliance with the turnover order."
And then there is this:
"Whether the allegations set forth in Section II are true and, in connection therewith, to afford Respondent an opportunity to establish any defenses to such allegations; and . . ."
He is just now getting a hearing to even address the issue of whether the fraud was committed. Notice the word "allegations?"
He was put in jail to be coerced (in the words of the document) without a speedy trial. Perhaps you should familiarize yourself with the "rule of law."
Do you think you have rights? Think again.
He deserves a trial to try to get at the truth. However, there is no denying that his latest treatise makes good points about rule of law and has market insights and a solution. Do you see anyone else offering SOLUTIONS to the current problems? What is Benner's position on the decline of the U.S.and our current problems?
Am I allowed to take from his writings those things I find useful while ignoring those things that are not factual or to my liking? Am I allowed to ignore his criminal activities (alleged, but I've no doubt true) but still learn from what he writes? Must I throw out the baby with the bathwater, embrace him in total or reject him totally?
Here's my prediction: we're going to go through the 1970's once again (I was there the first time; it hurt), and we're going there for many of the same reasons: 1) an unpopular war (two actually) unfunded or at least not included in the regular budget, the interest on which will eventually cost twice the principal (think buying a house with a mortgage; you'll eventually pay triple the asking price). 2) Oil crises that rapidly drove the cost of energy to all-time highs, not unlike the Yom Kippur War of '73 and the OPEC embargo of 1979; we've visited $140/bbl once and with the next disruption in the Mid-East (whatever it is, and there will be one) we'll visit $140/bbl again, probably higher. 3) The cost of wars, both Viet Nam and Iraq/Afghanistan are always borrowed, the costs spreading far beyond the length of military engagement, sapping funding that could have been used for domestic programs or tax cuts. Here we've had tax cuts while at war, pushing the cost out to future presidents and generations. The cost of recovering an economy following a war is always a direct consequence of that war, not merely an untidy and unexpected "surprise." It always happens that way. Did anyone really believe "Iraqi's will pay us back (after WE invaded THEIR country) through reparations paid for by (their) increased oil production?" or that that was a way to fund the war? We are going to see 1970's style inflation; count on it and gold will hit the mythical $2000 per ounce sooner than later.
Because I agree with Armstrong in one area doesn't mean that I agree with him totally. I don't believe that the world is ready for, or going to go to a single currency model as he suggests, but I do find myself wondering, as he does, just how we're going to coerce the rest of the world into funding our debt - buying treasuries - without a rise in interest rates occurring. I further agree and have long been a proponent of the fact that the government doesn't set interest rates. Get real; treasuries are sold at auction, and the buyer determines the interest rate by what they're willing to pay. Every day in the bond pits of the CME, formerly the CBOT, bonds and treasuries are sold to the highest bidder with interest rates on face-value bonds inversely proportional to their price. Where this notion that the government sets rates got started is beyond me, probably by people who've never been to any auction I suppose. As the next $1 Trillion in treasuries hits the world markets, disinterest in buying them will push prices down and (therefore) interest rate up, which will impact all preexisting bonds, both private and government, raising rates across the board. Just like the 1970's. Even Volker, if you remember back that far, raised rates in response to prevailing rates set in the bond pits, trying to leapfrog ahead of the market in an effort to slow the economy; he didn't raise rates in anticipation of bond auctions or sales in the bond pits of the CBOT, he followed them.
Of course if you still want to believe that setting rates on overnight interbank lending affects anything but that and other short-term lending, you do so at the peril of failing to understand how and why inflation - and I definitely liked Armstrong's separating inflation from the usual "too much money chasing too few goods" argument - really happens and really works. In this day when almost all money is just electronic blips on some computer hard disk, and, as Armstrong points out, the effect of money leveraging makes trying to count the money "out there" totally different than trying to count the number of actual dollar bills in circulation, define "too much money" in that antiquated equation. Inflation will proceed as it did in the 1970s from excessive borrowing, and it will be severe; pray-tell, how could it not be?
Good article. Keep what you like, ignore the rest, but it's not necessary to "take sides" on whether Armstrong (or his adherents or detractors for that matter) is a hero or a goat to enjoy what Armstrong has written and to learn from it what one can.
I just hope that the investment scheme that seems to have gotten him into so much legal trouble wasn't based on his view of economics as presented in this writing... LOL
I have not yet read the full article, which I will, but I must agree with the above point!
Well, I don't really know if it was originally from him. But it works.