Professional Documents
Culture Documents
During 2006, I was studying the gold market, the Kondratieff Cycle
Dow Jones Industrials and the work of Ludwig van Mises (on credit cycles) and each
one was pointing to an imminent financial crisis. The inspiration
for this well-timed study came from reading commentators ALL
of whom were on the fringes of the investment world - more
asymmetric information. Martin Armstrong, whose latest work,
“It’s Just Time”, I discuss below falls into the same category –
and not just on the “fringes”. He has been in prison for almost a
decade for contempt and commingling investment funds. Before
this, however, Armstrong had REFUSED to hand over his financial
model to the US government which may explain his unfairly harsh
treatment. His analysis, however, borders on the “mind blowing” -
even more so if his calls continue to be correct.
“Far too often, the majority thinks only in a linear fashion, rather
than dynamic.”
BB Energy;
BB Network infrastructure.
BB He is the first financial analyst I’ve seen who has made reference
to the Mayan calendar.
BB A major turning point low for 2002.85 (i.e. 365 days x 0.85)
which was 28 October 2002; and
Euro/£
The motivation for Martin Armstrong creating his model dates back
to the 1970s when he claims to have identified cycles in stock
prices that exist on all time levels, i.e. intra-day, daily, monthly
and yearly etc, that occur in the run up to major changes in
Each 8.6 year cycle breaks down into an upward leg of 4.3 years
and a corresponding downward leg of equal length. The upward leg
consists of an upward wave of 2.15 years, a retracement lasting
1.075 years followed by a further upward wave of 1.075 years
Goldman Sachs Commodity Index
to a peak. The 4.3 year downward part of the 8.6 year cycle is
the exact reverse, or mirror image, of the upward leg. Below is
Armstrong’s chart of the Economic Confidence Model. I have used
this one from 1997 because of the higher picture quality, but there
has been no change to the predicted turning points.
Sugar
Note both the interim top at 2009.3 and major turning point low at
2011.45 which I mentioned earlier. In relation to 2009.3 (20 April
2009), Armstrong notes that interim turning points like this one
sometimes don’t work with the same degree of precision as for the
major turning points:
“This is due to the fact that internally there is yet another layer of
activity, the 8.6 month cycle that constitutes 6 waves within each
leg of the 8.6 year cycle…There is yet another layer beneath this
Coffee calculated in 8.6 week intervals, followed by still another, 8.6 days,
hours, minutes and believe it or not seconds.”
US$/Aus$
From the information he gives, you can work out all of the cycles
from years through to months and then down into weeks and days:
Armstrong argues that the 8.6 year cycles build into groups of
six waves forming major waves through time of 51.6 years –
South African Rand/US$
which is almost exactly the length of long wave economic cycles
discovered by Kondratieff, to whom “It’s Just Time” is dedicated.
Ironically Kondratieff suffered for identifying the hidden order in
economic events by being jailed too, by Stalin rather than the US
Government.
The last two highs of the 51.6 year cycle were 1929.75, less than a
month before the Great Crash, and 1981.35, which coincided with
an interim peak in the stock market and in Armstrong’s view was
the “…peak in the New Deal with escalating inflation and perpetual
deficit spending”.
In the same way as six 8.6 year cycles build into a 51.6 year cycle,
the 51.6 year cycle builds in units of six into a 309.6 year cycle
US$ Index and, as Armstrong notes “At this level, I began to notice the rise
and fall of civilisations” although I wonder if “empires” is perhaps
a better word. This is shown below.
NASDAQ
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, etc.
BB Why are 8.6 year and 51.6 year cycles combined in groups of
six?
Armstrong acknowledges that he will explain this for the first time
although he still doesn’t sufficiently address the issue of “Why
six?” in my opinion. He argues that waves are multi-dimensional
Zinc (US$/lb) and alongside the 8.6 year wave there is an:
I spent some time looking into why 8.6 and 51.6 year cycles should
be combined in units of six. My assumption was that it must have
something to do with fractals or sacred geometry – and I think I
Lead (US$/lb) might have made some progress via the work of the scientist and
esoteric researcher Drunvalo Melchizedek in “The Ancient Secret
of the Flower of Life, Volume 1”. I detect an overlapping approach
between Armstrong and Melchizedek albeit heading in completely
different directions.
Tin (US$/tonne)
Source: Wikipedia
Proceeding from the Seed of Life is the Fruit of Life, then Metatron’s
Cube, the five Platonic solids and ultimately everything in existence
– and possibly Martin Armstrong’s cycles? In Melchizedek’s opinion:
Back to Armstrong’s work and starting from the last peak on the
51.6 year cycle in the Economic Confidence Model, he illustrates
the current six year intensity wave:
Note that 1981.35 was the high in inflation and 1985.65 was the
formation of the G-5 to “coordinate global economic manipulation”
as he describes it.
The interaction of the intensity wave with the 8.6 year wave
can lead to “…a ‘giant’ or ‘rogue’ wave insofar as it may appear
to be coming from nowhere.” Armstrong argues that it was the
interaction of this 6-year intensity wave with an interim high on
the 8.6 year cycle that led to the 1987 Crash and the 1999 low in
CBOE Volatility Index (VIX) gold, amongst other significant events.
Beginning with 1775, which he also used as the start of the 224
year cycle of Political Change for the US, Armstrong derives the
following dates on the 37.33 year wave:
More interesting dates are thrown up during this period, e.g. 1900
saw the formation of the Labour Party in Britain, 1937 saw Neville
Chamberlain (the appeaser) become UK Prime Minister and Japan
invaded China in the same year (effectively the start of World War
2 in Asia) and Nixon was impeached in 1974. The last date of
2011.98, i.e. 24 December 2011, is also interesting – Armstrong’s
model is throwing up this convergence in 2011 with regularity.
Armstrong then questions what the cycle implies for 2008? I agree
with his view:
It is also worth noting that the 2008 crisis led to the gold price
breaching US$1,000/oz for the first time and unprecedented
demand which refiners couldn’t keep up with.
I got some push back from the first issue of the Thunder Road
Report when I cautioned that the crisis could be used by the
Dark Global Brotherhood as I call them (or the “Powerz” as the
threatened, but not imprisoned, analyst Jim Willie calls them), to
create a world currency over which they have absolute control.
BB The major turning point low for the 8.6 year cycle of the
Economic Confidence Model on 2011.45 (14 June 2011); and
With all of these cycles converging, the year 2011 could truly be
a BIG ONE.
Later in “It’s Just Time”, Armstrong grasps the key point about
the current crisis - in my mantra, “IT IS ALL ABOUT THE DEBT”
and what the US and UK authorities (in particular) are doing
– borrowing and printing trillions. Armstrong highlights an
important difference between the US and Europe during the
Great Depression:
“When there is a Debt Crisis, capital will travel around the globe
for security. This is also furthered by the floating exchange rate
system where capital travels also due to expectations not of
profit in a particular investment, but solely within the currency.
A Debt Crisis combined with a floating exchange rate system will
lead to the most volatile outcome perhaps we have seen even
since the Tulipmania of the 1600s.”
Place your bets...for me it’s Gold & Silver, Energy, Agriculture &
Food and Network Infrastructure.
Disclaimer: The views expressed in this report are my own and are
for information only. It is not intended as an offer, invitation, or
solicitation to buy or sell any of the securities or assets described
herein. I do not accept any liability whatsoever for any direct or
consequential loss arising from the use of this document or its
contents. Please consult a qualified financial advisor before making
investments. The information in this report is believed to be
reliable , but I do not make any representations as to its accuracy
or completeness. I may have long or short positions in companies
mentioned in this report.