Martin Armstrong’s latest letter dated December 15, 2009

Click here for Martin Armstrong’s latest letter entitled, The Decline of the West: Has Society Come to an End? (18 pages) dated December 15, 2009

Long view look at Western Civilization. I will comment later.

Side musing: If you are interested in Martin’s latest battle for his freedom, click here, several papers available.

Recent drop in gold

Recent drop in gold is not a trend breaker yet. We will watch this closely.

Click here  for Jim Sinclair’s thoughts on the recent correction (with a nice graph).

Here is another note from Jim Sinclair, the man who went through the 1970’s gold market:

Dear BT,

The popular delusion and madness of the crowd has driven markets forever.

Two weeks ago you could hardly find a gold bear.

Gold traded at $1224.10 in the cash market. Central banks on both sides were shocked.

Those that wanted to buy felt lost, and those that wanted to print more paper felt challenged.

MOPE came in from all corners.

China, talking their market interest yelled, “Gold Bubble.”

The classic MOPE was an article stating that since central banks had been buying gold, it has to be the top. That takes the cake in terms of whimsical imagination without historical precedent.

From a man that has seen what a gold top looks like, this is not it.

All of a sudden the black hats were chasing the gold hats. You should know how many times in the 70s, I watched as even the nearest and dearest went into totally disorganized retreat mode. I yelled charge, and looked behind me to see no one whatsoever.

It can get damn lonely out here. However, those that are right rarely have company.

How many times have we seen this in the gold market? What has it meant so far? It means nothing more now.

Gold is going through $1224 and $1278 on its way to $1650, which will occur on or before January 14th, 2011.

Armstrong disagrees, as he sees $5000 by June of 2011.

Alf’s prices are without time estimates.

Regards,
Jim

Side musing: Alf Fields has called for $10,000 at last check. If these men are calling for gold to at least double (if not quadruple) in less than 14 months, do you really think we will not see another leg down in the global financial collapse in 2010? Nothing is fixed. Expect more of the same.

Martin Armstrong’s latest letter dated December 6, 2009

Entitled Dow and The Future: Theory and Myth. We are clinging to old ideas. Click here. (30 pages)

This is an excellent 30-page paper from Martin Armstrong on how cycles interact to create the present economic conditions we are really seeing and what that might mean for the future. Cycles are complicated, I won’t kid you. Read, or at least skim, the first part of Martin’s letter. What you need to take away from that first part……the floating US Dollar (and now it’s decline vs. other currencies) has changed the way all aspects of the economy, and therefore your investments, interact. You must take this into account when looking at future investments and the real gain or loss to expect. Cycles are running at the same time, pulling and pushing capital around the world. It is not a straight cause and effect.

A quote from Martin Armstrong’s letter:

I have from the outset warned that the high in 2007 that took place int a stock market would not be a major high long-term and we will see new highs in the immediate years ahead.

I have also warned we are in the throes of a debt crisis centered (1) in real estate, and (2) government.

In other words, capital will flow from real estate into things like gold and stocks.

Martin Armstrong is suggesting that the devalue of the USDollar and the flow of capital will cause gold and stocks (movable assets) to rise and real estate (immovable assets) to decline in value. This is similar to John Williams (shadowstats.com) prediction of a hyperinflationary period with the dollar continuing to be devalued and distorting the prices structure of current assets. See The Coming Collapse post on this blog.

Page 10 starts the specific predictions of the stock market indexes.

DOW

A close above 10,800 before year-end signals new highs sooner rather than later. A 12,500 resistance in 2010.

In this paper, Martin Armstrong is talking about the flow of capital. Where investors are going to put their money in the face of imploding debt, devalued USdollar, and global economic turmoil. These are general observations, not stock tips. He is trying to get across that investment strategies are changing from the last 30 years, be aware. This is a big picture look. He is also trying to state the truth, so that the ”powers that be” might listen and make this transition cycle less painful rather than more painful. But they haven’t listened up to this point, so my hopes are not high. You will not hear this truth about what is really going on from F-TV talking heads, your financial advisor, or Big Ben.

Groovygirl’s comment: be very careful looking for a magic investing bullet here, some stocks will do well, others will not. Focus on the immovable vs. movable assets. Stocks that have value because movable assets gain value, will gain value. Real Estate stocks will still struggle. US stocks are valued in dollars, which according to several experts will continue to be devalued.

The Coming Collapse

So much great information coming through this month, I don’t know where to start. More confident about when things will break and how it might look.

I have mentioned some of these things before, but now I am getting confirmation from three different sources, Martin Armstrong, Jim Sinclair (and Alf Fields), and John Williams. From their respected areas of expertise, they are saying the same thing. Collapse of the USDollar within next 5-6 years.

So, what will a collapse of the dollar look like in the US?

First, John Williams from Shadowstats.com…hyperinflationary depression. The FED will continue to “print” dollars and devalue the purchasing power of the dollar. This will create a hyperinflationary economic environment with a 25% contraction (great depression) in economic activity. Hyperinflation means at least a 1,000-10,000% inflation rate before a collapse. Hyperinflationary currency defaults happen quickly, because they are exponential. The time period from an uncomfortable inflation rate to collapse could be 10-18 months. This is the time of possible civil unrest, extreme political change, and disruption in key services. So, right now, continued battle between inflation and deflation with more “printing” until 2014-2015, when the extreme hyperinflation period is upon us. This hyperinflation (and the aftermath) will cause a great depression in the US economy. John states that the dollar could start really being effected as soon as next year, we have already seen a devalue of the dollar this summer.

Side musings: Very good 30-min audio interview with John Williams about his latest Hyperinflation paper. Click here.  A must-listen.

Next, Jim Sinclair, the dollar will drop to between .46 and .52. At this point the World Bank will set up a new reserve currency and the US will be bankrupt and default on its outstanding debt to its global creditors. Jim believes this new currency will involve gold in some fashion. We will see, but regardless the coming US default will mean a dead dollar and some new currency. I suspect that when “the powers that be” introduce this new currency, it will not be announced, but your dollars will just be replaced in your bank account. So, look at the dollar price for clues as we get closer.

Martin Armstrong…gold. The price of gold is the gauge of global confidence in fiat currencies and the global financial situation. Martin is calling for gold at $5,000 by 2016. Some are calling for a higher price (Alf Fields says $10,000) and some are calling for $5,000 sooner.  Both Jim Sinclair and Martin are talking about a temporary high in gold from Jan. 14 to Jun. 25, 2011. Martin is also suggesting a surge in gold into April of 2010, now that the gold price has broken $1200. Regardless, gold is the confidence gauge. It is also a means to protect purchasing power in the face of a collapsing dollar. Gold will only reach these heights because the USdollar (and other fiat currencies) have imploded.

All of these things…..falling dollar, high gold, and hyperinflationary depression are all interrelated and reinforce each other in the coming low of this current cycle.

So, we are looking at a continued bumpy ride with a deflating dollar, no rebound in the economy, more corporate/banks imploding and a gold high, hyperinflation, possible civil eruption, currency collapse and replacement of the dollar all by 2015-2016. If you have not already started preparing, do it now.

It is time to hunker down, pay down debt, reduce expenses, store food and necessities, and buy gold and silver. (Click here for specifics.) You might as well start now, because you will be forced to with the coming great depression.

Yes, this is very depressing.

The good news is that with this information, you can prepare for your family and not panic in the moment. There are solutions to surviving this coming collapse, I just listed them in the previous paragraph.

The other good news….this is just a cycle. It will not last forever and it will get better. Lots of people in history have gone through hyperinflationary depressions and lived to tell about it. You will do the same. Some make alot of money buying assets cheap.

I write this warning because no Financial TV talking head or government official is going to warn you and tell you what is really happening. And others will just try to create fear and panic without solutions. Don’t panic, educate yourself and prepare.

If you prefer ignorant bliss, forget what you just read.

Side musing: so, groovygirl, what about our 401ks and home values? If they are valued in dollars, they might look like they gained value, but the dollar will decline. (Just as stocks this summer rose the same amount as the dollar lost value.) Then they will be revalued in the new currency like everything else. This new currency will be designed to devalue , not increase value.

Remember your grandparents telling you about the great depression and how they lost all their savings in the bank. You will tell your grandchildren how you lost all your savings in your 401k and home equity.

Stock prices will rise in the face of inflation, but with a falling dollar, hyperinflation and a new currency, they will not hold their value. In addition at some point the poor earnings, due to the depression, will force a reduction in stock prices.

Jim Sinclair has suggested that gold will peak, and then stay there, because of the global impact of a new reserve currency. This is yet to be seen. But until we get there, gold and silver will preserve your purchasing power better than anything else.

Martin Armstrong’s “last” letter

Click here  for Martin Armstrong’s “last letter”. No wait, we did it!!! They are not moving him, he will write more.

This was supposed to be Martin Armstrong’s last letter. Of course, we now have the wonderful news that it will not be! The letter entitled The Sum of All Fears: A Great Depression (11 pages), dated November 26, 2009, is a very good one to read.

Some notes:

Martin uses history to explain what a depression really looks like. I especially like his take on seeing the influence of cycles rather than a direct cause and effect. It is very enlightening.

Some main points, we have moved from a time of immovable assets as a hold of wealth to a time of movable assets as a store of wealth. In other words, look for gold, silver, rare stamps and coins, and fine art to go up in value as many more people start buying these items. They will replace real estate as a store of wealth. Martin’s letter goes into much more detail about why these things will occur and how that will completely restructure the economic and financial systems currently in place.

Martin has mentioned the real estate cycle in his last 3 papers….PAY ATTENTION TO THIS. For a refresher the chart is on page 7. No one, anywhere is mentioning this very important shift. If you have the majority of your net worth in your home, you must understand that this is not sustainable. Most Americans look at their home as always rising in value. Even now that it has lost value, they think it will recover again. It will not. There will be a little gain in 2015, but it will never get to the 2007 level of value again. By 2030, your house will be worth what it was in 1950. Keep in mind that because of hyperinflation, the dollar amount may go up, but that dollar will have lost purchasing power.

The most important line in this letter:

They (the banks) did not create the bull market. They only accelerated a pre-existing trend.

Not only is this true for the real estate boom, it will be true for future booms and busts. The pre-existing trend is there. Make sure you know what it is.

Holiday crash update

Max has a good video sum-up of the Thanksgiving Dubai announcement. Click here.

The Dubai government has announced that they will set up a fund to help the Dubai company. This is a distraction. They will use this fund to do just what Max says…..sell assets cheap to insider investors and let the debt implode and all the world-wide credit derivatives associated with these investments die a slow death.

Another opinion from Jim Sinclair’s website….click here.

The most interesting part of this announcement…..timing. Wednesday night was the beginning of a US holiday, and thus most of the global trading volume was low. It was also a regional holiday so the people were distracted as well. The censorship of US and EU newspapers in Dubai over the holiday is also interesting.

This is part of the greatest wealth transfer in history. Implode the indebted investment, screw the investor, buy the real assets cheap. This pattern will continue until the global debt to asset ratio is sustainable again. Look for more of the same.

When it is all over, the very rich will be ultra rich and the rest will be poor. The US will be bankrupt. This will happen in your lifetime, probably within a decade. This will not be announced, there will be no national warning. It will not be covered by the media, it will be denied. Disinformation and distraction will be the core of the news hour.

Protect your investments and savings now, if you have not already done so.

Side musing: Martin Armstrong’s fight, click here. Warren Pollock’s thoughts on Martin Armstrong’s situation and other thoughts (take from it what you will). Click here.

Side musing update: Monday afternoon, November 30, 2009: it looks like the email/fax/attorney campaign worked. Martin Armstrong will not be moved to another prison at this time. Click here for the latest update.

 

Martin Armstrong latest predictions…..

………have to be true.

They have hit a nerve somewhere.

They are trying to move Mr. Armstrong where he can not issue his letters anymore. Click here.

Here is a link to Nathan’s blog for more detail. This is very concerning.

Words have power, truth has power.

Update: Monday, November 30, 2009: it looks like the email/fax/attorney campaign worked. Martin Armstrong will not be moved to another prison at this time. Click here for the latest update.

Martin Armstrong’s latest letter:A Forecast for Real Estate

Click here for Martin Armstrong’s latest letter dated November 15, 2009 entitled A Forecast for Real Estate. (12 pages)

Excellent read. If you are a home owner or plan to be one, read this real estate prediction of Martin Armstrong and his cycle theory. Homes as investments need to be view differently in the next 20 years than they did in the last 20 years.

We are in a 26 year decline in real estate as an investment class.

 

Therefore, houses should no longer be looked at as a place to store one’s wealth for the next 26 years. Prices (in inflation-adjusted terms) will be declining during this period and will not “keep up” with inflation as well as gold or possibly stocks.

 

Therefore, if you want to purchase a house, look at it as a sustainable place to live for the next 20 years and only from that perspective. This has definite value for survival and living, but not an investment. Energy/water prices will go up, so having the ability to modify your own house has value, but don’t expect to get money out of your house to make those additions. The value will not rise as it did between 2000-2007.

 

It looks like the real estate market will turn upward in 2012, but will peak and take a hard slow decline in 2015 until 2023.

  

Just things to think about for the timing of purchasing or selling.

 

If you have most of your “retirement savings” in your home, do not rely on that as your only retirement funding. Start saving now in other investments.

 

Some real estate categories that may fair better…commercial real estate bought cheap and with a small or no mortgage where rents will keep up with inflation. And land/farms, bought cheap with little mortgage where commodities can be produced that will keep up with inflation.

 

At the end of this cycle (2030), it will be time to look at real estate as a possible investment again. This will be the beginning of the “spring” cycle of the K-wave.

Martin Armstrong’s latest letter:Capital Flight

Click here for Martin Armstrong’s latest letter dated November 11, 2009 entitled Capital Flight: The USA Has Lost It’s Stature as the Financial Capital of the World. (14 pages)

This is a good one, please read.

Quotes from Martin’s letter:

“ What we must do is dissect the whole economic structure and study HOW it works in order to understand the solutions. We cannot proceed just on OPINIONS. Where’s the proof? Where’s the study? Where is the evidence of what you say is correct?

What has taken place over the years post World War Two is that the concentration of wealth in the United States caused a false sense of invincibility. The housing market had a good run. From roughly the 1955 period, we have seen about a 52-year rally into 2007. It appears we may have reached a major high in real estate and this is of great concern. For if this is the case, then what in fact we are actually looking at is a serious contraction in what people believe has been their long term Piggy Bank.

This trend is converging with the retirement of the baby boomers. It is also converging with the securitization of real estate pools that created the 2007 high in February. This combines even still with the dangerous problem we have of the debt that is also starting to implode on a STATE and NATIONAL basis.

Effectively, because we are not the financial capital of the world as we were in the 1930s, the trend that emerges will be different as well. When capital was fleeing Europe and rushed to the dollar driving that up in price so that we then turned to protectionism, the opposite is now taking place whereas the dollar is falling as capital is fleeing, so if we see anything, the high degree of imports will be inflationary in the US, not deflationary.

With the banking system still in deep denial and capital beginning to show signs of caution shortening its maturity even in sovereign debt, the long-term horizon will also collapse. The more difficult it becomes to fund long term, the greater the deflationary effect will be in housing. Never the less, this will not (deflation) be any national trend.

What we have is an inflation pressure in other sectors that we will see manifested in stocks and commodities. It is the real estate that is still leveraged and will take a serious impact upon exclusively real estate. If funds are not available to provide long-term mortgages, then the prices in this sector will continue to fall. That is not the same fate that is shares by the rest of the financial world.

It is the lack of liquidity in the real estate market that is the problem. Prices reflect the ability to borrow 30 years of future income. As that contract, prices collapse.

We do not have that of leverage in stocks and commodities.

Consequently, The future that lies ahead is not as easy as most would want you to think. The core interrelationships will shift and change. We are facing a serious problem with the real estate sector as a whole, and this will be reflected again in the second phase of the major crash that began 2007.15 precisely to the day. The banking crisis is not over either. As this turmoil brews you will see every fundamental idea of how market function will be laid bare on the sidewalk of ruin. This is not the time for opinions. This is time for serious work.”

Jim Sinclair’s Commentary on Martin’s Letter:

The article by Armstrong presents conclusions based on fact, not opinion. It makes present time comparisons that must draw your attention to the equity markets in the Weimar experience.

It helps explain the increasing prices of goods and materials in a period of at best modest demand. It refers to the large currency exiting from the US, which may well have to do, among others things, with those huge profits made since April of 2009 by the financial industry.

It is a thesis, as I see it, for Martin Armstrong’s courage to state, at risk to all he has, his reputation in markets, the conclusion that gold is going to $5000.

It explains the stair step that Trader Dan has been outlining for us. This is a time for data, not opinions as opinions lead to confusion. Data leads to actionable conclusions.

It is more foundation for me to say gold will trade at $1224, $1278, $1650 and then of to Alf and Armstrong’s numbers.

Latest letter from Martin Armstrong $5000 Gold

Here is the latest letter dated November 7, 2009 from Martin Armstrong entitled Gold $5000. It’s 17 pages. Click here.

I will make some comments later, just wanted to get this to you ASAP.

groovygirl’s comments:

Check out pages 12-17, especially page 15. If we close December above 1033.90 per ounce for gold, 2010 looks very good for gold. We need to break $730 to break the trend. There is major support at $800.

Martin Armstrong makes some general gold predictions for the time period between now and 2016. He is more specific for the time period between now and 2012. Watching the gold price for the next 2 months will tell us if we should expect an up-trend in April 2010 or October 2010.

Charts are on pages 15 and 17.

The first part of the letter discusses the history of gold. Good stuff. Martin also makes the argument that the rise in the price of gold is always associated with the concern over an unstable government, not a hedge against inflation.

Click here for Jim Sinclair’s website link with comments about the controlled bank implosion and Martin Armstrong’s latest letter regarding $5000 gold. A must read.