muses of the moment

May 31, 2010

Latest Letter from Martin Armstrong dated May 27, 2010

For immediate release, latest letter from Martin Armstrong dated May 27, 2010 entitled The Two Phases of the Great Depression, click here.

Read the acknowledgments, Martin sums up his predictions for world economic powers.

Martin answers the question that groovygirl (and apparently others) have been asking, will we (especially in the US) have a depression?

I think this is a very important paper to read and then reread.

I think this letter makes it clear, Martin says that we will not have a 1930’s style depression. Certain investments will deflate, others will inflate, basically because we have the same contraction in sovereign debt and a currency crisis as the 1930’s and NO tie to gold. This is the key to the changes, the global fiat currency system untethered to gold.

Conclusion 1: gold will breakout, fall back to new support, starting a new up-trend (page 4-5).

Conclusion 2: The monthly cycles are producing the same turning points as in the 1930’s only in relation to dates….time. They are producing the opposite effects in movement in the DOW price.

It appears that whatever we see going into June in the DOW, we will see the opposite effect in August. Short term, Martin sees June as a key at 10,040 (page 7), with declines in August. He says there is no indication of new lows, especially as European crisis continues. There seems to be flight to safety to the USDollar, bonds and stocks.

groovygirl side musing: even though we have reached a low in the DOW that will hold, it doesn’t mean we will have no more volatility in the markets. Groovygirl stills likes gold before stocks, and definitely before bonds and currencies. I don’t know that Martin answered the hyperinflation question. Actually, I don’t know that we can answer the hyperinflationary question yet, as the printed money is still sopping up deflating debt (now in Europe). One thing is clear, governments will print whatever is necessary to avoid deflation. And secondly, they have no intention of paying back any of their debt. But the key to market timing…..when will investors clue into these to facts and what investment will they pile into.

As Martin says in his letter, it is not boring.

Side-side musing: “When something gets said, don’t worry about analyzing and agreeing or disagreeing: just let the information sit, a building block of experience to be assimilated.” These are wise words in these times. There is too much coming at us too fast, lots of opinions. Let it sit with us for a little while. It is just information with no emotion or judgment tied to it for the moment. Click here for more from W E Pollock.

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