Renaissance Man – What Is It Really?

February 15, 2016

Renaissance-man

QUESTION: Mr. Armstrong; I read a Wall Street Journal article on you from 1999. They called you a Renaissance Man. You are certainly so diverse and a strong person to endure what you have but still you do not wallow in self pity. What is your secret?

Respectfully;

BT

Ida Armstrong

Ida Armstrong

ANSWER: My mother raised me to always stand up for what you believe in. Yes, I remember when the WSJ called me a Renaissance Man. I am not sure exactly why education today has been so different from those days that created Renaissance Men as we call them today. My theory is how you approach knowledge. I always looked for the connections. I think we teach our children in the totally opposite manner. We departmentalize everything and in the process of dividing everything, we lose the knowledge of the whole.

When I was in High School, I was taking Spanish, French, and Latin. I had virtually completed the first semester when I was called down to the principal‘s office. I was told I had to drop French because taking three languages at the same time they determined was too much for a student. I said my grades were fine and obviously there was no problem. My argument fell on a close mind. That was the rule and it was applied to me. I argued they were all Latin based and so I could see the connection between the three. The word for bed in Latin was lictus, in French lit, and in Spanish lecho.  He thought I was a smart ass because I asked if he comprehended what I was saying in French, comprendre, in Spanish comprender, and then in Latin comprehendere. He did not grasp my point. I was given a study hall in place of French and my enthusiasm for school went out the window.

So I do not know. If I am a Renaissance Man, then I assume the real definition is someone who sees how everything is connected between subjects. The formal definition of a Renaissance Man is a person with many talents or areas of knowledge. To me, that misses the point. It is all about seeing the connections, not disconnected knowledge about everything. If there was a subject which did not fit the connections, then I was not interested.

Where to Invest

February 15, 2016

Asset Investment

QUESTION:

Hi Martin,

I am a subscriber to your investor service and read your blog daily for years now. Thank you for your wonderful service to educate those who will listen.

You posted when the deflationary spiral is over, we “want to be diversified with equities with good capitalization, some spec-stocks, gold, silver, and real estate (greatly dependent on area).”

Once we are through this deflationary cycle, do you see global stock markets rising or will this be primarily a flight into US equities? I am looking at this for asset allocation and have a US dollar based perspective. Does foreign diversification in equity holdings even make sense for a US based investor whose sees the world priced in dollars (not euros, pounds, yen, etc.)?

Best Regards,

Rob

ANSWER: This will be a shift from Public to Private for the most part. It will not be exclusively a shift into equities. We should see gold and silver rise as well. Some regions real estate will hold its own, but not the high-flying areas that reached peaks in 2015.

The Market in Perspective

February 14, 2016

Directional ChangeGCNYNF-W 2-14-2016GCNYNF-W-FOR-2-3-2016

Last week we had a Panic Cycle in Gold and a Directional Change. Both performed on target.  As we have stated previously, the Directional Change can be by itself a very fascinating tool. The Directional Change can at times be the beginning of a breakout to a new trading level (major thrust) in one directions which the market making a break to a new plateau in price movement. However, at other times, Directional Changes can mark the high or low and the culmination of a trend.

Directional Change Back-2-back - R

The Directional Change can appear back-to back as we have currently for the weeks of 02/08/16 and 02/15/16. Here is an example from last year when we also obtained a back-2-back set of Directional Changes followed by the Turning Point Target. You can see this produced a choppy pattern where we made a high on the first, backed off on the second, and then rallied into the Turning Point target on the top line.

Currently, the Turning Point target is also this coming week. So here caution is advisable for we can make a new high, yet close lower by the end of the week. Pay close attention. Our Daily Opening number is 1256.03 and our Weekly opening number is 1289.43. We closed last Friday at 1239.40. Therefore, the opening numbers are still above the market suggesting new highs remain possible. However, since we closed well above the Weekly Bullish Reversal at 1209, we can retest that area first. If that holds, then a new intraday high is possible before turning back down.

IBEUUS-W2-14-2016

EUFOR-W 2-14-2016

We still have not yet reached our former Reversal at the 116 level to retest key resistance. The Euro closed last week at 112.51 and our opening numbers are 112.70 on the Daily Level and 113.62 on our Weekly Models. Here too we have rising Panic Cycles and a turning point.

DJIND-W 2-14-2016

DJFOR-W 2-14-2016

When we turn to the Dow, we closed Friday at 15973.94 below one Reversal but not both. Here our opening number on the Daily level is 15963.32 and on the Weekly level it is 15961.97. Here too we have a Directional Change with rising Panic Cycles. The main turning point seems to be the week of the 22nd. Keep in mind we may get a split target here from the intraday and the closing.

 

Gold Low of Lows or Just A Low?

February 14, 2016

GOLD-Text

QUESTION: Marty; I had purchased your gold report and the low for gold came in exactly as you laid out on that benchmark date you gave more than two years in advance. But you are not saying you called the low of lows. I assume you remain skeptical about a reversal in trend long-term. Correct?

Thanks

KD

Bench-1980

ANSWER: Correct. The low formed right on that target. However, while there is typically a counter-trend move between the Benchmark targets and even a cycle inversion as we saw on these Benchmarks at the 1980 high which the first one picked the all time high and the second the end of the first break, I would not be comfortable claiming we called the all time “low of lows” here for everything else is not lined up just yet. Yes, the low formed on the Benchmark we provided in that report (not on the blog for obvious reasons). The next convergence of the Benchmarks after 1980 came in 1983. That did not pinpoint the high, but the panic to the downside began right on that Benchmark and the low was then confirmed for a 19 year bear market.

Hunt MoneySure the typical goldbugs hate the dollar and only look domestically with a myopic view of often just gold, dollar, Dow and the Fed. It is hard to imagine that the dollar declines here when the USA is the only place safe right now to park money. This still appears to be a counter-trend move and nothing else. With governments dead broke and hunting money everywhere, the hyperinflationists seem to be smoking crack for they remain delusional. We are still in a massive deflationary spiral and 2017 it gets really bad with the G20 coming online where every country has to report on everything anyone has outside their own country.

Int%Sprd-MA

During the Sovereign Debt Crisis of the 1840s, you can see that government rates surged far above corporate. The Great Depression was massively deflationary because most of the world defaulted on its debt and that drove the dollar up and US rates to historic lows. We are looking more at the type of move of the 1840s where the the free market will turn away from government and pour into the private assets.

UB1798-Y-MA

(the blue label marks which issue we began to use prior to maturity)

This is not going to end pretty. Yes, gold will rise along with most anything else other than government debt. Keep in mind one thing. You can take the stock market down even 90%, but that will never create a depression. If you take the bond market down which is generally 10:1 with respect to equities, just a 10% decline in value equals the same economic impact as taking the stock market down 90%.

Putting this all in perspective, we are not quite ready for prime time. I would not say we forecast the “low of lows” but just “a low” in this process right now. This was simply in line with the closing above 1044 for year-end and our call for the Euro to rally back to retest 116. The end of this fiscal tragedy is not too far away.

Supreme Court Justice Antonin Scalia Died In His Sleep

February 14, 2016

Antonin Scalia

U.S. Supreme Court Justice Antonin Scalia has died at the age of 79 in his sleep. He was on a hunting trip in Texas with friends and he went to bed Friday night commenting to his friend that he wasn’t feeling very well. He died peacefully in his sleep. I know many people despised him claiming he was a crazy conservative. I have read many of his opinions where he was in dissent and well as wrote for the majority. I must say, I believe his reasoning was the most UNBIASED of anyone on the court. He believed in STRICT CONSTRUCTION and had others on the Supreme Court maintained that position, Americans would not be taxed on worldwide income today unlike the rest of the world, who out of desperate economic conditions, now seek to hunt their citizens on a worldwide basis as well. Those applying to the Supreme Court go through a voting process. I believe I made it through that process and understanding the reasoning of Scalia, I knew that if I could capture his interest, I would get in. It was when the Supreme Court ordered the government to respond in my case, I made it through all the hoops and I believe I owe that to Scalia’s STRICT CONSTRUCTION that limited the power of government unlike others who seek to expand it at our expense. They government knew it would lose and the net result, they had to release me and tell the Supreme Court the case was moot for I was released.

Scalia was a STRICT CONSTRUCTIONIST. That means that judges do not make the law, the people do. Some of his lobbying within the court really pushed government abuse backward. I have written how the most notorious trial in English history was that of Sir Walter Raleigh who was convicted on a written statement of a threatened witness who was not presented in court. Raleigh demanded to confront his accuser and the court denied that request and found him guilty for political purposes. This is our 6th Amendment Right to Confrontation. It was Scalia who wrote the opinion for the court providing the full history of this write and overturning a case in the State of Washington that entered recordings but denied the accused exactly the very same right to cross-examine the State’s witness. (Crawford v. Washington 541 U.S. 36 (2004)).

It was also Justice Scalia who overturned the sentencing guidelines in criminal case in Blakely v. Washington. The fundamental was the prosecutor got the jury to find someone guilty of a crime on minimum proof, and then the judge would enhance the sentence of facts never presented to the jury. This was a bitter fight, but who was on the government side was the so called “liberal” justices who voted in favor of the government. This is what Scalia wrote in Blakely:

 Whether the Sixth Amendment incorporates this manipulable standard rather than Apprendi’s bright-line rule depends on the plausibility of the claim that the Framers would have left definition of the scope of jury power up to judges’ intuitive sense of how far is too far. We think that claim not plausible at all, because the very reason the Framers put a jury-trial guarantee in the Constitution is that they were unwilling to trust government to mark out the role of the jury. 

In the case authorizing the government to take personal property if someone else will improve it for a better use, KELO et al. v. CITY OF NEW LONDON, Scalia was in dissent.

Today the Court abandons this long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded 

Scalia has been perhaps the most outspoken Justice to ever sit on the court. He recently stated in dissent that “… to say, as the court does, that Arizona contradicts federal law by enforcing applications of the Immigration Act that the President declines to enforce boggles the mind.”

When it came to Obamacare in King v. Burwell, the Supreme Court upheld it as a tax which was totally unconstitutional. It was clear that the decision was wrong but the court wanted to uphold it without any foundation of precedent. Scalia dissented and called it for what it was:

“We should start calling this law SCOTUScare … [T]his Court’s two decisions on the Act will surely be remembered through the years … And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites.”

While many will disagree with me simply because they were on the other side of the question, the problem we now face is this is becoming a very undemocratic process where appointed judges make the law, not the people and the constitution is reduced to a scrap of paper referred to in selective parts that fit the current desire. Scalia was a STRICT CONSTRUCTIONIST. It is what it is. There should be no room for changing the Constitution. Both the LEFT and the RIGHT have not followed that road of Strict Construction. They criticized Scalia for having wit and a sharp tongue. I admired him for that for you always understood his reasoning regardless if you agreed or not. The law was the law and we would not have this movement Black Lives Matter because the “liberal” prosecutors and judges are “liberal” in protecting their own.

Obama now gets to leave his mark on the court and we can expect probably a pro-government liberal socialist who will steer the court in the favor of government and hail the NSA for a job well done asking do they need more power. It is strange but the “liberal” judges are only liberal with our rights handing them to government for the greater good much like Brussels, because we are too stupid to know what is best for us. Unfortunately, Scalia’s death is going to be our undoing. He kept even the “conservatives” in check as he did Roberts in the healthcare issue. This was not a good weekend.

CASH IS KING

February 14, 2016

Cash is King

QUESTION:

Hello Mr. Armstrong,

I read your blog every day. Thank you but i’m having trouble figuring out where to place my money moving forward. Cash, the markets, the banks, gold…. It feels like you are saying cash is the place to be right now but maybe i have a difficult time comprehending all that is going on

Where there be at time whereby you direct or inform where to place our money? or is that up to us to decide based on the trend you posts?

Thank you

DOWN Spiral

ANSWER: No. I have been saying right now we are still in the deflationary spiral and that is when CASH IS KING. This naturally depends upon where you are. The first quarter here may off the extremes for the year in most markets. So you want to be in a position to begin to come out of CASH for when CONFIDENCE begins to decline in GOVERNMENT (not just central banks since the majority do not even understand what they are), then we should begin to see the staging game prepare for what looks like the 2017-2020 move. Then you may want to be diversified with equities with good capitalization, some spec-stocks, gold, silver, and real estate (greatly dependent on area).

UPWARD SpiralFrom a TIMING perspective, this is the Great Alignment. We will be yelling loudly when the timing is right. Edging into this will begin this year. But when will this whole thing begin to unravel? That appears to be during the first half of 2017.

Keep in mind that if you read this blog, you are already in a position where you have lost CONFIDENCE in government. Do not judge the world based upon your view. What counts is the majority view and they still THINK government is in control and is actually there to help them. When they start to see this basic assumption is wrong, then everything changes.

The younger generation already has lost faith in government. It is the new voters pouring out for Sanders and Trump against the establishment. They see Social Security in the States as a TAX, not as a plan for their retirement. However, this same segment of society is too young to remember silver coinage. They do not have the same view of precious metal. Some funny video have appears offering a 10 ounce silver bar or a bar of chocolate. The vast majority of the people on the street take the chocolate. They are not on the same page. They could not even sell a 10 ounce silver bar for 99 cents. Not everyone sees the world with the same way.

 

No Need to Live in Fear – It’s the Ying and Yang of Civilization

February 14, 2016

Punch

QUESTION: Martin. …Thank you for getting back to me. I have one quick question though. What does it mean when you say “It is in the staging period”? Thank you for your insights. I don’t want to live in fear, but don’t know what to do.

ANSWER: There is no need to live in fear. If I tell you I am going to punch you in the face, and say see, her it comes! Do you stand there and just watch it? Or do you move or defend yourself? If you understand what is unfolding then you can move with confidence and not get sucker-punched. Do not live in fear. Just accept this is our fate. We cannot stop it for this is the way things advance. They require events to promote change.

yin_yangIt appears that 2016 is “the staging period” and by that I mean everything is preparing to align and when it does, we will see that alignment if you simply open your eyes to the world around you. As long as we understand what is coming, no worries; we can handle it. It is the reshaping of the future that we have to fight for. What kind of world will we leave our children? We can see the authoritarian posture of government as they hunt money everywhere. This has got to stop. They have become the enemy of civilization. People come together to conduct a more efficient economy. When government abuses the power and sees us as cattle, then we retreat back in the direction of smaller tribes that offer freedom from central oppression. The Ying and Yang of Civilization.


Cycle of Peace

February 13, 2016

War-Cycle-2014

 

QUESTION: Mr. Armstrong,
What does your program tell us about cycles of peace?

Respectfully,
SP

BusinessCycle-Waves of Creative Destruction

ANSWER: Of course. The Cycle of Peace is the counter-trend to the Cycle of War. Like the War Cycle, it is linked to the economy. If the economy turns down, that is when War turns up. I have always said when we are fat and happy, war does not surface. Turn the economy down and that is when aggression rises.

Business Cycle

I am not here to scare you to sell you some swamp-land or whatever. If we can get just 10% of the people to understand cycles, then PERHAPS we can change the way we manage society after the Crash & Burn. The first step in surviving the downturns is understanding they exist. This is why the Goldbugs irritate me. They seek to blame others for their own stupidity. Instead of understanding that there is a cycle to begin with, they are no different than Karl Marx and assume it can be always up and never down. When gold rallies, it is real and when it declines it’s manipulation.

MAA-Painting

I spent time studying the waves in the ocean attempting to predict the next big one. I also went to art school and use to spend a lot more time painting in oil. I was not that great as you can see, but it was relaxing study. I even wrote much of the Greatest Bull Market in History from the beach at Paradise Islands, in the Bahamas. I stayed for probably a month there at the Ocean Club.

yin_yangStudying wave motion in nature allowed me to see the complexity of wave motion in everything else around us. So yes; there is a Cycle of War and its opposite is the Cycle of Peace. There are always two side like male and female. This is also known as Ying and Yang in Asian culture. It is the merger of these two opposite forces which create the union that propels society. You cannot have one without the other – good v evil. Without evil, it might be very boring.

India & the Hunt for Money

February 13, 2016

Pan-Card

COMMENT:

hi marty, i am from india. You ve no idea how much your blogs have helped me understand the duplicity of our governments. The Government has made mandatory registering our PAN card with the dealer for any purchase made for even as low as 2 lakh rupees (3600 dollars). They are literally hunting for money.They take everything from us and provide nothing. Thanks a lot. Please keep up the good work.

INDIA-Y 2-13-2016

REPLY: I follow India closely as well. The Pan card (Permanent Account Number) is a code that acts as identification of Indians for tax purposes. They are hunting money in all forms from cash to gold. This culminates in 2017 when the G20 begins sharing info on everyone. Anybody with a foreign account will be revealed to their government. This is why government is collapsing. There is not enough money in the system to satisfy their demands.

In part, it has been the rising aggression for taxation that help to push the stock market to new highs. When in the 2012 report we warned India would make new highs, many wrote and asked if Socrates was drunk? How could we call for new record highs in India and not in China? The markets tell you where things are going if you just listen.


The Global Hunt for Money

February 13, 2016

Global-Political Economy

COMMENT:

Dear Martin,
The hunting for taxes is a non stop game in Portugal. Now, the new government, decided to increase fuel taxes as they said because “oil price is going down and government is getting less VAT due to lower prices.”. This was THE OFFICIAL government explanation to add a special tax on fuel!
At same time, the same politicians, are cutting public employees working hours from 40 to 35 hours per week and planning new public spending.
Can this government be surprised with the recent move on portuguese 10 year spread vs Germany from 170bp to 420bp?
With admiration for your work,
GC
REPLY: I just did an interview with the major press and for the first time they called to ask my opinion of politics and Trump taking note that I have said this is a global phenomenon. I found this very interesting that they called me to be a political commentator knowing I travel the world. This is very interesting. Slowing the eyes are opening.
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