Tuesday, December 31, 2013


"Good resolutions are simply checks that men draw on a bank where they have no account." - Oscar Wilde  


Year End Closing Numbers

Year-End 2013 Number

The Year 2013 has been a great year for equities and a rough year for commodities. Gold has put in its worst performance since 1981 while the Nikkei has put in its best performance since 1972. As we look ahead, 2014 will begin the rise in Civil Unrest that will also begin to turn more violent. There remains a serious risk of World War III as the economy turns down after 2015.75. Even when we look at Syria, the US Administration only tries to support Saudi Arabia who remains funding the rebels. They foolishly believe that they can control these religious zealots and the consequences of that failure can be catastrophic.

Meanwhile, the hardline Republicans do not want to deal with Iran and cannot see their nose in front of their own face even with a mirror. The youth elected the President of Iran who is trying to stand up against the hardliners there. The Republicans are more likely to create a war than peace. The Obama Administration is only trying to help Saudi Arabia gets its pipeline through Syria and is not interested in any negotiations to try to stop the conflict in Syria when they know it has been their allies feeding the rebels. The crisis that can easily erupt in the Middle East this time is substantially different because of the economic vulnerabilities in the West and the regrouping of economic strength in Russia.

The closing indicators for 2013 are as follows:

Market                                 Long-term Bearish           Bearish                 Bullish

Spot Gold . . . . . . . . . . . . . .           660.20                   1232.80                 1445.85

Spot Silver . . . . . . . . . . . . .              8.023                     14.550                  31.780

Dow Jones Industrials . . . .             9965.5                   13128.5                  16681.5

S&P 500 Cash . . . . . . . . . . .           1135.1                   1425.9                   1855.5

Toronto Composite . . . . . .             7644.1                   10970.4                 14330.0

Nikkei 225 Cash . . . . . . . . .            7012.0                   10770.0                 17583.0

German DAX Cash . . . . . . .            4155.5                   5423.0                   11802.0

Wheat (Chicago) . . . . . . . .              2550                       5650                       8935

Crude Oil (NY) . . . . . . . . . .              3218                       6418                     11502

Crude Oil Brent . . . . . . . . .              2775                       9150                     13330

Euro/US Cash . . . . . . . . . .              11875                   12865                     15203

It is all Connected – US Population Growth Collapsing & That Fits In Nicely with the Economic Collapse

Everything is connected. The correlations are complex yet predictable. I have stated numerous times that the more affluent a society becomes, the slower the growth rate. Then add uncertainty and it gets much worse. The population of Rome collapsed and this defeats the Ponzi scheme of how governments assume they will always have a rising tax base. The population of the United States is now growing slower than it has since the Great Depression years of 1932-1937. The latest population estimatesreleased Monday by the Census Bureau indicates that the population of the USA added only about 2.2 million residents in 2013. Government programs are doomed and taxes will rise as the gut of the elderly increase the burden on a shrinking youth population. The U.S. population will now just surpass 317 million people.
Then you add the lower interest rates to bailout the banks and reduce government deficits, the net result is wiping out pensions and the elderly as well as the tax base and technology advancement shrinks jobs for the youth. The California City of Desert Hot Springs with a population of 27,000 will be sent into bankruptcy because of police pensions. The system that has been designed by government is effectively no different that the idea of creating fancy derivative models that counted on the current trend staying in motion – that is when Genius Fails.
Dollar Vortex
As we look ahead into 2014 and into 2020, we are headed into the eye of the economic storm. It honestly will require no conspiracy of all-powerful groups to collapse the economy. The Senate investigations of the 1930s from which the SEC was born, NEVER discovered any of the rich moguls short. They all lost huge money and were found to be long at the top as well from Rockefeller on down.
The “super rich” will be going down the same drain because the underlying system was constructed on bogus assumptions that whatever trend was in motion will remain in motion. They need not try to collapse the economy – it is doing it all on its own and they could not conspire to prevent it.
Sorry – that is not how everything works. It is a shame we have to be put through this nonsense for our families. The finger-pointing will always lead to some group in the private sector the government will promise to hunt down. But the hunters are the problem – not the prey. Pointing the finger at the “super rich” as Joe Biden called the, will lead to state control of everything. Do you want Communism and the New World Order or Freedom? Your choice. It is government designed by morons that has created this mess – not Bill Gates.
This is WHY Strategic Trading is so vital to our survival – NOT Day Trading. This is NOT about making 10 cents on the dollar and 90 cents for the brokerage house. Sometimes LESS is far more. Hoover said it best. Capital ran from one currency to the next so fast, they could not figure out what was even the problem. Unfortunately, we are in the same boat. It is absolutely critical to understand what is coming or you will be fooled and dead broke.


Roman As

The Roman god Janus is who January is named after. He is pictured with one face looking backwards and the other forward in time. He was the tradition of New Years Eve looking at the past and being optimistic of the new year to come. In that sense, he was all about cycles and learning from past events for the future.

The Temple of Janus was interesting. In time of peace, the doors at both ends remained closed. When Rome was at war, both doors remained open. This was the symbol and respect that the future outcome was always presenting a possibility for change.
These are concepts that endure today, even though there is no actual god Janus. The Romans created gods as did the Greeks representing particular things. In this sense, the doors are open right now and political change is in the wind as civil unrest rises.
If you understand the workings of things, the divine scheme upon which everything is constructed, then you will move with the business cycle instead of fighting it. It is truly an amazing force all on its own.

Fab 50: Announcing the 2013 Fabulous 50 Blog Award Winners






The Value of an Artistic Eye – You Seen Patterns other Do Not

COMMENT: Marty; I just had to write to let you know how much you do mean to a lot of people given the stubborn goldbugs who do hate your guts it seems. I bought the stocks in 2011 with the turn in your model. I sold gold in 2011 and all my gold stocks at the same time. I bought the Nikkei for your turn as well. I too am now a trader going with the cycle and the flow. I will be at your training seminar. I can’t wait. Even your call on Japan turning after so many years was truly amazing right to the month. I now see how everything is connected. Nobody could be so right on everything from a personal perspective. You have deciphered the code of how the world functions.
The goldbugs hate you. The bankers hate you because you proven them wrong time and time again. The analytical  community tries to ignore you and main stream press are scared to death of you. What you have discovered has truly turned the world upside down. You are the Copernicus of finance. They hated Keynes before the Great Depression. They embraced him afterwards. Your day is coming. My hat is truly off to you sir.
I was a starving artist and then became a commercial artist. It taught me the economics of the trade. Now, even my children have learned so much from your public service. Thank you for such a great year. As I write this, gold is back below $1200. Some people will never learn.
Wishing you and yours a very Happy New Year
SE and family
REPLY: Thank you. Never looked at myself that way. But hey – Congratulations. Yes, this has been a great year for equities and the best year performance for the Nikkei since 1972. Some people will never see the patterns that exist right before their eyes. Two people can look at a cloud. One will see a face, the other thinks he is crazy. I think being able to see requires also a creative mind or perhaps a artistic ability. I also went to art school and enjoyed oil painting. This was a painting I gave to my mother. I always relaxed painting the sea. I loved stormy scenes. Not sure what that means. It was just not boring. I too never tried the art field other than I did own an Art Gallery at one time and was involved in underwriting the lithograph trade in the 1970s. I knew Norman Rockwell and Salvador Dali, who gave me a set of wild playing cards he made. I was involved in selling their lithographs.
Art-Gallery 1972

This is an old photo of my Art Gallery where I also sold autographs as well back then in 1972. I have tried many fields and at the time I thought I just could not find my passion so I would move on and try something new. Now I do see that dealing in all sorts of things from importing goods made in China, banking, metals, art, computers, real estate, collectables, and trading, they have all combined into an experience of a lifetime giving me inside knowledge of a number of industries.
Your artistic ability lets you see patterns where others do not. Trust me. It create a dynamic eye in your mind. Yes, the Wall Street Journal called me a Renaissance Man back in 2000 because of my diversity. I just always had an inquisitive mind and investigated everything I encountered. Assuming I am always wrong keeps me constantly vigilant and investigative. Hence, the old adage – never marry the trade, is precisely the key to success. Being stubborn and blaming everyone else for your failures means you will never learn from your mistakes and constantly relive the same failure over and over again. Those who are greedy and cheap only concerned about money, will never accomplish anything meaningful in life because they are so afraid of losing a penny it is like someone afraid of flying so they stay home and will never experience life in its fullest.
I was fortunate enough to witness the crash of so many markets from coins and stocks, to bonds and real estate between 1966 and 1971 as a prelude to the collapse of the fixed rate exchange system in August 1971, Those observations allowed me to see the commonality in it all – it was the same pattern over and over again. That taught me it did not matter what you traded – it all rose and fell. Arguing over what the value of the instrument should be proved pointless. It was the human interaction that mattered – not some theoretical value. There was no exception – ever.
The markets made me a trader learning to go with the flow. Keeping your ear to ground and listening to what the markets are trying tell you was the key. Instead of you telling the markets what they should be doing like Marx and Keynes, I took the Smith approach of trying to discover HOW markets moved. It was not my job to create Utopia. This is the difference between a trader and a bankrupt investor.
What I have learned is that EXPERIENCE is the builder of knowledge. You have to do it before you will ever truly grasp the subject and fully understand it. This is why people in government who have never worked in the private sector cannot understand how to manage the economy. All the money in your pocket will not make you smart. Only actually doing something allows your mind to see the subtle little nuances that exist between the cracks and every word, You have to understand things INTIMATELY.
In my research, I assume NOTHING and I always strive to comprehend the actual THINKING PROCESS at that time you have under investigation. Definitions change with time as do customs and beliefs. You cannot judge something based upon current conditions. People assumed that Greeks were pagans worshiping many gods. But investigate further and you will see that their idea of a god was nothing close to what we have in modern religions. No one looked to Poseidon or Athena as actually being their “creator”. They had a household of “gods” with each having charge of one aspect. It was Zeus who was perhaps the supreme god, but it is not clear he was even a creator. They would have sex with a mortal to create a child, but not create them out of thin air.
3-FatesYet to further complicate things, Zeus could judge you, but had no power to enforce it. His judgement was a “recommendation” to the three women really in charge known as the the tree fates. So concepts change dramatically where someone went to the temple of Poseidon not to worship so much as to plead for safe passage at sea. This migrated to the idea of patron saints being in charge of different things but none are seen as a creator. So it is important to understand the real thinking at the time of any investigation without applying modern standards. Trying to simply call the Greeks pagans as if all these so called gods were our vision of an almighty creator is not quite true. Their structure is highly foreign to our way of thinking. Yet it is important when you realize Aristotle influenced Marx and Keynes. You always have to truly sort through the thing process to see where the logic comes from.
Take the term Philadelphos, which was a title in Greek that meant“brotherly love” and in the 17th century they named Philadelphia for that misinterpretation of the ancient Greek assuming it was the “brotherly love” in a Christian sense. Therefore, Philadelphia uses the slogan of the city of Brotherly Love. However, it actually referred to in ancient Greek that you married your sister – quite far from any sense of Christian loving your neighbor you called brother. This is why Ptolemy II (285-246BC) who married his dominant sister Arisone II (8 years his senior) so she could really rule was known as Philadelphos as was his sister. It was an entirely different type of “brotherly love” that the term actually meant.
So when doing research, it is vital to honestly understand the time frame in which you are investigating. Never assume you understand. You have to prove it. This follows through to everything. To comprehend trading, you have to understand the ebbs and flows of human nature. Sounds complicated – but it is not a chart of gold, stocks, or bonds, but the rise and fall in confidence with that instrument. It is human nature that makes things boom and bust. Never the innate object under investigation. Gold ONLY has value because people like it. Trends and times change. The women painted by Rubens were always robust. Why? To be fat PROVEDyou had money. To be thin like models today meant you were poor and low class. With time, everything changes.

Attacking the Messenger Didn’t Save Gold

COMMENT: Mr. Armstrong; I have read much of the hateful vindictive slander that has been hurled at you by the gold community. It is really shocking how much some of these people hate you. The whole thing about Kristy was disturbing. I met people at your conference who sent her money claiming she needed it to scan reports. Then the story how they saved you when it was Congress who issued a letter to investigate your treatment. They even tried to take credit for that. I guess these are the very people who have to puke their guts out before the metals will ever turn. Just as you said, going into the low everyone will turn bearish. I listened and sold. Thank you so much for helping me to become a trader.
Thank you again
REPLY: Yes the stories these people have crafted are off the wall. I like how they pretend to put out comments from the kid who grew up across the street from me I happened to mention once. The problem, he died when we were kids so he is not the author of these comments they fabricate – Kenneth Siegel. Yes I was shocked at people soliciting money in my name. One friend sent $5,000 thinking he was helping me when they were exploiting readers. As for not being grateful and how the Goldbugs got Congress for me, it was the other way around. I put Nathan in contact with Glen Downs, they did not introduce Glen Downs to me. Everything they can twist upside down they have done.
No matter what they have fabricated, gold still went down. The idea that somehow desperately trying to paint me as some ungrateful jerk would stop people from listening to me and save gold just didn’t work. They argue banks manipulate gold, yet are they not trying to do the same thing by slandering me? Yes, these comments are even criminal. You cannot fabricate this nonsense with immunity. Just amazing how far some people will go to try to save gold.

NSA Intercepts Everything – Even Computer Deliveries

The NSA has now been further exposed by a German Der Spiegel Magazine putting forth that they intercept computers and have hacked everything imaginable. I have come out and warned about Windows 8 and took deliberate moves to remove it from all our computers. Any new computer we but is stripped clean. When you create software that reports back to mother regularly, we introduce security risks. The NSA has one of the most elite hacking units around, Tailored Access Operations, known as TSO.
When you create a means for Microsoft to track what programs you are loading into your computer, that allows the NSA to peek as well. You cannot close that down.  My concern is not terrorism. That is so over played it is absurd. My concern is the financial snooping to see if you might have money or valuables the government might need. This is the very sane thing that sparked the American Revolution – Writs of General Assistance that allows the Kings agents to just snoop at whatever you had in your house.
What the NSA has done is precisely the same actions of the former king. There is NOTHING that is private and they have turned privacy into suspicion.

Shots Fired at German Ambassador In Athens

Shots were fired in Athens at the residence of the German Ambassador reported by the BBC. This is what is tearing Europe apart. The IDEA of a New World Order will never work because there are still cultural differences and one government will not prevent war. They never heard of Civil War I suppose. Germany is being blamed for its DEFLATIONARY Austerity views as it remains paranoid about the 1920′s Hyperinflation just as the US remains obsessed with any decline will always turn into a Great Depression. The Germans always restore to DEFLATION and the Americans turn to INFLATION. This is part of the rising tide of Civil Unrest in the Cycle of War.

Economic Collapse is Structural Design Flaw Requiring No Conspiracy

QUESTION: Mr. Armstrong; I think I understand that what you are saying conspiracies are irrelevant because the system is self-destructing all on its own. You wrote: “They do not need some sinister group to orchestrate the collapse of the economy. Politicians screwed that up ensuring its demise without intentionally adopting such a scheme.” Am I correct in my interpretation?
Thank you
ANSWER: Yes. You hit it spot on. When the Euro was being crafted upon this theory of a New World Order where one government would eliminate war, I made it clear that the Euro would fail unless there was a single national debt. They said at that time this was Phase I and that would be Phase II because they did not believe they could sell that idea to the people. Well, Phase II never took place and the people who were there are gone and those in place know nothing about Phase II and this they have to defend the current structure. It will require NO EFFORT of some sinister group.to collapse the system. It will happen without anyone’s help. The US debt structure never paying anything off is the same fatal flaw. The economy will collapse regardless of the desire of any group. Yes these structural flaws could be fixed right now. But that requires government changing and letting go of some power. Hence, the collapse in inevitable.