Armstrong will dow reach 30000 by 2015

8/7/2019 Armstrong will dow reach 30000 by 2015

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Armstrong Economics TM

Will the Dow Reach

30,000 by 2015?

2007.15

2015.75

2013.6

2011.45

Copyright Martin A. Armstrong All Rights Reserved August 14th, 2009

C om me nt s W el co me : A rm st ro ng Ec on om ic s@ GM ai l. CO M ( In te rn at io na ll y)



A C K NOW LED GEM E N T S

I would like.to thank the many people who have

been writing from around the world. It is encouraging

to know that there are so many people who are interested

in uncovering the truth. I have also special thanks forso many providing valuable insight into trends around

the woild from China, Soviet Republics, South Africa,Brazil, Australian, and India. I believe we can su~vive

the folly of governments' even if they refuse to listen.

The key is understanding the nature of events, and that

allows us to correctly make the decision' to be on t'heopposite side. .

I would like to also thank all myoId friend and

former clients for their support and to know that theyhave continued to gather information that serves us all

in times of crisis.

We are standing on the precipice o£ a new era in

global-social-economics. How we enter this new age isof critical importance. Government is incapable to doinganything for any reform of its own abuse of power is notup for negotiation. We must weather the storm, and to doso we need to understand its nature. Just as the 1930s

Great Depression set in motion profound changes that wereeven manifest in geopolitical confrontations, we have nowreached such'a crossroads. A debt crisis has its tentacles

deeply embedded into'every sector right into government.

This is the distinction from a mere stock market crash thatnever alters the economy long-term. We are seriously still

over-leveraged and some banks are st],lltry-ing to be hedge

funds and have to speculate to make a profit. That is a keywarning sign that the worse is yet to come.

comments, suqges tions & Quest;ions

Please mail to:

Martin A. ArmstrongFCr Fort Dix Camp, #12518-050

PO Box 2000Fort Dix, NJ 08640

PLEASE REGISTER YOOR EMAIL .AIlJRESS

F C ::R .FUIDRE ~--'l'l;D NnlS CRITICAL 'ID CDR SOR. \" IVAL

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Copyright, McL.. .~"1 A. Ar:mstrong, all rights reserved.

This Report may be forwarded as you like without charge to individuals or governments around the

world. It is 'provided as a Publ;c Service at this time without cost because of the critical facts

that we now faced economically. The contents and designs of the systems a:ce in fact copyrighted.

At a future date, a new edition of the 198.6 The Greatest Bull f!larketIn History ll!illbe released

and a new book' will soon be pufulished on the model itself ~ The Geanetry of T:iJne.It is vital that

we do not forget this is a world economy and the arrogance that any nation can dictate to the world

is just insanity. ~ve!'y nation aff2cts all ocher-s no differ:::nt than if one nation were to pour all

its toxic: w aste into the ocean. Ever-ything is interlinked and solu tions are never isolated events.



;!!101.'S

Will the Dow Reach

30,000 by 2015?

ur cyclical journey through time. has given us an explanation that theEconomic Confidence Model is a global model and what peaks precisely withit is what one could call the "hot money." In reali ti ty, this is theconcentration of capital into a particular nation, sector, and even downinto the individual level. The Marxists are targeting the "rich" andknow not what they are doing. It is like discovering there is a noise inyour chest (the beat of your heart) and they think it should be silent.

A particular sector becomes attractive to capital. It acts like a magnet drawing itin fran around the world. As this sector becomes the focus of the capital concentrationwe end up with the result of booms and busts as well as progress and innovation. This

is the very essence of econcmic life. Yet at the same time, there is tht.s constantoscillation between Pu blic and Private Gonfidenoe. This is described in times ofeconomic crisis as the "flight to quality" but we must respect, it is not a one-waystreet. When capital becomes frightened· after a speculative bub ble in the privatesector, it rushes to the public sector bonds, B ut when the source of that decline inconfidence lies within the public sector, then the capital flow is reversedand the "flight to quality" is the tangible assets in the private world. What we arelooking at is a collapse in Pu blic Oonfidence that is going to materialize into ane w "bull market;" that will see the Dow Jones Industrials rise to perhaps even the

30,000 level going into October 1st, 201 5.

Now let us take this to the next level.As I have previously explained, each andevery market has its own distinct and veryunique cyclical frequency. So what does notpeak with the Economic Oonfidence Model willfollow the beat of its own drums.

N evertheless, each individual mark etwill also display an underlying currentwithin. Just like the water at the beachwhere the energy flowing ·through the water

creating the cyclical wave motion may bemoving east to. west, there is still the cur....;rent within the water that may be movingnorth to south. These two actions are infact moving at 90° angles to each other.The one rule to always remember, what holdstrue in the physical world must hold true inthe world of human-interaction that is oursocial-political-economy. The laws of thescience· of physics applies to all thingsincluding how we even interact with each

other.

This 'is also the Grand U nif ied T heoryof all cyclical movement. It is the veryessence of how energy itself is transportedand transformed. As it moves through societycreating booms and busts, all we can do isunderstand how, why, and when such movements

will take place.

I have explained the volatility cycleof 72 years. The same numbers will reappeartime and time again at all different levels

in our observation. If we take 8.6 monthsand divide that by 12 months to obtain thepercentage this represents of one year, weend up again with 72% (rounded).

What I am about; to illustrate is thatthe proof of this 8.61 5 cyclical frequencythat when measured in years equals Pi (3. 14times 1,000 in days, is that it appears ineverything around us even when we may notbe looking for it. This proves its fractalnature, and thus it is the key to all cycle

1



Further proof that there is a hiddenworld of time is also demonstrated by thefact that we saw a 17.2 month decline ininterest rates from the June 2007 high.What we have is the same frequency showingup in different mediums that possess theirown unique frequencies in normal times.

The emergence of the 8.6 frequency ina wide variety of mediums is indicative ofmajor events. Like the ocean, there are justperiods where the wind is calm and the wavesin the water almost do not exist. This iswhen the current within the water becomesthe dominate mover and shaker.

There is a cycle to everything rightdown to your moods. ~vhen we look out at theworld, what we see is a complex interactionof forces that are clashing like titons ofold. Perhaps the Greeks ascribed to gods

these forces they observed and attributedthem to actions of beings.

We are dealing with the complexity oflife itself. Darwin observed from his ownempirical exploration, that emerged intohis theory of evolution. Today, we havediscovered what he could not see - DNA. Wecan now take that D N A code and track thesimilarities and evolution. Those who onlysee evil in such things as being contrary toreligion and the Bible, overlook a simplefact. This is what can be proven. It does

not m~ that God did not'decide to take amonkey and transform him into a man. The twopo ss ib il it ie s c an no t l : : > e mu tu al ly e xc lu si veinsofar as science and religion.

If DNA is the blueprint on how to makecopies of a species to perpetuate life itselfin all forms, then perhaps cycles are theequivalent D N A in how all life interacts.Moving from one level in time to the nextis mapping a fractal world of complexity.

What I hope to reveal is a dynamic andnew worid of interaction. If we can climb thisexchelon of complexity, we can reach a newunderstanding and progress beyond the worldof bias and prejudice not to mention the manysuperstitions.

If we can understand the world of complex

interaction, we will end the witch-hunts andstop the quest to blame someone for what ourown government does every time - des tory ourfuture by self-interest, corruption, and fearof a loss of power.

If we existed when the dinosaurs ranaround, no doubt we would be blaming that onsomeone also. We try to pretend we can evenidentify a single source and then tell theworld we have criminally thrown them in jailand the economy is back to normal. Nonsense!

We are either going to graduate to thenext level of existence or we will stay inour primitive primordial ways of blaming allevents on man as if we have the power to infact move the world like the Greeks believedin their gods were mischievous creatures whojust enjoyed messing with the plans of men.Today, we prosecute everyone and conj u te upwild theories to make it sound good that areno more t.ruthf ul : than anyone else in thisprimitive primordial historical state. Ju stas the commodi ty Futures T rading Commissionaccused me of manipulating the world economy,

this illustrates my point. We might as wellstill be sacrificing virgins and praying toNeptune.to make the waves smaller.

We cannot rise to the next level untilwe abandon these stupid presumptions. We canno more control the world economy even as anation, than we can the weather. The systemis so complex, we cannot see if we refuse toopen our eyes. Th2re is a dynamic worldwai ting for us if we stop the arrogancethat we are a3 almighty as the Greek gcrls.

2



Capital Flow

'!he Ecx:D:.mic

Conf idence ~ l

It is clear that the economy peaked in"February 2007 w ith the Economic ConfidenceModel for that is where the housing marketindexes reached their zenith. The stockmarket crashed briefly precisely to the day of

the model, but then rallied later in theyear showing that the concentration of thecapital was squarely within the debt marketsand not stocks.

Interest rates rose into June showingthe hidden core was a debt problem. This wasthe first result of the February high in theeconomy with the model. As debt problemsbegan to emerge, this signalled that therewas trouble lying beneath the surface. Manyneeded cash and this started to force rateshigher into June given a clear warning of

what was to corne.

The Dow Jones Industrials rallied intooctob er 1 1th, 2007 before reaching its high.Keep in mind, that stocks have in normalcondi tions been the competing investment forfixect income. Therefore, cash will at firstflee from debt to stocks and this then had

created the next result - the IX:W peak.

Unfortunately, the majority do not evenunderstand that capital flows, no less how.The flow of capital can be tracked through-out time and just as it concentrates intoone sector and nation, we must understandwhat happens when that concentration beginsto reverse. The rise in stocks after theeconomy peaked is a normal result of how thecapital flows like water through our socialpoliticial-economy. The first reaction isto flee fixed income and move to equity.This is the typical flow of capital in adebt crisis." It is reversed in a speculativebub ble in stocks where capital flees to thebonds.

Illustrated above is an overlay of theEconomic Confidence Model with behind it wefind the two individual markets of equityand interest rates. Not everything peaks atthe same time. For every action in the firstglobal model, there becomes an equal andopposite reaction that ripples down the line.

The peak in the housing market, set inmotion a contraction in capital that causedthe rally in interest rates into June 2007,that was then followed by the initial rushfrom fixed income to equity creating the newDow highs in october 2007.

The low in interest rates thus tookplace in 17. 2 months (2 x 8. 6 months) f rom

the June high of 2007. As the flight to socalled quality ended, the next to bottom inMarch was the equity market 17.2 months f romits high in 2007 (2 x 8 .6 months).

These are the natural consequences ofhow capital will flow into a sector and thendepart. What we are looking at on the verybroader term, is that the Dow will rise andand reach a new record high as we see the.reverse continue to unfold. In other words,the flight to quality now will be the f lightfrom government debt back to private sector

equity rather than debt. This should thenmaterialize a major high i n the Dow that wiltherefore be followed by a rise in interestrates setting the stage thereafter for thenext new dawn of a cyclical trend.

These events take place in slow-rrotion

when we look at them from the long-term viewon an annual basis - not daily noise. The

Free Markets are never wrong for they showyou what will unfold in slow-motion.

3



Capital F 1 c . J i 1 r l Analysis

(1) Capital flows amongnations driving currehcy values higher and lower

just as mankind migrated spreading out around the whole globe. Capital

responds in the sameway looking for the greener grass

(2) Capital flows even within a nation between sectors creating the .toom

bust cycle.

(3) Capital flows to the movers & shakers of innovation on an individual

basis and their excess capital is put back into the global pond and then

becomes available for someoneelse to create a newwave of innovation

aptial flow analysis is something I have developed from observation and

working with the movers & shakers around the world. In the 1980s, everyone

was inGeneva. That was the center for dealing with the vast hoards of

cash coming in from OPEC.However, as oil declined as did gold going into

1985, the next 4.3 years was a shift incapital flows that was signalled

.. by the failure of the Japanese yen to correlate in 1985. The yen, unlike

othercirrrencies, bottomed in 1982 - not 1985. The huge popular trade back then wasthe Deutsche mark./cTapaneseyen spread. Suddenly, that spread began to reverse and

the mark was nowheaded to new record lows nearly 4 to the dollar going into 1985.

The yen, held its ground.

One of the primary lessons of mymany

years of observing, has been that absolute! y

nothing takes place without reason am a

very clear p.1I1X)Se. Just as Einstein had

difficulty b~1i8ving that· anything coulcl

be purely randomand that God was playing

dice with the universe, the same is true in

everything I have ever observed.

Just because wemay see something that

is strange and makes no sense at that brief

momentin time, it does not mean that we

should ignore it. The Free Markets are just

never wvong! Politicians will disagree as

will Marxists, because they desire the true

power to manipulate the economy. Neverthe-

less, it is bullshit to believe in such an

arrogant posf.taon, Wecan no more control

events than prevent death perpetually.

The fact that the yen rottomed in the1982 cycle event, set the stage for a clear

7 year bull market going into the bubble

top for 1989. All other currenciesrottomed

in 1985, rose into 1987, created a crash

precisely to the day of the model October

19th, 1987, but this was all capital flows

pouring out of the United states and even

Europe headed on a journey to flow to the

newhotest market in the world _ Japan!

Just like the talking heads on TVwho tr

to provide the definitive explanation each

day howthe market's movementin a single and

distinct fundamental explanation, reality is

never what they believe, if they believe wha

they are even saying. C,overnmentdoes the ver

same thing, and it seems to me they delight

their ownapplause for being so smart.

This is a far too complex system of inte

actions on a global scale to reduce the cause

to a 60 second or less sound-bite. Weare in

all honesty preventing our ownevolution for

we are trapped in this world where the clear

majority believe the world is flat. Maybe it

will take a collapse of such devastation to

unfold before wewise up and realize we just

got it all wrong.

Every subtle moveis for a purpose. The

fact that the yen did not makenew lows in1985, set the stage for the minimumreal bull

market that requires 7 years minimum.This

is why the 1982 low held and 1985was a retes

with the rally into the bubble top for 1989.

The Pattern Analysis projected correctly. Th

individual cyclical timing models on ,Japan

were also lined up with 1989. Andabove all,

the 1989Decemberhigh lined up with the

EconomicConfidence Model 1989.95. This was

now a foreseeable event horizon in Japan.

4



is at a 90° angle to the core inherent naturafrequency within the individual market thatwe are observing. Like w ater, this is thehidden current under the surface that is beineffected by the wind forcing energy to flowat the surface contrary to the underlyingcu rrent hidden b eneath.

r x :w .JCNES INIXJSl'R IALS

We can see from the above two chartsthat the flight to quality and the Dow Jonesboth reached their lows in 1 7.2 months - akey timing interval of twice the 8.6 monthfrequency. The Dow Jones Industrials fellinto Harch 2009. This was following a swiftwaterfall effect insofar as there was noreaction rally - just a meltdown.

Looking at the Dow Jones Industrials,if we project precisely from the oct 11th,2007 high, 17.2 months to the day gives usMarch 19th, 2009. The precise low on an

intraday basis was March ·6th at 6,470. Thelowest close took place the next week onMonday March 9th. The ideal target of the19th was 8.6 trading days later.

This demonstrates that aside from theindividual cyclical frequencies within theDow Jones Industrials that are different fromthe NASDAQ 100 and the S&P 500, still thereis that unique signature frequency of 8.6that moves through everything and at times

Therefore, cyclical complexity runs verydeep indeed. To see it all, we need computersto peal back the layers both in time, and inthe actual activity. There is a vast new worldthat is waiting to be explored, if we under-stand it even exists. The fact that the Dowreached this March low in 17.2 months is awindow into the existence of a world we shoulnot ignore.



I find it curious that when the CTA.

contacted Princeton Economics, they evenadmitted that they recognized that I hadinvented capital flow analysis and wantedme to build a model in Washington. When Ideclined, the staff believe that was thereason for the assault on the company andme personally. Perhaps, tJut I am not surethey were the source. They may have been

instigated by others, b ut that source wasNew York Investment Banks who saw the modelas a threat because they could not tradeagainst it, and we were educating theiru su sal prey.

Nevertheless, the CTA. recognized thatthe fate of nations could be predicted bycapital flow analysis. When the model hadaccurately predicted the change in trend inChina and in 199 8 I gave a lecture in theCity of London that was reported in theLondon Financial Times that summer thatour model predicted the collapse in Russiain about 30 days, which unfolded ·that Septmaterializing in the Long-Term capital Man-

agement collapse and contagion, they thenand there realized the importance of thistype of model.

At ·the court hearing of October 3rd,2000, the SEC and CFTC demanded along withthe .receiver that the Institute be shut downand when staff showed up with written lettersrequesting from the Department of Energy to

construct a rnod.elfor them because we hadalso forecast when oil hit $10 that it wouldrise to the $100 level going into 2007. Thecormnodity F u tu res T rading Corrrrnissionw asinstigated by the New York Investment Banksto shut the model down at all costs. Theydemanded the court close the Institute andignore other agenci:es requesting help. Theywon.

The SEC and CFTC saw Princeton as thethreat because they did not understand anymodel. To them, anything that could do such

things is proof of being too influentialand thus evidence of manipulating the worldeconomy. They want to keep the public dumbso the New York Investment Ban1<.erscan feedon them to eaTI1 proprietary trading withabsolute immunity for whatever they do. Thisis the sad state of the corruption in ourso called regulatory system. It is part ofthe cycle and is what is causing the realcollapse in Public Confidence. This is theessence of what we face.

I suppose I will be blamed for the factthat the flight to quality came to an end i17.2 months again. They will most likely alsblame me for the demise of the political-economy that we are facing. But they have ifact fulfilled the cycle. Their own corruptiis destroying our future. This will becomeself -evident when the ca9i ta.lfLows flee thegovernment bonds and return to equity and

gold where the Cow may rally into 2015.75.

What Ddes The Future Hold

The Free Markets are never wrong, onlythose who analyzethern, including myself. Isomething is not developing as expected, itcan never be the markets, only the failureconsider all the data impacting the market.,

Consequent.Ly, if we step back and look 3.tthe major trends, we can see the eventual

outcome. Just as the yen tottomed in 19 82,a 7 year rally predicted the peak in 19 89.When oil tottomed, an 11 year bull marketwas projecting into 2007.

The major low for the Dow that was inperfect harmony with the Economic ConfidenceModel was 1 99 4.25. The low was to the precisday. Bull markets unfold in increments of 711, and 21 intervals. The first timing onthis PatteTI1 Projection Analysis was linedfor 2000. This was a bub ble top in the Cot.Cand was precisely 7 years from the lowest

annual closing in 199 3/1 99 4 intraday. Thenext target 11 years produced nothing. TheDow rallied into 13 years from the 1994 lowand that was not on the PatteTI1 ProjectionAnalysis grid. This was the capital flowresult from the Economic Confidence Modelpeak in February 2007 (2007.15). Since this2007 high does not conform on all levels andall slices of analysis, it cannot be a maj orhigh. That means we must look at the finaltiming element on the Pattern Projection _A.nalysis that brings us to 21 years for thebig high from 1994 - 2015.

In other words, the real peak in eq uityis targeted to the next peak in the EconomicConfidence Model 2015.75. For now, we maysee a 6 month rally. The main resistance is11 ,000 level in the Dow. T~leneed a monthlyclosing atove that level to signal the March2009 low will hold. Otherwise, we shouldexpect a retest of the lows and still evenperhaps new lows going into 31.4 months downfrom the Oct 2007 high with a rally into thneat target 2015.75 reaching 30,000+.

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Armstrong will dow reach 30000 by 2015