John Little – OmegaShock.com

Yes. Really.

I know. I know. It sounds crazy to think that something like the Economic Confidence Model (ECM) could be so accurate. But, it really does appear to be all THAT (and a bag of chips).

The only problem is that we tend to ignore what we do not understand. If something doesn’t make sense, it doesn’t exist to us, until we understand it.

So, let me give you a look a the really solid ideas that are the basis for the ECM, as well as giving you an example of someone discovering a principle at work – before another someone came along and gave us the HOW.

Ultimately, it doesn’t really matter how it works. What matters is that you take steps to get out of the way of what is coming.

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Doomsday in October 2015? Really?

As I said on Monday, everything runs according to some kind of cycle.

(By the way, sorry about no article yesterday.
I also teach a Bible class on Tuesday,
and I didn’t have the time – or energy – to write.)

In fact, I can’t think of very much that doesn’t run according to some rhythm or cycle. And, the exceptions that I can think of, probably DO run according to a cycle that I just can’t see.

Example – The Discovery Of Brownian Motion

That brings to mind something that you might not have heard of:

Brownian Motion

Botanist Robert Brown was looking at pollen grains under a microscope. They were in water and moving. But, he couldn’t predict or describe the reason why they moved through the water in the way that they did. It seemed random to him.

That was in 1827.

Almost a hundred years later, in 1905, Albert Einstein published a paper that was able to give a mathematical basis for this seemingly random process.

To put it another way, a scientist who understood that the Universe was rational was seeing something that didn’t appear to be rational. And, it took an exceptionally rational person – Einstein – to show us how it really was rational.

I guess that you could call it an issue of faith. We needed to just have faith that there was a rational reason behind something that didn’t look all that rational – until someone could come along and use math to show us how it worked.

The Discovery Of A Business Cycle

So, just like Robert Brown, we also have noticed that there seems to be a certain motion to an economy. It goes boom for a while, and then bust – with a tremendous regularity.

And, it has taken an exceptionally rational person – like Martin Armstrong – to recognize the underlying mathematical nature to this rhythm.

And, it’s… π.

Yeah. I know. That’s a really strange idea, but let’s take a closer look.

How He Put It Together

Martin Armstrong first came fact-to-face with the idea of economic cycles, as a young man, when he realized that gold had been $162/ounce in 1869 – when he knew it to be $35/ounce at that moment in time in the 1960s. He said:

For the first time in my life, I was faced with a paradox that seemed to conflict with traditional concepts. How could gold be $162 in 1869 and yet be worth only $35 in the 1960’s? Surely, inflation was supposed to be linear. If a dollar was a lot of money in 1869, this meant that adjusted for inflation gold must have been the equivalent of several thousand dollars. If value was not linear, then was anything linear?

He dove into the library, researching everything that he could find on the possibility of cycles in business and economics. He read about the Kondratiev wave, but there didn’t seem to be enough behind it.

Then, Martin says:

I didn’t know how to go about such a quest to find if the business cycle was definable. Admittedly, I began with the very basic naive approach of simply adding up all the financial panics between 1683 and 1907 and dividing 224 years by the number of panics being 26 yielding 8.6 years. Well, this didn’t seem to be very valid at first, but it did allow for a greater amount of data to be tested compared to merely 3 waves described by Kondratieff.

Martin then resolved to test his observation:

Using 1929.75 as a reference point, major and minor turning points could then be projected forward in time. For the most part, I merely observed and kept to myself this strange way of thinking. In 1976, one of these 8.6-year turning points was quickly approaching (1977.05). For the first time, I began to use this model expecting a significant turn in the economy back toward inflation. My friends thought I was mad. Everyone was talking about how another Great Depression was coming. The stock market had crashed by 50% and OPEC seemed to be undermining everything. I rolled the dice and stuck to it and to my amazement, inflation exploded right on cue as gold rallied from $103 to $875 by January 1980.

Once Armstrong became convinced that he had found something that could help predict the turning points of the future, he began to put it to use.

The Success Of The ECM

In the 1980s he tried to warn the US government that currency manipulation would cause problems, but they ignored him. And, the Crash of ’87 came as he predicted it would – on October 19th, 1987.

But, even he doubted the accuracy of his own model. In fact, it took him a while to realize that the 8.6 year cycle that he was looking at was precisely:

pi x 1000..

…or 3141 days

I’m pulling all of this off of an old article that I found on the Internet. Martin was writing this in 1999, in which he also said:

The future that lies ahead will increasingly move ever greater toward intensity and volatility. Such periods have always brought not merely great booms and busts, but they too hold in the palm of their hand the thunderbolt of war. The economic future of Russia is one of such corruption and decay, that it too will rise as the warlord who seeks to regain what he has lost. China too will eventually beat the drums of war as its economy worsens and its leaders seek to hold the slippery reigns of power. Such periods of economic strife will begin to grow in intensity particularly following 2002.85 and moving into 2007.15. Only when economic chaos reaches a sudden state of eruption is it possible to see a successful revolution. The government was not prepared in Indonesia. However, unless a complete shock takes place in China and Russia, it is far more likely that these two nations will not fall to internal revolution but will seek to turn the economic tides against their neighbors. These are basic facts of history that cannot be denied. War is directly linked to the economic fate of mankind. Undermine the economy and you will create the next Hitler.

I find it interesting that he was so accurate.

Well, it gets better. In the same article, Martin offered up a graph that he had produced two years previously:

That is phenomenally accurate, and I showed you this graph, on Monday.

You can read a copy of Martin’s article, here:

http://www.contrahour.com/contrahour/2006/06/martin_armstron.html

Another Voice On The ECM

If you read the comments section of the post, you’ll read this one, by Joanie, on February 1st, 2007:

I heard Marty interviewed on the radio back in 1998 he was a guest on a stock market radioshow, He was fascinating and I heard him predict a turning point of july 20th 1998, which was a few days away, I thought OH SURE!! I was sceptical, but sure enough the turn down came and I watched it slide for a week, then I was convinced he was right on. I went to cash like he advised and didnt buy back in until Oct 1998 where he predicted a low turning point. It was like having an ace up your sleeve, and to witness it myself and profit was truely awesome.

Then again I eagerly listened to him again as a guest on the radio program and took notes on his prediction for the 2000 high and the 2002 low, and I took notes thinking this is crazy how am I going to buy stocks if their all going down for two years, I had never shorted, well let me tell you when the top in 2000 came and stocks just kept sliding, I learned how to short real fast and didnt cover till Martys 2002 Oct/Nov low, it was like poetry in motion. He in my mind became my stock Guru hahaa! He’s a phenominal genius. I will never second guess him again, I heard him in live on radio and witnessed it for myself. He had all kinds of turning points weekly, monthly, it was very cool! I wish we had him back, …and now we face the 2007 Feb.27 top turning point to the downside

Not many months later, we had the financial crisis of 2007-08.

Martin Armstrong’s Motivations

To get a better idea of Martin’s motivations, he wrote this recently:

If it is possible to make people aware of the truth behind the curtain, then just maybe we can save the day for our children and ourselves became this is coming at us head-on at warp speed now. There will be a turning point coming in history. This is when the big shifts in political systems take place like 1933 that saw Mao, Hitler, and FDR all come to power in one year.

I respect that. A LOT.

Martin Armstrong has said that his Economic Confidence Model is a global one. Each country will have their own model. And, Martin has said that the complete model has 32,000 different variables. The best thing to do with something that complex, is to follow the author of that model.

So, I recommend that you pay close attention to what Martin is saying and writing. You can do that, here:

http://armstrongeconomics.com/armstrong_economics_blog/

And yes, I really do read and listen to what he has to say.

I truly hope that you’ll be ready for this
(That’s a link. There’s not much time left.)

A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished. – Proverbs 22:3

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If you find a flaw in my reasoning, have a question, or wish to add your own viewpoint, leave a comment on the website. Your input is truly welcome.

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Categories: Economy, Finance | Tags: 2015, Brownian Motion, Cycles, Doomsday, ECM, Economic Confidence Model, Kondratieff, Kondratiev, Kondratiev wave, Martin Armstrong, Pi, π