cobran20

Martin Armstrong's Economic Writings

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Can the Euro survive a sovereign debt crisis? - 14th June 2010

http://www.martinarm...sis-6-14-10.pdf

He's published a few other good articles since that one:

Are we running out of other people's money - totally agree that the next bubble to burst will be in government spending, as is happening in various states of the US and the PIIGS.

2010 - The Collective Conscience

Is Goldman following the model

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Armstrong has dedicated an entire article to Oz. He makes wulfgar's call on the $A look tame!

link

So far so good for Armstrong's forecast for the $A. After what I thought would be a dive to 77c, it held 81c. Perhaps I'll get my parity after all, if not Armstrong's $A1 = $US2!

post-148-12809163050841_thumb.jpg

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So far so good for Armstrong's forecast for the $A. After what I thought would be a dive to 77c, it held 81c. Perhaps I'll get my parity after all, if not Armstrong's $A1 = $US2!

Could it also be Cobran, that many of us are naive waiting for our downturn then.

If what Armstrong says is true then Australia may march to the stars on the coat-tails of China.

The long awaited house price downturn could simply not arrive, but in fact be simply a step on the way higher.

I'm hoping Armstrong is wrong, but many of the things he suggests about the ascendency of China, as the next super-power, suggest that Australia could become the gem in the crown, because of our mineral deposits.

I'm sure a lot of economists here would agree with him.

Whilst I may be contrarian, his arguments bear thinking about.

I'm still not so closed of mind, that I dismiss anything to the contrary of my own position.

To do so is to become fanatical, and dogmatic.

I think at this stage in my appraisal of the world, that Armstrong has got it wrong, but!!!

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Could it also be Cobran, that many of us are naive waiting for our downturn then.

If what Armstrong says is true then Australia may march to the stars on the coat-tails of China.

The long awaited house price downturn could simply not arrive, but in fact be simply a step on the way higher.

I'm hoping Armstrong is wrong, but many of the things he suggests about the ascendency of China, as the next super-power, suggest that Australia could become the gem in the crown, because of our mineral deposits.

I'm sure a lot of economists here would agree with him.

Whilst I may be contrarian, his arguments bear thinking about.

I'm still not so closed of mind, that I dismiss anything to the contrary of my own position.

To do so is to become fanatical, and dogmatic.

I think at this stage in my appraisal of the world, that Armstrong has got it wrong, but!!!

When the markets bottomed in March 2009, they had dropped around 50%, which is not uncommon bottom for major bear markets. We could have been climbing a new bull market's 'wall of worry' since then. If the markets have not rolled over by late this year, I'll have to re-assess the situation and assume the central bank's printing presses have overcome the market's deflationary forces. In a free market, the excesses are purged quickly. Now we seem to have much more manipulated markets and the day of reckoning will further postponed . I suspect that means much more volatility ahead.

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Forgot to add this little quote:

... However, the mere decline in real estate that is going to prevail broadly about 26 years from the big 2007 high, is NOT the measure of DEPRESSION simply because it declines...

I thought the high in RE for the US was in 2005. He seems to be using the stock market high for extrapolating RE forecasts. Either case, he's suggesting another Japan RE scenario for the US.

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I thought the high in RE for the US was in 2005.

The reference may be in relation to a high/turning point in confidence, not in RE valuations.

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The reference may be in relation to a high/turning point in confidence, not in RE valuations.

That makes sense and 26 years about 3 x 8.6 (business cycles). I wonder how he arrived at 3?

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A couple of choice quotes from "Staring into the Abyss", written on 31 July 2010.

Under a situation from the European view in 1931, the only thing to survive was tangible assets. This is not merely gold, but shares in corporations with tangible assets. Velocity is always the key for as it declines due to people then hoarding money, you get deflation. When people are afraid money will become worthless (paper of debased coinage) they spend it faster before it depreciates and that creates hyperinflation. It all depends where confidence stands – with government or within the private sector. We are headed into the later.

When governments collapse, it can get very, very nasty. This is when tangible items of value, gold, antiques, art, and movable objects has a basic barter worth. Land typically declines to its basic value non-leveraged cash value. Even during the Great Depression, Land that was valued at $1.20 in the mid 1800s per acre fell to 30 cents. This is cause by the lack of any credit to allow borrowing that is leverage in the real estate market. A 30 year mortgage brings forward 30 years of future income today. It is not money yet earned.

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Interesting view.

So, if Australia gets a trade surplus which lead into a current account surplus like it happened in the last few months of commodity boom, does that mean it is time to jump off the ship? How about the big CC deficit of Greece and Spain? last country with big CC deficit that got busted was iceland....

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Interesting view.

So, if Australia gets a trade surplus which lead into a current account surplus like it happened in the last few months of commodity boom, does that mean it is time to jump off the ship? How about the big CC deficit of Greece and Spain? last country with big CC deficit that got busted was iceland....

I would ignore the trade related flow and look at the capital flow. Presumably if we're running a deficit, then somebody must be willing to fund it, otherwise there would be a loss of confidence by in Australia by foreigners, which would not be good news!

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The current account deficit fell, so things must be turning pear shape according to Armstrong's theory.

5302.0 - Balance of Payments and International Investment Position, Australia, Jun 2010

JUNE KEY POINTS

BALANCE OF PAYMENTS

  • <LI type=square>The current account deficit, seasonally adjusted, fell $10,817m (66%) to $5,640m in the June quarter 2010. There was a turnaround of $9,706m on the balance of goods and services, resulting in a surplus of $6,497m in the June quarter 2010. The primary income deficit fell $1,112m (9%) to $11,909m.
  • In seasonally adjusted chain volume terms, the deficit on goods and services fell $1,260m (16%) from $7,694m in the March quarter 2010 to $6,434m in the June quarter 2010. This is expected to contribute 0.4 percentage points to growth in the June quarter 2010 volume measure of GDP.

INTERNATIONAL INVESTMENT POSITION (IIP)

  • Australia's net IIP rose $4.2b to a net liability position of $763.5b in the June quarter 2010. Australia's net foreign debt liability increased $14.1b to a liability position of $671.9b. Australia's net foreign equity liability decreased $10.0b to a liability position of $91.6b.

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Man he gets upset at the end of that one.

That gold tax they introduced will drive the gold bugs mad! They'll have to buy & sell gold on the black market to avoid paying big brother.

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http://www.martinarm...2010-9-2010.pdf

check out his advert on the back of some mag,

$12000 for annual subscription, no wonder the pricks in jail

His clientele were governments and big businesses - chicked feed to them! The chinese government and Thatcher called him in for onsite meetings - imagine what that fee would have been like!

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i spose he did call a few crashes and booms., wonder what he actually did to end up in jail. i do like his posts tho. just not his fees for the early work.

maybe he was telling his clients how to evade the govs tentacles, sure thats enough to get you in jail, after thats what hes been railing against this whole last post.,

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