Martin Armstrong: Dow 35,000 By 2021?

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The most hated stock market rally still has room left to become truly despised, according to Martin Armstrong.

Armstrong is an economic forecaster, former hedge fund manager, monetary and foreign exchange currency expert and a deep student of history. He has advised central banks, powerful political leaders, and has testified before Congressional committees on economic cycles and monetary and currency issues.

At present, he’s extremely concerned about the gross distortions central bank policies have had on the global economy. Excess liquidity has caused asset prices to become recklessly inflated while enabling otherwise-doomed companies to persist by feeding off of the cheap and plentiful capital.

But while Armstrong predicts this “one giant mess” “is not going to end nicely”, he warns that things may get a lot more deformed, especially in the US, before the break point is reached.

With so much of the rest of the world beginning to succumb to the arriving global recession, capital is fleeing towards the relative safety and positive returns offered by America’s financial markets. As a result, Armstrong sees the US stock market continuing to power higher from here, with the Dow Jones Industrial Average potentially tagging 35,000 by 2021:

It's on a greater global scale now. The US economy is doing OK, for now, but the rest of the world is imploding.

If you look at the capital flows, everything’s been moving into the United States.

If you just look at France and Germany’s stock markets, where were the peaks? Back in 2000. They still have not exceeded their 2000 Dotcom bubble highs. The markets are telling you something.

It’s more than people really understand. The capital flows have been moving into the United States from Europe dramatically and also from China. I mean, that was the whole issue behind bitcoin. More than 80 percent of the volume was all coming out of China because the Chinese figured out "OK, fine, there are currency restraints,. So if I can’t get my cash out of the country, I’ll buy bitcoin and then I’ll sell it in on another terminal outside of China, probably in the US, and I get my money. That’s what’s been going on.

The whole thing is just one giant mess. And this is not going to end nicely. The stock markets are moving up because it’s the only place to put money. I mean, yes, you can buy gold, but that’s for the retail person. I mean, when you’re talking about the sizable money of pension funds and institutional buyers, the stock market’s the only place to go.

So that’s why the market has been constantly knocking on heaven’s doors. I don’t see the Dow going anywhere but up. I mean, we’re probably looking at least 35,000 or so by 2021. If not higher.


Click the play button below to listen to Chris’ interview with Martin Armstrong (59m:43s).

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This is a companion discussion topic for the original entry at https://peakprosperity.com/martin-armstrong-dow-35000-by-2021/

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He has a long history of conning people… just sayin’.
https://en.wikipedia.org/wiki/Martin_A._Armstrong
Plus he’s a climate denier, usually the sign of low intelligence.

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To me, these sorts of attacks lend a bit of extra credibility to what he says. Someone cares enough to run around hosing him. And a bunch of ad-hom stuff too. Nothing about the substance of what he actually talks about. “Oh my gosh he’s a felon.” Gasp.
So is the future head of the ECB. Nobody has said a thing about that.
Sheryl Atkisson had a recent piece on the weaponization of Wikipedia.
https://sharylattkisson.com/2019/06/the-weaponization-of-wikipedia/
PP has had a lot of podcast guests over the years. Can anyone remember the lead comment being an ad-hom attack? Its pretty rare.
Just saying.

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I’m also going to point out Armstrong is practically the only person out there calling for a rally in equities. He has been doing so for years - based on his “public to private” wave cycle theory.
I’m guessing that our friends in the “public” sector doesn’t want anyone to pay attention to what he says. They are afraid that if people listen, and think “gosh, the ECB really is trapped”, then people will actually follow what he says and flee EU-nation bonds.
Just like he says in the podcast, suppression of his voice (which is what intrepid “Gerry” here is trying to do) won’t achieve anything. Once confidence snaps, the rush for the exits will be similar to what happened after Credit Anstalt in 1931.
(and if you need to panic out of your positions - its probably best to panic before the general mass of people decide to flee)
Again, our friends running the public sector are perfectly fine putting a felon in charge of the ECB when it suits their purposes. But if a private citizen appears to be able to predict the major cycles, well then, we sure shouldn’t listen to him if he is saying that something unpleasant is going to happen because…of course…“he’s a felon.”

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The video below shows bands of idealistic, but very ethnocentric, youth attempting to sell the world a “pro-our-group” viewpoint. Governments have embraced the role of leading this effort and coordinate efforts of the worldwide faithful in located in multiple nations.
Wikipedia is one of the front-lines. Seminars to train everyday citizens to police and edit Wikipedia are taught by both government offices and NGOs too its passionate citizens.
Bypassing defenses
When we watch a “commercial” on TV, we know that we are being sold something and to take everything with a grain of salt. But when we are watching a “news program” or reading “reference material” from an encyclopedia our defenses are lower. We accept the words as true more easily. Authoritative sources are most effective.
https://www.youtube.com/watch?v=TAzBsVzYH1o&feature=youtu.be&has_verified=1
RuTube Video of same: can be found here (in case the above is removed)
http://thesaker.is/how-israel-censors-the-internet/
 

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SandPuppy, what you say may be true about Wikipedia; but that isn’t the right use of an encyclopedia. The encyclopedia is best used to learn or refresh the basics; after that, if you need better, you research it.
 
Of a much greater threat is when books (including the Congressional Register) have had entire sections replaced under the Document Reclassification act; the unavailability of research materrials without paying compilation industries like El Sevier huge sums of money (though if you can get to a university library, you currently can read the material there); the destruction of books in libraries across the US due to a lack of interest by video-feed-citizens.
 

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I have invested several times in the stock market, and immediately been badly burned each time, each time by actions that either were criminal, or should be criminal.
Point being, I do not trust myself to be able to successfully invest in the stock market; so Armstrong’s 35k is useless to a hominus such as me.
As for the first post, I wouldn’t worry about that. The guy seems to have only five posts total, which would make it look like he’s a self-appointed albatross around Armstrong’s neck.
 

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Well, beyond the ad hominem, I find it unwise to discount what someone says on one issue just because they may not be “correct” on another issue; especially if the former is within their wheelhouse, while the latter is outside their area of expertise. I’ve learned to listen and give credence mostly to the things a person knows best, while allowing that they do not know all. Armstrong understands the dynamics of the market better than I do, and several people I know who work in climate-related fields know better than he does on that subject. So I don’t listen to what Armstrong says on a subject he doesn’t actually know intimately. That’s like criticizing Art Bergman for thinking free agency in basketball is a good thing; who cares?! He’s an oil geologist, not sportster.
 
Life is so much less frustrating now that I have embraced the glorious and inevitable imperfection of every person I meet, including first and foremost the one I see in the mirror every day.
 
 

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I so agree Michael that systematically slewing “the commons” of an encyclopedia is most certainly not its function. By relentlessly policing and editing Wikipedia to one specific self centered viewpoint, they spread their viewpoint (short term effect) and destroy this medium of group sharing of information (long term).
The even longer term effect is the damaging of trust across the ethnic group boundary.
 
 

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My greatest financial fear is that we will go straight into a crack-up boom.
If this happens, the prudent people of Peak Prosperity will do okay (if they have gold and silver), but it will the indebted people who will do the best. Those who have levered-up to buy their homes or investment real estate will be laughing. How frustrating will it be to have been prudent, and saved, and waited for prices to return to ‘normal’, only to see prices of property take off and those who took out the mortgages making out like bandits? It would make me bitter.
I’m thinking perhaps I should do as the governments are doing and lever-up rather than save. Why fight the governments and central banks? Why not join 'em in debt? One thing for sure is that they are going to print their way out of this, so why not have that printing benefiting me?
I’ve been waiting to buy a home that also makes sense as an investment property, as it’s likely I’ll be moving on in a few years, but it’s very hard to find anything that’s cash flow positive. But maybe I should forget about that criterion and just buy something anyway, knowing that my debts will be wiped out when the big inflation comes?

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E-
You could always do what the big guys do. As I understand it, they form an LLC, borrow money from the bank to buy a big property, and if things go south, the LLC goes BK, and the bank gets the collateral (they have to sell the property) and the big guy walks away, no fuss, no muss. And if inflation hits and prices scream higher, the big guy benefits from the leverage of using OPM. 10% gain on a 10%-down property = 100% net income.
I think Trump might have done that particular maneuver before.
Not financial advice, etc, etc.

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Mr Oz = raised eyebrow
 
pattern detected…

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So to expand on Eannao’s comment above, Armstrong’s model is bullish for real estate, yes? I have a home on 15 acres. We have greenhouses and our home on about half of that land and the rest has zero top soil…not great for farming and I don’t have the time resources or interest to develop it for such. If I sold half the land today I expect I would net roughly 1/3 of our outstanding mortgage putting the target of owning our home outright within the next ~5 years within reach. I’ve been saying we’re at a top in housing since 2014 and I’ve clearly been wrong the whole time, but unless incomes go up, I don’t see how it can move much higher…not a lot of room in interest rates left when you can get a 30 year at sub 4%. But maybe capital inflows offset stagnant incomes and bottomed out interest rates? If so, maybe I should hold for another couple of years. Or, go all in on debt and develop the land myself to hold as rentals? My inclination is to be proactive and conservative, but that strategy has caused me to miss out on a lot of the ill-gotten gains of the last decade…is this what it feels like to be the last bear to capitulate?

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Here is what I got from this interview:
As far as the Future:

  1. Strong Dollar
  2. Dow to 35000+
  3. Weak Global Economy
  4. No Interest Rate Hikes/further cuts for no apparent reason.
    Will be interesting to see how this plays out. Thanks for the Interview Chris
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I agree Snydeman. Everyone has their areas of expertise and non expertise. Just because someone isn’t an expert in everything doesn’t mean they dont have valuable insight to provide in other areas. For me personally, my area of expertise is ecology, energy and the physical infrastructure supporting the economy because that’s what I’ve studied and immersed myself in for the last 30 years. Its second nature and I have a hard time sometimes grasping how clueless so many people are to this. My background isnt finance and I always knew my shortcomings so whenever I read something that didn’t make sense I tended to focus on that. Dig into it like cleaning out a tooth cavity, until I do understand it (still a long way to go for finance stuff)
The human mind works by creating logical stories that present a complete picture of how all things are interrelated. Since no one can know everything, our brains fill in the gaps of knowledge, building bridges between the topics we do understand. That trait of our brain functioning is both good and bad because it enables us to function without understanding how everything works (how could we?), but it means that our brains are liable to build incorrect bridges between our areas of knowledge. I see this everywhere with basically everyone, especially financial and economic commentators. Again, thats simply a function of how our brains work. It explains why our economic leaders can develop and implement such backwards policies that cause so much irrepairable damage to the world. Because they are based on flawed understandings of how the physical world works. As far as I understand, economics students arent required to take a single science or engineering course, which boggles my mind.
My quest has been to bring together science and finance. Many try to do this but we all have our flaws. My greatest respect goes towards those who understand this aspect of how our brains work and openly admit to their shortcomings.
A few years ago J M Greer and his blog was pretty popular in his community. He made some fascinating insights into society and human behavior. But at times he ventured too far in trying to create the “complete picture” and clearly extended himself too far. It’s obvious he was BS’ing at times because he just didn’t understand a particular thing he was including in his discussion. My respect for his writing went down a bit because you then wonder what you can actually trust to get reliable insight based on real knowledge. But that doesnt mean he doesnt have a lot to offer in other areas.

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I didn’t ask Armstrong about resources because that’s not his area. Or climate change.
I tend to stick to people’s areas of expertise when interviewing.
A simple summary of Armstrong’s position might be this:

  1. Things move in cycles
  2. Those cycles have various periodicities. For stocks that is 8.4 years.
  3. There’s a crap-ton of money sloshing around the globe, always in search of a better home.
  4. A lot of that money is in gigantic piles, such as at sovereign wealth funds, and other mega-concentrations.
  5. Tracking where that money is either about to move next, or is in the process of moving provides some trading advantage.
  6. The next big pivot is January 2020, just six months from now. It will be a huge swing from deflationary to inflationary with a hefty dose of cost-push inflation.
    That last point coincide nicely with my own views on the oil investment deficit hitting sometime between now and 2022. Can’t pump what you didn’t find or re-invest in.
    If or when oil really spikes in price, a lot of things will spike along with that, especially the sorts of things that the Fed and BLS like to micro focus on as being “inflation” such as food, gasoline, clothes and the like.
     
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After listening to this tape, we should all jump into the stock market right now and get on the train to the Dow 35000
He never said anything about the numerous Black Swan events sitar in the background or could conceivably come up. It gets to a point of analysis paralysis and I think he even he may be surprised at what happens

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I’m not sure if he said it to us here - or if it was over at USA Watchdog - but Armstrong did mention that there was (most likely) going to be a correction in both gold and SPX in the fall. I know you were being snarky, but I figured that the information might still be useful.
Again, the larger trend is all about money having to hide somewhere. You tell me: if sovereign debt is no good, where does the big money go? Gold? Gold is tiny. The bond market is 3 times the size of the equity market. When a nation goes BK, there is no “bankruptcy” process where the assets are sold and the creditors get paid, unlike private debt. If a sovereign stops paying, you end up with nothing.
With private debt, if a company goes under, you still get something after bankruptcy; assets get sold, and the creditors get to split the proceeds. Armstrong is suggesting (based on historical observation) that once the first sovereign default occurs, money will flee the remaining sovereign debt issues en masse in anticipation of further default events. “Money flees in anticipation of events.”
This happened in 1931. The Great Depression was not due to the stock market crash in 1929. It was due to a bond market crash that happened 2 years later. Again, bond market = 3x the size of the stock market.
As long as confidence in sovereign governments remains intact, money will hide in bonds when bad things happen - when those “black swans” show up. Once confidence in the sovereign fails, Armstrong says, money will run to hide in private assets.
He says that US sovereign debt should be good through 2021/2022.

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After listening to this tape, we should all jump into the stock market right now and get on the train to the Dow 35000
Ray Dalio is saying the exact opposite and encouraging people to buy gold. He's a much more credible figure than Armstrong.
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http://fofoa.blogspot.com/2011/09/once-upon-time.html?m=1
future podcast? About freegold.