Topic: Martin Armstrong Discussion - page 283. (Read 647062 times)

Martin Armstrong's predictions coming true. It really looks like 2017 for serious global economic collapse, except the USA which will grow strong and US dollar will grow stronger:

3.POS is still in development and the currency will survive it just fine in fact it will probably increase in value, again.

Nice catch.  

I would agree with Armstrong that electronic "money" will NOT become any world currency for a long time.  There are NO local businesses that I know of (major US city: metro population over 2,000,000) that even take BTC.  NO ONE in Peru takes it that I know of.

Bitcoin may catch on as a popular payment option, I hope so.  But, I would expect that to happen in the USA and Europe first.  If BTC cannot become widely used in the developed countries, I doubt that it would be worldwide.

TPTB also has raised the issue of Chinese dominance in mining of BTC, a mild negative to BTC IMO.

QUESTION: Mr. Armstrong, your real estate cycle turned up from 1955. It does not match the Case-Shiller index which peaked in 1890s and bottomed in 1920 and then began to rally after 1940 into the 1955 period. Something seem strange with that index given the huge Florida real estate bubble which burst in 1927. Can you explain why the Case-Shiller seems to be off so much? Here is a chart that has been going around the Web.

Thanks



ANSWER: This is the typical problem with people creating an index and then trying to extend it back in time. They ALWAYS ignore the currency and project purely a domestic view. During the 1890s, J.P. Morgan had to bail out the U.S. Treasury for it was dead broke. As people feared the government would declare bankruptcy, private assets rose in NOMINAL terms. This was matched by the massive exit of foreign capital from the USA.

The Case-Shiller index bottoms in 1920, but this was the point of a massive rise in the dollar’s value. Foreign capital poured into the USA to park because of World War I. This, in turn, led to wild speculation in Florida, which as you correctly stated, burst in 1927. Because rhis isdex is national, it also suppresses regional booms. As real estate peaked in Florida, the hot money then shifted to stocks creating the Phase Transition into 1929. It was this capital flows between asset classes into stocks where that concentration led to the 1929 bubble.

The Case-Shiller index, which suddenly rose from the Great Depression, does not take into account the dollar devaluation that sparked that rise as it did in equities. That was virtually a 60% devaluation of the dollar that moved it from $20 to $35 on a gold standard by FDR. Was that rise “real” or currency related? Sorry, the real rise begins post-war from 1955. That was the real housing boom.

The Case-Shiller does not accurately reflect the changes in currency. One must look at everything in terms of international value before they can see if they really made money or just broke even because the currency declined. From a value perspective, the 1929 high was more than three times that of the 1890s. So the high of the 1890s was purely a rise due to the collapse in the dollar; it was the hallmark of the panic of 1893 and was best expressed in Grover Cleveland’s speech before Congress.

You just posted a chart that contradicts your earlier assertions and shows MA to be correct in the US market.

How many times do we have to go through this? As with everything else, as we have seen above, you are not able to get things from the first/second/third time. Ok, let’s do it again.

That real estate picture that MA claims to have drawn in 1979 uses the Case-Shiller home price index. Back then there was nothing like “internationally inflation adjusted value“ and nowhere was it mentioned by MA or anybody. He started to exploit this trick relatively recently when it became obvious that he failed yet another of his numerous predictions so he had to cover his ass by making it up. Interestingly, he uses that IIM trick on real estate because, as he argues, real estate attracts global money but at the same time he does not use IIM when he makes predictions on the Dow, Gold, Nikkei and so on (which also attract global capital).

Now, if you compare the index and the picture, you’ll easily find out that they do not match (put it mildly). First, the index had been rising without any drop up until 2006 (the MA’s graph predicted drops after every 8.6 years). Second, the absolute high according to MA should have been reached in 2007.15, but in reality the S&P Case-Shiller topped in 2006 https://research.stlouisfed.org/fred2/series/CSUSHPINSA, http://www.spindices.com/index-family/real-estate/sp-case-shiller, and the original Case-Shiller topped in 2005 http://www.econ.yale.edu/~shiller/data.htm
Third, the index significantly recovered and keeps rising, contrary to what MA predicted.

Here is another dirty trick that MA used. When real estate picked he did not say anything. Only after the crisis hit and real estate plunged he came out and claimed that he’d predicted the top. Not only that, he claimed that he predicted the top to the day referencing to (wait!) the S&P Reit index. Again, there was nothing about “internationally inflation adjusted value“ or any of such bs. But wait, there’s more. The S&P Reit includes not only home RE, but everything else such as residential, office, health-care, hotels, etc. In other words, from very beginning he used the Case-Shiller (only home RE). Then when it didn’t work out, he switched to the S&P Reit which tracks all RE, and now he switches again by bs people with a new trick called “internationally inflation adjusted value“.

I am curious to see what else is he going to come up with when his post-2015 forecast eventually fails.  

and? What are you trying to prove? Should we listen to an uneducated charlatan who sells crap to idiots like yourself or should we resort to facts? https://research.stlouisfed.org/fred2/series/CSUSHPINSA

   
Looks like yet another charlatan
January 15, 2016, 05:02:04 PM

5. Absolute high in real estate in 2007 - wrong

January 17, 2016,
It shows the peak at 2007.15 and then a decline to 2033. And the reality is real estate now is way higher than 2007 levels almost everywhere. Look at what is going on in San Francisco, LA, New York