Response to an email; Nobody knows when this economic cycle will bottom out

A market bottom is predicated on a prior peak. Since the global economic cycle has been distorted via the yield curve and QE for the past decade, how can we know when a bottom will come? The answer is that we do not know. No one knows.

Note: Keep in mind, I once believed in the predictive capacity of Martin Armstrong’s algorithms and you can count me as a victim. This was why I attended his November 2015 WEC in Princeton. It wasn’t wasted money. The $3,000 in total costs was money well spent. I found out he was just another salesman.

Now, I don’t mean to beat a dead horse, so to speak, but I received an email from a subscriber regarding Martin Armstrong’s cycles. This email is one of a few dozen I have received from readers who have lost money and wasted opportunity listening to his recommendation.

I used to follow him [Armstrong] closely and made decisions based on his comments…..no longer. However, I am in too deep because of his precious metals prognostications. I positioned 20% of my net worth in PM’s, waiting for his ( I quote ) “$5,000 oz. gold and $100 oz. silver by late 2020 into late 2021.”

God speed and God bless!

Gary

Here was my response.

Thank you for the email and thoughts. I, too, believed what Martin Armstrong was discussing all the way until the end of 2015.

Prior to the end of 2015 I thought perhaps he knew what he was talking about, since he seemed so adamant about his Big Bang Theory. Moreover, he became a go-to guy in the alt-financial media. But as the months dragged on, I realized he was incorrect, and began to readjust my perspective on things and his work.

He was one of the only ones who was correct about the stock market, but since bonds did not tank as he expected, assets priced off the yield curve continued to do well and I remained bullish on a sundry list of items. I recall him discussing gold at the 2015 conference while gold was 1050 at the time. He was talking gold dancing in the 950-900 level and silver dropping to about 9.

He had been talking about a huge reversal in the price of gold [by 2017]; But personally, based on past performance [of gold and silver], I thought that reversal was too early. Indeed, we are seeing gold fluctuate around this level now for the past few years.

Given what we are seeing in the economy with the deflationary forces at play and the fading of the yield curve once again, I don’t see any reason for gold to take off at this point. My concern about Armstrong’s cycle is that since there was no nominal high in 2015 there cannot be a nominal low in 2020. My concern is that the economy may drag lower for years and that we will be wishing that the economy bottomed out in January of next year.

I think you see what I mean. We see the economies around the world fading. [Given that we never experienced a spike in bond yields] what is the catalyst to stop those [economic] declines by January of 2020? It is impossible in such a short time frame to see this happen. There are indeed cycles to the economy, to business, and to the monetary system [even with ongoing central bank intervention]. It’s just not according to Armstrong’s timeline.