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Cycles & Pattern
Projections
Two Very Different
types of Analysis.
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Copyr i ght Mar t i n A. Ar mst r ong A l l Ri ght s Reser ved August 7th, 2009
Comment s Wel come: Ar mst r ongEconomi cs@GMai l . COM f I nt er nat i onal I v l
Cycles & Pattern
Projections
Two Very Different
types of Analysis.
"-' U _ J ' mmtatr Mnmmi i n m i r L
The Forecast Of An Earl i er Generati on
^ y ^ W^ S P * * * ^ urrent_Eanjings Reports ^
CHARL
By: Martin A. Arnratrong
Former Chairman of Princeton Economics International. Ltd.
and of the Foundation For The Study of Cycles
M
any people have written and asked
interesting questions about cycles.
Everything from why they exist to
are they subject to change? Some
have asked: Does this mean that the
future is predetermined? This is a
very deep subject. I am preparing a book I
have entitled the "Geometry of Time" that
goes into the core nature of how these cycles
in fact move through time and space and why.
I have also been asked i f I would make
a comment on the famous Wall Street Journal
publication of February 2, 1932 where a chart
was published showing cyclical patterns 1810
to 2000. Since this was clearly published in
1932, i t can safely silence the skeptics as
to hindsight.
The Wall Street Journal stated that the
chart was given to them by a Mr. Edward Rogers
of Detroit who stated i t was found in an old
desk in Philadelphia in 1902. It was being
offered to their readers for what i t might be
worth.
It is hard to say when cycle theory had
really begun to take off. But i t is very
clear that in modern times, i t surely had
begun during the 1800s. Yet we cannot allow
ourselves to get confused between pattern
projections and real cyclical projections.
This Famous Wall Street Journal chart of
1932 is not really a cycle, per se. It is
a chart projecting a pattern of highs and
lows that falls closer into the same type
of category as technical analysis and even
Elliot Wave. The core similarity of a l l
three is i t is based upon "patterns" and
not cyclical events of coordination, contag-
ion, and correlation.
That by no means takes away from any
of these pattern recogonition slices of the
complex world we live in. It is like you go
to diner with a person you eventually love.
Your mind records everything taking place
without you directing i t to do so. Suddenly,
20 years later, you end up at the same plact
and remember that night. You may access that
same memory from a song, smell, or t as t s
that may have been unique. The point is, we
can access the same memory different ways.
This is because our mind functions dynamic-
ally, not linearly.
There is a fundamental difference
between cyclical analysis and pattern
projection analysis. The former is only
concerned with turning points irrespect-
ive of whether or not i t is a high or a
l ow. I t i s an event dr i ven anal ys i s . When
we l ook at pattern projection analysis, as
I have di s t i ngui s hed i t , we ar e s pe c i f i c a l l y
t r y i ng t o " pr oj ec t " a hi gh or a l aw.
The t wo di f f er ent appr oaches l i e s i n
t he cor e of what t he phenomenon i s we ar e
ac t ual l y wor ki ng wi t h. Pattern projection
analysis i s obver s i ng t he r es ul t , wi t h no
concer n of what causes t he pat t er n. Cycles
ar e i nher ent wi t hi n t he des i gn s t r uc t ur e of
ever yt hi ng i n t he uni ver s e f r om t he beat of
t he sun i n 300 year c yc l es , vol canoes , t he
movement of pl anet s , t he r i s e and f a l l of
t he ocean, t he pr eces s i on of t he equi noxes,
t he pr ec es s i on of t he seaons, t he beat of
t he hear t of l i v i n g c r eat ur es , t o b i r t h -
life- deat h c yc l e of l i v i n g or gani s i ms .
Because cycles ex i s t wi t hi n ever yt hi ng,
t her e i s f ar gr eat er dat a avai l abl e t o get
t o a under s t andi ng of t he dynami c s t r uc t ur e
of howt hey oper at e. Cycles ar e t he medi um
t hr ough whi ch a l l ener gy i s t r ans mi t t ed be
i t l i g h t , r adi o waves, ear t hquakes, el ec -
t r i c AC c ur r ent , or wave ac t i on i n t he vas t
ocean.
I f you s t and i n t he ocean j us t ahead
of wher e t he waves s t a r t t o br eak, you wi l l
f eel t he wave goi ng t o shor e. You wi l l t hen
not i c e t he wave i s pas s i ng through t he body
of wat er i t i s not t he wat er movi ng wi t h t he
wave. You wi l l l i f t up and down i n t he same
s pot . A cup f l oat i ng t he s ur f ace wi l l r i s e
and f a l l l ar gel y s t at i onar y. The ener gy i s
movi ng i n a c y c l i c a l pat t er n t hr ough t he
wat er . Ther e may be a c ur r ent i n t he wat er
movi ng at 90 t o t he ener gy waves, but t hat
i s agai n a s epar at e di s t i nc t i v e f or c e.
When we l ook at pattern projection
analysis we ar e concer ned about t he out come
or r es ul t of t he c y c l i c a l f or ces unf ol di ng
even i f we do not under st and c y c l i c a l event s
behi nd t he scenes. Cycles ar e s et i n mot i on
and ar e t he r eal movers & shakers f or i t i s
t hi s s t r uc t ur al des i gn t hat ac t ual l y moves
t he ener gy f r omone pl ace t o t he next . I n
s oc i et y, we r espond t o event s and t hen we
r eac t based upon our obs er vat i ons of t he
communi t y. I f ever yone becomes s car ed and
hoar ds t he i r c a pi t a l f ear i ng a r ec es s i on,
t hen we t oo c u r t a i l and save out of sheer
c aut i on. Thi s economi cal l y i s energy t hat
we can measur e and pr oj ec t l i k e t he wave
of ener gy pas s i ng t hr ough wat er . I ns t ead
of wat er , i t i s t he communi t y.
Per haps I spar ked mor e br ai n c e l l s t o
f i r e based upon t he l e t t e r s r egar di ng my
di s c us s i on of Hei senber g' s uncertainty Prin-
ciple. I t may sound degr adi ng, but f or as
much as we bel i eve we ar e some s or t of s pec i al
c r eat ur es , bot h our i ndi v i dual and c o l l e c t i v e
behavi or i s s hocki ngl y not much di f f er ent t han
t he cor e s t r uc t ur e at t he at omi c l e v e l wi t h a
t wi s t of s el f - awar enes s t hat needs us t o i n
f ac t r ewr i t e Sir Isaac Newton's Laws of Motion.
Newton's Laws ar e based upon obj ec t s t hat ar e
unawar e. So whi l e an obj ec t may r emai n s t at i on-
ar y u n t i l and ext er nal f or c e hi t s i t and t hen
an equal and oppos i t e r eac t i on may unf ol d, i f
we ar e deal i ng wi t h s el f - awar e obj ec t s , we need
t o expand t he l aws. A c at sees a s t at i onar y
bi r d. I t t r i e s t o sneak up on t he bi r d. I f t he
bi r d hear s a sound, i t wi l l f l e e wi t hout seei ng
t he c at . Thus, when deal i ng wi t h s el f - awar e
obj ec t s , t he var i abl es i nc r eas e.
( 1) sound can spar k f l i g h t
( 2) gr oup behavi or s par ks f l i g h t
( 3) ac t ual s i ght of t he c at wi l l cause
t he bi r d t o t ake f l i g h t
We ar e no di f f er ent r egar dl es s howsmar t
we t hi nk we ar e, i t i s t he same des i gn upon
whi ch a l l l i v i n g t hi ngs ar e cons t r uct ed - s el f -
pr es er vat i on. Ther ef or e, s oc i et y i s l i k e a
f l oc k of bi r ds . Per haps one bi r d on t he edge
hear s somet hi ng and t akes f l i g h t wi t hout even
s eei ng a r eal t hr eat . Ot her s see hi mt ake t o
t he a i r and j o i n not knowi ng why. When t he
obj ec t i s s el f - awar e, mot i on can be caused by
a per cei ved or ac t ual r e a l t hr eat , or by a
gr oup behavi or . We c l e a r l y need t o expand t he
Newtonian Laws of mot i on when deal i ng wi t h
s el f - awar e obj ec t s .
Thi s i s wher e Heisenberg comes i n . We can
pr edi c t statistically t hat a gi ven per cent age
of a gr oup wi l l r eac t , but we cannot pr edi c t
whi ch i ndi vi dual s wi t hi n t he gr oup wi l l do so.
Thi s l eads us t o del ude our s el f i ns of ar as we
conf use i nt el l i genc e and f r ee wi l l wi t h a
under s t andi ng of gr oup behavi or .
Cyclical Analysis i s about pr oj ec t i ng an
event hor i z on, a t ur ni ng poi nt t hat i s i n
f ac t caused by a conver gence of t r ends c ar i ng
t oget her . Two waves 130 out of phase wi l l
cancel each ot her out . They may mul t i pl y i n
ampl i t ude when i n phase, or p a r t i a l l y of f s et
each ot her . I t i s t he event and not t he
pat t er n bei ng pr oj ec t ed.
2
ver s e, i ns of ar as why we coul d not pr edi c t
whi ch at om i n a gr oup woul d r adi at e. Yet ,
we have spent a l o t of t i me even i n t he
wor l d of phys i c s , but we have over l ooked
a bas i c assumpt i on. How does ener gy move?
I bel i eve t hi s s i mpl e ques t i on has not been
answer ed l eadi ng t o a l o t of conf us i on.
Quant umTheor y has l ong pr ovi ded a
pr obl em i n t hat t hi s wor l d may be t oo
compl ex f or us t o t r ul y see. Never t hel es s ,
t he quest t o r each a Gr and Uni f i ed Theor y
wher e t he l aws of c l a s s i c a l and Quant um
Mechani cs combi ne a l l , r emai ns a pr i mar y
goal among phy s i c i s t s .
Thi s t heor y of mul t i pl e uni ver s es
emer ged as an at t empt t o expl ai n some-
t hi ng r e a l l y s t r ange. The exper i ment t hat
was s et up was t aki ng t wo wal l s one i n
f r ont of t he ot her . The f i r s t wal l has a
s i ngl e v e r t i c a l s l i t cut i nt o i t .
I f we now s hi ne a l i ght i nt o t he
s l i t , on t he wal l behi nd you wi l l see a
s i ngl e v e r t i c a l whi t e l i n e . What we get
so f ar i s not ver y s t r ange. J us t a s i mpl e
v e r t i c a l l i ne of l i g h t as shown above. "
4
The exper i ment get s mor e i nt er es t i ng
when we cut t wo s l i t s s i de- by- s i de. One
woul d expect now t wo v e r t i c a l whi t e l i nes
s houl d appear . Thi s i s wher e compl exi t y
begi ns t o show i t s t r ue nat ur e.
whi t e l i g h t yet f r omonl y t wo s l i t s . We
ar e s t eppi ng i nt o t he wor l d of compl exi t y
and t he mi nd- bendi ng r es ul t s .
I f we cont i nue wi t h t hi s s i mpl e and
pl a i n exper i ment by now c ut t i ng f our s l i t s
and s hi ne t he l i g h t agai n, what you expect
does not happen. I ns t ead of mor e, we now
ar e get t i ng l es s . The t heor y t o expl ai n
t hi s i s t hat l i g h t t r avel s i n a wave f or m
( c yc l e) and t hus wher e t he t wo waves meet
and ar e i n oppos i t e phase, t hey cancel
each ot her out . Hence, we have wave t heor y
t hat somet i mes a i nphase gr oup of waves
wi l l j o i n t oget her maki ng a l ar ger wave
r e f l e c t i o n, and waves t hat ar e 180 out - of -
phase wi l l c anc el each ot her out .
Then we add Ei ns t ei n who ar gued t hat
l i g h t was not a wave, but c ons i s t ed of
pa r t i c l e s c a l l ed " phot ons" and i f t hat was
t r ue, t hen how do phot ons make such a
st ange pat t er n? I t has been accept ed t hat
par t i c l es s t i l l wi l l di s pl ay a wave f unc-
t i o n. I t i s t hen assumed t hat par t i c l es
can i nt er f er e wi t h each ot her .
The next s t ep i n t hi s exper i ment was
t o nar r ow t he beamof l i ght t o such a
s mal l beamt hat onl y one phot on woul d come
out at a t i me. Det ect or s wer e t hen s et up
t o r ec or d t he r es ul t s .
f i l l
i $ t . ?
The pat t er n above shocked ever yone agai n
The phot ons appear ed t o l and onl y i n s pec i f i c
pl aces and not ot her s . Ther e coul d be no ot he;
phot on c r eat i ng t he i nt e r f er ence. What coul d
i t be t hat was c r eat i ng a i nt er f er enc e wi t h
t he phot on when onl y one phot on was comi ng
out at one t i me? You can see t he emer gi ng
conf us i on f i ndi ng compl exi t y i n s i mpl i c i t y .
Thi s i s wher e t he t heor y of mul t i pl e
uni ver s es emer ges. I t i s now assumed t hat
because i n c y c l i c a l wave t heor y t wo waves
t hat ar e out - of - phase by 180 wi l l cancel
each ot her out , our knowl edge of howa l l
c yc l es f unc t i on i n waves t r anscends i nt o
t he compr ehensi on of how even i ndi v i dual
phot ons must behave s i nc e t hey s t i l l move
i n a wave f or mat i on. Thi s has pr oduced t he
t heor y t hat t her e must be mul t i pl e uni ver -
s es .
The t heor y i s based on t he f ac t t hat
onl y on phot on i r> emer gi ng at a t i me. Thus,
t her e can be no i nt er f er enc e wi t h anot her
phot on. Hence, t he t heor y goes t hat t her e
must be mul t i pl e uni ver s es and at t he same
i ns t ant i n t i me a per son i s s hoot i ng a pho-
t on at a wal l i n t hi s uni ver s e, t he same
per son ex i s t i ng i n a pa r a l l e l uni ver s e i s
doi ng t he same t hi ng. Thus, t he i nt er f er en-
ce i s wi t h t hat phot on i n t he pa r a l l e l uni -
ver s e.
Thi s i s c er t ai nl y c r eat i ve. However ,
t he t r ue answer may be a l i t t l e mor e down
t o ear t h. Thi s i nt r oduces us t o t he r eal
wor l d on c y c l i c a l compl exi t y s i nc e what we
ar e t al k i ng about i s c yc l es t hr ough whi ch
i s an or der ed pr i nc i pl e by whi ch a l l t hi ngs
move be i t l i g h t t o t he beat of our hear t .
Cy c l i c a l movement i s t he essence of l i f e
i t s e l f .
What i s t aki ng pl ace i n t hi s s i mpl e
exper i ment i s t hat t he phot on i s bl i nk i ng
i n and out y i el di ng t he appear ance t hat i t
i s di s appear i ng and t hi s i s what caused t he
mul t i pl e uni ver s e t heor y. Wher e does i t go?
The bl i nk i ng i n and out of exi s t ence
can be expl ai ned by ei t her t wo p o s s i b i l i t i e s
t hat do not r equi r e mul t i pl e uni ver s es wi t h
many dupl i c at es of our s el ves doi ng t he same
t hi ng at t he same t i me.
( 1) The phot on i s behavi ng i n i t s nor -
mal wave pat t er n, but we ar e abl e " |
t o see i t onl y when i t i s at i t s
poi nt of maxi mument r opy f ound at
t he nadi r and t he z eni t h wher e i t
i s changi ng cour se. I t s t r i k es t he
same s pot s because of i t s c y c l i c a l
pat h t hr ough t i me and space. The
answer l i e s i n c y c l i c a l compl exi t y
and what we can see as bl i nk i ng i s
t he poi nt s of maxi mumener gy t hat
appear s l i k e a pendul umat i t s t wo
most ext r eme poi nt s .
( 2) t he uni ver s e i s composed of l es s t han
10% of phys c i al mat t er t hat we can
see wi t h over 70%bei ng Dar k Ener gy
and t he r emai nder Dar k Mat t er . Thus
any i nt er f er enc e i s wi t h ei t her t he
Dar k Mat t er or Dar k Ener gy t hat we
ar e unabl e t o yet det ec t c l os e up.
The mor e pr a c t i c a l r es ol ut i on of t hi s
exper i ment i s t hat we ar e onl y abl e t o see
v i s ua l l y t he phot o at i t s turning points i n
i t s c y c l i c a l pat h. By expl or i ng t he cyclical
nat ur e of s oc i al syst ems, we can see much
c l ear er i nt o a l l ot her ar eas of s c i enc e.
What gover nment hat es t he most , i s t hat
t hey cannot a l t e r cyclical turning points.
P o l i t i c i a ns want t o c l ai m vot e f or t hemand
t hey wi l l out l aw r ec es s i ons . They wi l l t hr ow
i n j a i l a l l t hose who caused i t , and i t wi l l
never happen agai n. Thi s i s l i k e t r y i ng t o
out l aw deat h or pr e- mar i t al sex. You cannot
out l aw even human vi c es , pr os t i t ut i on, dr ugs,
dr i nki ng, or gambl i ng. Gover nment s t hat t r y
ar e pi s s i ng i n t he wi nd because you ar e t r yi ng
t o a l t e r human nat ur e. A l l t hey do i s dr i ve
such vi c es under gr ound, make t hemmor e at t ac -
t i v e , i nc r eas e t he pr i c es t o par t i c i pat e i n
such vi c es , and of t en cause count l es s deat hs
as di d t he Prohibition Days.
Cycles ar e no di f f er ent . L i k e J oseph i n
t he Bi bl e who war ned t he phar oah of a 7 year
dr ought t hat was comi ng, he pl anned, l i v e d
wi t h t he c yc l e, and s ur vi ved. We al s o had a
7 year dr ought t hat was t he Dust Bowl and had
made t he Great Depression t r ul y gr eat , and
al t er ed t he ent i r e empl oyment l andscape. We
i gnor e cycles, and ar e s car ed of t hem. But t hi s
i s how energy i t s e l f moves t hr ough a l l such
syst ems no di f f er ent t han a ener gy wave passes
t hr ough wat er , but does not move t he wat er .
I t i s t he i w i j T - and t he z eni t h of a l l
c yc l es t hat r epr es ent t he maxi mumamount of
ener gy t hat causes t he turning point t o unf ol d
I t i s not a par t i c ul ar hi gh or l ow. That i s
a pattern t hat f l ows f r om t he event hor i z on,
i t i s not t he s our ce, nor t he cause!
Ther ef or e, we must under st and t hat t hese
ar e t wo s epar at e f or ms of anal ys i s . I f we see
a r e s ul t , we must t r ac e i t t o i t s sour ce. When
we do, we see t hat t her e ar e t wo s epar at e and
ver y di f f er ent f or ms of anal ys i s t aki ng pl ac e.
Some nat i ons wi l l bot t omand ot her s wi l l peak
wi t h t he same t ur ni ng poi nt s on t he Economic
Confidence Model. We a l l do not boomand bust
t he same way. Chi na i s f eel i ng t he " r es ul t "
i t was not t he " s our ce" of t he event .
The Economic Confidence Model has been
of t en des cr i bed as t r ac k i ng t he "hot money"
f or c a pi t a l concent r at es gl obal l y f oc us i ng
upon a par t i c ul ar nat i on or r egi on, t hen
i t t ar get s f ur t her descendi ng concent r at i ng
i nt o a par t i c ul ar s ec t or , t hen i nt o t he
i ndi v i dual l e v e l . I f c a pi t a l di d not i ndeed
concent r at e, i t woul d be wi del y di s bur s ed
and t hi s woul d k i l l i nnovat i on & pr ogr es s
whi ch i s why communi smf a i l e d f or i t i n f ac t
r ecr eat ed t he f eudal dar k ages.
Capi t al f or t hi s c yc l e concent r at ed i n
t he F i nanc i al s ec t or . Thi s i s why we do not
see a bubbl e t op i n t he s t ocks nor even t he
commodi t i es. The bubbl e was i n t he debt
mar ket s. I t was t he i nvest ment banks t hat
bl ew- up t he economy. I f i t wer e not f or t he
s t r a t e gi c a l l y pl aced key peopl e by Gol dman
Sachs, i t t oo woul d have f ol ded. Paul s on
r ef us ed t o hel p Lehman or Bear el i mi nat i ng
compet i t i on and now Gol dman has v i r t u a l l y
a monopl y s i nc e Mor gan- St anl ey has pul l ed
back r e a l i z i ng t hey f l ew t oo c l os e t o t he
sun. Gol dman woul d not make t he money as
a bank, t he i r pr o f i t s ar e comi ng f r ommai nl y
pr opr i et ar y t r adi ng - not banki ng!
The Uni t ed St at es has been i n f i l t r a t e d
by t he New Yor k I nvest ment Bank Cl ub so
pr of oundl y, t hey ar e des t r oyi ng democr acy
and ens ur i ng t he US wi l l l os e i t s s t at us
of t he concent r at i on of gl obal c a pi t a l .
Ther e f ocus has been t o domi nat e mar ket s,
mani pul at e what can be done, and t o al ways
make s ur e t her e i s t he per f ec t r i s k l e s s
t r ade.
The t wo banks t hat di d not want t o
b a i l out Long- Ter mCapi t al when t hey a l l
bl ew up on t he Rus s i an c ol l aps e wer e Bear
and Lehman. They wer e t he t wo who Paul s on
r ef us ed t o hel p. Why? They wer e Gol dman' s
r e a l compet i t i on and di d not go al ong wi t h
t he " c l ub" and t hey saw t he bai l out of
Long- Ter mCapi t al Management as a i ndi r ec t
bai l out of t hei r c r edi t or s - AI G, Gol dman
et c .
The unpr ecedent ed r i s e i n t he banki ng
pr o f i t s post - 1980 has cr eat ed t he s pi ke
hi gh i n t hi s economi c c yc l e. They onl y seek
t he per f ec t t r ade and engaged i n t he CDS
mar ket t o pool mor t ages t oget her t hat no
one woul d do i n t he ol d days a f t er t he
Gr eat Depr es s i on because of t he cont agi on
f ac t or ( c or r el at i on) .
Once t he I nvest ment Banks cr os s ed t hat
l i ne i nt o t he " bi g" mar ket , mor t gages, t hey
cr eat ed a t i me bomb t hat coul d undo t he ver y
s t r uc t ur e of west er n c i v i l i z a t i o n . They had
as us ual assumed t hat t hi s was a r i s k l e s s
t r ade f or t he gover nment woul d back up t he
debt j us t as t he I MF was backi ng up t he
Rus s i an bonds back i n 1998 t hat went bus t
c r eat i ng t he Long- Ter mCapi t al Management
c ol l aps e and cont agi on.
Because debt i nvol ves ever y as pect of
s oc i et y unl i k e ccmmodi t i es or s t ocks when t hey
mani pul at e t hose mar ket s, t hey put at r i s k t he
ent i r e way of l i f e . The day may come when
Gol dman i s s i t t i n g t her e i n t hei r vaul t s wi t h
t ear s i n t hei r syes whi l e count i ng t he i r b i l l i o n -
and l ament i ng t hat a 3 mi n t el ephone c a l l may
$1, 000 and t hei r war ches t i s r e a l l y wor t hl es s .
Even t he SEC and CFTC ar e s af el y i n t he
pal ms of t he " c l ub" f or t o s t op any upcomi ng
compet i t i on, t hey pi c k up t he phone, al l ege
f r aud, and t he SEC and CFTC r un i n doi ng t hei r
di r t y wor k. A f or ei gn company CBL was wor ki ng
i n r es t r i c t ed s t ock owned by di r ec t or s of many
publ i c c or por at i ons . They s t ar t ed t o t ake bi g
money away as Swi ss banks wer e of f er i ng t o
l end agai ns t t he s t ock t o enhance y i el ds and
t hus t he s t ock was not s ol d. CBL had i nt er es t
up t o $6 b i l l i o n . Hundr eds of mi l l i ons had
l e f t Me r r i l , and many ot her s . Charles Schwab
i t i s al l eged was t he sour ce who c a l l e d t he
SEC who r ushed i n , s ei z ed t he c or por at i on i n
Eur ope, and c r i mi nal l y char ged di r ec t or s . The
f r aud was cl ai med t o have been $13 mi l l i o n
yet t he SEC r ec ei ver r ec ei ved $28 mi l l i o n i n
f ees . And you t hi nk t he SEC pr ot ec t s mar ket s?
Dr exel Bur nhamwas des t r oyed on t he r e a l
nonsense t heor y of i ns i de t r adi ng f or whi ch t h(
cour t s accept ed and al l owed t o be pr os ecut ed.
Mi l ken was gui l t y not of t he i ns i der t r adi ng
t hat t ook pl ace i n t he Depr es s i on wher e a
di r ec t or knew t he company was bus t so he s ol d
hi s s t ock bef or e announci ng t hat i nf o. Her e,
Gui l i anni ' s t heor y was t wo peopl e know some-
t hi ng, but a t hi r d does not . That t hi r d per son
i s def r auded out t he opportunity t o make t he
same money. Thi s i s b u l l s h i t s i nc e t hat same
so c al l ed i ns i de i nf o ex i s t s i n commodi t i es, ^,
debt cur r ency or anyt hi ng el s e wor l dwi de. It' s
how t he gl obal economy f unc t i ons . The NY " c l ub"
el i mi nat ed Dr exel Bur nham, a Phi l adel phi a f i r m,
who was not par t of t he " c l ub" but a compet i t or
The NY " c l ub" mani pul at es c our t s , j us t i c e , Fed,
Tr eas ur y, and p o l i t i c s . They ar e t he Dar k Lor ds
of f i nance. : - who wi l l never be i nves t i gat ed.
5
I t i s unf or t unat e, by t he SEC and CFTC
ar e mer el y pawns, and seemt o have no such
i nt ent i on of change t he syst em. The degr ee
of c ont r ol of t he " c l ub" i nt o gover nment i s
pr event i ng r ef or m and i s doomi ng our f ut ur e.
Fr omher e on, you must now begi n t o
see t hat c yc l es ar e di s t i nc t f r om pat t er n
pr oj ec t i on anal ys i s . The f ut ur e i s l i k e l y
t o be unpr ecedent ed i n f l a t i o n i ns t i gat ed on
t he advi s e of t he " c l ub" who pr o f i t by s e l l i n g
a l l t he debt . The s e l f - i nt e r e s t of p o l i t i c -
i ans & t he " c l ub" pr event avoi dance.
The most l i k e l y event s t hat we wi l l see
i s no doubt t he r i s k of conf i dence i n t he
gover nment c ol l aps i ng r es ul t i ng i n t he
br oad r i s e i n i nt er es t r at es , t hat t he l i k e s
of Gol dman wi l l cheer . L i k e Scr ucr e c ount i r o
of Gol dman wi l l cheer . Al r eady, t he wor l d i s
s t ar t i ng t o di s bel i eve t he economi c s t a t i s t i c s
out out by t he Uni t ed St at es . Not hi ng i s r e a l
and t hi s i s c ont r i but i ng t o t he st eady dec l i ne
i n Publ i c Conf i dence. Si nce t he " c l ub" makes
a l i v i n g f r om s e l l i n g t he Gov' t debt , t hey do
not hi ng t o hel p t he nat i on, onl y has t en i t s
demi se t o f i l l t hei r pocket s al ong t he way.
Gol d cont i nues t o c ons ol i dat e bel ow
t he $1, 000 l e v e l . Thi s i s a c r i t i c a l s i gn
t hat conf i dence i s s wi ngi ng away f r om t he
gover nment . J us t as Chi na i s concer ned f or
t he do l l a r , t hey speak t he t r ut h unl i ke t he
bul l s hi t we hear f r omWashi ngt on. They ar e
speaki ng wi t h r egar d t o t hei r s el f - i nt er es t
and so i s Washi ngt on. Chi na i s concer ned
about i t s hol di ngs of dol l ar s and has been
r educi ng t hei r mat ur i t y. The Washi ngt on
cr owd i s al s o s peaki ng out of t hei r s e l f -
i nt er es t i ns of ar as t hey do not want t o
f ace r e a l i t y and keep t e l l i n g ever yone -
don' t worry, be happy!
I t appear s gol d i s bui l di ng a base f r om
whi ch a r a l l y up t o $2, 500- $3, 000 ar ea i s
ver y l i k e l y . Ther e i s even a pos s i bl e r i s e
up t o t he $5, 000 l e v e l . But t hat i s t he most
ext r eme pr oj ec t i on. Thi s i s s ugges t i ng t hat
conf i dence i n t he dol l ar i s dec l i ni ng. Thi s
i s not t he c l a s s i c " i n f l a t i o n " nonsense, but
t he c ol l aps e i n cur r ency val ue consequence.
The Dow J ones I ndus t r i al s ar e s t i l l
poi s ed t o make new r ecor d hi ghs wi t h t he
Dow t es t i ng t he 20, 000 l e v e l . However , you
must under st and t hat t he pat t er n of how you
get t her e i s us ual l y t he pendul um. The mor e
you swi ng t o t he bot t om, t he hi gher t he r i s e
t o t he z eni t h.
The pat t er ns can of t en be measur ed i n
t er ms of ener gy swi ngs i n bot h di r ec t i ons .
I t i s l i k e t r av el i ng t o t he moon. NASA used
t he gr avi t y of t he moon t o pr opel t he s hi p
back home. The mor e you swi ng i n one di r ec t i on
short-term wi t h r api d speed, t he hi gher you
wi l l see t he oppos i t e mot i on. I t i s a mer e
ques t i on of c al c ul at i ng t he energy wi t hi n
t he syst em. That I wi l l save t he f or mul a f or
t he "Geometry of Time" wher e i t can be t her e
pr es ent ed i n a mor e aut hor i t at i ve manner .
The cyclical analysis pr ovi des us wi t h
t he event hor i z on. Pattern projection analysis
i s f ocused upon what t hat event wi l l pr oduce.
For exampl e, 31. 4 mont hs i s a key t i me
wher e t her e i s an event hor i z on f r oma maj or
bubbl e t op. Thi s has t r a di t i o na l l y been t he
l ow. The economy may dec l i ne wel l beyond t hat
even f or as much as 23 year s wi t h o s c i l l a t i o ns
of cour se gi vi ng many f al s e i ndi c at i ons t hs
depr es s i on i s over . However , t he under l yi ng
l ac k of publ i c conf i dence l eads t o i nher ent
mi s t r us t of gover nment so l i k e a bi r d t hat
j us t hear s a sound, s oc i et y t akes f l i g h t i n
t he oppos i t e di r ec t i on.
The i deal pat t er n i s t he r a l l y i nt o t he
Sept ember per i od and i f t he Dow cannot get
a mont hl y c l os i ng back above 11, 000, t hen
we wi l l t ur n down i nt o t hat 31. 4 mont h event
hor i z on one mor e t i me. Ther eaf t er , i t appear s
t hat t he new hi ghs wi l l unf ol d af t er t hat
poi nt i n t i me and we wi l l see t he c ol l aps e
of publ i c conf i dence t hat coul d be maj or .
I s t her e hope of avoi di ng a mel t down?
I woul d l i k e t o say yes . But t he dept h of
sheer c or r upt i on i s beyond be l i e f . Ther e i s
no hope of get t i ng t he " c l ub" out of t he
pocket s of gover nment . Democr at or Republ i can
makes no di f f er enc e. We ar e r ul ed by a sheer
pr of es s i on p o l i t i c a l c l as s t hat i s as i ndi s -
t i ngui s habl e f r om t he execut i ve and j u d i c i a l
br anch as anyone can i magi ne.
Democr acy di ed a l ong- t er m ago. Our
po l i t i c i a ns ar e s i t t i n g on t he ot her s i de of
t he t abl e, and we ar e al ways t he meal . I n
Aus t r al i a about 20 year s ago, t he Labour
Gover nment got i n t he " l uxur y" t ax on t he
s l ogan t he r i c h woul d pay f or t hei r French
Wines, Fur coats, Farraris. When t he t ax was
passed, i t i ncl uded a l l e l e c t r i c a l pr oduct s .
Ther e wi l l never be hope f r omgover nment as
l ong as t her e i s no i ndependant management
of t he s t at e.