Martin Armstrong says Major Turn at Hand – batten down the hatches, or…
Written by Martin Armstrong – former chairman of Princeton Economics International Ltd.
Friday, 24 April 2009 07:44
A turn date in Martin Armstrong’s Economic Confidence Model passed on April 19th or 20th, depending on how many days you use to calculate a year. The graphic shows that the model is predicting a top at this turn date before heading down into a long-term low in June 2011. As Martin explains in the essay below, the model does not necessarily mean that a top in the Dow Industrials is at hand.
For instance, the 1989 turn date forecasted a top in the Japanese Nikkei. The Economic Confidence Model was created with inputs from around the world and therefore is not limited in scope to just pinpointing stock market tops and bottoms. Personally, I am looking at the US Dollar, the Treasury market or the Shanghai market for signs of a top. All these markets have experienced strong rallies off of recent bottoms and might be ready to turn lower.
Why Models Are Our Only Hope?
Should we create a model to manage our social-economy?
In the real world, experience counts as the primary attribute in any field. The question we face in the middle of this economic crisis is simply this: "Is there anyone at the helm who has any experience at all?" Can we disregard gathering the experience of those who have gone before us by constantly re-inventing the wheel for every crisis? Wouldn’t it be nice to have gathered a database so when an economic panic took place, and we tried a particular stimulus, the result was a particular effect. Yet for every economic crisis, we seem to start at the beginning retaining no knowledge or experience from the past assuming in our arrogance that that was then.
It is time to start taking advantage of the collective progress of man that has particularly developed during the last Century. We have not merely landed on the Moon, we have developed sophisticated computers to get us there. We have even conquered many forms of disease, also through the process of scientific learning.