Saturday, May 19, 2012

Armstrong Economics: Mirror Mirror (Martin Armstrong, 05/14/12)

Armstrong Economics: Mirror Mirror(Martin Armstrong, 05/14/12)

12-Year Old Girl Explains World Debt

April 27, 2012 at the Public Banking in America Conference, Philadelphia, PA 12-year old Victoria Grant explains why her homeland, Canada, and most of the world, is in debt.She spells out the fraud the banks are committing against the people. April 27, 2012 at the Public Banking in America Conference,

If you put 100 000$ in bank, bank has the right to give credit for 500 000$ to someone else based on your amount of money. This "law" is in all western countries, from Europe to USA. That means, 400 000$ dont really exist. But those 400 000$ will be loaned to someone, and that someone will take mortgage on his house/firm. If he can't pay it later on, bank will posses his house/firm. With no money from bank, they now have REAL possesion! As easy as that. Magicians

The Bank Runs In Greece Will Soon Be Followed By Bank Runs In Other European Nations

The bank runs that we are watching right now in Greece are shocking, but they are only just the beginning. Since May 6th, nearly one billion dollars has been withdrawn from Greek banks. For a small nation like Greece, that is an absolutely catastrophic number. At this point, the entire Greek banking system is in danger of collapsing. If you had money in a Greek bank, why wouldn't you pull it out? If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically. In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro. So if you had money in a Greek bank, it would only make sense to withdraw it and move it to another country as quickly as possible. And as the eurozone begins to unravel, this is a scenario that we are going to see play out in country after country. As member nations leave the eurozone, you would be a fool to have your euros in Italian banks or Spanish banks when you could have them in German banks instead. So the bank runs that are happening in Greece right now are only a preview of things to come. Before this crisis is over we are going to see bank runs happening all over Europe.

If Greece leaves the euro, the consequences are likely to be quite messy. Those that are promoting the idea that a "Grexit" can be done in an orderly fashion are not being particularly honest. The following is from a recent article in the Independent....

"Whoever tells you a Greek exit would be no big deal is an idiot, lying or disingenuous," said Sony Kapoor of the European think-tank Re-Define. Economists fear that a disorderly exit would prompt a huge run by investors on Spanish and Italian debt, forcing those countries to seek support from an EU bailout fund, which, with a capacity of just €500bn, is widely regarded as too small to cope with those pressures.

A Greek exit from the euro would not only result in a run on Spanish and Italian bonds, but it would also likely result in a run on Spanish and Italian banks. (more)

Gold/Silver & Mining Stocks Going From Today’s Cycle Bottoms to Parabolic Peaks by 2015

Once every year gold and stocks form a major yearly cycle low while other commodities form a major cycle bottom every 2 1/2 to 3 years. Occasionally all three of these major cycles hit at the same time….That’s what’s happening right now and it should lead to a powerful rally over the next 2 years, culminating in 2014 when the dollar forms its next 3 year cycle low.

So says Toby Connor ( in edited excerpts from his original article*.

Connor goes on to say, in part:

The CRB Index and US Dollar Index

The implications are that once the CRB has completed this major cycle bottom we should see generally higher prices over the next year and a half to two years, presumably topping during a major currency crisis as the dollar drops into its next three year cycle low in the fall of 2014.


I think the recent rally in gold is signaling that gold has put in its yearly cycle bottom. Since gold did not break below the December low of $1523 I think we can assume that this is a B-wave bottom and should be followed by the consolidation phase of a new C-wave that should break out to new highs either later in the fall or next spring. [Read:

The next two years should generate an even more impressive advance than the 2009-2011 rally, possibly even generating the bubble phase of the bull market in late 2014 or early 2015 as the dollar crisis reaches a crescendo. [Connor is not alone in his assessment that the peak will be in that timeframe.


Eric Sprott – Governments Frightened of Panic Liquidation Event

from KingWorldNews:

Today billionaire Eric Sprott told King World News that governments are desperately trying to avoid a “Liquidation Event.” Sprott, who is Chairman of Sprott Asset Management, also warned the the market is liquidating, “irrespective of whether the powers that be want it or not.” Here is what Sprott had to say about the unfolding crisis: “Something has to be done because it’s totally out of control these days. I mean you can’t have bank runs (like we’re seeing). The one thing the powers that be, the central banks and the governments, have tried to do is to avoid what I call a ‘Liquidation Event.’

Sprott continues @

Goldman Sachs e-mails show illegal naked short selling was bank’s policy

It doesn’t happen often, but sometimes God smiles on us. Last week, he smiled on investigative reporters everywhere, when the lawyers for Goldman, Sachs slipped on one whopper of a legal banana peel, inadvertently delivering some of the bank’s darker secrets into the hands of the public.

The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time – primarily with the retail giant, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks.

Last week, in response to an motion to unseal certain documents, the banks’ lawyers, apparently accidentally, filed an unredacted version of Overstock’s motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they’ve been fighting for years to keep sealed. (more)

How Money Dies

Wall St Week Ahead: The market is oversold, but major signs say "sell"

Normally a big decline would set up Wall Street for a technical rebound. But that may not be the case next week, even after the market posted its worst weekly loss for the year and the S&P fell for six straight sessions.

With the corporate earnings season drawing to an end and recent U.S. economic data raising doubts about the pace of growth, the S&P 500, which is down 7.3 percent so far in May, could decline further next week as concerns about the financial health of Europe persist.

"What has changed in the world since April? We went from hearing a constant refrain that the world is awash in money and markets must go higher to hearing nobody wants to take any risk. ... All in a week," said Peter Cecchini, global head of institutional equity derivatives at Cantor Fitzgerald & Co in New York.

The S&P 500 fell 4.3 percent for the week, its steepest weekly decline this year, and closed below 1,300 for the first time in four months. (more)

Catch This REIT if the Roof Falls AvalonBay is a buy once it hits this target

AvalonBay Communities (NYSE:AVB) – This real estate investment trust specializes in upscale apartment communities. An improving U.S. economy with high apartment occupancy levels should result in higher rental rates for AVB, and new development activities will be an important driver of earnings in 2012. FFO per share forecast in 2012 has been adjusted upward to $5.40 vs. $4.57 in 2011 since it was highlighted in our April Top Stocks to Buy. AVB has a dividend yield of 2.64%, which is expected to increase.

On March 30, the stock broke from a multiple top with a trading objective of $150 and made it to over $149 before profit-taking and a broad market selloff drove it down. Both longer-term investors and traders should consider AVB as a buy if it falls to $135. Our longer-term target remains at $175.