Posted Dec 17, 2015 by Martin Armstrong
QUESTION: Marty, it was fantastic to meet you in Berlin and the conference really opened my eyes. Can’t wait for the sneak preview of the Trader level in Socrates. The Investor level is amazing providing a long-term outlook written by the computer. Your staff said the computer was writing daily trading reports in the Eighties, but you never told people it was the computer back then.
This brings me to the Bloomberg interview of Larry Summers who was still arguing against a rate hike before yesterday. The interesting point was his admission that economists cannot forecast the business cycle as you said at the conference. Why do they not even try and then hold up the silver cross and hope you go away?
ANSWER: Traditional economics is incapable of forecasting for economists have no real world experience. It takes a trader to see that there are patterns within markets and by no means are they random if you use technical analysis, Elliott Wave, Gann, or whatever. Each type of analysis (other than fundamental) begins with the realization that this is not some random walk of a dog through the park. The theory of random walk was developed to explain their inability to forecast. You might as well say who knows if the sun will appear tomorrow, it is too complex to try to figure out how the heavens move. There are too many planets and stars to track.
All of the turning points that the Economic Confidence Model has forecast in my lifetime alone, even to the precise day, demonstrates that there is no such thing as a random walk. Yes, there is complexity masquerading as chaos and within there are definitive patterns. Even the Maya discovered time. They studied the heavens, as did the Babylonians. Economists seem to be unable to observe patterns and they claim anyone who does must be the devil. This is illustrating that the social sciences (if you dare call them a science) are still living in the Dark Ages. They will burn anyone at the stake alive who disagrees.
Keep in mind that if you can forecast the economy, then you alter politics. How can politicians run for office and vow to alter the future if they cannot manipulate the business cycle? Communism and socialism have failed because they attempted to alter human nature to manipulate the business cycle. Most modern economists accept, as a general rule, that they can manipulate society and the economy. Therein lies their self-interest and this is why they do not want to examine if what we have revealed exists. I do not care if we are not 100% correct. Being better than 50/50 consistently is impossible as pure luck or coincidence.
As for the pretense that 100% of the people would make reality take place if you could forecast is absurd because they would never all act the same. The evidence of proper management is the story of Joseph from the Bible when he warned the Pharaoh that there would be seven years of plenty and seven years of drought. There will always be two forces, as in politics. This is an excuse why not to try. If we assume there will always be plenty and no cycle, then we are plain stupid as a society.
Some schools are starting to teach the Economic Confidence Model. It is the way to the future.