Two years ago Martin Armstrong’s Computer Model predicted the Trump Presidential win and the Brexit vote. In 2013 at the World Outlook Financial Conference, Martin gave the date in February, 2014 for the Russian invasion of Ukraine. This year Marty’s model predicted the independence vote in Catalonia – but that wasn’t the one that blew me away.

In September, I asked Marty about Bitcoin. He told me it was tough to get a read because of the lack of historical trading data and volume numbers. With that in mind, he said the short-term chart looked like the uptrend could carry much further than most people expected but – and it was a big BUT – his computer model was forecasting a top starting the week of December 18. (The actual peak was December 17^th and 18th.)  

I don’t know why I was surprised. I’ve been following Marty’s model since 1983 and in that time it has accurately predicted so many major events from the date of the fall of the Berlin Wall to the top of the Nikkei Index in 1989.

I could go on but allow me to share one more story. Forgive me if you’ve heard me tell it before but it’s worth repeating. The first time I saw the documentary about Marty – The Forecaster – in 2014 I was shocked to see a slide from our 1998 World Outlook Conference in one of the scenes.

The slide read:

• 1998 Collapse of Russia
• 1999 Low in oil and gold
• 2000 technology collapse (like railroads in 1907)
• 2002 Bottom US share market
• 2007 Real Estate Bubble – Oil hits $100
• 2009 Start of Sovereign Debt Crisis
• 2011 – 2015 Japan Economic Decline
• Euro begins to crack due to debt crisis
• 2015.75 – Sovereign Debt Big Bang

There it was…all of it happened…absolutely amazing – so maybe I shouldn’t have been surprised with the Bitcoin call.    

So What Now

Regular attendees of the World Outlook Financial Conference heard Marty’s forecast in 2013 that the Dow Jones was on its way to 18,000 and once breaking that barrier would hit 23,700, which it did this year. And when it broke through that number – another major move to the upside would take place.   In November, in anticipation of the speed of which the markets are moving, Marty published a new report called How To Trade A Vertical Market… obviously great timing given the Dow just added the fastest 1000 points in history.  But for how long and how far?

We’ll get the answer this year as Marty’s model has already predicted that 2018 will feature a Panic Cycle, which could come shortly after the World Outlook Conference. More importantly The Panic Cycle will feature major moves in both directions depending on the specific market. As Marty says, Panic Cycles are notorious for trapping people on the wrong side of the market, so obviously it’s essential to be on the right side in order to protect yourself and profit from what’s coming.

Adding to the volatility is that Marty forecasts 2018 as the beginning of the Monetary Crisis Cycle, which impacts every market.

We’re already seeing it in the weakness of the US dollar and the accompanying strength of the euro and to a lesser extent the loonie. But is the US dollar weakness an opportunity to buy? Conversely is the euro strength an opportunity to play it to go down? Get those questions right and you can make a lot of money.  

Marty’s Summation

“This is going to be a crazy year that seems to be divided into two trends in many markets but not all.”  And by the way, he is responding to a ton of requests, including one from me, and he is producing a special report on Canada that will be available at the Outlook Conference.

Marty will be with me Friday night, February 2^nd and again on Saturday afternoon, February 3^rd.   We’ll cover stocks, gold, interest rates, the bond market, currencies and oil.

It’s an incredible opportunity to hear who I consider the top forecaster in the world.

One More Question:  Why Does He Do It

Armstrong Economics is in demand throughout the world. They advise on literally trillions of dollars worth of investments. The Wall Street Journal called him the highest paid financial advisor in the world.  So why does he find the time for us no matter where he is in the world?

Simply put, there are two reasons. First off, we’ve been friends for over 35 years and he has always been generous with his time and support. And secondly, he has a major commitment to helping individuals, (especially our children who are inheriting this financial mess), navigate through these increasingly volatile and chaotic times.

I hope you to take advantage of the opportunity. If you already have your ticket great! Tell a friend, tell a family member too!

Sincerely,

Mike

P.S. Getting the chance to hear Marty is one of the best reasons to bring a younger person to the conference. It will be an amazing eye opener that he or she won’t get at university or in the mainstream media. That’s why we have a special offer – if you buy a ticket – you can bring a student absolutely free.   The only thing is that we ask you to let us know that you want a student ticket when you purchase your ticket. We have only 23 of these tickets left so please don’t wait.

P.P.S  Date: The World Outlook – Friday, February 2^nd and Saturday, February 3^rd.

         Place: The Westin Bayshore, Vancouver, B.C.

        Tickets: – Go to www.moneytalks.net/events/world-outlook-conference-2018.html

P.P.P.S   There are still a handful of special rate rooms available at the Westin. The special rate expires tomorrow! CLICK HERE to reserve 

Can’t make it in person? Subscriber to our HD Video archive – get unlimited viewing of all our mainstage speakers including both of Marty’s presentation on any device from anywhere in the world. CLICK HERE to order

1. They Chose Rape, Beheadings and Murder

In one of the most controversial stances of the year. Prime Minister Trudeau vows to rehabilitate returning ISIS fighters. His Minister of Safety disagrees.

….continue HERE

2. Martin Armstrong: The Municipal Debt Crisis Begins

I have previously reported that about 50% of German municipalities are insolvent. This is a global trend and we are witnessing it in the United States as well.

…read more HERE

3. Market Now Entering Mania Phase

“We have negative interest rates wherever we look, either on a real basis discounted for inflation or in nominal terms,” he said.

Now, with the recent GOP tax cuts reducing the corporate rate and freeing $2.5 trillion sitting overseas for potentially more stock buybacks, we’re looking at a burgeoning mania in the works.

….read it all HERE

On the surface, the sleep industry appears to be a relatively undesirable space for a startup.

Beds and mattresses are heavy and bulky, and sales are traditionally based on a tactile experience that consumers have with products in physical stores. Holding inventory is expensive and risky, and shipping is a nightmare.

Sure, people are willing to shop online for almost everything these days – but when up to 40% of life is spent lying on a bed, isn’t that a product that should be tested out before a purchase decision is made?

STRANGE BEDFELLOWS

Despite the conventional wisdom to the contrary, the $15 billion mattress industry has seen the entrance of several ambitious startup companies, and they are starting to put a dent in market share.

Today’s infographic from Online Mattress Review tells the story of how disruption is occurring in this unlikely space – and it all starts with big changes to the business model to make online mattress sales more palatable for both the company and the consumers.

AN UPDATED MODEL

Here are a few key ways online mattress companies, like Casper or Purple, have changed up their value proposition to customers to make life easier for themselves:

Money-back guarantee
By offering a money-back guarantee of up to 100 days, online mattress companies give customers plenty of time to test their product. This reduces the chance of buyer’s remorse.

Going all-in on memory foam
Memory foam, as well as other mattress types that can be compressed down in size, allow for fast and easy shipping. Consumers can take a box the size of a filing cabinet and easily navigate it around corners and doorframes in a household setting.

Fun, relationship-based marketing
To appeal to the millennial market, Casper has taken on some quirky initiatives, such as creating Insomniabot-3000 (a chatbot for people who can’t sleep), and a Labor Day Mattress “Sail” boat cruise.

COMFORTABLE GROWTH

In 2016, the market share for online mattress sales was 5%, and it’s expected that the number for 2017 could be at least double that.

While tech startups and the sleep industry may seem like strange bedfellows at first, it’s clear that consumers are embracing the chance to get in bed with the idea.

….World Debt Is Rising Nearly Three Times As Fast As Total Global Wealth

Some nasty dark clouds are forming on the financial horizon as total world debt is increasing nearly three times as fast as total global wealth.   But, that’s okay because no one cares about the debt, only the assets matter nowadays.  You see, as long as debts are someone else’s problem, we can add as much debt as we like… or so the market believes.

Now, you don’t have to take my word for it that the market only focuses on the assets, this comes straight from the top echelons of the financial world.  According to Credit Suisse Global Wealth Report 2017, total global wealth increased to a new record of $280 trillion in 2017.  Here is Credit Suisse’s summary of the Global Wealth 2017: The Year In Review:

According to the eighth edition of the Global Wealth Report, in the year to mid-2017,total global wealth rose at a rate of 6.4%, the fastest pace since 2012 and reached USD 280 trillion, a gain of USD 16.7 trillion. This reflected widespread gains in equity markets matched by similar rises in non-financial assets, which moved above the pre-crisis year 2007’s level for the first time this year. Wealth growth also outpaced population growth, so that global mean wealth per adult grew by 4.9% and reached a new record high of USD 56,540 per adult.

This year’s report focuses in on Millennials and their wealth accumulation prospects. Overall the data point to a “Millennial disadvantage”, comprising among others tighter mortgage rules, growing house prices, increased income inequality and lower income mobility, which holds back wealth accumulation by young workers and savers in many countries. However, bright spots remain, with a recent upsurge in the number of Forbes billionaires below the age of 30 and a more positive picture in China and other emerging markets.

There are a few items in the Credit Suisse’s summary above that I would like to discuss.  First, how did the world increase its global wealth at a rate of 6.4% in 2017 when world oil demand only increased 1.6%??

As we can see from the IEA – International Energy Agency’s Global Oil Demand table above, total world oil demand only increased 1.6% over last year.  Thus, the rate of increase of global wealth of 6.4% in 2017 was four times higher than the 1.6% increase in world oil demand.  I would imagine some readers would stand on their soapbox and emphatically claim that energy has nothing to do with wealth creation.  Unfortunately, these individuals somehow lost the ability to reason along the way.  And we really can’t blame them for making such an absurd remark because they probably believe their food magically appears on the Supermarket shelves.

Second, the financial wizards at Credit Suisse reported that global wealth also outpaced the population growth.  What they are suggesting here is that the “Millenials” who (many) are becoming wealthier by sitting in front of a screen and clicking on a mouse than their grandparents (the poor slobs) who were mainly working in the manufacturing industry by producing real things.

Third, while the Credit Suisse analysts stated that the Millenials were facing some disadvantages, there was a bright spot with a recent surge in the number of Forbes billionaires below the age of 30.  Well, ain’t that a lovely statistic.  What once took an individual at the ripe old age of 55-70 years to achieve a billionaire status, now can be done right out of college.  It’s probably not a good sign for the economy going forward that we are seeing more billionaires below the age of 30.

Global Debt Is Destroying Real Wealth

Okay, now that we know the global wealth reached a new record high in 2017, what about the other side of the story?  You know… the debt.  As I mentioned in my previous article, ECONOMICS 101 states:

NET WEALTH = ASSETS – DEBTS

Now, that equation above is a simple one… kind of like 2 + 2 = 4.  However, the financial industry likes to focus on the assets and not the debts.  But, according to a recent article on Zerohedge, Global Debt Hits Record $233 Trillion, Up $16Tn In 9 Months, the world added more debt in 2017 than total U.S. GDP:

As we can see, total global debt increased from $217 trillion at the beginning of 2017 to $233 trillion in the third quarter of 2017.  That is a $16 trillion increase in global debt in just nine months.  While U.S. GDP hit $19 trillion in Q3 2017, if we add another quarter for the increase in global debt, it could surpass $20 trillion for the entire year.

So, even if global wealth surged in 2017, so did world debt.  According to the data, global wealth increased by $16.7 trillion in 2017 while global debt expanded $16 trillion… nearly one to one.  However, this is only part of the story.

If we look at the increase in total world debt and total global wealth over the past 20 years, we can see a troubling sign, indeed:

Since 1997, total global debt increased from $50 trillion to $233 trillion compared to the rise in global wealth from $120 trillion to $280 trillion.  There are two disturbing trends shown in the chart above:

1.  Global Debt has increased 366% vs. 133% for Global Wealth since 1997
2.  Net Wealth was $70 trillion in 1997 versus $47 trillion in 2017

If we compared the percentage increase in global debt versus global wealth, global debt is rising at nearly three times the rate of global wealth.  Furthermore, doing simple arithmetic by substracting DEBTS from ASSETS, global net worth fell from $70 trillion in 1997 to $47 trillion in 2017.

By putting the numbers together, right in front of our eyes, we can clearly see that the world is going broke by adding debt.  Basically, we erased $23 trillion in Global Net Wealth in the past 20 years.  However, I believe the situation is much worse than the figures shown above.  For example, I came across an article several months ago on Zerohedge that also reported the increase in global debt, stated it did not include FX Swaps, etc.  According to their data, Foreign Exchange Swaps likely exceeded $13 trillion.  FX Swaps are more short-term debt instruments, but they are still debt instruments.

Moreover, we have no idea what other nasty debts or obligations are hidden out of sight of the public.  Regardless, if we were just to include the FX swaps worth $13 trillion, the estimated net worth of Global Wealth would only be $34 trillion ($280 – [$233 +$13] = $34).

The Percentage Of World Gold Investment To Global World Assets Is Much Higher Than We Realize

Now, here’s how the financial situation gets really interesting.  If we go by NET WEALTH, then the value of global gold investment as a percentage of world assets, IS MUCH HIGHER.  According to the typical financial asset allocations, precious metals comprise approximately 1% of total global assets.  The following chart shows that total global gold investment is valued at $3 trillion and silver at $51 billion (based on $20 silver, last year):

Thus, $3 trillion in the value of world gold and silver investment equals a little bit more than 1% of the $280 trillion in global wealth.  However, if we are clever and remove the debts, the real NET WEALTH is closer to $34 trillion.  Thus, total world gold and silver investment comprises nearly 10% of GLOBAL NET WEALTH, or ten times higher than it is currently valued.

Furthermore, we must remember, physical gold and silver, purchased and held in one’s hand has no debt attached to it.  Of course, this assumes that an individual didn’t take a loan out against their precious metals holdings.  Thus, the precious metals have always been the highest quality stores of wealth for 2,000+ years… even though the Millenials forgot about them for the promise of millions of Crypto profits.

Unfortunately, the situation is much worse than what the figures in the charts above reveal.  Why?  Because, the only way that debts can be paid down is if we have another $233 trillion worth of profits from economic activity, correct?  Now, I am not talking about $233 trillion in costs; I am talking about PROFITS.  Big difference.

To pay back $233 trillion in debts, we have to burn one hell of a lot of energy… don’t we?  That’s correct; we have to burn energy to create economic activity.  And not just plain ole economic activity, PROFITABLE economic activity.  Well, we are in BIG TROUBLE because we have been burning one hell of a lot of oil (95+ million barrels per day), but global debts are increasing faster than global wealth.

So, it’s just a matter of time before GRAND FACADE comes crashing down.

Here’s how I see the future unfolding…

1. The Falling EROI- Energy Returned On Invested will continue to gut the oil industry, and in time the world will experience CLIFF LIKE declines in global oil production
2. As oil production suffers massive declines, global debt will become unmanageable.
3. As debt becomes unmanageable, it starts to collapse.
4. As debts collapse, so will assets.  Why?  Because debts are the other side of the assets
5. As assets collapse, so with the value of STOCKS, BONDS, & REAL ESTATE
6. As investors watch their investments implode, some who still can think for themselves will buy gold and silver
7. As investors flock into gold and silver, patience will finally pay off for precious metals holders

Please stay tuned for my first SRSrocco Report Youtube video to be out in the next two days.  I have all the charts and graphs finished, just working on getting my mouth to work correctly for the voice-over.

Lastly, I wanted to thank all the newest and existing Patrons and SRSrocco Report Members who support the site.  Your generous support has allowed me more time to start other projects (Youtube videos & new Forum.. coming this week) as well as the ability to write more detailed articles.  I believe the Youtube videos will be able to explain some of the analysis that might be difficult to understand.

Check back for new articles and updates at the SRSrocco Report.

Join me in a look at the long term trends that are currently reversing in gold, silver, dollar, euro and the yen.

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