Does the name Martin Armstrong ring a bell? It should, because over the years he’s been in the news quite a bit. He’s been called a genius, was named economist of the decade, and hailed as a market guru and original thinker. Other opinions are not as flattering.
But this much is certain: He’s risked his reputation by making daring predictions, has won the respect of Wall Street, and has stood up to the establishment’s best punches.
No forecaster has a perfect record, and Armstrong is no exception. Still, his record is so good that investors pay close attention when he speaks. And he has plenty to say.
For example, he predicted there would be “chaos” around the world in 2023 and that’s been proven correct. The war in Ukraine is still raging, another between Israel and Hamas threatens to draw the superpowers into the fighting, and now the FBI is warning of a heightened risk of terror attacks at home. With this said, some background information is in order.
Taking A Chance
Armstrong’s background is certainly unconventional. At 13 years old, he began working at a coin and stamp store, and at 15 he bought a bag of 1,000 rare Canadian pennies. Those appreciated so sharply that for a brief time he was a teenage millionaire. And then their price crashed. He invested the remains of his diminished fortune in a mutual fund, but that also crashed.
According to Wikipedia, Armstrong became the manager of that store, branched into gold coins, and began analyzing precious metals. During the sharp recession in 1973, when his coin and stamp business had declined, he began predicting commodity prices.
Armstrong did a great deal of research. He found that in the 224 years between 1683 - 1907 there were 26 financial panics – one every 8.6 years. He also realized there were 3,141 days in 8.6 years – exactly 1,000 times the number equivalent to the Greek letter pi. 3.141 is significant because it is used in many geometrical formulas.
Later he discovered this number often marked a turning point in many economies and in world affairs; it was even inherent in many human activities. Armstrong wondered whether it could also be connected to other components of world events. According to The New Yorker, he went to the British Museum to calculate the exact number of days until commodities and currencies would reverse course and begin a new trend.
Using those data, he developed what he called an Economic Confidence Model. It predicted an upturn in commodities in early 1977, and to his surprise, he was right. In 1987, the Model predicted something spectacular: The market would crash on October 19. Several weeks before that date, he took ads in newspapers alerting investors to what was coming. The market was amazed.
He has made many other precise forecasts. Among them: the exact date Japan’s Nikkei Index would peak; the day the S&P 500 would make a high in 1998; the financial collapse of both the USSR and Long Term Capital Management, a development so traumatic that it rattled the financial system. The model also predicted US markets would make a high on Feb. 27, 2007 and bottom out on June 18, 2011. These too were very accurate; only later was it realized the Model predicted important underlying changes in markets to the day.
Although Armstrong had kept details of his discovery about pi secret for 12 years, along the way he had gained a large following because of his many accurate forecasts. His clients included people with connections to central bankers and powerful politicians. During this time he worked as a consultant, earning fees as high as $10,000/hour.
But they were not the only ones interested in his work. The CIA was too. They wanted more information about how he forecast the collapse of the Russian ruble. The New Yorker reports they even had agents watching him. Armstrong turned down their request for info.
The Wheel Turns
For 25 years, Armstrong had lived a charmed life. But despite all the fame, fortune, power and prestige on Sept. 29, 1999 he was indicted for defrauding Japanese investors. In 2002, the bank he dealt with agreed to pay $606 million to fully settle all claims and that should have ended the case. But it did not.
According to marcus-vetter.com, HSBC, the bank’s new parent company, unexpectedly wanted a lifetime gag order on Armstrong to prevent him from assisting the Japanese in lawsuits against them. This would also prevent him from disclosing his version of the case. Another unexpected development was the 9/11 terrorist attacks, which destroyed the SEC’s file on him.
While Armstrong was awaiting trial, the court tried to get hold of the code for his model, but he refused to turn it over. According to marcus-vetter, the sentence in cases like these is a maximum of 18 months, but the presiding judge repeatedly reimposed the jail time. Armstrong pressed for release, noting that no money was missing at this point.
But the government saw things differently and dismissed all of his lawyers. “This took place in an extraordinary closed court proceeding where the government had the press illegally removed from the courtroom,” said marcus-vetter. The government did not stop there; they charged him with civil contempt.
Armstrong was kept in prison without benefit of lawyers, trial, or charges for over 7 years – the longest such term in American history. In the words of The Wall Street Journal, “In such a situation, jail time can stretch on for years.” Left with no other option, he pleaded guilty.
Armstrong was moved into solitary confinement for 12 days and denied access to crucial legal documents. The government agreed to drop 23 of the 24 criminal counts if he pleaded guilty to one count of conspiracy “for merging/commingling investors’ accounts with his own trading accounts.” They brought this charge despite the fact that the bank confirmed in a letter “that Armstrong…was contractually allowed to merge/commingle funds.” He was sentenced to an additional five years in prison.
Send In The Legal Beagles
To an armchair analyst, this case is baffling, bizarre, and even a bit Kafkaesque, but we’ll leave it to legal experts to explain whether the court exercised justice or only vindictiveness.
These days, Armstrong still comments about economic and political developments and still speaks his mind. He calls the Biden Administration “a complete, corrupt absolute disaster.” He said a government default would wreck the economy and make millions broke overnight. And he’s concerned that among the illegal migrants entering the country, there are some who may be terrorists. Moreover, “Lockdowns are coming to America again, absolutely.”
As for other issues, Armstrong believes Hamas has won the public relations battle and is trying to isolate Israel on the world stage. “This attack is much deeper than anyone imagines,” he says. He thinks the dollar may get stronger in the near term as overseas investors send their money here for safekeeping. Ultimately, however, even the US economy will plunge.
Armstrong is not always right, but everyone has a right to express an opinion and he has certainly earned the right to express his.
Sources: armstrongeconomics.com; marcus-vetter.com; newyorker.com; wikipedia.org; zerohedge.com
Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.
