Martin Armstrong is a fun character to follow. The famous economic forecaster -- the fomer head of Princeton Economics who is now spending some time in jail for conpiracy to commit fraud -- regularly writes market missives from jail. What's interesting is that his predictions have been uncanny.
For example, look at the chart below. This chart was actually published in 1997. It correctly predicted a major top at the end of the millenium, an interim bottom in 2002, and another top in 2007. It is now predicting the resumption of the downtrend into a major, secular bottom in the 2011/2012 timeframe.
Armstrong is a big believer in Kondratieff cycles -- long-term market cycles that are said to follow and predict long-term human psychology in economics.
Here is a description of his beliefs from a recent New Yorker profile:
"One day, in a newspaper, the young Martin Armstrong came across a list of financial panics between 1683 and 1907. He found that, on average, there had been a panic every 8.6 years. As he read more, he began to suspect that 8.6 was a highly significant number. In the early seventies, Armstrong became a trader and dealer in gold, and began compiling forecasts about commodities and currencies, which he sent out to clients. Over time, forecasting became his business. He constructed what he called an Economic Confidence Model, which he relied on to predict an upturn in the price of commodities in the early days of 1977. It worked."
The legal intrigue and conspiracy theorists behind the famous economic forecaster make him even more interesting to follow. Armstrong was stuck in a long-term legal battle in which he was held in contempt of court for 7 years. He finally pleaded guilty this year and is now serving a 5-year sentence for conspiracy to commit fraud. He regularly published writings from his jail cell which can be followed here.
