Friday, August 20, 2010

Bond bubble created as bankers protect their own presages "lost decade" ahead for U.S.: Raymond Merriman's weekly preview comments

Treasuries made new "Bubble II" highs as stock indices dropped with the solar storm Thursday, and fears of the Hindenburg Omen and double-dip recession were voiced. Jobs are still scarce, workers are tapping their 401(k) accounts in record numbers, and the powers that be are concerned about ... spending taxpayer money and protecting bankers ... And by the way, if you like Martin Armstrong's Economic Confidence cycle thoughts then you'll want to read this, too. We start our weekend as usual with Raymond Merriman's weekly preview. His perspective on the markets, economy, and even political climate is truly unique. He always has remarkable insights to share. We'll see what he's saying in his public comments this weekend, incorporating his cycles analysis with his financial astrology for equities, bonds, currencies and commodities - for commentaries that are always fascinating. Here's Ray Merriman's set of public preview comments for the upcoming week, from his site at Merriman Market Analyst MMACycles Weekly Preview Comments:

MMA Comments for the Week Beginning August 23, 2010
Written by Raymond Merriman

Review and Preview

We made it. The deepest part of the Cardinal Climax midsection is ended now, from the point of view of where the majority of the longest planetary cycles congregated (July 21-August 21).

The world didn’t end. But I do believe political and economic leaders of the world (particularly here in the USA) made critical decisions during this time band that will reshape the balance of power in the world over the coming decade, and perhaps several decades. The most notable decisions in this regard included the passage of the Financial Regulatory Reform Bill on July 21, and the August 10 decision of the Federal Reserve Board to resume purchases of U.S. Treasuries to keep long-term interest rates down (along with their short-term Fed funds rate), instead of commencing an” exit strategy” to draw down its hugely inflated balance sheet since the crisis of 2008. Although the purpose of each was to protect the consumer and avoid a double dip recession, I don’t think it will accomplish either. The only people protected by each of these acts will be the bankers themselves. And even that protection will be short-lived. The result, in my opinion, will be exactly the same as the “lost decade” in Japan, which of course everyone disagrees with. This time (and this country’s conditions), is different. Really? I don’t think so.

Last week I discussed all the bearish divergence signals occurring in global equity markets since June 21. Well, this week most of the equity markets started a recovery that lasted into Wednesday-Thursday. But then it ended abruptly as most fell hard into the end of the week. Some of these indices made new lows for the month, and others closed lower but did not make new lows. In almost all cases, however, it was a week that started out with hope and ended in worry, which is about par for the course when Mercury turns retrograde AND Saturn makes its third and final waning square to Pluto, while in opposition to Jupiter. That is the week that was.

Short-Term Geocosmics

Mercury will be retrograde for the next three weeks, and I suspect analysts will be looking back and assessing what just occurred in the past month, while trying to figure out what it means for the future.

Except for Mercury retrograde, there are few geocosmic signatures in force this coming week. The Sun will leave Leo and move into Virgo on Monday, commencing a full moon on Tuesday. That’s really about it, which suggests this will be a week of reflection and analysis. The focus of analysis will probably upon jobs, which is the domain of Virgo. Where have all the jobs gone? More importantly, when will they return?

But that doesn’t mean the markets and the news will be quiet for long. You may remember the last time Mercury went retrograde (April 17-May 11). That was when the Deepwater Horizon Oil rig exploded in the Gulf of Mexico, leading to the worst oil spill in American history (April 20). That was also the day that Chiron ingressed into Pisces. The high of the year unfolded in the many world equity markets then too, such as in the DJIA on April 26, when Saturn also formed its fourth opposition to Uranus. It was during this period that the DJIA had that unbelievable 1000-point drop in about 25 minutes, but then recovered 800 of those points into the close (May 6). This Mercury Retrograde period will end nearby to the second passage of the Jupiter-Uranus conjunction on September 18. We could see markets exhibiting huge price ranges again.

With most of the signatures of this Cardinal Climax ending a one-month peak as of Saturday, August 21, we are apt to observe one of two market behaviors. Either the trends that started late last week continue into this week and maybe beyond, or we find markets drifting back and forth, looking for clarity in an environment that seems like a fog. With Mercury retrograde, we are apt to see mixed economic signals and contradictory political ones, making clarity a rare commodity. The most disturbing characteristic under Mercury retrograde happens when political leaders try to rush into a decision before a matter has had proper time for study and debate.

Longer-Term Thoughts

The Sun will start its month-long trek into Virgo now, so let’s talk about jobs in light of the recent government and central bank decisions during the mid-section of the Cardinal Climax last week. The jobs crisis is not just a USA phenomenon. Friday’s Wall Street Journal reports “Jobs Crisis Grows as Greece Falters.” The austerity program the IMF advised for Greece is clearly sending that country into a much deeper recession (it was obvious that would be the result, which makes you wonder what is the purpose to the IMF). Friday’s Wall Street Journal also reported “Jobless Claims Jump in New Sign Recovery is Sputtering.” The too was obvious given the economic and political direction (and lack thereof) with the U.S Congress and White House. You can’t spend you way out of such a deep recession anymore than “You can bomb the world to pieces, but you can’t bomb it into peace” (lyrics from “Bomb the World,” by Michael Franti).

In Wednesday’s Wall Street Journal was an excellent article by Jeremy Siegel and Jeremy Schwartz titled, “The Great American Bond Bubble.” Readers may recall that I expected a bubble in financial markets this summer related to Jupiter conjunct Uranus in Aries. My initial thought was that this bubble would happen in equities. But by early July my opinion changed that it would happen instead in U.S. Treasuries. The August 10 decision of the Fed to resume buying of U.S. Treasuries, instead of drawing down their balance sheet, virtually assures that Treasuries are indeed now entering the realm of the “Double Bubble Trouble,” a return to rates that were present in mid-December 2008 when transiting Jupiter was in conjunction to the natal Jupiter the Federal Reserve Board chart. The 30-Year Treasury Bonds ran up to a record high of 143 then. Within six months they were back down to 113. On Friday, August 20, they were making a new yearly high above 135, having gone almost vertical on a weekly chart since the 114 level of April 9.

To digress just a bit, I would like to use this to support my contention that the Fed decision could very well result in a “lost decade” in the USA, just as happened in Japan in the 1990’s (and again in the first decade of the new century, so it was really two lost decades, and this wonderful country is still in “lost-but-not-found” land). After Japan’s economy and stock market crashed following its all-time in December 1989, their government and central bank also tried a “quantitative easing” program of reducing interest rates and supporting its bond market. The JGB (Japanese Government Bond) rallied from a low of about 87 in 1990, to an all-time high of - guess what? – 145 in 2003. And it is rallying again, currently around 142 as of Friday. So they too have a case developing of “Double Bubble Trouble.” But the more important point is this: did it help their economy? Did it grow their job market? Did it help their stock market? No.

So what will be the result of this “Great American (and Japanese) Bond Bubble?” First of all, it is devastating “Main Street” savers, like retirees and soon-to-retire persons. Although the value of Bonds has increased, the dividend yields (interest) which savers use to depend upon for spending has evaporated. This means many (most) have to draw down their savings just to survive. They are no longer purchasers in the consumer-driven economy of anything but the essentials. A great segment of society that is necessary to enhance economic expansion is injured and out of play. Furthermore, as Siegel and Schwartz state, “Is there any doubt that interest rates will rise over the next two decades as the baby boomers retire and the enormous government entitlement programs kick into gear?” In other words, this bubble will burst, as all bubbles do, and it will end badly, as all bubbles do. It may even end in a hyperinflation, for as Martin Armstrong, former Chair of Princeton Economics ( writes, “When empires die, the clash between private and public assets swing into hyperactive mode…. When people are afraid the money will become worthless they spend it faster before it depreciates and that creates hyperinflation. It all depends on where the confidence resides – with government or within the private sector. We are headed into the latter.”

But back to the question about employment, as we are entering Virgo and pundits will be discussing the jobs situation over the next month. Here is part of the future, and the shift in balance discussed last week per the Cardinal Climax, and alluded to by Armstrong. We have reached the peak in government employment. Maybe not at the Federal level yet, but most definitely at the state and local level, where the great majority of states and communities are headed towards bankruptcy and default. They will be forced to lay off state and local government employees in droves in the next year or so. Where will they go? How will they live with no interest on their savings due to the low interest rate decisions of the central bank which only seems to benefit other bankers – and large banks at that who are still “too big to fail?”

On August 16, the WSJ reported that the 110th bank failure in the USA for this year occurred the prior week. The trend continues towards record bank closings of small banks, who are being gobbled up by the “too big to fail banks.”

But the good news is that we made it through the heaviest part of the Cardinal Climax, which means (to me) a New Era is beginning. It may be slow in getting off the ground, but I think the majority of people will now see that the relationship between government and its people has to change, and it will now begin to change. As with every successful relationship, the alchemical balance between closeness and separation needs to be found. Then trust can start and from that, mutual growth and even excitement about the future will follow.


We are now accepting orders for the Forecast 2011 book now via phone (1-248-626-3034), fax (1-248-538-5296), email (, or through our shopping cart online ( We are pleased to announce the price will remain the same as last year. That is $55.00 if ordered after October 31, and $45.00 if ordered before (plus postage). We will also be offering special 10% discount rate for our subscription services to those who also pre-order Forecast 2011. This is a great deal, for in the words of one of our daily subscribers recently, “I don't know whether you want to hear/take any comments at all but I wanted to say that, so far, I am a very happy camper and the only thing which I think that I did wrong with subscribing to your service that I did it TOO LATE! What was I thinking....? :-)" - Remko Rood, Lugano, Switzerland, futures trader and technical analyst, former cash grain trader.

For a review of the forecasts from the Forecast 2010 book, please go to, and scroll down to about the third or fourth article on the opening screen. Or go directly to

The monthly MMA Cycles Report and its companions – the MMA Japan Cycles Report and MMA European Cycles Report – will come out this week, Monday and Tuesday, via posting on our web site, and attachment via direct emails, for subscribers. This report covers our longer-term analysis of the U.S. stock market, precious metals, crude oil, currencies, Treasury Notes, and grain markets. The MMA Japan Cycles report covers the Nikkei, JGB Bonds, and the Dollar-Yen. The new MMA European Cycles Report covers the German DAX, Swiss SMI, and Netherlands AEX, each in English only. These reports are included in the Japanese, German, and Dutch translated MMA Cycles Report respectively. New yearly (or renewing) subscribers to these reports will receive a free copy of the Forecast 2010 book while supplies last (see below). You also qualify for a special discount t on a yearly subscription if at the same time you pre-order Forecast 2011. For subscription information, please go to SERVICES at

If you are an active short-term trader, you may be interested in our Weekly or even Daily Market reports with short-term trading recommendations. It is the only way I keep in touch with traders on a daily or even weekly basis, as I no longer offer personal consultations. These reports give in-depth analysis of the DJIA, S&P and NASDAQ futures, Euro currency (cash and futures), Swiss Franc, Dollar/Yen cash and Yen futures, T-Notes, Soybeans, Crude Oil, Gold and Silver. The daily reports cover all stock indices listed above, as well as futures in Euro, T-Notes, Soybeans, Gold and Silver. Subscription to the daily report also includes the weekly report. For more information, go to, or call our offices at 1-248-626-3034. In the words of one of our subscribers: “I recently subscribed to your weekly report and am finding it to be excellent and a very useful companion to the MMA Cycles Report. I can't imagine now managing my investments without them.” Order now with the Forecast 2011 Book and receive a special 10% rate reduction through October.

CD’s DVD’s, and MP3’s of the July 11 webcast are now available!!! Each of these various ways to see the event can now be ordered via our website at (just click the opening banner), or by calling 1-248-3034 or email operations at The cost of each is $45.00, plus postage if necessary. This webcast covered our outlook for stocks, precious metals, interest rates and Treasuries, foreign currencies vis-à-vis the U.S. Dollar, and Grains. We pick this time because it was right before the astrological midpoint of the Cardinal Climax, which is taking place now. It may be the peak of the huge trend reversals expected in many of these markets, aided and abetted by major changes of trend in geopolitical matters. It is interesting to see how the stocks, grains and currencies moved right up into this time band, as outlined in this presentation. You won’t want to miss this. Order now, because most of the trading opportunities presented are in effect mainly from July 21 through October 8, 2010!!! is holding a three-day video conference on Friday, Saturday, and Sunday, October 1st, 2nd, and 3, 2010. This pioneering Internet astrological conference features dozens of internationally known speakers. Very economically priced, all participants have access to all live broadcasts with the ability to replay them from the archives for up to three months. Call (212) 929-4507 or email

I am oftentimes asked for recommendations of a money manager who uses my methods, since I won’t manage other people’s money. That is especially true now with the volatility in the market place as of late. The thing is, almost all money managers I know use their own systems. But many subscribe to my services and share my thoughts about the future of the economy, various financial markets, and how to position one’s portfolio along these lines. One money manager who subscribes to our services that I would suggest for those looking to structure a longer-term portfolio, such as a retirement account, is Duke O’Neill of Capstone Capital Wealth Management, Boulder, Colorado. He can be reached at, or 1-(303) 247-0600. For those looking for a professional trader of commodity and futures contract might consider Ted Lee Fisher at Ted is a legend in financial futures and has a seat on the CME. Both are very knowledgeable of the tools I use, of the way I am looking at markets, and yet each makes their own decisions as exactly when to enter and exit any market.

To the above list, I would also like to recommend long-term MMA subscriber Erwin Brunner of Zurich, Switzerland. Mr. Brunner is the founder of BrunnerInvest AG. One of his five funds was awarded the “Best in-house fund of funds” in the world recently. Mr. Brunner is a former director of the Swiss Banking Corporation (today it is known as UBS), and a general director of Rothschild Bank in Zurich. As an independent wealth manager for high net worth individuals and institutional clients only, he places his clients into the funds of the best performing fund managers in the world, via his own research and experience. For high net worth readers interested in Mr. Brunner’s funds, please contact him through

OK. You’ve asked about classes in Financial Astrology, and I am giving two of them in great South American cities in late September and early October. Since these constitute “investment education,” many of you will be able to write the expenses of this trip off (travel, some meals, and cost of conferences). Here are some more details of each – and I hope to see many subscribers at each:

September 23-26, 2010: Buenos Aires! Seminar on Financial and Mundane Astrology with Raymond Merriman and others, with special emphasis on Argentina’s Merval Index and precious metals and whatever else is of interest to participants, for each Financial Astrology workshop is different. For more information, contact Claudia Rizzi at, or visit our web site at If you only speak Spanish, go to We will host a special gathering of MMA Subscribers at the end of the seminar, depending on interest expressed.

October 1-2, 2010: Rio de Janeiro! Workshop on Financial Astrology with Raymond Merriman, plus a Mundane Astrology panel with Merriman and others. The workshop will have with special emphasis on Brazil’s Bovespa Index and precious metals, and whatever else is of interest to participants. For more information, contact Renato Chebar at We may host a special gathering for MMA Subscribers on Sunday, October 3, the day of Brazil’s elections, if enough subscribers request such a meeting.

January 14-16, 2011, Zurich, Switzerland. “Forecasts 2011” symposia featuring top mundane and financial astrologers, plus one day workshop on Financial Market Timing with Ray Merriman, to be followed by a special meeting with MMA Subscribers (at no cost). For more details, go to

March 10-12, 2011: Mexico City, Mexico. Speech on Forecasts 2011, and workshop on “Evolutionary Astrology: The Journey of the Soul Through States of Consciousness.” For information, please contact

April 28 and 30, 2011: Kansas City, Mo. “Forecasts for 2011” and “Financial Astrology Workshop” with Raymond Merriman. Sponsored by AOA. Details soon. This will be the next Financial Astrology workshop in the United States.

September 1-8, 2011: Bali! "Financial Astrology" Intensive workshop with Raymond Merriman, and "Mundane Astrology" with Claude Weiss. For more information on this unique week-long intensive and incredible South Pacific paradise adventure, please go to

Disclaimer and statement of purpose:
The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language.

This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world.

It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.

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