***THE FINAL SUMMIT?***
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***THE FINAL SUMMIT?***
By J. Adams
http://www.primenet.com/~lion
"USSR, The 3rd World Countries & US"
May 8th, 1995
When He opened the seventh seal,
there was silence in heaven for about half an hour...
(Revelation; Chp.8, v.1)
-A Lesson In Humility-
"Stocks are at now what looks like a permanently high plateau..."
-uttered by economist Irving Fisher
a few days before Black Tuesday, 1929.
I never expected the DJIA to reach current heights. My attempts to
predict the exact point level and time of the final peak in stock prices
have consistently failed. Out of my own *irrational egoism* and anger
toward a self-deceived world that is robbing us all of our future, I
have been seeking to *prove* I'm perfectly right and everyone else is
perfectly wrong. However, this is not the case, and, consequently, I
have been suffering from my own irrational expectations and systematic
errors.
As for the expectations of economists and society as a whole, I
doubt that the near vertical climb in the DJIA over the past several
weeks is because collective expectations are becoming more rational and
stock prices are tending closer to some sort of equilibrium. To the
contrary, the evidence suggests investors' expectations are becoming
evermore irrational and the degree of *disequilbrium* is now far worse.
Thus, there is greater reason to believe we are facing the Grand
Supercycle crash and a catastrophic upset of people's misled
expectations.
-Irrational Collective Expectations-
"In individuals, insanity is rare,
but in groups, parties, nations and epochs it is the rule."
-Nietzsche, 'Beyond Good and Evil'
Measures of mass mood now strongly indicate that stock prices are
near a climactic high-point. Intermediate-term indicators like polls of
investor sentiment have recently signalled that the majority of
individual and institutional investors have become bullish (i.e.,
expecting stock prices to head higher over the coming months).
According to last week's issue of Barron's, there are nearly three bulls
for every bear among individual investors (p.mw108) and two bulls for
every bear among money managers (p.29).
The pervasive optimism on Wall Street and throughout American
society is also being registered in long-term measures of sentiment.
The average dividend yield on the DJIA recently dropped below 2.5
percent, the lowest since the August '87 peak which was followed by a
'29 style crash. Reflecting people's high expectations (and reckless
greed), record amounts of money have been poured into equities via
mutual funds. Since 1989, the mutual fund industry has grown from $1
trillion and 2,900 funds to $2.2 trillion and 5,400 funds (there are now
more stock mutual funds than stocks on the NYSE). Mutual fund assets
are currently equivalent to 85 percent of bank deposits compared to
barely 10 percent in the early-1980's.
The money pouring into mutual funds has been flowing into the stock
market at an accelerating pace. When bonds reached their historic top
in October of 1993, the cash level of bond funds fell to record lows
(this was followed by the worst year for bonds in a quarter century
during 1994). We are now seeing a repeat of this pattern with stock
funds which currently have near record low cash levels as a percentage
of total assets (see: 'Investor's Business Daily', 5/1/95, p.B3). Thus,
as is the historical pattern, everyone is effectively buying in at the
top (see David Dreman's 'The New Contrarian Investment Strategy', 1982
or Martin Zweig's 'Winning on Wall Street', 1986).
-The Final Summit-
"A diplomat's words must contradict his deeds-
otherwise, what sort of diplomat is he?
Words are one thing- deeds something entirely different."
-Stalin, 1913
The run-up in stock prices to all-time highs in recent weeks
reflects how collective expectations for the future are the highest in
history. A primary reason for people's optimism is the seeming end of
the Cold War and the fading specter of global nuclear war. As the East
has done away with communism and sought to make friends and cooperate
with the West, the world's hopes for future peace and prosperity have
been lifted to all-time highs.
An example of how the global peace process has generated rising
collective expectations is a striking correlation between superpower
"summits" (a word that literally means "the highest point or part; the
top...) and the three most recent major peaks in stock prices.
There was a summit meeting in June of 1990 at which U.S. President
George Bush and Soviet Premier Mikhail Gorbachev signed an accord for
the START agreement to do away with a large share of each sides'
strategic nuclear arsenals. At the summit, President Bush declared, "We
may not agree on everything, indeed we don't agree on everything. But
we believe in one great truth: the world has waited long enough, the
Cold War must end." (The historical irony of this reference to "one
great truth" by George Bush might prove to be exceptionally bitter.) A
month later the Western alliance ended the Cold War and proposed joint
action with the Soviet Union and Eastern Europe. Also a month later the
DJIA peaked at the 3000 barrier (closed on July 16th and 17th of 1990 at
2999.75) and then entered a three-month plunge of over 20 percent
associated with Iraq's invasion of Kuwait and that year's crisis in the
Persian Gulf (which was likely Moscow's handiwork- see my article, "The
Persian Gulf Deception", on my web page; the location (URL) is above).
In 1992, there was another June summit between the superpowers.
Again, a new agreement was reached to make further, dramatic cuts in the
two sides' strategic nuclear arsenals including the elimination of
heavy, multiple-warhead ICBM's. Mr. Yeltsin, the new Russian leader,
declared: "We know one thing. We shall not fight against each other."
(Again, the bitter irony of this statement is likely historic,
especially given what was going on in the former-Yugoslavia at the
time). That month the DJIA peaked at 3400 and then dropped nearly 10
percent over the following four months. Also that month the first U.N
forces were introduced in Sarajevo as Western military intervention in
the Balkan war began. (Western military involvement in the Balkans
should eventually draw the West into a war with Russia- see my article,
"The Balkan Trap", on my web page.)
Lastly, in January of 1994, there was a summit in Moscow at which
Russian President Boris Yeltsin and American President Bill Clinton
signed an agreement to stop targetting each others' countries with
nuclear weapons. This summit meeting was overshadowed by the election
of a new, hardline Russian parliament during the prior month. The
political party of ultranationalist Vladimir Zhirinovsky supposedly won
in these elections, thus raising concern in the West about Russia's
political future and the potential for a new, extremely dangerous
confrontation between the two nuclear superpowers. Along with the
summit in January of 1994, stock prices reached a peak just below the
psychologically significant 4000 level in the DJIA and then entered a 10
percent drop into April. (Notably, I had been tracking Vladimir
Zhirinovsky for over a year before his political party, which is a bogus
creation of the KGB and the Central Party of the Soviet Union under
Gorbachev, won Russia's parliamentary election in December of 1993. I
specifically predicted his party would win in the election of the new
parliament since I expected the election to be rigged. See my article,
"The Zhirinovsky Connection", on my web page.)
The correlation between Russian/American summits and the last three
major peaks in the DJIA might be relevant at the current juncture since
a summit meeting between Yeltsin and Clinton is scheduled this week in
Moscow. If the DJIA is around its final peak here, then the upcoming
summit, which is associated with celebrations of the fiftieth
anniversary of the end of the second world war in Europe, may well be
the *final* summit between the world's nuclear superpowers before a
third world war.
The reason we might be looking at the final summit is because what
has developed over the past several years is most likely a *false*
peace. (World peace today is well represented by the modern peace
symbol, i.e., the Cross of Nero, a satanic symbol in which the Cross of
Christ is inverted and broken. This represents how peace in today's
world is, in fact, an antichristian lie.) As is explained in my articles
posted on the worldwide web, the odds are that Russia's ruling elite
broke-up the Soviet Union, did away with Communism and became friends
with the West in order to get America and its military allies off-guard
and open the way for a surprise third world war. Thus, previous summits
and the one this week are all about raising false hopes and irrationally
high expectations in the West for the explicit purpose of a total upset.
The approaching upset of collective expectations following the final
*summit*, which is reflected by current all-time highs in stock prices,
will ultimately involve a global nuclear war. This, I believe, is what
the "Grand Supercycle crash" is all about.
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