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                         ***THE FINAL SUMMIT?***

                               By J. Adams


                  "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


    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


                  -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.