Martin A. Armstrong

Martin Armstrong (born November 1, 1949 in New Jersey) is the son of a lawyer and Lt. Col under General Patton in World War II. His full biography is on line.[1] In short, Martin was encouraged by his father to get involved in computers during the mid-1960s. He completed engineering both in hardware and software but he returned to the gold business that he had begun while in high school to earn money for a family trip to Europe in the summer of 1964. He continued to work on weekends through high school finding the real world exciting, for this was the beginning of the collapse of the gold standard. Silver was removed from U.S. coinage in 1965 and by 1968 gold began trading in bullion form in London. The gold standard collapsed entirely in the summer of 1971 when President Nixon closed the gold window. In 1975 it became legal in America, for the first time since 1933, to trade gold in bullion form. Armstrong began exploring financial panics after witnessing the Crash of 1966. He went on to develop timing models such as the "Economic Confidence Model" that have been the subject of many press articles[2] Armstrong's discovery of this cycle was called The Secret Cycle by the New Yorker Magazine.[3]. This model had stunning accuracy: it pinpointed changes in the economy right to the day. In Time Magazine, Justin Fox wrote that Armstrong's model "made several eerily on-the-mark calls using a formula based on the mathematical constant pi." (Pg 30; Nov. 30, 2009).

Armstrong's Princeton Economics International, Ltd. established offices in Paris, London, Tokyo, Hong Kong, and Sydney, Australia employing about 240 people around the world. In 1983, the Wall Street Journal cited Armstrong as it's highest-paid advisor. He became one of the top currency analysts and his work was requested by the Presidential Task Force (Brady Commission) investigating the 1987 Crash. The firm rose to be perhaps the largest multinational corporate advisor in the world and by the 1997 Asian Currency Crisis Armstrong, invited by China, flew to Beijing to advise the Central Bank.

After discovering that staff at Republic National Bank were illegally trading in the company accounts, Armstrong through counsel threatened to file suit if the funds were not returned within one week. Instead, Republic went to the Commodity Futures Trading Commission and alleged that Armstrong had conspired with their own staff to hide trading losses from his clients in Japan. The allegation of a $1 billion fraud caused the government to rush in and admit in open court that they had filed charges solely based upon what Republic told them and had not bothered to contact any alleged clients in Japan. They admitted that Armstrong was not in default of any obligation to Japanese investors. When it became clear that the accounts were simply unsecured borrowings of Japanese yen, mostly at fixed rates of interest, and outright purchases of Japanese portfolios from public corportions and were NOT solicitations for managed accounts. Armstrong was thrown in contempt of court for an allegedly missing $1.3 million out of $3 billion. When friends offered to put the entire sum of money up for bail, the court denied bail at any price at the direction of a receiver, Alan Cohen of Goldman Sachs and Tancred Schiavoni of O'Melveny & Myers. They kept Armstrong in prison for more than seven years denying him a trial, a right to a lawyer and freezing all funds. They claimed the contempt was "civil," not criminal and thus there were no rights normally afforded criminal defendants.

Ultimately, Republic National Bank pled guilty and all its directors received absolute immunity provided they return $606 million. Despite the fact that the deal was that all alleged victims be made whole, Cohen and Schiavoni refused to allow Armstrong to be released and he was held for another 5 years in prison on contempt of court. Armstrong was only released after the Supreme Court ordered the government to respond to a petition, which replied that the contempt had been vacated. Armstrong was held in contempt of court for nearly 7.5 years. The government agreed to drop all the charges except for a conspiracy count, telling Armstrong that if he pled, he could argue for time served. When he took the deal, the government then argued that the court had no power to provide such a credit and refused to release him once again. Armstrong is still on appeal in Washington, DC and the case will no doubt go to the Supreme Court. After spending more than 7 years in prison on contempt of court, Judge Keenan ruled Armstrong owed no restitution whatsoever.



As a teenager, Armstrong worked at a rare stamp and coin dealership and became a millionaire at age fifteen. He then opened his own store at age twenty-one. After studying historical gold prices, he developed a cyclical theory of commodity prices and began a company, Economic Consultants of Princeton.[4] The Commodity Futures Trading Commission filed a complaint alleging that the term "track record" was a legal term and applied only to money management not forecasting. Armstrong was not managing money at the time. Although the first allegation was that Armstrong was registered with the SEC and not the CFTC, that was dropped after the 1985 Supreme Court decision SEC v Lowe held that writing about markets and the economy is a First Amendment issue that did not require registration.

Armstrong was a frequent contributor to academic journals, was often sought for comment on financial topics and contributed op-eds to the Wall Street Journal. As an investor, he proved that his market timing approach predicted both the high-water mark of the Nikkei in 1989, months ahead of time, and also the July 20, 1998 high in the U.S. equities market.

In 1981 Armstrong formed Princeton Economics and, in 1998, he established a hedge fund in partnership with Magnum Global Investments as well as Deustche Bank. These were public funds and no allegations ever concerned these operations of funds management. Armstrong was named as fund manager of the year in 1998 for his performance at Magnum.

During that time he developed a financial prediction model called the "pi-cycle model" and published long term forecasts which are still monitored by the financial press. In the United Kingdom, for example, a popular financial magazine Money Week published an article on Martin Armstrong on March 27, 2007, titled "The strange case of the jailed market genius." In that article they highlighted the model had predicted a major top in financial markets for February 27, 2007, with the next major bottom being June 18, 2011.

Legal Battle

In 1999, Japanese fraud investigators determined that Armstrong had been collecting money from Japanese investors, improperly "commingling" these funds with funds from other investors, and using the fresh money to cover losses he had incurred while trading. These allegations were dropped when it became clear the accounts never belonged to "investors" and most notes were in street name and had not even been issued until after the case began on the orders of Alan Cohen. Republic New York Bank tried to escape liability by telling the government that all of its account statements were false, yet they were on file as part of its regulatory requirements. Eventually, Republic pled guilty in 2001 and agreed to pay $606 million as restitution, taking over the $1 billion in dollars in notes and pocketing the currency profits of nearly $400 million.[5]

Armstrong was indicted in 1999, and was ordered by Judge Richard Owen to turn over a number of gold bars, computers, and antiquities that had been bought with the corporate money, denying Armstrong all his personal constitutional rights on the claim that corporate officers have no personal rights belonging to citizens.[6] Armstrong was thrown in jail on civil contempt for an allegedly missing $1.3 million out of $3 billion, and was denied bail even when friends were willing to put up the full $1.3 million in cash.[7] Armstrong was jailed for seven years for contempt of court, and only went to trial when the N.Y. Court of Appeals removed Judge Owen from his case. Judge Owen was recused also in the Frank Quattrone case and has quietly stopped handling cases since there appears to be a question about his mental competency.[8] Armstrong has spent several days in solitary confinement. Left with limited options he was forced to plead guilty and was sentenced to five more years in prison.[9] Armstrong's case is still pending appeal in Washington, DC. A decision is expected by early 2012.


Armstrong, who is divorced, has two children.[10] Martin Armstrong Jr. and Victoria Armstrong supported their father in what was, according to Martin Armstrong Jr., a "one sided legal battle." Armstrong's daughter Victoria Armstrong said, "It took nearly thirty years for my dad to develop this model and his refusing to turn over its source code to the government is a big reason why he has been held in jail for over seven years without a trial. His model was his life’s work and his passion that ultimately landed him in jail. Although it's great to hear people that have benefited from his insight, after seeing what has happened to him I wish he kept it to himself." [11]

Current Writings

Armstrong continues to write and provide forecasts on websites such as[12] and[13] For them he uses a manual typewriter from the 1960s, and he includes hand-drawn illustrations.

On April 9, 2009, Armstrong published the paper "Looking Behind the Curtain," an exposé written in prison giving details of events connecting Goldman Sachs to U.S. government manipulation of financial markets. Others have documented these events including Gretchen Morgansen in her latest book, "Reckless Endangerment."[14] Part I [15] and Part II[16]


  1. ^
  2. ^
  3. ^
  4. ^ Princeton Economics: Economic Confidence Model
  5. ^ Gilpin, Kenneth N. (2001-12-18). "Republic New York Pleads Guilty to Securities Fraud -". JAPAN: New York Times. Retrieved 2010-07-26. 
  6. ^ "Investor Ordered To Give Up Gold -". New York Times. 2000-01-08. Retrieved 2010-07-26. 
  7. ^ "Market Forecaster Is Still Behind Bars -". JAPAN: New York Times. 2000-01-18. Retrieved 2010-07-26. 
  8. ^
  9. ^ "Jailed Adviser Is Sentenced and Fined in Fraud Case". The New York Times. 2007-04-11. 
  10. ^ [G Morgenson The New York Times 2007]
  11. ^ [Martin Armstrong Jr the Gold-Speculator 2009 Martin Armstrong's Jr. request to help Martin Armstrong Sr.]
  12. ^
  13. ^
  14. ^'s%20Book%2006-26-2011.pdf
  15. ^
  16. ^

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