Martin Armstrong (born 1950) is the former chairman of Princeton Economics International Ltd. Indicted in 1999 on charges of bilking Japanese investors, he spent seven years jailed for contempt of court before finally pleading guilty in 2007, and he is now serving a five-year sentence for conspiracy to commit fraud.
As a teenager, Armstrong worked at a rare stamp and coin dealership and became a millionaire at age 15. Then he opened his own store at age 21. After studying historical gold prices, he developed a cyclical theory of commodity prices and began a company, Economic Consultants of Princeton.
The Commodity Futures Trading Commission filed multiple complaints about this company, finding that it failed to maintain adequate records, misstated performance results, and was not properly registered. During this time, Armstrong continued to collect gold and antiquities which would later become a major bone of contention with the New York State justice system.
Armstrong was a frequent contributor to academic journals and was often sought for comment on financial topics. 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.
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.
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. Assisting Armstrong in his scheme was the Republic New York Bank which produced false account statements to reassure Armstrong’s investors, and which in 2001 agreed to pay $606 million as restitution for its part in the scandal.
Judge Sonia Sotomayor was reported to have been part of the panel of appeals judges that upheld a lower court ruling to keep Martin Armstrong in prison for contempt of court.
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 fund’s money; the list included bronze helmets and a bust of Julius Caesar. Armstrong produced some of the items, but claimed the others were not in his possession; this led to several contempt of court charges.
Armstrong was jailed for seven years for contempt of court, and only went to trial when the NY Court of Appeals removed Judge Owen from his case; in 2007 after spending several days in solitary confinement. Left with limited options he was forced to plead guilty and was sentenced to five more years in prison.Despite the unjust conditions of his case, Armstrong continues to write essays and has commented on the current economic conditions facing the United States and the world in 2007-09.
Armstrong, who is divorced, has two children. His daughter, Victoria Armstrong, paid her father visits in prison on most Wednesdays, spending about one hour with him in a common room with other visitors and prisoners. Martin Armstrong Jr and Victory Armstrong supported their father in what was, according to Martin Armstrong Jr, a “one sided legal battle”. They asked the public for help and sent letters to the judges.
According to Armstrong’s daughter Victoria Armstrong, “It took nearly 30 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 7 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.”
Armstrong published in 22 May 2009 a piece entitled “Is Democracy Dying? Leviathan, The Power Cleverly Hidden Behind Politicians” in which he uses the history to explain the delusion of Democracy. The paper “Looking Behind the Curtain”, Published by Armstrong on April 9, 2009, details purported events connecting Goldman Sachs to U.S. government manipulation of financial markets.
As of 24/11/2009 a dedicated site hosting over 40 of his essays is available at martinarmstrong.org. Additionally Armstrong’s recent writings are also available at http://www.scribd.com found by searching for Martin Armstrong.
As of 2/11/2010, Armstrong filed motions with the US district court in New Jersey for medical treatment and/or home confinement. He has complained about a serious infection and the loss of sight in one eye due to repeated requests for medical treatment denied by the authorities at Ft Dix Camp Prison. More info at Princeton Economics Blog. Recent court motions can be found at www.martinarmstrong.org
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