The Final Summit?

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.

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).

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.