Ex-Con Has Investor Following on the Internet

Martin Armstrong is a 61 year old ex-con who lives in New Jersey with family

members. He remains on probation and spends his time preparing for an investment seminar set for December 2011, working for lawyers, working on book deals and working with filmmaker, Marcus Vetter, on a documentary about his life that is said to air in November 2011, according to Bloomberg.

Armstrong is a self-taught New Jersey native. Although he never received a college degree, he came up with what he called "confidence cycles" in the marketplace. The theory was related to the time period between the financial crises from 1683 to 1907, which were all separated by an average of 3,141 days. That number of days was equivalent to 1,000 times pi (3.141), or the ratio of a circle's circumference to its diameter.

His popularity swelled and he became very highly regarded in the financial world by the late nineties, when his firm, Princeton Economics International LTD out of New Jersey, was forecasting future financial panics. His theory was that every 8.6 years there would be a boom to bust cycle. His prediction was correct about the peak of the Japanese stock market prior to it turning south in 1989 and the collapse of the Russian market in 1998.

Prosecutors alleged that Armstrong defrauded a group of Japanese investors for $700 million and hiding some $15 million from the feds. He refused to give up 699 gold coins, 102 gold bars, rare coins and an ancient bust of Julius Caesar, among other things, resulting in him being hit with the longest prison time on record for federal white collar crime. When he was sent to prison in 2000, gold was at $285 an ounce and at the time of the article, it was trading at $1,652 an ounce. He continues to deny that he has it stashed or knows where it is. In addition to the 7 year sentence for bilking the Japanese investors, he pleaded guilty in 2006 for lying to investors about his assets under management and his trading record. Armstrong's partner in crime was Republic Securities, now a part of HSBC Holdings PLC. They joined in the guilty plea, admitting that they aided him in the swindle, costing the firm $569 million in restitution. After 12 years in prison, the felon was released in March 2011.

While in prison, Armstrong began banging out his predictions and later started disseminating them over the internet, where he allegedly has a cult following of some 200,000. Unfortunately, with his history of being a convicted felon, getting customers to pay for his global economic advice is going to be difficult. Armstrong is planning to try and get his conviction overturned as well as getting the SEC to reverse its order barring him from the financial industry in any capacity.

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