Get Ready For War The Dow Jones – Turning Down?
The US share market should have bottomed Friday/Monday. Instead, we inverted and made a meager high. This is not good at all. This warns we may see a test of the bottom of that channel next week or as late as the week of October 7th.
Everything is indicating Obama may start a war attacking Syria BEFORECongress returns. September has been a major target this year all along. The fundamentals keep increasing for this target. We began with the German elections. Then we added the Debt Ceiling issue. But there is something even more serious why Obama needs a war and the mainstream press is lined up goose-stepping to whatever the Obama Administration dictates.
The Treasury has extraordinary powers and even Congress member and staff have a Thrift Plan that is like a 401K but government is the trustee. They have been taking funds from that to stay under the debt ceiling. This is the second time they have done that. But come October, they run out of everything.
With the fear that the conservative will not raise the debt ceiling, Obama needs a war to prevent a default. The easy way to do this is act when they are out of session so when they come back they are boxed in by the mainstream press to fund whatever.
Parliament in UK is generally also not around during August. The gulf war began August 2nd, 1990. World War I began 28th July 1914. World Way II began September 1, 1939. The Korean War began early on June 25, 1950. The Gulf of Tonkin incident (or the USS Maddox incident) took place August 2, 1964. While December may be the season to be jolly, August is notorious for starting wars.
We have a Directional Change this week with a key Weekly Bearish Reversal at 14805 and 14450. A closing below the latter will warn we may see that postponement. Keep in mind, that Europe needs a war as well not just for the German elections, but to employ the youth and divert them from the economic collapse. It appears that any escalation of the war would come in November 2014.
The evidence has shown that government often sacrifices troops to enrage the people to increase their power. During World War II, they let troops die knowing the Japanese would attack since they broke their code. But to save the troops would gave revealed the had the code. We are normally collateral damage. It is their edge that counts -always.
Capital Flows – The 4.3 Year Directional Change & Sovereign Debt Crisis
QUESTION: I have been following your articles but I am confused by your latest few articles. Previously you were mentioning that there will be a flight to quality as US has the largest debt market in the world. You also mentioned that this flight of quality will worsen the debt crisis in US into 2015.75. However, your recent articles seem to suggest that there is now no flight to quality but shift to private debt instead. If so, does that mean the sovereign debt crisis will not worsen yet but delay into 2025 instead? If capital is going into private debt, does that mean that economy will recover and grow then?
ANSWER: There are two flight-to-quality.
(1) First you have the natural domestic cyclical flow back and forth between the PUBLIC and the PRIVATE sectors. After the 1929 Crash of the Private Wave, capital turned to government and stocks do poorly and sovereign bonds do well. When the wave turned in 1985, the Dow exploded and the market rallied from 1,000 to so far almost 16,000.
(2) There are also international capital flows. Capital flees economic and geopolitical turmoil. When the G5 was formed in 1985, they chased the capital concentration out of the USA culminating in the 1987 Crash and it turned into Japan causing the bubble there for 1989. Then capital flows poured into South East Asia and that bubble burst 1994 as capital then turned back to the USA (moderately) and into Russia. When Russia broke in 1998 with Long-Term Capital Management, it the flowed into Europe for the Euro. Capital then flowed into the USA for the DOT.COM bubble 2000, which crashed into 2002. Then it poured into Mortgages for the next 4.3 years and that bubble burst in 2007. It then flew into gold and that peaked in 2011. Then it moved back to the Dow and is shifting away from government bonds. That should peak in 4.3 years or 2015.75. The capital flows change direction every 4.3 years.
So the flight-to-quality is away from long-term debt keeping it short-term and into the US private sector as capital concentrates. Just follow the money both domestically and internationally.
Regarding the Sovereign Debt Crisis, it can be postponed due to war that distracts people from what government has done. This is possible and it seems like the powers in Washington want to invade Syria. However, Russia will be an adversary and they will risk war with Russia telling themselves Putin is wrong. But it will be Washington who starts the war – not Russia. Putin is responding to the rising aggression of the USA and that seems to be geared at confusing the whole issue of the Sovereign Debt Crisis.
During World War II, the Fed was ordered to support the bonds at par. That was lifted in 1951 and that is when the bonds started their free-fall. These people KNOW they have a debt crisis, and that is why they are arming Homeland Security against a domestic uprising. Yet they continue to raise taxes killing the economy. They will destroy the world before giving up any power willingly. I have stated they will NEVER go quietly into the night or the light – they will kick and scream all the way.
The best way to buy time is to create a diversion. That they are experienced at. We must respect they can create a postponement for the war cycle turns up in 2014. So unfortunately the timing allows them to do that. This Private Wave does not end until 2032 so sadly they do have the time. But keep in mind that this wave began 1985.65 and the major focal point will be 31.4 years into it or 2017.05 (January). That should be the most they can postpone the start of this Sovereign Debt Crisis with the maximum culmination being 2025 and the optimal being 2020. They will lose. There is no question about that. They may trash the world in the process. You cannot imagine the hatred some of these people have gleaming in their eyes. They trust nobody. As a result – they will do outrageous things under the pretense their adversary intends the same if not much worse. They are fighting shadows in their own mind.Technology Advancement Changes Employment
QUESTION: Hello Mr Armstrong,
I was wondering your thoughts on the movements in 3D printing, nano tech and robotics. Given your projection for a coming economic re-structuring, is there a chance we move into mass unemployment with much of today’s manufacturing jobs (to name one industry) replaced by these new technologies.
Thank you
ANSWER: Yes. We are going through that process even now with the internet. It is eliminating countless jobs while creating new ones. At Princeton Economics use to have a staff of 240. Collecting data was a huge task and it was manual. Today, what use to take 30 people is down to one. Newspapers are collapsing as people turn to the internet and the “mainstream” press address only a generation expiring failing to grasp a new audience among the youth. Computer stores are rare for the best are now on-line. So much has changed and continues to evolve. Even the NSA has gone nuts grabbing everything like a spoiled kid in a toy store.
This is why unions are so destructive. They seek to keep raising the price of labor for the same job while freezing skills. That is counterproductive. They fight the natural evolutionary process that takes place because of technology.
Princeton Economics was the largest and highest paid firm ever with more than $3 trillion under contract. Why? We originally delivered our reports by telex. The cost for communications was about $250,000 annually alone during the early 1980s. Reports top the Middle East cost $50 in delivery costs alone. We opened offices around the world to reduce those costs for clients. We were the biggest client of Western Union at the time. When fax came out, those costs dropped from $50 per report to at most $5. Then email came out. Now the communication costs are nil. That is the advancement of technology and how it has changed even our business model.
So yes. Technology advancement changes everything for it destroys some jobs while creating others. The automobile eliminate horses and carriages. The airplane eliminated long-distant trains. Yet the train created mail order as product could then be delivered. It was the invention of the train that really created Sears & Roebuck & Co. whose catalogue could be used on the frontier. The railroad was the internet of the 19th century. The stocks boomed. It was the takeover of new companies that created the anti-trust laws in 1890 because as railroad merged, they reduced jobs.
A friend bought Easy Pass. Government promised it would never be used for anything else but tolls. As they went through an Easy Pass in Maryland, they received a speeding ticket for 66 in a 55. They can now fine you for speeding by calculating when you got on and off. As always, government can never keep their fingers out of other people’s pockets. We just generate money for their outrageous pensions they negotiate with them selves, for themselves.
We really do not need voting machines. You can do it online if they wanted. There is so much change that can be done it is amazing. Cell Phone watches are soon to come out. They are already talking about putting chips in your children in case the are kidnapped. Of course the government will then be able to track every person at all times. They can clone body parts. You maybe able to live at least twice as long. That should help unemployment increase further because they still will not figure out that if you lower taxes you create jobs – raising them destroys them.