IMF Admits They Are Clueless to Solve World Economic Crisis
At the meeting of the IMF and the World Bank, we began to see for the first time some blow-back against Obama’s hand-picket lawyer masquerading as the world leading of international finance. There were significant rifts between supporters and opponents of new state investment programs that LaGarde and Obama are trying to pull off taking pensions and squandering them on infrastructure that only produces temporary jobs anyway.
The LaGarde at the IMF warned at of the risks in the financial systems that amount to the shadow banks with a market of $71 trillion dollars. She asserted that this is a tremendous danger on the basis it is not regulated by her. Effectively, she wants to seize control of such money to bailout governments without reform.
Lawyers who prefer politics to rule the world are different from private lawyers. They are the same type of people Shakespeare wrote – the first thing we do is kill all the lawyers. They were the king’s lawyers (prosecutors) since private people were not allowed to hire lawyers. These type of people are high on their power and only see things as writing laws to force people to do what they demand. The cannot understand just how do you stimulate an economy by raising taxes. They want to tax you 80% and then want to charge you negative interest rates if you do not spend what you have left. They are totally insane. They cannot comprehend where is economic growth supposed to come from?
The only economy that has been holding up the Euro is Germany. Yet they impose Obama-Sanctions that have devastated the European economy. The German economy is on its knees, primarily due to the decline in exports.There is a growing battle starting to rage between politicians and real economists, yet within the economic community there is a huge division with the majority being closet communists and agree with the power of the state. Nobody is articulating a strategy against the looming economic slowdown that can only be based upon reform and lowering taxes. The conflict between the two camps had repercussions rising to the surface.
In order to promote sustainable growth, there is no consideration that even talks about restructuring the world economy. We face a serious economic collapse sparking a Sovereign Debt Crisis that can only be viewed against the backdrop of historically high debt levels. We are headed into an economic storm that can be measured on the Richter magnitude scale of earthquakes that might be really shocking. This is an unbelievable toxic combination of escalating taxation with aggressive enforcement and astonishing global record debt levels thanks to the banking crisis of 2007 for to bail out the banks, global debt shows a sustained rising trend that has reached nearly 175% increase since the crisis began with no hope of stopping before 2020. This lethal combination will be our undoing and these people cannot grasp that taking what savings people have left will accelerate our demise.
It was extremely interesting that at the meeting in Washington President François Hollande of France and the Italian Prime Minister Matteo Renzi insisted to push the consolidation of public finances in favor of economic programs on the back burner In other words – hello! They are now arguing for what I warned has to be done from the start – a single currency required a single debt. But this is too little too late. They have already lost the confidence of world capital.
German Finance Minister Schäuble protested against Obama-LaGarde’s proposal to spend on infrastructure. Schäuble does not want to grant additional funds beyond the already planned investments in infrastructure. Largarde warned that Germany must take care not to go beyond the EU deficit limits. She wants to seize private funds not public to pretend the deficits are under control. Again, window-dressing without substance. Clearly, any pretend stimulation of demand through higher government spending has already produced nothing. If you keep raising taxes and enforcement, then where is the private spending coming from if disposable income continues to decline? Those in government are lawyers and just assume they can write laws to defeat the free market.
The bottom-line is they are clueless how to manage the economy. They just do not teach this stuff is law schools – sorry! All they could do was the IMF invited countries to engage in economic risk-taking to push economic growth. At the same time, the IMF insists on austerity to promote the control of financial excesses. The IMF is just clueless and has articulated nothing as a solution.
Obama-Sanctions & Ukraianian Ceasefire
The economic sanction against Russia are causing serious economic damage in Europe. Farmers are going bankrupt and Finland has lost its triple-A rating thanks to Obama-Sanctions. The sanctions were wrong from the start and they should be removed immediately. The attempt at a permanent ceasefire has come about not because of Obama-Sanctions, but despite the Obama-Sanctions. The one-sided partisanship of the West in the Ukraine conflict ordered the government in Kiev had to engage the East in a military crackdown or the IMF said there would be no loans. Even Obama’s cronie, Christine LaGarde, dictated his terms secretly attached to the IMF that has become anything but independent.
Now there are alleged to be several thousand civilian casualties whose blood is on the hands of Obama and LaGarde. The question remains, if the ceasefire holds, then why do we still have Obama-Sanctions? If they are not lifted, one must question if we have Obama and his oligarchs trying to instigate economicostracization of Russia to increase the market share for American energy companies and the Middle East.
The people of Kiev are caught in the middle. Their government has been taken over by the West – stuffed with politicians the people are told if they revolt against them, they will receive no support. Their government tells them they must have patience for they will see reform after the war. Meanwhile, the people of Kiev are really pawns. The heating system and hot water are old style communist. You do not have a hot water heater in each home. It is provided by the government from a central plant. They have no hot water and have to use stingers (electric rods that heat the water) and the government told the people they would not turn on the heat until there were 3 consecutive days of frigid weather. Now they are turning off electricity for a few hours during the day. This is why the people are moved to revolution. They cannot even get a hot bath.
Those who write about Ukraine assume western basics that do not even exit.
The Pending Phase Transition & Cycle Inversion
QUESTION: Marty, I went to cash in September since this was the first time you said there would be a serious correction in the stock markets going into November. Do you think we will get the phase transition into 2015.75 or a cycle inversion creating the low next year and stocks would then rally into the phase transition for 2017 to 2018? Is it still too early to pinpoint this development?
Thanks
JB
ANSWER: The sell signals achieved on Friday will most likely see follow-through on Monday. That could form just a temp low with a bounce and then back down for November. We are running out of time. I hope to do a Webcast in November to address some of these issues. Yes, the ECM was the key. Everything shifted from that target week from the dollar and the Dow right down to Palladium.
A Phase Transition is typically 52 to 59 weeks in general. This is the broad measurement and not the fine-tuning. Looking closely at the market currently, we were due for a correction because of all the talking heads have to get trapped. That is the fuel for a Phase Transition.
It remains possible to still be flat and churning into 2015.75 and then a cycle inversion unfolds with the market rising into 2017-2018 as the main hedge against banks, pensions, and governments. November is still our target for a near-term correct low. Lets see where we go from here. We must respect that this is a Sovereign Debt Crisis. In such circumstances, smart capital simply moves to Private asset sectors out of Public.
Pension Crisis
After 2015.75, we will begin to observe the Pension Crisis manifest before our eyes. There are few governmental exceptions within Western Society without this serious trouble. While they keep everyone occupied between soccer and football, governments have done an incredible job of committing massive fraud upon the public. Public unions are simply demanding that governments raise taxes and extort money from other sectors to hand to them.
Government pension funds are a joke. Even in Britain, pensions will run out of cash next year: Amount handed out to future generations will be disastrous. Those under 35 should not expect anything for their taxes. (see also the Mail). This will be part of the ever increasing civil unrest that we see coming after 2015.75 moving into January 2020.
The World – International Living
For those looking to get away, the WORLD is a new idea. They have taken a cruise ship and turning it into condos. You can be one of 200 who get to buy your condo and the ship just keeps sailing around the world. For non-Americans, it is tax free living. For Americans, well the first $100,000 is tax free.
US Share Market for Next Week Oct 13, 2014
We have elected a Weekly sell signal in the Dow and this is warning that we may yet see that November low during the week of November 3rd. The critical support now lies at 15961 and a weekly closing beneath this area will warn of a sharp correction that will make people’s nose bleed. Nevertheless, our models show next week as a turning point with Directional Changes back-to-back for the next 2 weeks and high volatility for the week of 11/03. Critical support also lies at 15555/ Only a monthly closing below this area would warn of a sustained correction.
When we look at the cash S&P500, the market is stronger than the Dow reflecting the shift is still in place for the broader market leading. Our energy models are still bullish for the broad-term. Here we do see support lies at 1814 and 1766. We would need to see a monthly closing below 1814 to signal a sustained correction is possible. Where the Dow tends to target November, the S&P 500 targets December for a turning point with high volatility in November. The weekly turning points still show choppiness 10/13, 10/27, and 11/10. Key days next week will be Monday and Friday. This is the same targets in the Dow on a daily level.
In the NASDAQ composite we see 10/13, 10/15, and 10/17 as daily targets with Wed showing high volatility. Here the key weekly targets are 10/13 and 10/27 followed by 11/10. Key support beings at 4239 and 4207. A monthly closing BELOW 4020 will signal a sustained correction. Keep in mind that November will be 72 months from the 2008 low in the NASDAQ. A low at that time on our long-range volatility models would imply we could set the stage for a strong rally after February.