Right or Wrong – The Dark Side of Human Nature
I greatly appreciate the confidence saying I am newer wrong. But on an individual level, NOBODY can possibly be right all the time. This is why I try to emphasize that the numbers are the numbers and that all we can do is watch how everything unfolds. I have no personal vision of the future and what I fear I would not say publicly anyway for that is just opinion. All I can do is say this is what has happened in the past and express what the computer says – not ME. The markets are the only infallible guide if you just listen. Like the year-end closing for the Swiss. A closing above the 9700 level simply stated the 2011 low should hold. Had we closed below that, then new lows were possible. The number define the forecast –NOT my opinion. Most people forecast on what they “think” will happen. I do not play that game. My OPINION is no better than anyone else’s.
The key to analysis and trading is you must define where you are right and where you are wrong. The key here is long-term verses short-term. One thing I observed is that trying to predict the closing of whatever tomorrow will be infinitely much more difficult than predicting years in advance. The trend is in motion. Like the Swiss Peg, yes you can fight against the trend, but the trend will always win. So where the Dow closes tomorrow really means nothing to the long-term. That is just what we call noise. There are countless variables that will determine the closing of the Dow on a daily basis. But the trend determines the course of where you are headed. It is the difference between the daily weather and the 4 seasons.
What we are going through was set in motion decades ago. We cannot stop this if we tried and human nature says we wont try anyway. It is NOT that I am never wrong. Personally, that is just not possible. I try to qualify what I “think” from the model. The markets tell us what they are doing if we step back and look at the world as a whole. However, what I try to relay is what all the markets are showing collectively. If we get signals in all, it is hard to be wrong for this is NOT my personal OPINION. You can see the future unfold in slow-motion.
The likelihood of me being wrong about the system imploding is about ZERO. Historically, no such system has ever survived no matter what form it has taken. That is not the question. The burning question is WHEN since all systems inevitably collapse just as we all must die. Many people have touted that QE1-3 would be inflationary. That was based upon OPINION for what they were taught made sense, increase the money supply and the purchasing power should decline. However, there is NO relationship that ever withstands the test of time. That is their mistake.
Money supply relative to population growth is also important. If money supply increases by 10% and population by 20%, it will still be less money per person and deflationary. Likewise, the difference between a core economy and a peripheral is that the money of the core spreads outward into the peripheral so you cannot limit your scope to purely domestic. Republic National Bank use to send skids of $100 bills to Russia. So if you printed $20 billion in dollars but shipped them overseas, the domestic money supply would never increase. When the government replaced the $100 bill, they ran ads on flights to assure people the old bills were still valid and were not cancelled as they do elsewhere.
So the likelihood of being wrong that the monetary system will collapse is ZERO. This belief among Austrian Economic followers will prove to be correct at the end of the day. The single question is only timing.
So it is not a question of personally being right or wrong. This is a global computer model monitoring everything. This is beyond human capability. Hopefully the light will go off in more and more people and they will see that everything is connected. The Swiss peg was necessary BECAUSE the Euro was fatally designed. The peg broke when more and more money began to flee Euroland. This is simply capital flows and nothing that requires too much analysis beyond common sense.
I strongly suggest reading 1931 in Herbert Hoover’s Memoirs. What we have been watching how capital moves rushing from one place to the next was observed in ancient times and mentioned by Cicero as well as in modern times as noted by Hoover. This has nothing to do with me being right or wrong. This is notopinion – it is simple fact.
Since the majority of analysts were wrong, of course they will now take shots at me. This is human nature that reveals their integrity or lack thereof. If you cannot disprove the message, attack the messenger. This is the sad part of human nature for it is the same reason crabs cannot escape the bucket. Crabs try to climb out pulling each other down and non escape. Instead of a light going off and saying hey – maybe this guy is on to something here, they would rather ignore the message and attack the messenger.
This human jealousy is what holds society within the bucket and prevents our advancement. Hopefully we can escape the bucket at least when it tips over. Then and only then will people say – well maybe he was right. Only when I am dead will the personal attacks stop. They then do not have to compete for readers. Instead of joining forces to escape the bucket, humanity pulls itself back down enabling history to repeat.
What can we do?
QUESTION: Hi Martin
How can the average American prepare for 2015.75 and the coming bond market collapse? What steps can we take? Is now a good time to sell any real estate we might own in the states? The property taxes in NJ are out of control and I am looking to sell my home. Is now a good time?
What can we do?
What can we do?
Thanks
JK
JK
ANSWER: We will prepare a special report on Big Bang for it is complicated. Stockpile some cash. When you go to the bank, take some cash out. Nothing over $2,000 at a clip. But that is necessary just in case there is a banking problem. Any such problem would be in the money center banks for their risk management consists of bribing politicians.
If you want to sell your home because of taxes, that makes sense. Property taxes will rise sharply as these local politicians try to keep their pensions funded. You might want to move south to Florida where the property laws are the best in the country. That is of course if you can move to begin with.
Any gold should be in gold coins. Silver coins would be good to buy as well rather than bullion. Keep in mind that they imitated Roman coins in India. Why? The design was familiar. So it is not the mere fact that the object is gold. It is the fact that the object is recognized. The average person cannot tell the difference between gold and fool’s gold. By no means make it exclusive in any one sector. Cash is necessary for it is the most familiar.
You may want to mortgage your house with a FIXED rate loan. That is one way to hedge the value selling the risk to someone else. Renting an apartment is often cheaper now than the property taxes. This spread is likely to get much worse.
We will provide a more comprehensive discussion in a report
The Dollar Pegs are Next
The next crisis will be the currency pegs against the dollar. Here we have pegs from Hong Kong to the Middle East. We will have the same problem for as the dollar is driven higher, thanks to the implosion in the Euroland, these nations will import DEFLATION from a rising dollar. This will break their backs and force pegs to collapse around the world. Keep in mind that this will unfold probably after 2015.75 and help to spiral the world economy into the worst depression in centuries. Start preparing for a rainy day.
These idiots are raising taxes when they should be lowering them as even Keynes suggested. Unfortunately, we are in a major crisis because of their insane mismanagement of the economy. There is nothing they will not steal. They are the type of people who are pocketing soap on the cart of the maid as they leave the hotel room. This level of corruption is turning into a feeding frenzy, which is our doom.
The rise in the dollar, will be the key to breaking the post-war economy. It was the flight of capital from Euroland into the Swiss that broke that peg. We will see in the months ahead the same crisis unfold in the Middle East and in Asia. This will be accelerated by the emerging economies who have issued $6 trillion in dollar debt since 2007. As the dollar rises, they will be forced into the same position as Greece – unable to pay their debts because the debt keeps rising in cost.
Dollar v Swiss – 2011 Low Still Holds
The dramatic move in the Swiss franc may have confirmed two other interrelationships. Against the dollar, we wrote at year-end “The Swiss is currently trading at 9934 and a mere year-end closing above 9785 will signal that indeed the 2011 low for the dollar will hold and that a test of the 11800 followed by 12300 level then becomes possible.”
Despite the wild move, the 2011 low was 7185 and the low on this dramatic move was 7406. The 2011 low did hold. This only warns that we will see the dollar rally as the next nail in the Euro is driven. The losses are mounting around the world showing all the so called professionals who seem to have believed mainstream media’s propaganda campaign to support the Euro. Everest Capital was forced to close its largest hedge fund. The managers were betting on a decline in Swiss francs. After the surprising decision of the Swiss central bank, the hedge fund lost more than $800 million dollars.
However, the other aspect we were watching in Switzerland was what appeared to be a peak in real estate for 2015 on a 26 year cycle. There has been a major influx of European capital fleeing into Switzerland to escape Euroland. With the surge in the Swiss against the Euro, that has created a virtual Phase Transition top in real estate for foreigners. Look to take your profits before it is too late.
Feinstein to pocket $1 Billion Personally
Sen. Dianne Feinstein is expected to pocket $1 billion from the Post Office for her family. These people are beyond greedy and they have the audacity to always blame the rich. Just amazing. Maybe the Greek cab drivers are right. Just where the hell do we start when corruption is everywhere?
Taxes Reduce Standard of Living – When it is So Corrupt, Where Do You Start?
People have no idea the real level or taxation that they pay. A flight from Zurich to the USA runs $975. The actual air flight is $498 on United Airlines and the taxes are $477. A staff member from our Swiss office brought some chocolate as a gift for Christmas. What was about $300 in Switzerland was $100 in the states for the same brand. Starbucks latte in Zug was about $10 before the rise in the franc compared to $4.76 in the States. Europe has no concept just how much they pay in taxes already. Government consumes everything until there is nothing left and it just collapses – DEFLATION. When you ask a Greek cab driver why they have not revolted, the response is interesting – it is just so corrupt, where do you start? Thetaxes on your cell phone in the States runs between 13% and 25% depending where you live.
Obama – Ultimate Marxist
Obama is at it again. He want to target the “rich” which is household income soon to be $200K+ and prevent them from leaving assets to their children as well as raise taxes on their investment. This definition of the “rich” is really not salary, but profits from investment. How about starting with politicians? They are not taxed on donations and het to keep what they raise not to mention they run their personal expenses through the laundering mechanism of political donations. Then Obama takes Air Force One to Palm Beach several times a year so he can go play golf. Those golf games cost the taxpayer well in excess of $25,000,000. He uses the government tax free and lives like a king and will for life and never pay a dime. How about starting with Washington. We could save $350 billion in 10 years eliminating political tax-free junkets.
The German Delusion
The desperate attempt to keep the Euro together is really setting the stage for sending Germany into a Great Economic Depression. Merkel now wants to raise the tax rate to pay for all her bailouts of Europe. She cannot comprehend that raising taxes to support the Euro is reducing disposable income and reducing the German living standard of the people no less fueling greater unemployment. All she looks at is trade and Germany is suffering because the system is seriously in trouble. With more than 50% of municipal government insolvent and tax increases needed to bail that out, the cost of supporting failed political theories is reaching staggering levels.
The Russian sanctions and the Euro combined are about ready to collapse the dream balloon they floated of Euroland into dust. You would think anyone with a pocket-calculator would figure this out that something has to change. Politicians are dangerous creatures for they devour whatever exists to support their lifestyle at the expense of everyone else. They are aggressive carnivores for they will strip the meat from the economy right down to the bones. Unfortunately, they will continue on this path because they are incapable of admitting a mistake. Society always pays for the mistakes of its leaders. Therein lies our worst nightmare.