Boehner on the Way Out?
John Boehner, the current Republican Speaker of the House, just may be thrown out. He wages war against the Tea Party and threw off every financial committee anyone who supported Ron Paul. This guy is serious bad news for he is old-world country-club style Republican who should have been hosting a game show – Let’s Make a Deal. He stands for nothing and if you made him dictator, he would not change anything in Washington. Boehner is from Ohio’s 8th congressional district. If Ohio keeps sending the obstructionist to Washington, they should pay everyone’s tax bills.
Currently more than 50% of the Republicans want him gone. He has to stand for election as Speaker and we could at least get some reform if he is kicked out in House elections.
Share Market Brief Assessment
The 2014 year-end closing in the Dow was strong, but not quite ready for liftoff. The failure to close above the 18500 level only keeps the Dow in a base-building position for what is to come. Only a closing below 16978 will signal a brief pause in trend. We will be addressing this in a special report for the year.
The DAX also closed at an 11 year high, yet also still contained. In France, the CAC40 closed LOWER than 2013. Key resistance will stand at the 472000 level for 2015. Italy also closed at 19012 just a hair above that of 2013′s close at 18968. Greece made and outside reversal to the downside. Nonetheless, the 13 low established in 2012 from the 1999 high warns that Greece will leave the Euro. Its economy and markets have been devastated by Brussels. The conversion to the Euro was the equivalent of strip-mining the national wealth. If Greece bails-out, this will become one of the better performing markets in Europe over the longer-term.
The FORECASTER & Marcus Vetter
To clarify the questions coming in about the movie the FORECASTER, I turned down American producers because I understand the way the system works. The government could easily pick up the phone and threaten them to do as it demands or else. This is why Snowden had to go to London to get the story out. If he showed up at ANY US newspaper of TV station, they would have offered him a cup of coffee while the NSA was rushing over to grab him.
This was the same reason I went with the German film producers. Marcus Vetterassured me he would not do a “poor me” film and he would tell the truth nothing held back. All his films sought to find the “big picture”, as he put it. He told me he wanted to create a film that would be a “sign of the time”. Marcus was doing three films about the economy in 1999, 2000 and 2001. And that was when he wanted to contact me. That is when he learned of what was going on and followed the situation.
He produced the Heart of Jinin, which has been an internationally acclaimed film. When I did ask producers who are clients in Hollywood about Marcus, I was told I could not have signed up with anyone better. Indeed, the quality of the film is like a movie. The only press to appear in the film was someone from Bloomberg. The various New York newspapers and magazines all declined to appear. Since Marcus contacted the government, receiver, and the courts numerous times asking them to appear, he was forced to simply state at the end that they all refused to comment to defend what they did. Perhaps I would have been a tad more aggressive and went up to them on the street to show them on camera running away, but hey – that’s just me.
Empire v Mere State
QUESTION: Marty, your insight into the failure of Austrian and Keynesian economics was really eye opening. At your conference you said that Adam Smith’s Invisible Hand applied internationally not just domestically. I believe I have reached the level of understanding you have been teaching us. It is indeed global and clearly everything is connected. Is China now in the early stage of Rome when it was growing in the shadow of the Greeks?
Happy New Year from Euroland
All the best
KM
ANSWER: Absolutely.China is in the current growth stage. It will take time. It took Rome 72 years to complete the second phase of monetary growth. Its first silver and gold coinage was struck in Greek denominations illustrating that the Greeks were still the financial capital of the world. Like an emerging market nation today who issues debt in dollars to facilitate their economy, the Romans adopted the Greek monetary system to facilitate trade.
Previously, the Roman monetary system began with bronze, for it was the metal of tangible value since it could be made into a plow or a weapon. Bronze coinage, known as Aes Grave, appeared during the 4th century BC and that standard weight system is still with us today. The Roman As was one pound and this was divided into 12 units called “uncia” or ounces.
Prior to the 4th century BC, the Roman monetary system consisted of just lumps of bronze known as Aes Rude. This form of money replaced cattle. This period of Aes Rude lasted about 309 years.
The Aes Rude is thus replaced with “official” government issued coins that were a standard weight system. This facilitated trade for it displaced the requirement of always having to weigh the crude lumps of bronze.
It was 211BC when Rome introduced the Denarius establishing its own monetary system distinct from the Greeks. Therefore, we have 309 years for Aes Rude, about 112 years for the Aes Grave, 72 years for the Greek denomination period, and then the birth of the Roman denarius.
The First Punic War (264-241BC) erupts over trade during this period of the Greek denominations that began about 280BC. The Second Punic War (218-201BC) is when Hannibal crossed the Alps and invaded Italy. This nearly succeeded, and we can see the impact in the monetary system. The Romans were forced to reduce the weight of the coinage from about 7 grams to under 5 grams, which was a reduction down to about 72%.
It was at this time Rome issued its first gold coinage, yet this was in keeping with the Greek standard of a stater. The Stater design was the Roman god Janus and the reverse is an oath taking. This was issued during the Second Punic War to impress the various Italian states to standby Rome for they had money and the oath taking was to demonstrate expected loyalty.
The evolution of the monetary system of Rome illustrates how empires rise. It also reflects that the dominant economy’s currency is ALWAYS used by surrounding nations. Consequently, history demonstrates WHY in fact QE1-3 failed to produce inflation for the dollars created were absorbed globally. Theories that only view the dollar from a domestic isolated perspective are incorrect and will always fail for that is not what history teaches us if we take the time to listen.