Euro
The Euro peaked in two weeks, fell back, and has rallied into this week. Nonetheless, key resistance still remains and the turning points remains the weeks of 05/06 and 05/20. The top of the channel for resistance we warned about was in the 13400 level which has not bee reached as yet. A weekly closing BELOW 13350 this Friday will keep the Euro neutral to bearish. So far the high has been about 13242. So we have not reached critical resistance yet. If there is going to be a drop, it would most likely come going into the week of 05/20. There should be some rally and then we have problems for the fall.
We need to see a closing on a daily basis ABOVE 13400 to suggest a rally before the decline. The Weekly Bullish stands at 13913. So this currency is not headed upward on a sustainable basis.
May – Tis the Season for Protests in Europe
The May protests in Europe are going by the slogan “fight against the king in Brussels”. Politicians are clueless. All they see is retaining their jobs at the expense of society and everything within it. There is no thinking out of the box. If they do not blink, they are risking the collapse of Europe as a whole.
Interest Rate & Deficits – The Real Crisis
Academics are truly amazing. They talk in circles, assume they are far above everyone else, and thus pontificate from the Ivory Tower without ever stepping foot out the door. There is a growing consensus that deficits no longer matter. WHY? Because they cannot explain how government has run persistent deficits yet nothing has happened. Therefore, we are dealing with a new paradigm shift in academic thinking.
In 1962, Thomas Kuhn wrote The Structure of Scientific Revolution, in which he gave birth to the term “paradigm shift” (p.10). Kuhn argued that indeed all scientific advancement was by no means evolutionary. Instead, he put forth that scientifica advancement was really a “series of peaceful interludes punctuated by intellectually violent revolutions”, and in those revolutions he saw as “one conceptual world view is replaced by another”.
Academia is made a Paradigm Shift and has convinced itself that deficits certain are no longer relevant. This dramatic change in thinking to this “new age” is not unlike the first new age of economics where academics became convinced that it was their destiny to manipulate society for its own good. The theory was government was CAPABLE of managing the economy and eliminate the business cycle so we would never again face a recession or a depression. Paul Volcker in 1979 publicly went on record in his Rediscovery of the Business Cycle that the Keynesian age of new economics failed. So here we are with academics once again postulating that government need not balance the budget and just spend all the time with no impact upon the economy.
The economic revolution has truly been a metamorphosis that has brought the world to the brink of total disaster. They are clueless. They have no idea of what they speak and of course they just never consider the consequences of their errors. And when their ideas fail like Communism and Socialism, well that is just OOPS! Sorry about that!
Marx’s ideas of trying to manipulate the economy that Keynes followed, has been responsible for more deaths that atomic bombs. How many died in China and in Russia under Lenin by force to adopt these new economic theories. This one will also blow up is everyone’s face but they are already so committed to this new ”paradigm shift” they will never say we were wrong.
This whole idea has led government to manipulate interest rates down to reduce their deficits at the cost of pension funds and life insurance companies. What are the consequences of manipulated interest rates and statistics to support this debt that does not matter?
