Rising Third Party & How It is All Connected
Back in 1997, we warned that our computer model was forecasting that by 2016, we would see a tremendous rise in third party activity. This was our forecast back then and most said what is your computer drinking over there? The blue line in this chart showed the historical 3rd party movement and how it correlates to economic crisis. But this was not limited to the USA. I stood up in Tokyo in 1998 and warned the LDP would lose, which was shocking since they never lost post-World War II. When they lost – our Japanese clients were in awe.
Lady Margaret Thatcher came and spoke at our conference in Princeton in 1996, which was in reality an tremendous endorsement of our cyclical methodology. I named the piece “It’s Just Time” after her response when she predicted that the conservatives would lose long before Tony Blair emerged. She had an instinctive sense of cycles as did Winston Churchill. The politicians who were good, had a “feel” for the trend and understood the cycles of politics. When I was moving back and forth between Dick Army and Bill Archer in Washington over Tax Reform trying to create a compromise between the Flat Tax and the Retail Sales Tax camps, Dick Army said to me with his boots up on the desk and smoking in his office, when the Democrats got back in, they would install both an income and sales taxa. Indeed, Obama is now trying to do just that. Dick also understood the cycles of change.
The rising 3rd Party movement is global. In Europe they are protesting against Brussels they are characterizing as the “king”. In Cyprus there is a rising 3rd party movement. But in Britain, there has been a huge upset. A rising 3rd Party has gained 25% of the council seats today. This is showing that as we head into the eye of the storm, this is going to be anything but politics as usual. This was a HUGE day for Nigel Farage.
Some people are just so desperate that we will be wrong on gold they remain blind to how everything fits together and pretend our computer somehow is prone to “human” error. The global economy is like a delicate forest with billions of species of plants and animals all interlinked and working together. Remove one, and you set off a chain reaction because there is another species whose entire survival depended upon it, In turn, other lifeforms will be affected down the food chain. The question presented:
“Your most recent blog post you stated “opinion is prone to human error” as humans are prone to error in general. That being the case, isn’t the programming of any computer (program) prone to possible error, i.e. Y2K was going to end the world the “experts” told us, and it never did. I’m not suggesting your computer program is flawed with error, quite the contrary, your computers track record speaks for itself. But how would you answer those critics of yours that suggest your program could be “prone to human error?”
Y2K was not human error – it was human hype as always. No expert that I know of contemplated any such end of the world nonsense. You simply changed the clock in your computer and you could see it would not fail. This was like the Maya event that they twisted into amazing fabrication. Human error is emerges from biased opinion. The entire object of creating a fully functioning Artificial Intelligence system that no one has been able to come even close to yet is to remain human error. I designed the system with NO HUMAN RULES, assumptions, or biases just how to analyze never what. It created its own experience and knowledge base teaching me by correlating absolutely everything and that included war as well as politics. It has surpassed anything any human can possible do.
Humans try to forecast a single market in total isolation. That is wrong, absurd, and cannot be done. For gold to rally for 13 years as the computer also projected, it incorporated the rise in 3rd Party Movement as well. We came out in 1997 and forecast that oil would rise from $10 to $100 going into 2007. That forecast was covered by Mark Pitman at Bloomberg News. Forecasting that the US share market would make new highs again starting after 2011 as covered by Barrons, was also part of the same forecast. All of these things and much more, including our warnings on the future collapse of the Euro in 1997 before it hit the ground running, are all connected. Like the example of the forest, they are interlinked and one will not take place without the other.
So sorry. To have been wrong on gold meant there would be no future bull market because there would be no sovereign debt crisis, collapse in the economic structure of Europe, and the Dow would not have made new highs because of capital inflows. It is all connected. We live in a dynamic would – not linear! There is a TIME and PLACE for everything!
What Do Central Bankers Really Look AT
QUESTION: Can you please comment on the following. I hear incessant talk about the market being supported by Bernanke. The Fed gets the credit for the market going up. (And when it goes down for not doing enough). How much truth is there in this mantra? How much is the Fed actually affecting stock prices by what they’re doing? It is very confusing to hear day after day CNBC commentators point to the fed as the cause for seemingly everything good and bad in the markets and economy.
ANSWER: Absolute nonsense! The Fed is worried about the rise in the stock market for they are as confused as the talking heads. The talking head’s problem is this constant myopic view of the domestic economy as if everything begins and ends here. We are working urgently to get a new book on the globalization of the economy out ASAP that illustrates this problem that plagues not just the TV comments, but the economics taught in schools. The reason why increasing money supply by the Fed FAILED to produce inflation is the complete failure to comprehend the global economy. It is the global capital flows involving debt and capital investment that drives all world share markets and currency values. The Fed does NOTeven control the money supply! International capital does!!!!
1927 Central Bank Secret Meeting
There were secret meetings between central banks as early as 1927 that tried to deflect the capital flows pouring into the USA back to Europe. The central bankers of the day are pictured here and their efforts to manipulate the world economy utterly failed and caused capital to then really shift to the USA creating the bubble in 1929. They are not in charge of anything – they aggravate the capital flows. This is the same problem right now and the talking heads are clueless about capital flows and their importance.
It was our seminar in London where the London Financial Times got in and reported on the front page that we warned Russia was about to collapse because we saw $100 billion in capital inflows with $150 billion in outflows. That forecast was correct and that sparked the collapse of Long-Term Capital Management in September 1998. They say if God did not exist man would create him just so he could sleep at night. We definitely view Washington the same – nobody knows what they are doing, but someone down there must, so the talking heads attribute everything to them. Sorry – the economy is on autopilot and this is just gibberish. Follow the money!
If two Americans are involved and one sells Rockefeller Center to the other for $3 billion, there is no impact upon the domestic money supply assuming both were dealing in cash or the debt was the same. However, if the Japanese buy Rockefeller Center, they have to import cash into the domestic economy and that expands the money supply. The Fed had nothing to do with it.
The US share market rises when there is a geopolitical or economic risk in Europe. In 1914, they shut the US share market for 4 months on fear there would be a massive selling panic on the outbreak of war in Europe. When the market opened, it rallied to the shock of the pundits. WHY? With Europe going to war, don’t you think you might want to move your wealth out of that place?
The USA was broke in 1896. J.P. Morgan had to lend the US Treasury gold because it was near collapse. By the end of World War I, the US was the financial capital of the world. By the end of World War II, the US had 76% of the world gold reserves. Capital all flowed to the USA for fear of Europe concentrating in the dollar, which is why it became the reserve currency. The press did not understand the globalization back then either and never will. They are journalists – not analysts. It is simply above their heads. What I have learned comes from our clients – not books and theory. You certainly would not go to a 5 year old for driving lessons in a car. If you have NOexperience, forget it. Only live experience opens your mind to see the subtleties that are the key. It is the same with trading. Someone who has never traded has no clue about the craft.
Everyone knew we advised the the majority of central banks after the 1987 Crash. A friend who did the intervention for the Bank of Canada came to my seminar in Toronto and brought about 15 members. Institutions began to ask me what the central banks were looking at. I would give the answer, and they would turn to see their reaction. When I was finished I said to my friend Pete from the central bank I hope I did not say anything that offended them. He said it was best speech he ever heard and wished he could speak like that to tell these people they did not look at half the nonsense they talk about. The central banks actually had phone lines connecting them. When I was there one day the phone rang. They refused to answer because they did not want to intervene. It just is not anything like what people think. When I would write to whomever, they responded because they knew we were serious.