ECB & China Accepting the Same Type of Products from Banks that Blew Up the World in 2007
The ECB and China are allowing their banks to post the very same products that Blew-Up the Financial World as collateral for loans. The banking crisis in Europe is devastating because the reserves were the various euro bonds of all member states. Cyprus went down because of their losses on Greek bonds. Banks is Europe are so bad, the ECB will accept just about anything to try to keep the system floating. This is a primary reason there is a tremendous risk of a massive capital concentration into the USA markets fleeing Asia and Europe.
Britain Brings Criminal Charges in LIBOR Fraud
Unlike the USA, the British courts and legal process are not as in bed with the bankers as they are in New York. They have brought to court today on criminal charges former brokers charged with conspiracy in the LIBOR interest rate fraud that continues to expand. This stands in stark contrast to the policy in New York City regarding the banks and brokers there as being the notoriousUNTOUCHABLES. The US is like to also charge low-level brokers who have been dismissed, but never the major bankers.
In our own case, the SEC appeared before Judge Louis A. Kaplan who pointed out that the document used by the SEC to bring its charges was (1) a translation of a Japanese document that they fashioned as they desired, (2) the omitted the first page stating they were notes, and (3) misrepresented the fact that we stated we were “conservative” and used less than 10% for hedging employing futures. They the SEC argues we were trading yen futures and had their receiver liquidate those positions when they were the hedge since the notes were payable in yen.
Judge Kaplan pointed out that the first page was missing and that we disclosed we would be using futures yet still granted the SEC injunction stripping the company of any right to hire lawyers appointing Alan Cohen of Goldman Sachs as the receiver and O’Melveny & Myers as his counsel. So even when the documents used do not say what the government claims, they still win in New York City. Kaplan even stated in court that if using futures as disclosed was “conservative” as the SEC was pretending, then “the last ant I saw is an elephant.” Nobody seems to have understood what hedge currency even was. Do you think they will EVER admit a mistake – only unbiased people would do such a thing – TYRANTS NEVER DO! So it is just hopeless and they cannot see that this simply warns that you have to be out of your mind to place any money in NYC if you cannot defend yourself when the bankers rip you off. This is why London regained the status of being the Financial Capital of the World. Unless there is REAL prosecution of bankers, there can be no free market and capital will never be safe.
Britain has not yet shown it will prosecute the heads of banks involved – only low level brokers. If Britain wants to retain that crown, it has to set an example for the whole world to regain confidence in its legal system and its integrity that the USA sold to the highest bidder,
ECM 8/7/2013 Turning Point
A number of question have been directed at what will this turning point produce. This should not be a major high or low in the major markets. What we should see is a mental shift develop at this stage in the game. In the case of 1987, there was a major high that formed first and then there was a major crash that BOTTOMED precisely on the target. That was the start in the shift of the capital flows.
This illustrates the impact is capital flows and this shifted the asset allocation from the USA to Japan. We had a rising Japanese yen that also acted like a magnet attracting global capital when the assets were also rising.
Here is the dollar-yen for this period. We can see the dollar low in November 1988 and then for the last year, the yen began to decline until it shot sharply higher into April 1990 as foreign capital then withdrew. The dollar was a leading indicator for all events because it was reflecting capital flows.
We should see volatility start to rise next week. The Dow is inching upward but is unlikely to exceed the primary target resistance in the 16000 area. A drop back in many markets into September is likely. But keep in mind that the major event should be later 2015 – not right now.
This should be the shift in capital flows and we do have to be concerned that a capital concentration in the USA could send the Dow Jones Industrials to extreme highs. The MAXIMUM target would be in the 43000 level. As crazy as that sounds, keep in mind we did hit the maximum target in 1989 for the Nikkei as that index rose from 18000 to 39000 between 1987 and 1989 precisely as our computer had forecasted.
We will be providing a major report on these prospects after the German elections. We will be holding a World Economic Conference also after the German elections. We do not yet have the date or the venue. We will let you know when. This no doubt will prove to be perhaps on of the most important events since the 1985 Conference we held in Princeton, New Jersey.