Debt & The Dow
The US government has now moved into the second week of a shutdown with 810,000 federal employees furloughed without pay or 28% of their work force. Some believe there is no end in sight largely because the Democrats are trying to use this to destroy the Republicans and the Tea Party. For this reason, Congress remains deadlocked with the second deadline coming October 17th, the increase the nation’s borrowing power, which if not approved will create a technical default.
John Boehner has halfheartedly vowed not to raise the US debt ceiling without a “serious conversation” about what is driving the debt. The Democrats are desperately trying to push the country into default because they think they will win the House in 2014.
Publicly, the Republicans nor Democrats are offering any sign of impending agreement on either the shutdown or the debt ceiling. Both sides naturally blamed the other side for the impasse. Boehner is trying desperately to get the Republicans in a unified state for he want to sit down and have a conversation with the president. But he is clueless as usual. Obama’s refusal to negotiate is political to further the Democrats at the expense of the nation. Obama thinks he can blame the Republicans if there is a national default. He is betting on that will destroy the Tea Party once and for all and thus refuses to do anything claiming Congress must do “its job” that he defines is reopening the government and raising the debt ceiling without any negotiation on concession. There is clearly a hardening of positions here and Obama believes either way he wins. If the Republicans blink, that destroys the fiscal conservatives. If they do not blink, the country goes into default and he then uses that against them in the elections. The Democrats see this as a WIN – WIN for them regardless of who they hurt in the process.
Conservative Republicans in the House have resisted funding the government for the current fiscal year until they extract concessions from Obama that would delay or defund his signature healthcare law, which launched October 1. If Obama gives that up, there is nothing left he can claim for his Presidency.
Still other fiscal conservatives are demanding that a similar condition should be placed on raising the debt ceiling. Boehner has not agreed to that one. The only thing Boehner says is true, but they are not his words: “It’s time to talk about the spending problem.”
There are suggestions for compromise where the debt limit hike might be combined with a new initiative to reform the U.S. tax code and achieve long-term savings in Social Security and Medicare rather than Obamacare. Other ideas floating around are to pass only a very short debt limit increase, which would create time for more negotiations at the expense of further market uncertainty, and repeal of a medical device tax, which is expected to generate some $30 billion over 10 years to help pay for healthcare insurance subsidies under Obamacare.
China, the biggest holder of US Treasuries ($1.277 trillion), urged Washington to take decisive steps to avoid a crisis and ensure the safety of Chinese investments. But playing politics will have a backlash that Obama does not count on. Default once, and what will happen is that this issue will come up time and again with each event becoming worse.
This will most likely result in fewer sales to foreign investors and the stock market will rise and capital is forced into the private sector. This week still shows we may see a directional change, but volatility will start to rise going into the first week of November. The volatility models are clustered around the second target of October 17th for the borrowing power limits.
Watch Nigel Farage – Britain’s Greatest Leader Since Maggie Thatcher
In Britain, you cannot get any more brain-dead than the Tories. They are doing a spectacular job at destroying the nation you wonder if they were not in secret league with the left – what the hell – the more chaos the more than can claim vote for them for change.
Here too, the clear implication that mistakes made by the Conservatives (Tories) under David Cameron’s leadership have helped fuel the rise of the insurgent fourth party, which wants to take Britain out of the European Union. Nigel Farage has more experience in his private sector background than the bread for public office Tories simply because their family held previous seats.
Indeed, Farage and Ukip are enjoying a surge against the Tories yet they try to dimiss the rising tide and maintain it is business as usual. Farage made several high-profile appearances in the city last week after being denied a pass to attend the Conservative conference. This is the same stupid attitude the Republican pulled by refusing to even allow Ron Paul’s name to be put in for nomination. Such an exclusion that makes perfect sense only to elites trying to hold on to power they do not deserve. After all, why should the Tory Party actually allow any democratic process to enter their meetings?
Politicians are our greatest problem. This is WHY I say we must end Republics and move toward Democracy. Rome fell into the hands of an oligarchy the same as the bankers today have controlled the politicians. Once you have CAREER politicians, then they vote only their own self-interest. We need DEMOCRACY where there are no CAREER politicians, people will serve their country for a maximum of 2 years (1 election) and never again. They are to meet at best once per month if not just once every 3 months. When they are private citizens, whose election is funded by the government with NO donations, then we are looking at last a real government. They would be the check against the bureaucracy and NO expansion of government, implementation of taxes will be allowed without a vote put to the public. They are to vote on computer or at the library. Voting should then be mandatory.
Do this, and we will eliminate CAREER politicians, corruption, and we just may reduce war in the process. Obama accepts the Nobel Peace Prize, then goes to church where he plans killing people. Come on. We do not need this shit. General Giap is a legend. He is 102 years old and led North Vietnam to victory against Japan, France, and the United States. He remains perhaps one of the greatest generals of all time illustrating that just sometimes, being smart and practical can defeat the political minds of those who play with other people’s lives.
We are headed into a political storm on a wide scale basis. Everywhere we look, there is political change on the horizon.
Sticking Your Finger in the Light Socket & Expecting Different Result – Pure Insanity
The definition of real insanity is sticking your finger in the same light socket over and over again, yet expecting a different result. This is what we do with each and every crisis. There is some investigation and political pronouncements, yet NOBODY ever asks has ANYONE ever tried this before and did it work? As a society, we just are incapable of ever learning anything. Science moves ahead, but even that comes with great pain. They burned Bruno at the stake for dare saying the earth revolved around the sun – God forbid. Economics is much the same. We cannot advance because of the bias, prejudice, and self-interest of so many groups. This necessitates the entire system collapsing in order to force change.
Government is cracking. There is a rising tide against the stupidity of government, and their response is to usurp even more power. As we head into 2016, it is important to grasp the seriousness of what we are facing. We are attempting to bring on line for the world to see our full version of our Artificial Intelligence system. The only way to eliminate human bias is to objectively analyze events and call the shots as they are. The best way to accomplish that is by computer. What we have created here is far beyond anything ever attempted. We have constructed the largest data base in history. That has then been provided as a learning base for the computer. In this manner, you can ask it a question and it will respond. Thus, we can ask if there is a solution to a specific event.
The year 2016 is a primary target for political change. 2014 is a target for turning the war cycle and 2015.75 is the next turn on the Economic Confidence Model. We are in serious trouble. Even in Ireland, the people on Saturday were actually voting to dismiss the Senate to save money. Here we have Ireland actually voting to get rid of politicians in one house to save money.
Weather
QUESTION: “Mr. Armstrong: I am surprised there has been no discussion about the recent weather pattern and storms throughout the country. Your prediction of severe storms in the fall based on May being the coldest in recent history was right on.”
Best Regards, R C
ANSWER: We will be trying to incorporate another forecasting service on weather in which I was a joint venture partner – Strategic Weather, which is now called Planalytics.
This is a venture I helped to create with my friend Dick Fox who was Chairman of Temple University. This is long-range weather forecasting based on cyclical models rather than the traditional methods. Its accuracy is far greater than other methods. We will be incorporating this analysis, in additional to our models extending back thousands of years, into our forecasting global economic models especially for agricultural markets and trends. Like markets, this looks at historical patterns that repeat. There are natural cycles that impact the earth and claims that we are creating global warming are just absurd. Didn’t the earth go through Ice Ages? How did the earth warm up then without man? We are but a pimple on a fly’s ass sitting on an elephant. Automobiles have only been around in quantity post Great Depression. To think we can change the dynamics of the earth in such a short time span is arrogant. One volcano throws more dust in the air and polution than 10 years of automobiles in the United States.
It is time in general to welcome a new age of forecasting that is not based upon short-term noise nor personal opinion. Just the fact please. Has such a trend taken place before? Is there a cycle? Gee – the energy output of the sun is a 300 years cycle. Just maybe global warming comes in sync with the cyclical fluctuation of the sun. Bold idea I suppose.
Is Anyone Really in Control?
QUESTION: Do you believe that the Club you have written about since your piece Behind the Curtain published several years ago is in control of markets rather than the popular conspiracy groups?
ANSWER: Actually nobody is in control. If they were, we would not have these contractions since Long-Term Capital Management in 1998 where these so-called sophisticated investment banks always need to be bailed out. Far too many people simply believe the big investment banks are very sophisticated. That is just not the case at all. They are too busy manipulating markets to ever spend the time on risk management.
I know the game. Whenever they lose big time, they claim it is a rouge trader. Let’s set this straight. Nicholas “Nick” Leeson was a former derivatives broker whose the story claims did fraudulent UNAUTHORIZEDspeculative trading that led to the collapse of Barings Bank, which was the oldest investment bank in Britain. They had an account at out Hong Kong branch of our brokerage house. We had no problem because the board of directors provided authorization for his credit line. If you do not ask for something like that, you are asking for trouble. In the case of Yakult in Japan, I asked for a letter from the board of directors confirming they were aware of the directions of their Chief Financial Officer. When they would not provide such a letter, I refused to comply with the orders and the account was closed. However, they hid $100 million loss at our Hong Kong office and then asked for us not to reveal that publicly. It took them one year to pay us that money, thereby confirming that the Board of Directors knew what was going on while the press demanded the head of their “rouge” trader.
I have NEVER see a rogue trader yet beyond small change. When you get into huge amounts of money, the board ALWAYS knows. They just pretend to be victims to save face.
This is why I say banks MUST be barred from proprietary trading PERIOD!They are NOT sophisticated and openly pretend to be so, and routinely blow themselves up like clockwork. When you rig the game, bribe everyone in sight, own the courts and the regulators, install your own people in government, you do not rely on risk management, models, or being a REAL trader. This model has undermined everything in society, deprived us of a fair and honest government, and has placed at risk the very thing that makes civilization function – the synergy of cooperation that is greater than the sum of the parts.
How Empires, Nations & City States Die – We seem to be right on Schedule
In Britain, there has been the private ongoing scandal how insurance companies sell annuities and have been cheating their clients who have counted on these products for their pensions. The entire pension crisis is going to be earth shattering to say the least and far more devastating than the mortgage crisis. Instead of investors and banks failing, these fools have toyed with the very fabric that create a society. You just cannot do this to the masses. The people who create these scandals must have been raised by wolves for they are totally void of understanding or morals.
There is only one outcome when you screw all of society in such a manner. They tear down the walls and drag them out to the streets. Historically, these events just do not end nicely. With the war cycle turning up, we are not looking to be in the pink as they say nor in the money.
The Pension Crisis is far different from the Mortgage Crisis. Now we are fooling around with the very issue that even destroyed the Roman Empire. Only a moron would promise pensions to state workers and then expect that they can just tax people forever so there was no need to actually fund such things. We are looking at state and municipal bankruptcies like Detroit where 50% of tax revenue was going to pensions. They keep raising taxes because they also refuse to reform or reduce the size of government. This causes a Phase Transition in the cost of government. We are going to see taxes soar in the USA to the point they will most likely DOUBLE. This will drive more and more capital underground, reduce LIQUIDITY future that is the destruction of a cooperative civilization, and this will further reduce the VELOCITY of money. This is how ALL empires, nations, and city states have died – by their own hand.