Socialism Brought Home
An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, “OK, we will have an experiment in this class on Obama’s plan”.. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F.
As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.
To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Could not be any simpler than that.
Here are possibly the 5 key points about such an experiment:
1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.
Global Market Watch for Nov 6th, 2013
Covering Eastern & Western Europe – Middle East – North & South America – North & South East Asia – India
The Most Comprehensive Forecasting Organization in the World
World Share Markets STKPGSO 11-6-2013
World FOREX Markets FXPGSO 11-6-2013
World Bond Markets UBPGSO 11-6-2013
World Metals Markets METPGSO 11-6-2013
World Energy Markets ENPGSO 11-6-2013
World Agricultural Markets AGPGSO 11-6-2013
Apple has Tevealed Details of Gov’t Requests for Info
Apple has revealed details of requests it has received from governments across the globe to share customer data. The requests are in the thousands. There should be clear qualifications on these requests that they MUST be limited to terrorism and anything gathered on anyone else for monetary reasons should constitute total immunity from and such prosecution. If they want to play games, they need to be restricted because this is going in the direction of just grabbing everything to pay the bankers.
Million Mask March
Protesters gather around the world for the Million Mask March in more than 400 cities that were planned to coincide with Guy Fawkes Day in Britain. Just wait until they take 10% of everyone’s account to hand it to the banks. Will the masks come off then? What’s next? IMF proposes forced labor to reduce government deficits and manipulate the high unemployment stats? It would be nice if these people just for once REALLY understood what is going on behind the curtain.
Commodities Trade Differently & Always Have
QUESTION: You said gold trades in bursts? This seems to explain the nonlinear patterns you speak of. Is this correct?
ANSWER: All commodities, including gold, trade substantially different than stocks or real estate, which is the slowest moving asset of all until the final 2 years. Pictured here is wheat back to 1200. Note that you see what appears to be a brain wave. Commodities trade different because they are subject to nature. Manufactured items can be produced on a more regular basis. But commodities are subject to weather and even mining is subject to discovering supply. Look at energy. The US was dependent on the imports and now it is virtually self-sufficient. This has been caused changes in production.
Here is wheat impacted during the Black Death. Two trends were clashing. There was a 50% drop in population so demand dropped, but also there was a collapse in labor so production declined. Prices rose because there was still a shortage of supply because land went vacant and that forced landlords to begin paying wages. There are always far more complicated trends involved in commodities.
War has also impacted commodities. But when gold was MONEY, it declined in purchasing power WITH inflation. When gold is a free market as present, it moves opposite to inflation because yes it too is then a commodity. Making gold money will NEVER prevent the cycles as illustrated above and it will decline in purchasing power with inflation that is in part driven by nature.
Consequently, even gold makes runs to the upside (bursts) that are largely catch-ups. It does not remain constant even against silver. Gold is the worstinvestment from a inflationary standpoint if you expect it to track inflation for it does not and will not. From this perspective compare it to the Dow that rose from 1,000 to nearly 17,000 since 1980. You would have made far more money in stocks than gold. Nonetheless, Gold will rally sharply in a burst and catch up to some extent. It is a matter of time – not if. That is true of all commodities.
Cyclical analysis is all about defining WHEN such events will take place. Price is entirely a different aspect. The burst is just that – a rally that appears to come from nowhere playing catch-up because EVERYTHING has an international value. This will be laid out in our upcoming special report on gold to nail down that timing.
EU Commission Cuts its GDP Forecast to 1.1%
European Commission cuts its forecast for Eurozone GDP growth falling to 1.1% with slowdown in emerging markets cited as a key factor. These people cannot see that raising taxes and proposing taking 10% of everyone’s accounts is not DEFLATIONARY? This should be a case study for bread-dead thinking. There is just no rational explanation how people can be so blind.
Gold – Inflation – Do not fight the tape
QUESTION:
During the Panic of 1869, gold hit $162/oz on an intraday basis.
Grated this was measured in “greenbacks” rather than FRNs, but in terms of purchasing power, wouldn’t that be gold’s real all time high?
What might that be, if adjusted for subsequent inflation? Finally, given that no one—other than Methuselah and maybe Shirley MacLaine in one of her many Earthly iterations—lives to be 144 years old and thus can wait to break even, doesn’t this fact fly in the face of the oft-stated meme that gold always holds its value? (By the way, some very basic work I have done suggests that gold’s all time low value (as measured by purchasing power) might well have been 1999.)
Having visited many of the on-line goldbug prayer meetings, where they constantly reaffirm their unwavering faith, I sympathize with what you must face each day when you open your mailbox.
Thanks,
c
ANSWER: You are absolutely correct. The $162 high in 1869 was by no means reached in 1980 and the 2011 high did not exceed the 1980 high adjusted for inflation. The 1999 low was the historical low. It was the black and white film Toast of New York that was shown to me in High School history class that got me into analysis and research. I was confronted by that same question. How could gold be $162 in 1869 yet $35 under Bretton Woods? Suddenly, it was cyclical and not linear and that also meant it was NOT a hedge against inflation because it did not move steadily upward in sync. It plays catch up in bursts. The Goldbugs hate me for saying the truth. There is a time to BUY for the BURSTS and a time toSELL when it goes down because the BURST is over, To them, it has to be linear and anyone who exposes that is not the case suffers their attacks that are pointless. The joke in the office is who will assassinate me first – NSA, Bankers, or the Goldbugs?
It is what it is. The oldest advice in investing – Do not fight the tape. This will be good for another round of hate mail.
Merkel Embracing IMF Plan to Seize 10% of All Assets
IMF compulsory levy plan will be the largest expropriation of assets in history. These people view your assets as theirs and the entire problem is they are lawyers who justify this in their mind based on the fact that you are merely an unsecured creditor. The EU Commission charged with creating the Euro took the entire row of our London seminar. I made it perfectly clear that you could NOTcreate a single currency without consolidating all the national debts. They said no way, that would be seen as a bailout of Southern Europe. Well now the idea is to seize 10% of everyone’s assets to bail out banks that they sent into insolvency because there was no single national debt and they had to be politically correct and buy everyone’s debt. This is just massive DEFLATION on a grand scale.
These people are destroying the entire world. Just insane.
Obamacare – Total Disaster
The Obama administration, is under tremendous pressure over the botched opening of its healthcare website. They have scrambled on Tuesday to try to appease hundreds of thousands of people whose coverage is being canceled as insurers prepare for reforms in 2014.
Global Market Watch – Clarification
QUESTION: “… can you please comment on how an equity like IBM has “STRONG” , in dark green for the weekly….And has “MOVING HIGHER” in Lt Red for the monthly?”
ANSWER: With GMW you must understand that this is dissecting every market according to time. You can have a market that is bullish daily and weekly and the background can be dark green. However, the overall major trend may still be down so the monthly level can be MOVING HIGHER with a Lt Red background. So often you get people saying the market low has been made and now the rally is underway. How many times have the Goldbugs done that. This slices a market according to time. It plays one level against another. Therefore, you can ascertain real changes in trend from reactions.
Keep in mind that this is NOT a trading tool. It is an alert system to give you a view of the market. Eventually, you will then be able to click on a market and then get the detailed GMW for that market and the computer written report.
We will be establishing a per click access. So you can buy clicks in a bulk manner and look at whatever you like.
Nothing is ever 100%. Keep in mind this is not using cycles or reversals. This is a pattern recognition model. We are working to improve this as well. The patterns it records is applicable in all markets. We will be publishing back tests in things like the Dow Jones Industrials back before the Great Depression to illustrate how it performed. We test this showing a pattern number for each comment. In this manner, we are able to see the same precise pattern takes place in various markets over time.
Hedge Funds – The Bear Market in Liquidity
QUESTION:
Mr Armstrong,
Always a learning experience when visiting your website.
In view of your recent articles about the difficulties faced by hedge funds(e.g. SAC Hedge Fund being shut down,Largest FX Hedge Fund Closing Down,Commodity Hedge Funds are collapsing) do you consider that the Hedge Fund industry has peaked?
JR
Always a learning experience when visiting your website.
In view of your recent articles about the difficulties faced by hedge funds(e.g. SAC Hedge Fund being shut down,Largest FX Hedge Fund Closing Down,Commodity Hedge Funds are collapsing) do you consider that the Hedge Fund industry has peaked?
JR
ANSWER: Yes. This is also being caused by the merger of several trends. The banks are above the law, so they attack hedge funds to pretend to be doing something while leaving the bankers free. Next, the global hunt for taxes has reduced the American presence overseas dramatically. Many funds refused to take Americans because of the regulations. This has reduced liquidity and as that has unfolded you see the inability to trade larger sums of cash. Then there are the fees. When I was named hedge fund manager of the year back in 1998, the fees were 20% performance and 5% management. Those feed have dropped with competition and as capital shrinks, the viability of the industry is declining. This was the same pattern I observed in gold going into 1980. Competition increased reducing fees because you were making more money on the float in your account when interest rates were 17% than you were making on the gold. That was the kiss of death to gold and since I saw it was a bear market and rates would also go back down, it was time to retire.
Banks are Their Own Worst Enemy
I have been warning for years that once Solomon Brothers was taken over by PhilBro back in 1981 and Goldman Sachs went after J. Aaron, Wall Street was taken over by the Commodity Industry. Trading became the priority and market manipulation was the name of the game. But to the contrary of the conspiracy theorists, there was never this idea of perpetually manipulating any commodity to suppress its price or anything of the sort. It was all about profit here and now.
The banks moved from market to market. There were a number of us who kept track of everything they did. I taped every call not to be a whistleblower, but to warn clients what was next. When I was asked to fly to Beijing to meet the Central Bank of China in the wake of the Asian Currency Crisis that was targeted by the manipulators, they knew who they were and why. They could not come out politically and say NY was the center of manipulators, but that is why I was called in rather than an academic.
Now the socialists in Switzerland want to outlaw speculation altogether in commodities.The CFTC plans to set a maximum of 25 percent of the deliverable supply of the underlying commodity to be regulated because of the rising outcry against the bankers. But the CFTC is sponsored by the banks and they may pretend to be reducing their speculation, but will increase it.
We are in a downward spiral for the bankers. Their days are truly numbered. If they keep up this shit, when the economy turns down again, we will run the risk of history repeating. Black Friday is not a term for a shopping day. It was the Panic of 1869 when they were dragging bankers out to the street and hanging them. That is what the term really means.New York votes for New Mayor Who is in a landslide Against Bloomberg
New York votes for a new Democrat Mayor, Bill de Blasio who seems poised forlandslide victory. Mr de Blasio has run against everything Bloomberg has stood for and gained tremendous popularity by standing up against Bloomberg’s unconstitutional Stop-and-Frisk policy where police can search anyone at anytime on a whim. Only someone like Bloomberg could possibly stand for such a practice.
Bill de Blasio’s new campaign ad promotes in your face class and race warfare. He calls for “taxing the wealthy” to provide welfare recipients with more section 8 housing and free daycare. He claims the NYPD is unfairly targeting “people of color.” The ad also explicitly draws attention to fact that de Blasio has bi-racial children.
This is a new era in politics, but it is demonstrating that in 2014, there will be a tremendous risk that the Republicans will lose the House and we are about to see massive tax increases coming from the Democrats on every front. You will always find the pendulum swings to the extreme in one direction before it can swing back. So 2016 Presidential election will come with the economy turning down again and people will be blaming the Democrats who think they can always raise taxes. This will be the stage upon which a rise in Third Party activity becomes possible.
In Computer Hacking parlance, we are facing a Zero-Day political attack on the system meaning we are looking at a possible political meltdown before the press and politicians can figure out the entire system has massive vulnerability.
The Pied Piper – Is it even Possible?
J.P. Morgan as the Pied Piper
QUESTION: Hi Mr. Armstrong,
Just a thought. If everyone starts using your computer model then where does an investor’s edge come from? As you have said in the past, not everyone can get rich doing the same thing.
Thanks as always,
MB
Thanks as always,
MB
ANSWER: Don’t worry. I will never get 100%. Even the 1932 Presidential election that was the strongest any candidate performed, FDR still only gathered 57.41% of the vote. There will be a large percentage of people who will NEVER trade technically no matter what you tell them or prove. I still get hate mail every day from the Goldbugs. Why? They just have to blame someone else for their own failures. So it does not matter what I say. The markets will be the markets andNEVER will you get 100% or even 60% of the people following the same system. It has NEVER happened. This is like saying everyone will suddenly vote democrat or republican. Will never happen – not even possible.
Saudi Arabia Accused of Instigating Chemical Attack in Syria
The Russian have come out and stated that the Saudi’s were behind the chemical attack in Syria to instigate the war. They want Syria gone so they can run their pipe line to Europe for natural gas.
All World Stocks
Top Major Stocks (SAMPLE) - USIGSO 11-5-2013
We are bringing on-line the full scope of all stocks traded around the world including China. Institutional Clients who have been asking for this service are about to get your wish. We will be providing the entire world at your fingertips to (1) save you a fortune in research staff that would cost many millions of dollars just to track this type of data, and (2) this will allow you to avoid INSIDER TRADING charges given this is entirely computer generated with no human input.
Price action already incorporates all capital movement in anticipation of changes in trend. This is how the computer has been able to predict geopolitical changes as well such as the collapse of Russia more and 30 days in advance that resulted in Long-Term Capital Management crisis. We all know as when a stock declines on good fundamental news they report as it was not good enough. Fundamentals may seem reasonable and rational some times, but when the trend is down, bullish news is never good enough and in a bull market bearish news is quickly shaken off. The computer tracks patterns and trends. The fundamentals merely follow the trend.
The computer will also generate a detailed Global Market Watch providing history for each item it tracks so you can see what it has been projecting for the past 10 days, 5 weeks, and 5 months. This will allow you to follow its progress on any given item.
The computer will also write a specific report with the actual turning points and reversals on each and every item. This will allow you to use the Global Market Watch to highlight the markets, then you will be able to click on a specific item to obtain the detailed Global Market Watch in addition to the written report providing the specific targets for time and price.
Once you are familiar with the systems and how to use them, that knowledge can then be applied consistently to anything in the world. We will also be re-introducing the BIG MOVER forecast that targets golden opportunities worldwide. Forecasts of what will move the most for global traders scanning the entire world and providing that at your fingertips.
Pricing will vary according to the coverage you may need. But there is no portfolio that is too large and the cost savings will be vast for the largest institutions around the world. At last you will have an analyst that never sleeps or gets tired without a bad hair day.
Global Market Watch Nov 5th, 2013
Covering Eastern & Western Europe – Middle East – North & South America – North & South East Asia – India
The Most Comprehensive Forecasting Organization in the World
World Share Markets STKPGSO 11-5-2013
World FOREX Markets FXPGSO 11-5-2013
World Bond Markets UBPGSO 11-5-2013
World Metals Markets METPGSO 11-5-2013
World Energy Markets ENPGSO 11-5-2013
World Agricultural Markets AGPGSO 11-5-2013
Canadian Interview Nov 2nd, 2013
Washington Maxim Number One & The Obamacare Disaster
Obama’s signature “achievement” is Obamacare and no matter how dysfunctional it is, the Democrats will never admit its failure and we will spend more and more money trying to hide the flaws. Obamacare is both incompetent and fraudulent for it has been marketed like any lawyer crafts disclosure with exceptions. Obama only promised you could keep your current plan but did not say that the company would continue to offer that coverage.
People are simply going to be forced to move to get healthcare from state to state or die. The economic inviability of Obamacare is clearly a disaster to put it mildly. Yet no Democrat will ever admit it was a mistake any more than a European politicians will admit creating the Euro has been a total disaster failing to consolidate the national debts of Europe as Alexander Hamilton did in creating the financial system of the United States.
The story about the woman who lost her healthcare in California because the insurance company left California demonstrates the problem. They attacked the woman who appeared in the WSJ and the company, not their flawed policy. So cheer up – Washington Maxim Number One – Never admit a mistake no matter what.
SAC Hedge Fund Being Shut Down – Truth About Insider Trading
We have received many requests to bring on-line our computer analysis for US equities ASAP because of legal developments. SAC’s criminal guilty plea obtained by U.S. Attorney Preet Bharara of NYC was announced on Monday, is in addition to a $616 million settlement with the U.S. Securities and Exchange Commission. There is a new policy emerging in the SDNY that Bharara announced that this deal sends a message to Wall Street that no institution “is too big to jail.”
SAC Capital was located in Stamford, Connecticut and New York City while its legal headquarters was incorporated offshore in Anguilla, British West Indies – not the USA. Such structures afford no legal protection beyond taxes. Bharara rejected criticism that the plea is something of a disappointment because Steven Cohen himself was not charged with any criminal wrongdoing. Insider trading is not a crime in anything else other than equities and the theory in all honesty is absurd.
Real insider trading was a director of a company withheld bad info so he could sell his own shares and then announce the company was bankrupt. That was what the law was intended to prevent but Rudy Giuliani turned it upside down in 1987 to make a name for himself prosecuting Michael Milken so insider trading is now so vague it can be used to destroy all of Wall Street. That is the whole truth behind this type of prosecution.
Therefore, this really shows that the government can take down anyone it desires for there is hardly a hedge fund that does not get some tip on something.when they trade equities, One of our analysts came to Princeton from a famous hedge fund in NYC because he was told if he did not come to the firm with “guaranteed trades” he would not advance. I met him in the old Oak Room at the Plaza Hotel for an interview where he wanted to work with our firm because we were not involved in such dealings. This has always been an industry problem when you define “insider trading” as any info. If someone called and told you the dividend will be larger than normal, and you looked at the chart and saw the pattern was bullish so you bought, the government will argue the decision was made EXCLUSIVELY because of the tip. This means you cannot even discuss fundamental analysis whatsoever if you want to stay as far away from insider trading as possible.
Our systems are coming on-line for ALL traded equities worldwide. Yes we even have all equities in China. The criminal prosecution of J,P, Morgan and SAC Capital are illustrating the US Attorney Office in SDNY has turned over a new leaf. The banks are not exactly in the open yet, but they will not be as protected as they once were. They are moving closer to the sun and their wax wings are melting. When the ECM turns down and the banks are once again in the middle of a new mess, the public outcry will be very loud and politicians will flee. The Feinsteins who have protected the banks will be gone from office. The next generation will be advancing and with each generation comes some change in thinking. This is why you are starting to see CRIMINAL prosecutions that never took place before. The fall of Steven Cohen’s SAC Capital is the second big hedge fund to be destroyed in this manner. Galleon Group’s Raj Rajaratnam tried to go to trial and was found guilty. No hedge fund will survive a trial in NYC. They can only plea to get a deal.
Cohen’s fund, which once employed more than 900 people with offices on three continents. It will no longer manage money for outside investors including pensions, endowments and wealthy individuals, according to the settlement. This shows that indeed what happened was very substantial for it was the destruction of the fund in return for no person jail time.
Anyone seriously managing money MUST abandon the fundamentals as much as possible. The price action reveals the trend and unless they shift to such trading, any tip whatsoever will be interpreted as the SOLE reason for the trade even though you have 10 other indicators. You just cannot have any info in equities that is related to the company itself.