China – A new Era
QUESTION: Mr. Armstrong; It is becoming very obvious who China is listening to. You said China should bypass the NY banks and go directly to the Treasury. They did. They used QE to shorten their US debt holdings. They did. Now on Friday they have relaxed the one-child rule as you said they had to do and are adopting economic free market reform while the West is embracing Marx as you just wrote. You just commented you are opening sites in Chinese and Russian. Why does China seem to do everything you say but the West does not?
My highest regards
BH
ANSWER: Keen observations. But I cannot comment on who are clients or not. People who attended the Berlin Conference were shocked to meet people from central banks. Who you meet at our conferences is up to them to reveal – that is not my place.
The West is in decline trying to hold on to power. Yes their reforms in China are wise and well founded. China is building an economy and is keenly aware that it will grab the golden wreath of economic power. I was very impressed by China. When I was invited by the Central Bank back in 1997, I expected the typical bureaucratic meeting. I was stunned. Everyone had actual trading experience. They showed me a table with everything I ever wrote and they read that meticulously. They are students and are for now positioned in a rising cycle. They understand cycles for that is part of their thinking process and religion. The West sees everything linear. They understand there are cycles – no big deal.
Russia & the 309.6 Year Cycle
QUESTION: “Remember the 309 Year Cycle in Russia is due 2020. Still must have the Report on it somewhere.Maybe time to Digg it up.
Was a good call way back in the Gorbachev Times… you called for a reaction not a major change in Russia because of this cycle.
With the Russian Programmers you have, at least Language will not be a Problem.”
All the Best, hope all is well
E
ANSWER: Yes. If you find that report send a copy. We are preparing that and yes we have people preparing the site in Russian and Chinese. Russia is likely to become much more military after 2020.
Difference Between S&P & the Dow
QUESTION: Martin
I find it interesting how the ECM shows The DOW at three green largely pressing higher for daily. Weekly and monthly BUT the SP is turning red in daily and monthly
Please Explain how the DOW can continue to press much higher as the SP Declines
Regards,
JCL
ANSWER: The answer is the market is not ready to take off just yet. The difference between the Dow and the S&P is foreign institutional money, which buys the Dow big names. the S&P 500 is the broader market and that tends normally to be more domestic. It will also take off during the boom, but we are just not yet ready for prime time. Most likely we are looking at a turning point in the Jan/Feb period.
Also keep in mind that the Global Market Watch is not the system model. It is a pattern recognition model fully AI functioning recording patterns as it goes from everything and tests those pattern against its knowledge-base. Hence it is more of an alert rather than a trading system.
Stage two will be to click of the market and then a second and third page will appear. These will be (1) detailed GMW, and (2) the computer written report for that market with the arrays, reversals, and trading system. So the GMW is the first layer so you can see the entire world at a glance and then zoom in on what might be interesting.
Shell Game – Is Deflation Possible?
QUESTION: How is deflation even possible when the Fed could simply throw money from helicopters or create it from thin air with computers?
ANSWER: Everyone watches only the Fed. That is just a tiny part of the economy. The Fed has done QE1-3 – there is no inflation. The economy is larger than the Fed. But the dollar is the world reserve currency so the money does not even stay in the USA – it is a global money supply and $85 billion is nothing. Then under shell #2 is the real creation of money – Congressional spending which creates money that pays interest call bonds. That is the real money supply held by banks. Then under shell #3 is the deflationary forces that is raising taxation and shutting down the velocity of money destroying jobs and the global economy. Deflation is municipal governments also defaulting on pensions. It is NEVER a simple one-dimensional game. Go ahead. Keep watching the Fed. Duck when you hear a noise behind you for it is probably the government coming to look for gold in your teeth they can give to the bankers.
Expect Riots & Rise of Nationalism After 2015.75 To Pick Up Steam
Politicians are preparing for the worse everywhere you look. We forget so quickly that the American Revolution slogan was what – No Taxation Without Representation. Germany will not allow democratic referendums precisely the same move of King George III that set off the American Revolution, Homeland Security bought 2715 tanks for domestic use and enough hollow-point bullets to shoot every person in America 5 times. This is simply How Empires Collapse – A Orderly Path to Conclusion. Civil unrest is a long historical tradition. Lists of various riots through history are available on the Web,
Greece Rising Tide of Nationalism
Riots have already appeared in South America, Southern Europe, and we are starting to see them in Scandinavia and Britain. Now nationalism is appearing not just in places like Greece, but also in Poland this past week. There is of course civil unrest in the Middle-East everywhere you look including Egypt. The rising tide of Civil Unrest turns up in 2014 with the War Cycle. However, what fuels such events is always economics. Communism would NOT have failed in Russia or China had it been economically successful. This is indicative of the Copper Riotsin Russia of 1662 that were economically driven.
There is a rising separatist movement and this goes hand-in-hand with the first stage in civil unrest, which is the start of a nationalistic trend. As illustrated here, we are seeing a rising trend in separatist movements that will be expanded as the fuel from nationalist movements broadens.
If the economy turns down, you end up with people turnings again immigrants and fueling largely nationalistic trends. We saw this in the United States as it became the emerging market Sovereign State Debt Crisis of the 1839-1844 period. They more often than not omit this event from history books in the USA. But you can find old newspapers and etchings illustrating the crisis. This was a very serious economic event that destroyed the credit standing of ALL states and the Federal Government. It too was all about debt.
In China there was the Boxer Rebellion, also known as the Yihetuan Movement, that was a violent anti-foreigner movement displaying nationalism as China was in decline falling from its lofty place in history as the Financial Capital of the World handing that mantle to Britain. The Boxer Rebellion took place in China between 1899 and 1901. It was initiated by the Righteous Harmony Society and was motivated by proto-nationalist sentiments and opposition to foreign imperialism and Christian missions. The Great Powers intervened and defeated the Boxer Rebellion, in a humiliation for China actually waging war on their soil against their own people. This would be like Homeland Security going to Europe to put down a revolt in Poland..
Financial Panics have often turned violent, but these are typical blips on a screen as illustrated here with the Panic of 1873. There was Black Friday during the Panic of 1869 when troops were sent in to quiet Wall Street during the Gold Panic. It is when the economic decline is systemic rather than a single isolated financial panic, that we must distinguish from these types of blips.
Unfortunately, we see these types of events like Occupy Wall Street come and go and this masks the rising under-current that erupts into major sustainable uprisings. We just saw the Million Mask March in London. We saw the British government monitoring Twitter and arresting anyone who called for people to gather.
The Million Mask march in London is warning that there is a rising tide just under the surface. As the economy turns down, these trends will become more and more common.
Do not forget the Bonus Army march on Washington where the USA called out troops and tanks and killed American Veterans in the streets. The US government used tanks against unarmed civilians in Washington in 1932. That was just astonishing. This demonstrates why Homeland Security has been buying tanks for they know they will use them. The Bonus Army was all about economic promises that were not fulfilled resulted in the GI Bill for veterans of World War II because no one would believe them any more. Obama has been dismissing military generals who show any reluctance to use force against American citizens.
Those who claim it is a conspiracy theory to say Homeland Security will never use tanks against Americans, that is very nice, but history says that are wrong – perhapsDEAD wrong. If it happened before, it reveals human nature and that path will be taken once again.
The Nika Revolt in Constantinople during 532AD demonstrated the need for obedient troops that Obama takes his lessons from. The local troops would not slaughter the people of their own city and defend the government, Justinian had an army outside the city from another part of the empire. They had no problem killing local Greeks. Hence, military officers unwilling to obey orders are being dismissed now.
Don’t forget that there was Coxley’s Army that marched on Washington after the Panic of 1893 because of rising unemployment as we see in Europe today. That even became a political satire that was converted into a children’s movie – the Wizard of Oz. The Yellow Brick Road was the gold standard and the objection was guess what – austerity. So yes, Germany’s austerity to keep a strong euro has been tried before without success. J.P. Morgan had to bailout the Treasury in 1896 for it went virtually bankrupt with its gold supply depleted.
We are off to see the Wizard was Congress. The Tinman was Industry, the Scarecrow Agriculture, and the Cowardly Lion was William Jennings Brian and his firery speechThou Shalt Not Crucify Mankind Upon a Cross of Gold was the attack upon austerity. Baum was a participant in that march.
So the whole austerity movement has been tried before – BEEN THERE DONE THAT ONE TOO. Nobody seems to consult history as a catalog of the the success and failure of the follies of man. Our political brain-dead leaders who try the same thing over-and-over again like sticking their finger in a light socket and expecting a different result. Good one!
DAH!
