"We can deny our heritage and our history, but we cannot escape responsibility for the result. There is no way for a citizen of a republic to abdicate his responsibilities." Edward R. Murrow
The US share market is declining currently as people think the budget deal will help the Fed taper and then interest rates will rise. Of course, this is a superstition that is up there with the World is flat as well for anyone with a computer can simply correlate interest rates and the Dow Jones Industrial Index and find that bull markets take place with rising rates and bear market unfold with collapsing rates as in Japan for 23 years.
The initial support lies at 15338.17 level where our first important Daily Bearish Reversal lies. The Weekly Bearish Reversals do not begin until 14708 and 14450. Nevertheless, we are preparing a special report for there appears to be an important Cycle Inversion on the horizon. This is determined ONLY by our Global Correlation Model rather than the flat market model that does everything on an individual basis and does not correlate between markets or models within the same market. It is the Global Correlation Model that combines everything and will not run on a laptop in any timely fashion. Even the Global Market Watch is a pattern recognition system that does not correlate with the cycles, reversals, etc. Even the trading illustrated with the reversals we show at conferences is not correlated with cycles or pattern recognition.
Next week should get a bit more volatile and we have some very choppy trends into early February. Overall, we warned that the market could be reaching a temporary high because of a Cycle Inversion. We will discuss this in detail in the upcoming report.
Gold has made a sharp drop today as it still winds its way down. The concern that reaching a budget deal will also the Federal Reserve to reduce its bond buying is on point. The budget agreement is another factor that goes to the heart of the gold propaganda machine that we would be facing hyperinflation so buy gold. The idea that the Fed stimulus is even remotely inflationary is absurd when there is over $2 trillion in excess reserves at the Fed because the banks are not lending. The banks have been dumping their crap on the Fed but they have been trading with the money parking in excess reserves while not lending anything out. Sorry – but you just have to look at ALL the facts, not just the so-called buying of $85 billion per month. Where is that money actually going? Is it doing anything but increases the cash banks trade with? Gold is headed lower. There is no dispute on that one.
As we enter 2014, we may see Greece simply enter a default on its debt. This whole Euro nonsense is collapsing and we will have the May Elections in 2014 for the EU. Of course, even if the people voted for reform, the EU Commission has entered rules that even if the ELECTED politicians vote against the Commission, the Commission need not comply with any vote. Only the Commission can introduce legislation. Never anyone elected. Newly elected politicians can refuse a proposal from the Commission, but the Commission can still do as it likes and no vote can alter their agenda. This whole thing is one giant dictatorship clothed in a pretend Democracy. The EU Commission even covertly manipulated the Italian elections to get rid of the last Prime Minister Berlusconi because he was considering taking Italy out of the Euro. In Germany, Angela Merkel has rejected any more direct referendums whatsoever.
The rising protests in Europe will most likely turn really nasty when the people find out that it does not matter who they elect to the EU, the Commission rules. Now they want a SuperBank that can dictate to any country and no country can overrule this Superbank that is appointed by the Commission and cannot be controlled by any popular vote.
Protest are rising everywhere as the Cycle of War turns and everything is unfolding just as our computer has been warning. Now we will have 2015.75 to look forward to and then the 2016 US Presidential Elections where we have a chance that 3rd Parties will rise in the USA. This next spike in 3rd Party Activity should be as high as we saw in the 1930s and may even be a all time new high.
Socialism is so great. They love to steal from the poor and hand it to their bankers that act like drug dealers telling them to borrow more or they will collapse. Meanwhile 70% of the national debt went out to interest on an average basis around the world – not to create anything worthwhile. Then they are hunting capital everywhere and destroying the world economy to get enough money to pay their lenders.
There is just nobody with a light on behind the eyes. They are cheering Obamacare that they now have 1 million people. Big deal. There are over 300 million in the population. That is not even a half of one percent. These people could not hand out life-jackets on a sinking ship even if they had twice as many passengers. IMPOSSIBLE!
The so-called Flight to Quality is the shift in money flows from one sector to the other that traditionally is reflected in the currency. The inflationary boom into the 1980 crashed and burned into 1985 sending the dollar to records highs for the century. Money moves from PRIVATE to PUBLIC and that is where it is. The rise in the currency is NOT indicative of an economic boom or strength. The currency will rise as money flees from assets. The higher the currency moves, the greater the decline in trade and the higher unemployment will rise.
The Plaza Accord of 1985 was all about manipulating the dollar lower to reduce the trade deficit at the time and in theory create jobs. As Europe declines in economic activity, people move from bonds currently into cash. But the Euro is not exploding to the upside. It is really just holding for this is not the normal flight to quality. Capital is very confused regarding where to go in Europe, which is why the DAX has done well because people are moving internally within Europe into Germany in anticipation that if the euro cracks, they will get Deutsche Marks.
On Wednesday before the vote of confidence in Parliament, the government locked down itself in Rome fearful of the rising discontent in Italy. The Italian government fears violence at parades a whole new protest movement. This protest is growing from Turin, spreading to Genoa, Milan, Alfano, Rome, Savona and numerous other cities. This is what Homeland Security is worried about in the USA and what they bought tanks and bullets for domestic use to also protect American from America – or is it government from the people. Governments always delude themselves into believing they are the nation when it is the people who are sovereign not politicians.
The protesters are carrying their icons, which are pitchforks (“Forconi”). The movement began in Sicily back in 2011 that has inspired all of Italy at this point as millions are now protesting throughout the country with a solidarity against wasteful and corrupt government. We are seeing the same rising trend in Ukraine and in South America. Government has abused the people perpetually.
There are videos now posting showing in some places the police have joined the protesters. This Forconi (pitchforks) movement is a very different type of movement than which has appeared before and has taken on a show of force. This is scaring the hell out of governments everywhere for they know they are in trouble and Socialism is collapsing everywhere. But government will dig in its heels and kill its citizens before ever relinquishing any power. They cannot grasp how everything is collapsing around them. They actually think confiscating people’s wealth to keep the banks going is somehow going to keep the system from falling to dust.
This movement is very similar is respect to the discontent that we saw rising from the anti-bank protests by Occupy Wall Street a few years ago. This is the source of the problems and we face serious civil unrest right on time with the Cycle of War. That model seems to be spot on.
Part II
