The Scare Tactics Against Scotland
In response many questions coming in from Scotland about the negative campaign against Independence, let’s make a few things clear. The predictions that the stock market will crash if the currency declines is nonsense. The stock market rises when a currency declines and declines when a currency becomes excessively overvalued as during the Great Depression. If we are talking about the breakdown of a government, then stocks rise as the hedge against government – look at Europe and even the German hyperinflation. Real estate has boomed because capital has fled there from Europe. If Scotland offers a better deal, watch the money flow north. It is a confidence game.
The prognostications of a coming Great Depression where the stock market falls by 70% overnight is merely trying to look at the Great Depression and repeating the events without understanding the global economy and causes. That was a Sovereign Debt Crisis – not just an economic decline. As for the Long Depression of 26 years during the 19th century, that was set in motion by war in Europe and flooding of the money supply with tons of silver – i.e. Silver Democrats. It need not be paper money that creates the problem, it can be tangible money as well just as it will be electronic money.
True Salmond has threatened to renege on the offer that Scotland would take on a share of the U.K.’s national debt if it votes “yes” on independence since Westminster rejects any currency union. That would be Britain loss and Scotland’s gain. Scotland should not adopt the pound for then it will not be independent. It can use the pound unofficially similar to the way Ecuador and El Salvador use the U.S. dollar and as such its economy is indirectly linked to that of US economic policy. Scotland would be out of its mind to move toward the euro. That would be a total disaster and defeat the potential for Scotland to become the port for capital in the coming economic storm. Capital fleeing the Euro has poured into the UK, but if the UK does not straighten up and fly on its own, capital will then flee the UK en route to the dollar. Scotland could really set the tone for the world abandon the pound and do not take on a national debt. Can you image the economic boom times for Scotland? As for the bankers who needed bailouts and claim they will exit, impose a 60% tax on their capital and kick them the hell out. They are manipulators anyway and are only worried that Scotland would not bail them out for their next loss.
If anything, Scotland need only look to Europe for it has become very clear since the turn in the ECM in 2007 has demonstrated that sharing a currency without sharing a government is highly dangerous. You cannot have a single currency without a single government and that is what Brussels is doing – the federalization of Europe. Britain is living in denial. This marriage is breaking up and Scotland should take the first step.
True, the scare tactics are all negative and portray Scotland cannot stand on its own two feet. The National Institute for Economic and Social Research has played politics proclaiming that Scotland could fail “within a year” if it uses the pound informally and refuses to take on a share of the national debt. Sorry, that is total biased nonsense. Do not take on the debt and stay away from the pound. Britain is moving to electronic currency anyway. In July all public transportation accepts cards only – no cash. In Manchester they are experimenting with stores agreeing not to accept cash. Scotland should retain its own currency as it once did.
Ukraine Still Mad At Politicians
We still have people who try to claim the entire Ukrainian revolution was a CIA plot. They still disrespect the people of Ukraine and diminish their outrage at corrupt government. Just because the West has stuck their favorite sons in government, this does not sit well with the people. They are quiet mostly for now because there is war. I have spoken to people who were on the barricades and some who volunteer in hospital to take care of the wounded soldiers. They are real. The people who make up this stuff are just as always, make up conspiracies about things they have no direct knowledge about.
The people are still angry. They threw a politician in with the garbage who was one of the politicians who voted against the people.
Pending Pension Crisis – They Are Only a Promise
We have a major reform coming for the Pension field besides Obama trying to divert that money for infrastructure expenditure. The GASB Statement No. 68, Accounting and Financial Reporting for Pensions, was issued in June, 2012 and is effective for fiscal years beginning after June 15, 2014. This statement is an amendment to GASB Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and GASB Statement No. 50, Pension Disclosures.
This goes into effect for most public pensions during FYE 2016 as many have a Sept-Aug fiscal year. They are just starting to evaluate the effect .
In other words, governments are going to have to report the degree of funding for pensions. This will heighten the insolvency problem and it is right on schedule for 2016.
Even in Canada, the Ontario government faces a potential bill of $400-million to bail out U.S. Steel Canada Inc. pensioners if the steel maker’s pension plans are not restructured. Then we have companies laying off people a few year before they qualify for pensions. The entire crisis is a real global mess.
What Will Be Worse This Time Around?
QUESTION:
Dear Marty,
I’ve attended several of your conferences, and thank you very much for all you do.
You’ve said that the next decline is going to be far worse than the last one. Intensity and volatility is building. By that statement, do you mean both the US economy and the US stock markets may decline more than in 2009? I understand your comments about the US economy declining, but are you also saying that the US stock markets may decline to new lows below those of 2009, or do you anticipate the US stock market remaining fairly stable/flat relative to the US economy, given the anticipated problems in the debt markets? Following next year’s melt-up, what is your downside target bottom for the US stock markets between 2016 and 2020?
Best regards,
BH
ANSWER: No, this is in reference to the economy globally. Unless we can get that Phase Transition sooner than later in equities, there will be no dramatic crash. The last time wiped out so many retail investors, they have not returned and liquidity is at 50% of 2007 levels. This trend has impacted gold as well. The gold promoters have wiped out so many people there also the numbers interested in gold are down. Then we have FATCA preventing international capital investment flows with the hunt for taxes. Then we have the whole problem of reserves. The dollar is the only game in town and this has forced central banks to buy equities. They will not liquidate on a panic move easily. Without the real Phase Transition, there cannot be a huge swing down. The higher you move the wilder the move down.
You need that point of inflection to reverse a market. Take gold. Until you really break the back of the gold promoters, the low will not firm up. It is like Japan, The low in the Nikkei kept moving lower because everyone was long looking to sell the rally. You need extreme bearishness to create the low for they cover and mark the rally. Then the fight the rally as we have seen in the stock market – the perpetual non believers. We we flip that sentiment in gold you will reverse the trend/ Nothing ever moves just in one direction forever.
We expect the banking collapse in Europe to be the worst this time and then we have pension crisis. This will be ugly in selected sectors that are typically different with each cycle. The 1998.55 Wave gave us the collapse of Emerging Markets (Russia) and then the Dot.COM Bubble. The Next wave 2007.15 gave us the real estate & derivatives. There is always a different sector with each wave. Capital just wants to invest, it care not what the investment might be if there is money to be made.
We should experience tremendous DEFLATION in the USA as global capital pushes the dollar higher during to the Sovereign Debt Crisis with Moodys even looking to downgrade France now and War in Europe. All of that pushes capital to the USA. If China also looks like war with Japan, the yen will collapse and capital will come here like never before. That would also be the final straw for the Gold promoters who never have Plan B – only buy.
What is the 300 Year Convergence in the War Cycle?
QUESTION: Marty, you said that this cycle is the first time that the civil unrest and the international war cycle converge since the 1700s. You mean that it is a 300 year cycle of just that or is this when they align?
Thanks
NK
ANSWER: This is an alignment, not a 300 year cycle. If you have a 16 and a 18 week cycle, a some point they drift apart and then they converge. This is what sailors in the ocean called the giant wave. In wave movement you have constructive and destructive inference. When they align you get a bigger wave than normal.
This famous Japanese print known as the “Great Wave” does not portray a tsunami caused by an earthquake. The Great Wave pictures what its title denotes, simply a largeokinami, which actually means a “wave of the open sea.“ Until 1995, these “Great Waves” or “Rogue Waves” were known only from stories of sailors. The 1972 moviePoseidon Adventure depicts an ocean liner turned upside down by one of these waves.
In 1995, there was the first measurement of such a wave known as the Draupner wave or New Year’s wave . It struck the Draupner oil platform in the North Sea off the coast of Norway on January 1st, 1995. This provided the first opportunity to actually measure such a wave carried out by Engineer Paul Taylor. The platform survived this event, but the wave, measured with lasers, was 84 feet high (25.6 meters) in a sea where the average wave was 39 feet high (12 meters).
In our Cycle of War, we have split domestic from international. The international wave hit for events like WWI and WWII etc. Those are conflicts between countries. That is only one aspect of the Cycle of War. The second wave formation functions based upon civil unrest. This moves from protests up the scale to revolution such as the American and French Revolutions of the late 1700s.
This is what I am talking about that we have not a 300 year cycle, but the constructive inference between these two entirely different trends one domestic and one international. The Scottish vote today falls into the category of civil not international and is part of that cycle that is converging with the international where we see Russia v USA and China v Japan, and Middle East.
There will always be people who do not believe in cycles. There will never be 100% agreement on anything. They are typically the linear thinker and can only see a straight line. They do not connect the dots to see the whole picture. The entire universe functions on cycles. Nothing but nothing exists without a cycle. It is how energy simply moves from light “waves” to sound “waves”.
Sound Wave
Our heart beats and hospitals determine if we are live based upon brain waves. So I really do not get how people cannot imagine cycles since this is the foundation of the universe and life itself. The naysayers are just like the people who fought against the idea that the earth was round not flat or that we revolved around the sun and were not at the center of the universe.
Here is a chart of the cycle in the ice cores proving Global Warming is again bullshit and here too it was postulated by linear thinkers who cannot see everything around them and make the connections.
There Seems to be A Surge in the YES Camp
This is going to be very interesting. The money in the “City” (London) is on a “NO” Vote. But people often play what the WANT to Happen – not the actual trend. So the wild card will be the youth. Looking just at that group, there may be a surge in the YES vote at the end. It appears that the turnout will be in the 70-80% area. This will be a major outpouring of people voting that we have never seen in the USA. This surge appears to be like a Phase Transition.
It’s Not Official – There Are Huge Celebrations & They Are Calling it YES Eve
One family I personally know the youth is voting Yes, the Father and Grandfather are voting YES and the Mother is quiet and they suspect she will vote NO, but she won’t say.