Corruption Corrupts Everything
COMMENT: Mr. Armstrong, Your staff have told us you do not pay attention to what other analysts say because you are always too busy. I just wanted to say once again you are the only person who has been right about the dollar. The vast majority of the analysis out there has been dead wrong on gold and the dollar while others keep calling for the Dow to fall to 1000. We greatly appreciate beyond belief your teachings. You are truly the lone voice in the wilderness. No wonder the NY Media stays away from you. Bloomberg erased you from their system entirely. What does this say about the integrity of New York? I really wonder if the New York crowd will ever allow that film to be shown in America.
Cheers.
JP
ANSWER: Thanks. No I do not follow anyone else so I am not up to date on who calls what these days. I really do not have the time. I have heard this about Bloomberg. Whenever there is a list of frauds, I am never in it. Indeed, it seems they all just want to pretend this whole thing never happened. The movie will not doubt meet resistance in the USA. Just as they accused North Korea in stopping Sony’s film, you can bet the New York crowd will leave no stone unturned to prevent the movie from showing in the States. I believe they will do a world pay-per-view sort of thing in February or March. It hits the theaters in Germany in April.
Perhaps the American distributors will be intimidated by the New York crowd. They certainly control the courts, press, and Congress. What the heck, they just got Dodd-Frank overruled and the Volcker Rule suspended indefinitely. So I would not put it past them that they threaten any US distributors to prevent the film from showing in the USA. The special showing for those in the industry may be the only way Americans will see it. We will have to see.
Dow to Rise with Higher Interest Rates
The Dow held our Weekly Bearish Reversal at 17722. We warned that “The main bank of support begins at the 16300 area. A weekly closing beneath 17722 will shift the market into a basing mode.” There appears to be in place a consolidation phase with the Down churning back and forth until May. We did not yet achieve the confirming signal for this trend and the flat top warns that the high is certainly not yet in place.
We still see the resistance at the 18500-18600 area and that has to be exceeded before we can consider a real breakout with a runaway market. That day will still come. Most if not every fundamental analyst will preach the Dow will crash with the first uptick in interest rates. Of course, that is when we see the rally REALLY taking off.
In 1927, the USA lowered interest rates in a desperate attempt to send capital back to Europe. The Fed was then criticized for lowering rates that sparked the stock bubble. The Fed will RAISE rates thinking that the higher rates will temper the stock rally. They will make the SAME PRECISE mistake they made in 1927.
We can see that the Fed raised rates from 3.5% in 1927 up to 6% in 1929 and the stock market doubled on capital inflows. The Fed stating it may have to raise rates before inflation is the code word they are fearful of of stock market rally. They will have to raise rates of suffer criticism for creating a bubble domestically while raising rates will case the collapse in $6 trillion of dollar debt issued by other countries.
When rates start to rise, then we will most likely see the breakout to the upside in a phase transition.
Religion – Segregation – Civil Unrest
In France, retaliation have unfolded with civil unrest striking back with attacks on three mosques. In another French city, a homemade bomb exploded in the vicinity of a mosque which destroyed the facade of a church. In Montrouge a police officer was killed by an unknown assailant. The terror attacks in France are warning that the downturn in the economy of Europe is kindling the old tensions between Muslims and Christian/Jews. This is precisely on point with our model warning about civil unrest. Muslims are often still living segregated in France and are not truly integrated within society. The French previously wanted to outlaw women from hiding their identity with veils known as the ”Hijab”. From the Muslin perspective, it is a matter of interpretation as to which sect believes woman must be covered. In the Qur’an, Allah tells the believers to “lower their gaze and be modest.” It is a matter of interpretation. Specifically, the Qur’an says:“Say to the believing men that they should lower their gaze and guard their modesty; that will make for greater purity for them; and Allah is well acquainted with all that they do. And say to the believing women that they should lower their gaze and guard their modesty; and that they should not display their beauty and ornaments except what must ordinarily appear thereof; that they should draw their veils over their chests and not display their beauty except to their husbands, their fathers…” [continuing list of family members and others in front of whom women are exempt from covering] (Qur’an 24:30-31).
The problem with the Burqa comes when the identity of the individual is completely hidden from a security perspective these days that someone can hide bombs or whatever. In this new world where we all are losing our privacy, this customs begins to clash with this new age of government must know everything. The ”Hijab” also distinguishes Muslims and therein maintains the lack of integration. The USA became the melting pot because everyone coming from various countries had to speak English to gain employment. Today, ask an American what are you, they respond half Irish and Italian or whatever. That does not happen in Europe so easily.
There are plenty of “moderate” Muslim’s whose women do not wear any veils or Burqas and they have made the transition by integration. The same can be said of the Jewish community distinguished between the Hasidic community and the majority of the Jewish community. The Hasidic Jews dress in black and thus remain identifiable within society rather than integrated.
The Amish or Pennsylvania Dutch (Pennsilfaanisch Deitsch) are a cultural group that was formed by early German-speaking immigrants to Pennsylvania and their descendants. This early wave of settlers, which would eventually coalesce to form the Pennsylvania Dutch, began in the late 17th century and concluded in the late 18th century. They too retain their culture and remain totally segregated from society. They reject everything modern from cars to electricity. In this case, they cannot even live in ghettos within modern cities.
The danger enters when the economy turns down. This festers tension between one group that distinguishes itself from others. Riots and civil wars have brewed within Christianity between “Papists” (Catholics) as they became known and Protestants. This plagued Britain and fueled it civil war resulting in the beheading of the Catholic King Charles I.
Consequently, the Paris attacks are very serious. It is the fuel that feeds the flames of civil unrest whenever one group segregated from another. It does not matter what the distinction might be if it is race or religion. In China it was the Boxer Rebellion that was the wholesale killing of Westerners. In Singapore there are rising tensions that are anti-foreigners. We have anti-German feelings rising in Greece and anti-foreign tensions starting in Germany.
Civil Unrest is part of human nature. We all get along when the economy is doing well. Turn it down and what emerges in the rise in tensions between one group and another.