The Euro Bounce
COMMENT: Mr. Armstrong; Those in the industry call you the “legend” and indeed you come out and say the Euro will bounce and it immediately moves. You are perhaps far more influential than you let on.
S
REPLY: Yes I have heard that is my nickname. But the other side of this coin is simply that it is not influence as much as it is just that we have an extraordinary model that everyone is now trying to say they are developing AI to mimic us as always. But no matter what they do, it takes tremendous computing power and while they will pronounce they now use AI in a matter of weeks or months, they will remain totally clueless.
I am a programmer and a trader. That is a very rare combination and take a trader trying to communicate to a programmer is impossible for the two fields do not fully understand each other and so much is just a feeling that has to be magically coded. We merely have a system that took 20 years+ to train and allow the computer to learn. I had to learn new ways of coding to capture subtleties that exist yet are overlooked. That cannot be achieved in weeks or months.
So firms who announce they now use AI – good luck for they will still blow up. Wall Street began hiring quants because I used physics and even the White House acknowledged we had the only model back in 1985. My influence seems to be more that everyone tries to mimic what we do.
The Euro was oversold. Simple as that. Look at our Energy Model which is purely physics based. The Energy went negative and bottomed at the end of January. Energy returned to positive territory the past few weeks even though prices were falling. Beat that with opinion or oscillators. This model all alone indicated the Euro was oversold and a bounce was underway.
People always attribute this to me being so influential. I have been accused of manipulating the entire world as if this were a James Bond movie. Yes we have some very big clients who have learned not to be on the wrong side of our models. But to say the bounce is solely attributed to my influence is wrong. If I did not post that, the bounce would have still materialized. The market is its own master. I merely read the entrails. It seems I always get blamed for just having a very good model.
State of Emergency in Frankfurt ECB Protests
This entire experiment with the Euro is literally going down in flame.
Are we Headed Back to an Ice Age?
One of the most shocking things I bumped into in the middle of the night was when I input the data on the energy output of the sun and then correlated that into our data base back to 6000BC. Low and behold, the 300 year cycle matched up with the rise and fall of empires, nations, and city states. Suddenly, the 309.6 year cycle of the ECM made sense. What I had discovered from tracking the footsteps of mankind was not the CAUSE, but the EFFECT. Nature came blasting through as a major contributor to the equation.
It appears that we are headed back into a colder period – not warmer. Nobody living today ever saw icebergs washing up onshore. This is very disheartening for I was enjoying Global Warming. Without the fanfare, we are seeing others take notice of the shift back to a mini-ice age. There is extreme complexity going on here to which we should keep an open mind.
Dow To Be or Not To Be – Correction Time?
We warned that the Dow was not going to blast out to the upside and we saw a sideways to consolidating trend into May. Nothing has really changed and as you can see from our Energy Models, we have indeed been in a declining phase. Technically, the Dow is coming back to key support. With everyone screaming the stocks are overvalued and will crash, it certainly appears we will get this correction and that we may indeed need it to finish off this cycle in bonds.
What do I mean by that? A scare in stocks now will send capital into the bond market to make that final bubble high with a concentration of capital. Stocks are by no means overvalued. Retail participation is at historic lows. So there is no bubble and indeed we do not see a phase transition type of top that marks such major highs. What we do need is to scare the capital to send it running into the bond market to make it complete that high in bonds (low in rates).
Now look at the Dow in Euros. Here we do have the spike in our Energy models. This is implying we should also see the Euro bounce one time. Everyone and their corrupt politician representative is short the Euro. Thus, we have the fuel for a Euro rally soon as well. This will help bring the US market back down in terms of Euro and cut off the foreign inflows temporarily.
We have a Directional Change next week and both April and May are Directional Changes on the Monthly Model level. We still see May as the end of this critical period. So pay attention. We should have some choppy markets here for April and May.
Austria to Default on Debt of 10.2 billion Euros
The province of Carinthia in Austria with its multibillion-dollar commitments for the former Hypo Alpe Adria, is presenting the classic problem. Does the state honor its guarantees, or does it simply say sorry, we never really guaranteed that. The state government is looking to default of its debt of €10.2 billion euro guarantees. This is how it always goes down. Guarantees are historically abandoned when it comes to the bottom line.
History repeats in the most striking ways. The first bank to collapse that set in motion the Sovereign Debt defaults of 1931 was Credit Anstalt in Austria, 1931. That shook the foundation of confidence because it also marked the end of the Rothschilds as a formidable banking group.
The two famous banking houses were the Barings and Rothschilds who both emerged from the merchant field that evolved into banking. This will be a primary distinction that would highlight these great names from just the banking names. This is why the NY banks want to be traders. That is where the money was really made – not just lending. Nevertheless, it will also emerge that the big names are the ones that were deeply involved with government like the Bardi, Medici, Baring Brothers, Rothchilds right up to Goldman Sachs today.
From a book I am writing on the history of the global financial system since inception with the rise and fall or empires, nations, and city states, I dive into the details of banks. The documents of the Medici family clearly state “to deal as little as possible with the court of the Duke of Burgundy and of other princes and lords, especially in granting credit and accommodating them with money, because it involves more risk than profit”. Distinctly, it is clear that the text continued showing that the Medici did not wish to lend to the princes of Europe for there was no way to collect a debt from a sovereign. The contract continued warning “many merchants in this way fared badly” and that “our fathers have always been wary of such involvements and stayed aloof, unless it was a matter of a small sum lent to make or to keep friends.” The Medici policy was “to preserve their wealth and credit rather than enrich themselves by risky ventures.”
The Baring Brothers folded. The Rothschilds, despite the conspiracy theories, have been replaced by the modern merchant banking style firm Goldman Sachs. I cover in detail the rise and fall of every banking family with documentary proof – not wild rumor and speculation.
This is history unfolding once again in Austria. Sorry – the Rothschilds are not in the game this time. Not a single firm that has ever gotten involved with government survived. Interesting track record. Goldman Sachs is obviously trying to do what nobody has ever been able to survive yet in history. The closer you fly to the sun with wax wings, the harder and faster you fall.
ECB Grand Opening with Tanks & No Journalists?
Perhaps the strangest opening ever has marked the ECB in Frankfurt, Germany. The opening of the new, paid by the taxpayer office tower of the ECB, is accompanied by tanks and a military force to protect bankers. Whoever ventured on the road to the east of the city since Monday have to believe the Romans were invading and stood before the gates of the city. The ECB was strangely protected with barriers everywhere you looked, which was a reflection of their total lack of faith and disconnect with the people of Europe.
Convoys of police vans, water cannons, tanks, heavy clearance equipment and wheeled APC all surrounded the area expecting a Russian invasion of something..For two days, traffic chaos has been at historical highs that may have exceeded the chaos Obama creates when he want to play golf. The ECB appears to have intentionally tried to intimidate the population to suppress protests given the degree of their unpopularity. They spend $1.4 billion for their new tower andprotesters still appeared.
This has been at odds with German culture for anyone who has been to Germany will notice that there has been a counter-reaction to the image of Hitler – they detest military and police shows. The city of Frankfurt has indeed displayed a longstanding objection to police shows so the strange aspect of this entire affair has been for the police to use this as an excuse to come out of the closet. They seem to have enjoyed the excuse to show force at last if not begging for protesters to bring it one so they can practice how to deal with their dream – training for a state of emergency.
The Frankfurt police have indeed come out of the closet. Their scaremongering has led to a military display unseen in Germany with creating an exclusion zone, danger zone, water cannons, airplanes, helicopters and about 8000 troops. All of this to protect bankers. Just amazing. What the hell does this imply?
Then, believe it or not, the ECB imposed an exclusion of the press. The ECB has decreed that their opening ceremony news agencies are permitted, but not newspaper journalists. Curious. The newspaper embargo raises the question of exactly what is behind this authoritarian show of force in the heart of Germany?
Cell Phones Reveal Where You Have Ever Been
Carrying a cell phone creates a record of where you have been all the time. Indeed, the police use this info to arrest people. Many people have been arrested using this info. The interesting aspect, you can trace yourself thanks to Google.
MSNBC v FOX
What is interesting is that the ratings for Cable News reflects the shifts in politics. MSNBC keeps declining and not even CNN can’t beat Fox. This is interesting for it is reflecting a conservative shift underway and this is significant for it is preparing the way for a split in the Republican Party as fiscal conservatives do battle with the Boehner Country Club/Game Show Republican groups that are always - hey, lets make a deal. This shift is what we need to see for that is the source of the division of the Republican Party as was the case with Teddy Roosevelt’s Progressive Party movement that previously split the Republicans.