Ukrainian Food Riots
The CONFIDENCE in the Ukrainian government is collapsing. The price of food is soaring as people now believe their currency will buy less with each passing day. The hrynya has fallen below 4 cents US. Like German Hyperinflation, here too we see people trying to spend their money on food as soon as they get it. To quiet protests over food, President Petro Poroshenko ordered the minister of the food reserve to fill the shelves of stores with flour, sugar, canned meat, and buckwheat from the reserve. The problem – there was no reserve left.
Some are calling this the “Financial Maidan” for it was a march staged at the National Bank of Ukraine to protest the crash of the hryvnya currency and the resulting impoverishment of masses of people as food rises in price. Earlier in the day, Kiev mayor Klichko accused the demonstrators of being “Russian provocateurs” and expressed puzzlement as to the cause of the protests. Obviously, he is not qualified to run even a bar no less a government. Then he unleashed riot police on the demonstrators. Confidence in the Ukrainian government is simply collapsing.
People have seen pictures of brawls in the Ukrainian Parliament. However, I have yet to see an accurate account of what is really behind such outbursts. These are clashes between the old politicians and the new. The way things were always done was outright corruption and the new politicians lash out against secret deals to still fill the pockets of the Oligarchs. These old politicians (Oligarchs) would pass legislation seizing someone’s land for the state and then sell it to one of their family members. The government under Viktor Fedorovych Yanukovych was simply a nasty corrupt organization. They were shaking down businesses for protection. They would send in some regulatory agency who then threatened to close the business. However, they would allow them to remain operating and retain only 20% of the profits giving 80% to the corrupt politicians. That was a generous offer and was at the root of the revolution.
When the Yanukovych government collapsed, other nations froze accounts of Ukrainian politicians and Oligarchs who had stolen money from the country. The nations were many, such as Switzerland and Austria. The EU froze money as well. However, it appears that there is further corruption for accounts that were frozen, are being mysteriously unfrozen. Since many of Yanukovych supporters are still running the country behind the curtain, one can only question has there been some deal under the table to unfreeze money provided Ukraine supports the EU?
The entire problem is that the people rose up against the corruption of the government under Yanukovych. They did not get the revolution they were hoping for. The old politicians are still in control. Russia claimed they were fascists and instigated by the West, which was not true. The West, meanwhile usurped their revolution and warned the people if they overthrew this government, they were on their own, Then the current government argues there is a war so they cannot reform until that is concluded. Thus, the Ukrainian people effectively lost their revolution.
Spain using Facebook to Hunt for Taxes
Spain wants to collect taxes for citizens on Facebook and Twitter using what they say. Spain has its Financial Police to hunt down its own citizens and shake them down or imprison them as they are desperate for money. Last year, Spain went after known athletes for tax evasion. In addition to the social networks, the tax authorities are now also studying online platforms for sale of cars and rental houses.
Spain’s abusive police beat and hunt down citizens for spare change. The police are brainwashed against the people to protect the government. Hence, the police are very much acting as did the Roman Army that began to sack Roman cities to get money for themselves. This is the darkest danger of government. It pits society against itself and there in lies the fall of empires, nations, and city states.
Germany Threatens Greece with Bankruptcy? Should be Other Way Around.
hasGerman Finance Minister Wolfgang Schaeuble has threatened Greece with the state bankruptcy if Athens did not serve its debt with the ECB and the IMF. Greek Finance Varoufakis said they would like to pay, but would not have the money. He therefore wants to negotiate with the ECB on a haircut.In this case, billions would be lost to European taxpayers’ money.
Greece should default. NO COUNTRY has any intention of paying off their national debts – not even Germany. Let’s just get this started. Greece should default and then lets watch what happens to ECB, European banking system, and Germany. We are in a Sovereign Debt Crisis because these people perpetually borrow withNO INTENTION to ever pay off their national debts. The Greeks were sold a theoretical idea of Euroland. That could NEVER work outside the delusional mind of politicians. We will look at the ONLY solution at the upcoming Solution Conference on March 28th.
Energy Models & The Generational Cycle Shift
QUESTION: Marty; I was at the second 1987 WEC Conference in Princeton. I remember asking you about gold and you said it would decline for 19 years into 1999 and then start to invert in preparation for Big Bang. I have never known you to be wrong yet. You clearly said gold peaked and would decline for minimum 2-3 years and max into 5 years in 2011. We are approaching that 2015 year mark which is 3 years from the high closing of 2012 and 2016 is 5 years from the intraday high of 2011. The rhetoric indeed has not changed today as it was after 1980, which to me only proved your were correct again. The louder they scream means they are like a pig caught. The same fundamentals are always used to suck in more fools to be separated from their money. Is it possible to illustrate on your models how the computer was different for the 2011 high v 1980 high? Just curious.
All the best. Looking forward to this year’s WEC
Jeff
ANSWER: Just about every model we have was in a different position in 2011 compared to 1980. I suppose the easiest way to visualize the difference is the Energy Model. This physics based model captures the energy flow between the bulls and the bears – sort of like our capital flow analysis but for an individual market. It is far better in identifying bubbles than anything I have seen. It allows us to also determine which side of a ratio will move.
As you can see, the 1980 peak was a bubble. We do not see that isolated formation in 2011. The former must be resolved over broader periods of time if interfered with rather than a free market resolution. For the propaganda put out about gold is massive and like the Japanese government, the more you resist the trend, the longer you extend it. It was a different generation who still believed in gold standards etc.. That is why the decline was so prolonged. Kind-of like Moses having to wander in the desert for 40 years.
In the case of 2011, we do not see the same bubble. The younger generation lacks the mass believers that once existed back in 1980. Clearly, as a percentage of investors involved in gold, the rally into 2011 did not come close to 1980. This is part of the generational shift between these waves of 51.6 years. The older someone is, the stronger they believe in the old ways. We seem to have a sense of value etched into our brain from some period in our life. The older generation see $2 gasoline as outrageous and the new generation think it is cheap.
Nevertheless, you can see the difference on our Energy Model. There was no extreme bubble in gold in 2011. Hence, this should be resolved in the typical correction time frame 2 to 5 years rather than 19 to 26 years. This is part of the generational shift. In stocks, railroads were the leaders through the 19th century. The rails were the center stage of the Panic of 1907. The 1929 rally became the Industrial era auto, planes, etc. The older generation clung to railroads and agriculture.
We find even Aristotle recognizing the generational shift. His writings actually influenced Karl Marx. Aristotle saw as Athens was emerging as the Financial Capital of the World, it was experiencing a Market Economyand this altered what I call the Villa Economy. Traders emerged in Athens and were offering farmers to produce more crops than they needed so they could export them to other regions. This altered society transforming it into a Market Economy compared to the self-sufficient Villa Economy. Aristotle called these people those who made money from money. Aristotle also wrote:
- The life of money-making is one undertaken under compulsion, and wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.
- Book I, 1096.a5