Understanding the Double Reversals
The DOUBLE WEEKLY BEARISH REVERSALS we had at 286.10 on the S&P 500 futures back then were generated from the same HIGH. This is different from two separate events generating the same number. This we do not call a DOUBLE Reversal, just a very important Reversal. To generate the same number twice from the same event is EXTREMELY RARE. Nonetheless, generating the same number two or even three times from separate events is much more common.
Capital Flow & Domestic v International Perspectives
QUESTION: Hi Martin,
I listened to the interview you did with Financial Sense and you said something that struck me as odd. I think you said that the devaluation and failure of the Euro will drive capital to the US. Fair enough, sounds right to me. I think you then said that the Fed’s response would be to raise interest rates to slow or halt this capital flow. Seems to be that this would accelerate capital flow to the US. Hedge funds love the carry trade. If they can borrow at or near zero rate of interest in a currency that is depreciating (Euro) and invest invest in a currency that is appreciating (USD) at a higher rate of interest, I would think they would do so. What am I missing? Did I just hear what you said incorrectly?
Thank you in advance for your thought on this.
Mg
ANSWER: You are correct. What you are missing is the Fed will have to respond to DOMESTIC criticism. They lowered rates in 1927 to try to deflect capital inflows from Europe. Those inflows sent the US share market into a bubble precisely as was the case for Japan going into its bubble in 1989. But the Fed was criticized for lowering the rates and accused of creating the bubble into 1929. People will judge the Fed based upon narrow minded domestic perspectives. This will only accelerate the inflows for the Fed will believe it must raise rates to stop the bubble and attract even more capital to the USA.
What I am saying is reality – not advice or how things SHOULDfunction. This is simply the way they DO FUNCTION because we do not understand International Capital Flows. and try to manipulate the economy based upon purely domestic views that are in opposite of how the world truly functions globally. If the Fed does not raise rates, they will be accused of creating inflation for the blame must always be within the domestic sphere assuming we are in control just like Global Warming.
Symmetry Ukraine and Vladimir regarding Russia
We are reminded from a Russian reader regarding symmetry that the founder of Russia was Vladimir Sviatoslavich the Great (c. 958 – 15 July 1015) and hence today we have Vladimir Putin. The symmetry is even a bit deeper than just that the first names match. Vladimir Sviatoslavich the Great prince of Novgorod, grand prince of Kiev, and ruler of Kievan Rus’ from 980 to 1015, from which Rus[sia] takes its name, also directly involves Kiev of Ukraine. Russia was founded ruling the Rus in Kiev.
According to these records of the Primary Chronicle, it was the Vikings who invaded in the later 9th century after being invited by the Slavs. It was actually the Vikings from whom Russia is said to have taken its name – the Varangian Russes.
The Moguls were fierce warriors. Genghis Khan had tried to conquer China, but broke off his invasion in 1218 and turned toward the West. He died in 1227AD. The Mongols, led by the grandson of Genghis Khan (1162-1227), invaded the Rus and destroyed their capital at that time in 1240, which was in Kiev, Ukraine. All that remains is the last of the Golden Gates of Kiev. The Golden Gates were built in 1017-1024. The Mongols then turned back to conquer China in 1279. Eventually, the Mongol dynasty fell in China during 1368, and so was the fate of the Mongolian Empire after about 224 years.
The fall of Kiev to the Mongols in 1240 is incredibly important for this brings us to 15 cycles of 51.6 years (2.5 x 309.6) that also targets 2014. The rising tension in Ukraine is split between East that is aligned with Russia where the people speak Russian and the West where Ukrainian is the spoken language who see themselves aligned with Europe – not Russia. Meanwhile, Ukraine has become the last symbol of the old Soviet Empire and may play a strategic role in the years ahead for it is a central point of contention between Russia and USA.
Moscow began to rise as a city much later during the 14th century about 1340 when it was known as the Grand Duchy of Moscow between 1340 and 1547. Therefore, it was against this backdrop that we come to Ivan III (The Great) and his marriage to Palaeologus in 1472. This event appears to begin the blossoming rebirth of Russia that would lead to it becoming a world power. Ivan created the first Rule of Law that is the cornerstone of all national wealth.
We have also the 309.6 year cycle between Russia and Ukraine converging at this time as well in perfect symmetry. Ivan Mazepa (1639 – October 2, 1709), was the Cossack Hetman in Left-bank Ukraine, from 1687–1708, and Prince of the Holy Roman Empire ad personam 1707-1709. Mazepa was famous and also played an important role in the Battle of Poltava. After he learned of Peter I’s intent to relieve him as acting Hetman of Ukraine and replace him with Alexander Menshikov, Mazepa deserted his army and sided with Charles of Sweden. The politicization of this desertion has lasted all this time for Ivan Mazepa remains a Ukrainian hero and a traitor to Russia to this very day.
The Battle of Poltava had its 300th anniversary back on June 27th, 2009. Therefore, the 309 year target beings us to 2018. This was a battle, where Peter the Great and the Russians defeated the Swedish army in a turning point in a war with Sweden. Poltava is actually in Ukraine, and this was the battle that made Russia a significant power.
So we do have symmetry in both Ukraine and Vladimir. Interesting aspects indeed with respect to political change.