Happy Holidays to All
Trying to Take the Next Step Forward in Economic Evolution
COMMENT: they now propose a bill which provides that savers’ deposits in Austria will no longer be guaranteed by government. The banks should be responsible for the safety of savings, not the government.
Welcome to the almost obsolete world of modern banking.Our deposits/savings largely guaranteed by transactional bankers(whos balance sheets Joe Public cannot possibly understand the risk profile of) whilst central banks takeover credit creation!And of course state sponsored credit will pursue/bailout all the losing trades that are politically favored/sponsored etc!!
Really is time to get completely off the grid.
Richard
REPLY: We either back out of this mess with a restructuring to end federal debt and taxes restoring our liberty or this turns into the bloodbath. There is really no choice because you have so many people who believed in government who have no savings to sustain their retirement for they counted on some program or their pension fund has 40%+ government bonds. We have the evolution process of the economy to technology that is a wave of Creative Destruction rendering a large chunk or society unable to make the transition to a different skill set, and the typical way such waves are resolved has been with war which thins the herd.
Robots will eventually replace the military and police right down to Uber Drivers. This is extremely DEFLATIONARY which is part of the current trend as low skill jobs vanish to the peripheral economies. A reset in diminishing the numbers within the herd may be part of the cycle if we are not careful here.
The danger that is on the horizon becomes the control-alt-deleteevent. That is when one portion of the global economy advances too fast that it loses touch with the basic fundamentals and the whole thing implodes into a Dark Age. Look at it this way. If there was a massive civil unrest to the point normal commerce ceases to move, NYC has 7 days worth of food. Those people will have to leave the cities and rob the suburbs or starve. They lost the knowledge of how to even grow food. With each step in economic evolution we leave critical basics behind. Do you remember the actual phone numbers you call or you just push a button on your cell phone?
This is the risk placed on the table with Marxism for it handed power to government and justified its new role as the manipulator. In the process, the majority of people just assume everything tomorrow will be as it is today for government will protect us.
The Private Wave that peaked in 1929.75 justified the shift to government with the new deal beginning with the low in that wave 1934.05. Gold was confiscated right with that turn. The theCONFIDENCE moved back to government and that Public Wave peaked precisely with the peak in interest rate 1981.35. The low of 1985.65 was the birth of G5 and the Plaza Accord. Government has been fighting to regain control during the Private Wave and the world economy will end with a shift to Asia for 2032.95. There is a huge risk that we will NOT have a new age of technology in the West, but this may be akin to the fall of Rome which our advancements have moved too far too fast like the NSA.
Theories of transitions to new eras abound, but lack the research of such events. When jets were introduced, the bulk of pilots who flew prop planes could not make the transition just as others could not make the transition to computers. The same took place in trading. When screens came out, many old traders left for they could not get use to trading over screens. Changes in technology displace jobs and have typically been marked with DEFLATIONARY trends. Unions overpriced themselves at the docks in NYC and today no ships dock there at all. The unions destroyed their own jobs by their greed.
There was an elderly woman in her late 50s who made a comment in the hallway about my staff – Marty and the girls. From her perspective, I hired only young girls, from my perspective they could handle technology she could not. She would rather characterize this as an age bias rather than admit she lacked the skill set necessary for the computer age.
So indeed, welcome to the obsolete world where Marxism is destroying everything for government assumes it is justified to manipulate society. This is the risk we may not make the next step in the evolutionary process to some world of technology marvels. We cannot make this next transition with government simultaneously chasing loose change. For in their pursuit of money and taxes, they destroy the synergy that is critical to bind society into civilization. Cut those silver cords that bind us together turning everyone against one another (see something say something), and we may not make it to the future.
This is why the most critical step here is to remove government from the aggressor mode. We cannot reach a new age as slaves. So this is a full-blow control-alt-delete which you need to get off the grid, or we can reduce the amplitude of the crash and burn to make it to the next step. You will not get to that next step without addressing government. This is why we must eliminate the debt authority to borrow, taxes to allow society to reestablish the synergy they are destroying, and a debt-equity swap to try to ease the bloodshed and to transfer that capital into a new era to create the next new age.
Austria to Default on Bank Guarantees
Austria is now planning a far-reaching reform of deposit insurance – default. You pay taxes all your life and you are told government is there to protect you. Austria demonstrates the future all nations will face for they now propose a bill which provides that savers’ deposits in Austria will no longer be guaranteed by government. The banks should be responsible for the safety of savings, not the government. Your taxes are just for their benefit, not to protect the people. This is the latest report from a Viennese newspaper press and standard.
Little by little, we are watching the collapse of government and the entire socialist agenda. Governments are incapable of managing the economy because they are inherently corrupt and cannot function for the benefit of the people when it always becomes a question between funding their life-style v the people. We just have to be honest here and look at this Public v Private battle that has waged since the first person put something on his head and claimed he was king.
Political Dark Side of 2016 & Obama’s Intent to Bring War
NATO wants to take back the Crimea from Russia. The US wants to send in arms to Ukraine. All of this has provoked a response from Putin that has escalated the stakes. Taking back Crimea Putin has warn would lead to a nuclear conflict. Otherwise, Putin is looking to now escalate the conflict using Russian nationals in the former Soviet states of Estonia, Latvia and Lithuania as well. As the economy turns down from 2015.75, the geopolitical tensions will rise for this is how governments on both sides will distract the people.
It has also been suggested that if Obama can start a war before the 2016 election, he can suspend the elections in 2016 and stay in office under the Constitution. He has allowed the same people that were running the show under Bush to stay in place. They let him tinker with healthcare provided they ran all the war games and data collection unmolested. These dark sinister people behind the curtain would certainly NOT want anyone to come in and clean house. They have the power now and there is a serious risk we may see all our freedoms vanish whatever is really left. At best, they will want another stooge who leaves them run the world and they will let them play with the social issues.
This is the very dark side of government. Our computer has been warning about a rise in 3rd Party activity for 2016. However, keep in mind this could also be anything but business as usual. All projections show that typically the Democrats should lose the election. The Republicans SHOULD win, but our 3rd Party models warn of a split as was the case with the Republican split into the Progressive Party with Teddy Roosevelt. This introduces a wildcard that is very interesting to say the least. We will be providing that analysis for clients once Socrates is launched.
Swiss lose 6250 francs per person on the Euro peg
The Swiss Central Bank lost 50 billion Swiss francs on the Euro Peg. That works out to 6,250 CHF per person including children. So every couple lost 12,500 and a family of four lost 25,000 CHF. And this is all about government decisions in manipulating the economy. Great job.
IMF Advises Switzerland to Devalue the Franc
The IMF has now recommended that Switzerland shouldDEVALUE the franc by increasing its money supply. This is advice from the IMF run by a lawyer who clearly knows what she is doing because she worked in Chicago close the futures exchange at least. I suppose walking by the CME on your way to work qualifies you as a top currency adviser these days.
The DEFLATION is still unfolding for people are lackingCONFIDENCE in the future. As long as they remain uncertain about the future, they will continue to HOARD their cash and that causes the velocity of money to decline further fueling the DEFLATION. The IMF sees the problem with the capital flows still moving from the Euro into the dollar and franc while Euro based assets shift within Europe to Germany.
The strong franc will no doubt cause the Swiss economy to turn negative as well as the rest of the world turns down even harder. When the US economy declines, the Swiss will see a sharp decline and this appears to be a 26 year high in Swiss real estate as capital inflows slow.
Domestic Analysis v Global
QUESTION: Dear Martin,
I watched your Solution Conference and I appreciated it a lot. Indeed, I hope they will follow your suggestions.
As far as the markets are concerned here you can find attached the latest report of some guys I have been subscribing to since 2010. Their models warned of a possible top in commodities and precious metals for end 2010 / beginning 2011 and, at that time, I appreciated it.
But these people have been calling a TOP in US STOXX since at least 2012 and they have been screaming and yelling since then about a US STOXX BUBBLE, making comparisons with 1929, 1989, 2007 and so on, showing tons of charts and statistics from everywhere. Meanwhile, reading all your writings/posts you have been saying since 2011 that US stoxx would INCREASE because of capital flows from Europe to USA and from public to private. That’s so easy to understand.
At the same time they have been calling for a new bull market in precious metals stoxx since 2012 and they have been blatantly wrong. They have been arguing since then that from 2001 to 2011 there was a bull market in gold basically due to the old paradigm of gold as an insurance against inflation while the new bull market will follow a new paradigm typical of all post-bubble contractions. According to the new paradigm, reduced mining costs will improve profit margins for mining companies, enhancing their balance sheets and finally shares prices. According to the new paradigm we should expect a bull market in precious metals stoxx because of the increasing GOLD’S REAL PRICE, as seen during every post- bubble contraction. While I understand their reasoning, I don’t understand why they have been so wrong about the TIMING.
I respect people’s work, in every field, and I don’t expect these guys to be always write in their calls. Markets are complex and uncertainty is increasing. Anyway, their TIMING in calling a BUBBLE and a MAJOR TOP in US STOXX have been totally WRONG ( since 2011/2012 ), as well as their TIMING in calling a bull market in PRECIOUS METALS STOXX ( since 2012/2013 ). And they never apologize for their wrong calls.
I don’t really know what to do with these so called “ market historians “ and “ veteran traders “. We are speaking about people who have been in the field for at least 40 years and have been writing newsletters and developing forecasting models for at least 30 years ! How can they be so wrong ? How can I trust them?
Thank you for what you are doing and for your outstanding blog and services
Cheers,
Roberto
ANSWER: The problem with the vast majority of analysis has always been its domestic focus. They do not take into consideration anything external. They do not grasp that 1929 was a capital concentration that produced a bubble exactly like 1989 in Tokyo. How is such a bubble even possible when retail participation is at historic lows? The only way we have a stock market crash is the dollar has to crash and that would cause foreign selling as was the cash in 1987.
The difference is the limited domestic view compared to the global external view. It you are ignorant of global capital movement, you will never see the real booms and busts that are driven by capital concentration. It is like saying the entire new age will be all technology driven and therefore the mental ability becomes the major asset. That is looking and judging the entire world by the United States. How is that to take place in Africa, South America, or under developed nations in Asia? This is not a one-size-fits-all world.
The Wealth of a Nation is its total productive capacity of its people, which includes knowledge to brawn. Adam Smith’sInvisible Hand established that. Then there came a great trader who saw the world through international transactions. That wasDavid Ricardo who developed the theory of Comparative Advantage. Each nation should focus upon its ability of its people. It makes no sense to spend $200 from grow lettuce in a desert when you can buy it for 50 cents from some other nation.
Spain had all the gold in the world It was the richest country. It did not invest that money in developing its economy. It was one giant party time. They spent the money before it came in and went bust in the end. The joke at the time was rather blunt, The French unloaded the ships in Spain because the Spanish were too good for such low-level jobs. So the French took the money home and spent their earnings in France expanding that economy while Spain was having party time.
This constant view that gold will rally and the socks will crash, is so primitive it is absurd. They are taking a tiny slice of history and ignoring everything else. They fail to think this through even logically. The metals pay no interest so institutions do not invest in them. They can buy stocks, but not stockpile bullion without income. Those that do have bullion, lease it out for income, but then these people call that manipulation or paper gold.
Just what is suppose to happen with the world? Capital will ONLY go from stocks to gold? What about the traditional flight to quality? They are not historians if they do not address every aspect of the economy. There are people who prefer bonds, others stocks, and others gold and still a younger generation who wants electronic entries on their cell phones. This is not the world of yester-year. The economy evolves with time – it is never stagnant.
French Ban Thin Models From Working in Paris
Believe of not, the French have now passed a law that prohibits thin girls from working as models in Paris. Under the law, models will have to show they have a Body Mass Index (BMI) above a certain level. Of course, they will imprison agencies who use girls that do not meet their guideline. They will now go to prison for 6 months. Guess the French chased out the rich anyway, so I suppose the fashion industry will migrate to London or Milan. The primary reason they employ thin models is so they can all wear the same size outfits put out by designers.
The French government has nothing else to reform but the fashion industry. Shame. For under their fiscal policies people will starve as they destroy the economy anyway and they then will not be able to find employment being below some BMI number.