China – The Bounce
COMMENT: Mr. Armstrong. Everyone knows why the bankers hate you. They say you have way too much influence. You come out and say Shanghai should bottom tomorrow and it does. Obviously, you are the man no matter what you say.
RN
REPLY: We have a model that is great on time and price, but that does not mean that I manipulate the world by influence. That presupposes that market manipulation can reverse trends. That is impossible; any manipulation is within the trend. You cannot stop a freefall or a rally by influence, which has failed countless times.
I am tired of people blaming me for everything everywhere. Our Energy Model bottomed in advance, as it always does below par, warning it was overselling. The first Daily Bullish stands at 4080390 so until that is elected, we do not yet have a confirmation of a two-week rally rather than a two-day knee-jerk reaction. It was 19 days down; right on target in time and as was our target week of July 6.
The Directional Change was on the July 9, so everything simply lined up. Blaming me for influence rather than looking at the market and saying, “Gee, perhaps he discovered that there is a hidden order!” will only prevent you from seeing reality.
Any programmer will tell you it is IMPOSSIBLE to create a random number generator. A cycle will always emerge no matter what you do. Breaking the code is what they did during war to defeat enemies. I do the same to decipher the hidden order in market movements.
Blame me and you miss the whole reality that surrounds you.
Real Estate – the Peak is Here
I reported that we sold my mother’s house in one week. I too follow our model. The bounce in real estate into 2015.75 seems to be unfolding on time. What will make the peak is a rise in taxes. You have Chicago looking to raise taxes by 30%. Even in Texas there are growing protests over tax increases everywhere from Dallas, Austin, to San Antonio.
In France, protests call it theft. The London market has propelled higher than ever because of the problems in Continental Europe with the euro and France. The locals perceive anything that brings prices down, making housing more accessible in London, to be a good thing as the influx of foreign capital has been to get off the grid. This type of influx of foreign “investment” into the London property market is seen as a destructive force with entire neighborhoods transforming into ghost towns since they are just owned with no one actually living there. This has had a ripple effect, forcing local stores to close down for lack of business as nobody is actually there to service. Prices will decline on these types of properties, as they are unutilized.
The bounce in real estate into 2015 that our model projected was the higher end, not the low-end, as was the case in 2007. So far, everything seems to be on target. The overall long-term decline will be impacted by the reduction in long-term mortgages combined with insane increases in property taxes as governments try to stay afloat. The 30-year mortgage was the product of the New Deal. With Fannie declining and volatility in debt rising, the value of property should decline, lacking the “leverage” of long-term mortgages. We will see a decline more in line with the decline in prices meeting the availability of cash for deals.
DFT of Netherlands Poll: 60%+ of Dutch Want Out of Euro
The leaders of the EU are on a collision course with the population of Europe. This is now moving beyond Greece. Even in Northern Europe in Germany and the Netherlands, we are starting to see the majority of people wanting out of the euro – if they were allowed to vote. So wait until the economy really turns down after 2015.75. This is going to be very serious. The DFT in Netherlands conducted a poll showing the majority of Dutch now want out of the euro. The leaders are not just projecting their jobs. The euro is irreversible only because they will lose power and jobs; this has nothing to do with making Europe better.
Jade Helm
A lot of emails have been coming in about Jade Helm, a highly secret and most controversial U.S. Special Operations exercise that created a flood of conspiracy theories about a government takeover. The Washington Post has reported that Lt. Col. Mark Lastoria, a spokesman for Army Special Operations Command, said his organization is “considering allowing a small number of journalists to view selected portions of the exercise later this summer, but nothing is finalized.”
There is no question that the government is preparing for civil unrest. No, we do not advise them. But make no mistake about it, probably every single security agency around the world follows our model. They began drills actually practicing in cities with the turn of the War Cycle in 2014. Even back in the 1980s,Citadel, the competitor of West Point, asked to teach the Economic Confidence Model to their students.
It is impossible to keep what our model forecasts from the government. It certainly appears they are gearing up around the world for the turn in our War Cycle. Numerous news articles appear around the world, quoting us on this topic in many forums.
Let me state this very clearly: I have been warning that we are entering a period where taxes everywhere will rise. It has begun even in Texas. Government is simply unsustainable in its present form. There MUST be a total collapse and then rising from the ashes will be restructuring. Government will not lay down its arms willingly. They will attack the population if they attempt to rise up in protest. This is typical of the decline and fall of government. They always seek to sustain their power at all costs. They will fail as communism failed – that much is certain. However, keep in mind that it must get worse before it gets better. They are indeed preparing for civil unrest. They will hunt down citizens to defend themselves.
The primary reason Hoover lost the presidential election of 1932 was the result of the attack upon the Bonus Army, a group composed of veterans from World War I who wanted payment. The government sent in the U.S. Army to kill their own veterans. The Bonus Army was the popular name of an assemblage of some 43,000 marchers –– 17,000 World War I veterans, their families, and affiliated groups –– who gathered in Washington, D.C., in the spring and summer of 1932 to demand cash payment redemption of their service certificates. Retired Marine Corps Major General, Smedley Butler, one of the most popular military figures of the time, visited their camp and supported their protest. On July 28, 1932, U.S. Attorney General, William D. Mitchell, ordered the veterans removal from all government property. Washington police met with resistance and fired shots, killing two unarmed veterans. President Hoover then ordered the army’s removal from their campsite in downtown Washington.
Army Chief of Staff, General Douglas MacArthur, commanded the infantry and cavalry supported by six tanks; his second in command was Eisenhower. The Bonus Army marchers with their wives and children were driven out, and their shelters and belongings burned, but not before women and children died as well. MacArthur, the hero of World War II, unleashed tanks on the street against the veterans.
The TRUMP Card
Why is Donald Trump #2 in the polls? This very interesting trend illustrates what our computer has been forecasting for 2016. While Trump is inside the Republican Party, he is acting like a Third Party candidate. He is rising in the polls because of his stance on illegal aliens. That is a common problem everywhere in Europe and Britain. As the economy turns down, the population ALWAYS turns against aliens for taking their jobs. So, this will resonate and he can say what he wants for he is not catering to fundraisers.
Nonetheless, the element that I found fascinating is the REASON people are supporting him. I do not agree with what he says; I think it is too general in a wide brush. Yet there is the key. Our model has been projecting it will be 2016 that opens the door to a major shift in politics, which will be driven by the major turning point we face with 2015.75.
So let’s dig deeper. Why is Trump #2 in the polls? Many view Trump as his own man. He may be losing sponsors and business deals as everyone runs away from him because of his comments, yet therein lies the answer. People at least feel that he is his own man and NOT a politician. This is the underlying reason that our computer has been forecasting for 2016 as the political target. At this stage in the game, the Republican Party would never want him as their candidate, and I am not talking about the people but the party bosses. Trump would not play ball with them on their rules. That much the people are sensing.
When we look at our computer forecasting models for the 2016 presidential elections, the Republicans should have a percentage of the total popular vote. Whomever becomes the Republican candidate should win the election.
Here comes the wildcard: Third Party activity should rise in another spike high. Historically, this has emerged from splitting the Republican Party. That obviously took place for the Civil War when the Democratic-Republican Party of Jefferson split into today’s Democrats and Republicans. It split again for Teddy Roosevelt and his Progressive Party. We are looking at 2016 being the peak on another 51.6-year cycle (6 x 8.6). However, Trump is actually tapping into that sentiment if we look at this and analyze the trend without prejudice or bias. What Trump is gathering is the anti-establishment vote against groomed politicians.
Another confirmation of our correlation models confirming that the other side of 2015.75 is going to be nasty has been political change trends. We should actually see 2016 produce a major rise in voting turnout.
Note that the peak in voter turnout took place in 1876. This was about three years from the culmination of Wave 917 on the Economic Confidence Model (1865–1873). This wave followed the American Civil War and peaked with the cornering of the gold market by Jim Fisk that manifested in the famous Panic of 1869. However, on the international level, this is the start of the political change by perhaps the most influential man to ever exist in the field of economics – Karl Marx.
In 1867, Marx published the first volume of “Das Kapital”, a work that analyzed the capitalist process of production. Marx elaborated his labor theory of value, influenced by Thomas Hodgskin and Aristotle. What Marx and others did not understand was the changing profile of the economy as industrialization was evolving. Marx quoted Hodgskin as recognizing the alienation of labor that occurred under modern capitalist production compared to agriculture where a farmer reaped what he sowed. Employment changed during the Industrial Revolution; Marx saw this as the exploitation of labor, believing management was profiting off of labor, which he saw as the real value, as in an agricultural economy. Marx even quoted Hodgskin that no longer was there any “natural reward of individual labour. Each labourer produces only some part of a whole, and each part having no value or utility of itself, there is nothing on which the labourer can seize, and say: ‘This is my product, this will I keep to myself.'” (Thomas Hodgskin, Labour Defended against the Claims of Capital(London, 1825) 25.)
Yet the most fascinating aspect is that the first volume of “Das Kapital” was published in 1867 where Marx outlined his conception of surplus value and exploitation, which he argued would ultimately lead to a falling rate of profit and the collapse of industrial capitalism. Demand for a Russian language edition of “Das Kapital” soon led to the printing of 3,000 copies of the book in the Russian language, published on March 27, 1872. By the pi turning point, Marx was invited to speak in Amsterdam, which was really the beginning of the surge to Marxism because the economic decline was underway and people were looking for answers. After his speech in Amsterdam, sales of his work took off. In the autumn of 1871, the entire first edition of “Das Kapital” published in German sold out, followed by a second edition.
The entire Marxist movement began with that pi turning point in 1872, fueled further by the Panic of 1873. Germany set this in motion by ending the purchase of silver for coin production, causing a crash in silver prices that led to silver miners in the States lobbying for the U.S. government to support silver ushering in the Silver Democrats. This led to the Long Depression that lasted for 26 years, culminating in the virtual bankruptcy of the United States and the peak in U.S. interest rates hitting nearly 200% in 1899.
We all know something is seriously wrong. This economic system is dying for politicians know not what they do. It is warning us over the shoulder if we dare to look behind us. The music is getting louder and louder with each passing day.
So regardless of personal feelings, bias, or any prejudice, we must analyze Trump not for who he is, but what he is tapping into within society. We are looking at a major change on the horizon. The 19th century saw the shift toward Marxism as people understood neither the Industrial Revolution nor the Long Depression that was set in motion by the railroads emerging as the internet of the day, displacing local business with mail order from Sears. We too are experiencing a move toward the Robotic Age displacing jobs and changing the entire view of energy as electricity and magnetism displace fossil fuels. Trump just may be the guy who is at the right place at the right time. That does not say he wins. It just says he is stirring up the pot for 2016.
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