The Dark Cloud on the Horizon
The Dow & The Correction
The support on our weekly models lies at 17253 and 17068. Weekly closings beneath this numbers will confirm there is a correction in progress. Keep in mind that a decline in the share market should send capital into a final spin with the rush to a flight to quality creating the last peak in government. This is the bubble in government for this turn in the ECM and thereafter, we will see a very confusing and interesting future.
Keep in mind that during such events, there is no sector that is left untouched. Everyone will suffer for there is no safe-harbor for capital during such monumental periods of confusion.
So as we move for the closing this week, pay attention to these numbers.
Gold – Losing Its Mobility
One of the greatest advantages of gold throughout history was the fact that it was independent of government and movable. Today, the hunt for taxes by government has been expanded to all forms of wealth. Above is the entry form for India. Not only is gold specifically listed, it is listed in jewelry form, and cash is defined as $5,000. There is also the note about satellite phones. No matter what country you go to, the hunt for money in any form is in full swing. It is hard to imagine the world we are entering into. Wil we become like the Romans, just burying pots of gold and silver, unable to move it anywhere? In Italy, if your jewelry appears excessive, they pull you off to weigh it.
India & New Highs
QUESTION: Mr. Armstrong; It is wonderful that you have come to India. I only regret that you are not conducting an open conference here in Mumbai. I appreciate that your trip is only to visit the biggest institutions here in India and that is great that they receive you to help our country. I wanted to let you know that there are many followers here especially after attending your 2012 conference in Bangkok where you forecast that India’s share market would make new highs and separate from China in trend following closer to the US market. That forecast was so bold it has been widely remembered here in India for everyone else assumed we would merely follow China.
You also taught us lesson in our own history. We did not even know that we were once the financial capitol of the world. You know our history better than we do and that is something. Do you still see your forecasts made in Bangkok playing out as you projected in Bangkok? Will you do a conference here in Mumbai? You may be surprised at how many people would attend.
2012 Faorecast in Asian Report for Bangkok
REPLY: We are preparing a special report on India given that the trend is entirely different from what so many had forecast. I am not sure about holding a conference in Mumbai. Perhaps. We are considering opening offices here. Without an office in India, it is very hard to organize such a conference.
Yes, our forecast from 2012 unfolded on target. That is the advantage of having a computer that monitors the entire world. The long-term is still in play. India has a tremendous advantage. Lacking the social programs means your country will not experience the massive debt crisis we see in Europe. The family structure in Asia remains intact, whereas government replaced that structure under socialism in the West, and that is part of the future debt crisis. English is very prominent in India which has enabled the country to facilitate the U.S. market in particular from back office and telephone services to computer IT support and programming. These skills are very interesting for the future of India.
Additionally, TATA is one of the largest companies in India and is now the largest employer in the private sector in Britain, owning Jaguar and Land Rover. India has been overlooked by most in the West who are just unfamiliar with what has been going on in this country. I do look forward to returning more often, to say the least.
China & the Dollar
The dollar rally and the devaluation of the yuan is not a fluke and it most certainly is not a one-time event. The dollar declined against the yuan for 19 years during the same timing that saw gold decline from 1980 to 1999. The major low on an annual closing basis at 2013 and 2014 was an outside reversal to the upside for the dollar. The Yearly Bullish Reversal stands at 683 and technical resistance stands at 658. The dollar filled the gap that existed prior to 1994 and is yet another confirmation that the dollar rally is underway.
Yes, the world trade is contracting and will get much worse after October. Governments are destroying the world economy on their hunt for taxation. Politicians are hunting money as if it were some sport and are undoing everything that was built postwar. Numerous reports are coming in to us about people traveling on trains and having their bags searched for money in Europe. The hunt for cash is wiping out the world economy. Americans are being thrown out of banks and mutual funds everywhere. FATCA has forced Americans to repatriate dollars. The only real Americans who can operate overseas are now established multinational companies. Small companies cannot expand from the United States nor can individuals send money anywhere.
Add to FATCA the problem in Europe and we see capital still pouring into the USA from both China and Europe. The real estate cycle has/or will peak with this turning point around the world from Switzerland, Britain, Canada, to Asia right down into India and Australia. We are plagued by politicians who have absolutely no clue how to run an economy and it is now all about them retaining power virtually everywhere we look.
The dollar rally is unfolding despite the fact people do not understand why. They look only at the USA debt and assume the dollar must crash, when in fact, the problem we face is on a global scale and $18 trillion in U.S. debt is simply not the large enough for international capital to hide. The future is going to be anything but a textbook move. This is why this year’s World Economic Conference is going to be a real eye opener.
China Devalues Yuan — Why?
China devalued the yuan in what many think was a surprise move. What they do not understand is that this move is more than trying to firm up exports; this devaluation has a similar impact to raising interest rates to stem speculation. Foreign capital just lost 2%. I have stated before, the Bank of China has people with experience, unlike many central banks. This experience comes from working on dealing desks and they understand trading far better than any other central bank. True, the devaluation will help its sagging exports, but this is temporary for as the U.S. economy turns down after October, the dollar will rise further and we should expect the yuan to decline further.
The dark cloud on the horizon may be far different from what traditional analysis anticipates. The degree of plagiarism with so many people now copying what our forecasts, claiming they are their’s, and touting cycles without ever mentioning our model is really amazing. People are sending in examples from all over the world, and now there are even people claiming to have uncovered war cycles. The sad part of this is when it really gets bad, they do not have the research to back up their claims, and in the process, they will discredit our only solution to move forward. But this is expected. There are people who only try to make money and could care less about the future because they do not possess the real research that matters.
We will likely be launching Socrates in September. The longer-term outlook, how things will unfold, and in what order, will be provided only within that platform. This is the only way we can at least try to prevent these people from discrediting our only solution to take a step for society to move forward. Such people could care less and will burn down the barn to pick up a coin they dropped. They are low-lives, so to speak, and you can see why society has such a hard time learning from the past to move forward.
So we can at least try to prevent these clowns from plagiarizing everything we do when they lack the integrity to care about the future. What we face is humanly impossible to figure out because there are some very strange patterns that are setting up. The headlines are using a standard to scare people to make money. It will not unfold as they believe and what they think we have been forecasting is not true.
The serious money knows the source of this research. The charlatans selling bogus newsletters and giving interviews to sell books are all preaching in the wrong direction. The future will not be a road to hell – it will be a road to utter confusion.
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