Merkel to Run Again in 2017
German Chancellor Angela Merkel speaks during a session of Germany’s parliament, the Bundestag, in Berlin, Germany, July 17, 2015. REUTERS/Axel Schmidt
Reuters is reporting that Merkel has decided to run for election once again in 2017. The longstanding joke in Germany is that either she will have to die while in office, or someone will have to drag her out. She would not know what to do if she was not in control of Germany, and thus Europe. Anyone assuming that there will be a change in the idea of austerity within Europe better bet on something else.
“The Forecaster” U.S. Debut on August 1, 2015 in Cherry Hill, NJ
I want to thank everyone who came to “The Forecaster” screening at the AMC Theater in Cherry Hill, NJ. It was also a special night for my family to be able to attend. I was shocked that people flew in from Texas, Ohio, Boston, and even from the South.
We are all in this together. The more we educate people of the problem and its cause, the better our chances are at avoiding a totalitarian future. We need major political reform to save the future. Government is just on a path of self-destruction. It is better to understand what is coming rather than waking up totally unprepared.
The View on Gold and Silver
QUESTION: Thanks for the latest posts.I have 3 queries if you care to consider them.
Some years ago you used to say $5000 and $12000 when contemplating gold’s upside.Now the latter seems out of reach.Can you indicate what caused you to
change your mind?
change your mind?
Secondly, regarding a possible Republican Presidential victory, does this correlate with a USD high and, if so, why?
Lastly, is a gold: silver ratio of 100 a possibility? (I have mislaid that portion of the 2014 Report which covers this topic).
Many thanks & Best Regards
Bill
Bill
ANSWER: No, $5,000 is still the technical max based upon the patterns we have so far. Yes, that may change when the final low is in place. That depends upon the downward thrust for the steeper the decline, the greater the projection of that low materializing. The $2300 target is minimum whereas the $5,000 is a tech target – not based upon reversals and is independent of TIME.
We need the low to see if that projection will change from $5,000. I do not expect this target to rise above $5,000, but that is entirely possible, although certainly not beyond $12,000 which is the most extreme possibility and is probably not attainable. Such a level at $12,000 appears very unlikely because the system would likely implode long before that would ever develop. If government was in control, they would be going door to door confiscating everything at gunpoint. The currency would most likely change and we would be measuring gold as something else by then.
The ultimate high depends upon the patterns creating the low – not fundamentals. Nobody in his or her right mind will ever step up and buy the low. So it does not matter if demand for physical coins rises or falls, it will never be enough to make the low and is more akin to propaganda disconnected from the events in all other markets. No one ever tries to catch a falling knife. We need the final low before the COMPUTER can provide that target, rather than my opinion.
We have been the highest paid firm in the world for decades. Clients want to know what the COMPUTER is forecasting, not my personal opinion. So, I could be wrong. I find it primitive when people try to criticize me personally for it only shows their own ignorance. My opinion does not matter. I cannot wait for the day to retire and let them all argue against the COMPUTER. It is similar to politicians claiming, “Vote for me because I lie less than my opponent!” They remain trapped in a primitive world and cannot see the global connections. NO ONE can forecast the future based upon fundamentals and personal perspectives. That is in the category of a witch doctor. We need the COMPUTER to remove the bias and prejudice. It is what it is – nothing more. You cannot be an analyst and married to a predetermined view regardless of what the instrument might be. Everything rises, falls, and rises again with TIME.
When the low comes into place, then the COMPUTER will provide the projection for the high. We will have to see what comes out. The $5,000 number was exactly what I have been saying all along. That is a projection based upon technical analysis ONLY. It is not the COMPUTER’S forecast since we first have to achieve the low.
As far as a Republican victory, it is independent of a dollar high. We are looking at a meltdown regardless of who wins. The dollar high is simply that the debt crisis begins in Europe, manifests in Japan, and finally it hits the USA last. This is how it unfolded for the 1930s. The USA has the biggest federal debt, but the taxes are lower than Europe. The disposable income in Europe is far less than in the States, so there is less room for government to keep up this insane austerity that only support bondholders.
We will provide the silver/gold ratio update for clients. That ratio has made wild swings from 120:1 intraday to 12:1. Despite what the promoters say, there is no “fair” value to which this ratio will remain constant. It will swing back and forth. Yes, we will pay attention, for it will also help in looking for the turn.
Gold – What Now?
Gold elected the Monthly Bearish at 1155 and we did so well below that level, holding the 1084 number both weekly and monthly. Our energy models are turning positive, so it does not appear that we will have major follow-through at this time. When you elect a Bearish Reversal that far from the number, you typically bounce back to retest it before proceeding further.
We have a Directional Change back to back for August, September, and July. So, we may see a reaction to the upside to flush out the shorts since we have excessive bearishness building in the press, as the WSJ commented that gold is the “pet rock”.
A reaction rally at this point BEFORE new lows will relieve the short positions, but this is not likely to last beyond September. Therefore, we are more likely than not going to see the final decline stage into the Benchmarks. Gold is within the channel so the resistance is forming at the 1155 level followed by 1225-1300. Support will remain at 1084 on a closing basis with key support at 900.
Everyone who purchased the 2014 International Precious Metals Report will receive the update shortly. We will make an announcement as soon as it becomes available.
The Risk of Real Estate – Forget Derivative & Fiat
The asset class within tangible assets in the immovable category is none other than real estate. This greatly varies from one location to the next. We face two main problems with real estate because we are facing a major Sovereign Debt Crisis.
First is the fact we have a problem with leverage reflected within interest rates. While many tout derivatives and fiat money are the reason for a crisis on the horizon, of greater concern is the leverage within real estate. The 30-year mortgage was part of Roosevelt’s New Deal. Real estate prices collapsed along with massive bank failures. There was no credit available, so real estate collapsed to about 10 cents on the dollar.
Real estate was auctioned, and land that had sold for $2-$3 during the mid-1800s brought 10 to 30 cents an acre. FDR created Fannie Mae to revitalize the real estate market by providing 30-year mortgages to allow people to buy property. Sales were taking place at auctions and on a purely cash and carry basis, which obviously limited the buyers.
We have to be concerned about the results of shutting down these agencies, which can result in reduced leverage within the system; if you add to that a banking crisis, then we will see a return to the atmosphere of the 1930s. The amount of leverage within the entire system based upon real estate is astronomical. This has been a major factor in creating the long-depression in Japan, for at the top mortgages became 150-years with several generations responsible. Everyone was doing it so it became the NORM. As property collapsed with banks, everything changed in Japan.
Derivatives and fiat scenarios pale in comparison to the deleveraging of real estate for this is also a direct hit upon the people. Many have built their lives around the assumption that the value in their home will be there for retirement. This is part of the massive DEFLATIONARY wave we are in, and is why we have to restructure. The entire future will be lost and there are no political candidates willing to tackle a subject they do not understand. They will never accept the fact that government is responsible for this economic nightmare.
Secondly, the negative impact upon real estate will also come from taxation, just as Chicago is looking to raise property taxes by 30%. The 2007 peak in real estate was the low-end leveraged out by the banks in their speculative bubble. We warned there would then be a bounce back into 2015.75, but this would be the higher-end. This was aided by the inflow of foreign capital from both Europe and China. As taxation rises, this asset class will be hit dramatically. The high-end, which is peaking here in 2015.75, has NOT been financed for much of this has been paid for with cash by people trying to get off the grid. These are not the same locations or sectors that peaked in 2007, they were the low-end leveraged pools based upon unsound speculation. That hurt the majority of home owners, whereas this peak in 2015.75 has been in completely different sectors of the market.
We face these problems in real estate. With state and local governments going broke and property taxes rising sharply, put this in the cauldron and stir it with the decline in capital lending for mortgages, closure of Fannie Mae, and the collapse in long-term lending (transactional banking), and the potion created is a very toxic witches brew.
The stock market or monetary issues do not create depressions. You have to destroy the bond market for that is where capital resides typically at least 10:1. Once you take out the bond market, that deleverages to the real estate market and now you have undermined not just the investors, but you wipe out the savings of the population as a whole. People just begin to walk away from property as taxes rise. This is how Rome collapsed; the city of Rome fell from its peak of about 1 million inhabitants to just 15,000, and in the process, real estate became worthless.
It is critical for us to understand how civilizations self-destruct. They are ALWAYS at the hand of government. Their self-interests are always at the expense of the people. There have been few exceptions in 6,000 years of recorded history. The Paradox of Solution is always the solution as today’s crisis sets the stage for the next crisis. We live in a cycle, so indeed, what comes around goes around.
Nothing is ever constant and no solution will create a permanent result. Whatever we “think” today may not be true tomorrow, which is why we need a computer to avoid that human error factor to which there is no exception. We are all wrong about something at some point. That is how we evolve and learn. No human being is perfect because we cannot foresee the future. What I have seen in research is straightforward: if they have done it before, they will do it again. Why? Because similar situations produce the same series of human responses. History is a map to the future; there is nothing new under the sun.
No comments:
Post a Comment