Gold/Oil Ratio – Is It Really Making Record Highs?
QUESTION: Mr. Armstrong, Mining ran a chart of the gold/oil ratio pointing out that conventional wisdom has placed the two together on the theory that rising oil prices push up inflation increasing demand for gold as a hedge. You have stated gold is not a hedge against inflation and you appear to be correct with all the QE from US, ECB, and Japan, yet nothing has happened.
Mining says that the average ratio of gold to oil is around 15 saying it is at record highs now which have not been seen since 1973. The same thing happened in 1980 when a record gold price in inflation adjusted terms again coincided with a sharp rise in the price of oil. The ratio hit 36 during the 1973 OPEC crisis.
So has gold or oil bottomed? Or have we entered a new era altogether? I know you will have an interesting assessment of this ratio. That’s what you are known for.
Thank you
HW
ANSWER: Nice chart. However, it is always a question a DATA! If you looked only at a chart of the stock market from 2011 until 2015, you would conclude the market always moves higher. Long-Term Capital Management collapsed with the best of minds (When Genius Failed) because the modeling did not go back beyond 1971
Here is the gold oil ratio back to 1900 and its beginning. The record high is neither 1980 nor the 1973 OPEC crisis. The record high was 1932 and the Great Depression. This is calculated simply using annual closings. On that basis, we have not reached the Great Depression high. If oil fell to the Reversal at $25, to test the Great Depression high on this ratio gold would still fall to $875. The average is about 23:1 – not 15:1. If gold were really to respond in a financial crisis to a collapse in money stock, then this ratio could hit the 52:1 area. That would be something to write about. We should exceed the 1932 high on this move.
We are looking at both many commodity producing companies and oil producing companies going belly-up in this fish tank. These defaults will hurt banks who lent to them. This is just one slice of the pie we have to finish eating before we can leave the table. (DO NOT RUSH INTO MINING STOCKS – IT AIN’T OVER TIL THE FAT LADY SINGS as they say)
Judge Walker Is The Same Judge Who Fined a Lawyer For Filing a Suit on 9/11
A number of emails have asked if this was the same Judge Walker who fined a lawyer by the name of William Veale for asking him to remove himself from an appeal due to a conflict of interest involving a 9/11 lawsuit filed by April Gallop. Gallop worked in the Pentagon and was 40 feet from where they claim the plane struck the building. She filed a lawsuit against the Bush Administration for not evacuating the Pentagon, namely against former Vice President Dick Cheney, former Secretary of Defense Donald Rumsfeld, and the former Joint Chief of Staff Chairman Richard Myers. Bush is Judge Walker’s cousin and that is the “W” in his name – George Walker Bush. Judge Walker not only refused to recuse himself from an obvious conflict of interest, but he had the audacity to fine the lawyer $15,000 for daring to file such an appeal, as he felt it was an insult to the court.
Canada find Policeman James Forcillo Guilty of Attempted Murder
When a jury gets the chance to try a policeman, we see the results. This is indicative of the collapse of government the other side of 2015.75. The abuse of the police in being quick to kill people is not limited to the United States. This incident took place in Toronto. The jury found James Forcillo guilty of attempted murder in the 2013 shooting death of Sammy Yatim. The person he killed was 18-year-old Yatim on bus. The jury believed Forcillo was justified in firing the first three shots at Yatim, However, he kept shooting and they found him guilty of attempted murder. Police are no longer just trying to protect themselves. The unload full clips far beyond what is necessary. Back in 1999, New York police shot a killed Amadou Diallo on February 4th that year firing 41 shots while standing at his front door unarmed. The were put on trial in Albany, far from New York City to ensure the officers would not be found guilty.
You have a far greater chance of being killed by police than by a terrorist. This raises the question: Who are we really being terrorized by? Once upon a time, the police were respected and trusted. They have been transformed into paramilitary IRS agents hunting money for the local politicians. How far we have come from that Norman Rockwell picture of America back in 1958. What a difference 43 years can make.
Market Talk – February 1st, 2016
Despite a better than previous Chinese PMI release (48.4 against a previous 48.2) it was not what was expected (48.6) and so the Shanghai Index just could not make headway and eventually closed down 1.8%. Japan, on the other-hand, was still trading better (+1.8%) on the negative interest rate route as money looks for bargains in the private sector. As you would expect, banking stocks did not follow the enthusiasm with stocks such as Mitsubishi UFJ, Mizuho Financial and SMFG all closing around 6-7% lower on the day. Hang Seng closed marginally lower at -0.4% in thin trading. Europe saw a mixture of data with not one individual piece having the ability to master the command. Spain’s PMI 55.4 V’s estimate of 52.4 was shadowed by Italy’s poor 53.2 against an est. 55. FTSE opened positive but by mid-morning it too had succumbed to follow the pack lower and in quiet (well – relative to January) closed the day down -0.4%. DAX and CAC both closed lower but off their days lows.
The US data was on the whole negative also and within the first 30minutes of trading we were down 1% (ISM sub 50 again) but had dealers claiming we were following oil again! WTI and Brent were down around 6% eventually closing just sub $32. However, despite this early sell-off the Index spent the remainder of the day recovering to close up into some key stock earnings figures. Late futures trading this evening is seeing some strong gains as broad customer interests appear. Googles parent (Alphabet) is trading up 9% after earning ($8.67 per share) beat an expected $8.1.
The US data was on the whole negative also and within the first 30minutes of trading we were down 1% (ISM sub 50 again) but had dealers claiming we were following oil again! WTI and Brent were down around 6% eventually closing just sub $32. However, despite this early sell-off the Index spent the remainder of the day recovering to close up into some key stock earnings figures. Late futures trading this evening is seeing some strong gains as broad customer interests appear. Googles parent (Alphabet) is trading up 9% after earning ($8.67 per share) beat an expected $8.1.
Bond markets around the world sold off even as shares wobbled in early trading. US 10’s were last seen at 1.95% (+2bp). German 10’s closed the day 0.35% (+2bp). European peripherals lost a little ground with the following closes.. Italy 10yr 1.47% (+6bp); Greece 10yr closed 9.06 (-6bp); Turkey 10.60% (+6bp) and finally 10yr Gilts closed 1.62% (+6bp). Japan JGB’s closed 0.045% (-5.5bp). The market heard earlier in the day that the ECB had purchased 62.4Bn Euros of Bonds in January through Quantitate Easing when renewing its programme after the winter break.
Elsewhere, gold had a good day following-on from a firm close on Friday ($1116.40), today gaining over $13 (+1.2%). Also, although we saw some good US Dollar strength against (for example the Russian Rouble) the DXY only closed marginally lower at 99.05 (-0.6%) – mainly on the back of a strong GBP performance (+1.3%).
The Lucrative Career or Lies, Deceit, & Fraud
Being a politician is a business. They are, for the most part, concerned only about themselves and will always vote to raise taxes because they benefit the establishment, as the Clintons can verify. Some leverage their political capital by striking golden contacts while in office and selling influence derived from their power that is typically funneled through their families.
Others take a successful political career and enter the private sector, landing board positions and pretending to be consultants when they can only advise on how corrupt politics works; not the real world. Some turn to the media and land on TV, commentating sports, radio shows, or getting big bucks from book deals. Then there is the speaking circuit. Goldman Sachs paid Hillary for influence wrapped in a speaking engagement when she knows nothing of value for the private sector.
At the end of the day, being a successful politician is a highly lucrative business. Most leave office with many millions of dollars in their pocket while exempting themselves from any real prosecution for conflicts of interest, selling influence, or outright fraud.
Armstrong’s TEDx Talk
Watch Martin Armstrong’s TEDx presentation.
What Happens to Cash When Governments Go Electronic?
QUESTION: Mr. Armstrong; What happens to paper money when the government moves electronic? Is it just cancelled? Does cash then become worthless?
Thanks
RD
ANSWER: It appears that electronic currency will first arrive in Europe. The cash will be demonetized, so yes, it will become worthless. However, they will most likely give you a time window to redeem cash for electronic money. Keep in mind that this will produce a windfall for government. They are most likely going to tax anyone who cannot prove why they have cash.
This is typical; it is not a modern invention. The Roman Emperor Trajan (98-117 AD) saw the treasury depleted with the cost of his Dacian War. The brilliant idea was to DEMONETIZE all older coinage prior to Nero’s reform in 64 AD. They declared the old coinage to be invalid for paying taxes. As a result, you had to turn it in under the pretense that it was worn. In truth, he reissued coins with 10% less silver content. So, he took in the old coins, melted them down, and thereby increased the money supply by 10%. This was the Great Restitution Issue of Trajan. Politics never change. The same responses can be cataloged in a book. Perhaps I will do that in my next life since I already have a lot on my plate for this one.
The Changing Political Winds
Legal Reform – Learning From the Mistakes of the Past
Typically, the first thing society addresses which sparks a revolution is the abuse of justice. Shakespeare’s famous quote about the first thing we do is kill all the lawyers is not actually about lawyers. You have to understand the context. Private individuals were not allowed to have lawyers in those days – only the king. It was not until the American Revolution that the Constitution gave you a right to counsel, which the Supreme Court has effectively taken away giving you court appointed counsel working for the court who have achieved a near perfect conviction rate of 99%. Court appointed lawyers are a joke to put it mildly. They are paid $90 and hour generally compared to $600-$1,000 for private lawyers. Shakespeare’s famous quote comes from a rebellion:
DICK: The first thing we do, let’s kill all the lawyers.
Cade: Nay, that I mean to do.
Therefore, Shakespeare’s phase had nothing to do with killing general lawyers, it was the king’s PROSECUTORS who were corrupt. Jake Cade led the second Tax Revolt in England after the Black Death and the king’s “lawyers” (prosecutors) were the ones aggressively seizing homes and prosecuting people wrongly at that time. Hence, history repeats and all the Constitutional precautions have been eliminated by the Supreme Court.
The legal case which became the seminal beginning of the American Revolution was Entick v. Carrington and Three Other King’s Messengers, reported at length in 19 Howell’s State Trials 1029, was the start of the American Revolution also based upon abuse of the king’s agents. The action, dated November 1762, was for trespassing and interfering with the plaintiff’s dwelling by breaking open his desks and boxes and searching and examining his papers.
George III (b 1738; 1760-1820) became king in 1760. In February 1761 Parliament enacted the Writs of Assistance that were challenged in court in Boston, Massachusetts. These were writs that empowered, like the NSA today at their discretion, the kings agents to search anything they suspected. The defending lawyer James Otis (1725-1783) pronounced these writs were “the worst instrument of arbitrary power, the most destructive of English liberty, and the fundamental principles of law, that ever was found in an English law book.” Otis warned that the king placed discretion in the hands of every agent to act as he desired. Nothing has changed for government can do whatever it desires today and it is always the burden of the citizen to still prove he has any rights whatsoever.
John Adams (1735–1826; 2nd President 1797–1801) was there in the audience at that hearing that day. Adams was so moved by the four hour speech of James Otis that he declared: “Then and there was the first scene of the first act of opposition to the arbitrary claims of Great Britain. Then and there, the child independence was born.”
I am sure the kings men also viewed their power as necessary as the NSA does today and Christie says while running for President because he was a former prosecutor. The abuse of the king’s agents was simply that they could enter someone’s home and search all your papers. If you wrote anything derogatory against the king, off you went to prison. This is what inspired the American Revolution and the Fourth Amendment that there had to be a reason to search not just arbitrary desire to want to know and lets see what we can find as the NSA and FBI do today. This is the very essence of LIBERTY. You cannot pretend to be the leader of the free world and then advocate that the government has a RIGHT to know everything everyone is doing or what wealth they have. This is incompatible with the term – “FREEDOM”.
By the summer of 1789, France was moving quickly toward revolution. There were severe food shortages in France that year, and popular resentment against the rule of King Louis XVI was turning to fury. Jacques Necker, the finance minister of Swiss birth, who was sympathetic to the people, was dismissed on July 11th. The people of Paris responded and then stormed the Bastille, assuming that they and their representatives would be attacked by the royal army or by foreign regiments of mercenaries in the king’s service. The people stormed the Bastille seeking to gain ammunition and gunpowder for the general populace and to release political prisoners. The Bastille was a fortress-prison in Paris which had typically used to imprison people on the basis of lettres de cachet (literally “signet letters”), which were arbitrary royal indictments that could not be appealed precisely the same type of instruments used to imprison myself of “contempt of court”. These lettres de cachet did not indicate the reason for the imprisonment. This was precisely the same type of order used to hold me in contempt for 7 years as they stated openly in court that there was “no description” of any accusation. The Bastille held a large cache of ammunition and gunpowder, it was also known for holding political prisoners whose writings had displeased the royal government who were held without any charge.
As July 1789 unfolded, Parisian revolutionaries and mutinous troops storm and took the Bastille, which was the symbol of the tyranny of the Bourbon monarchs. There were seven inmates freed at the time. This profound action signaled the beginning of the French Revolution which erupted because of taxes andAUSTERITY mixed with the collapse of the rule of law. The debt default and hunting the rich (which destroyed the economy) was a revolutionary reaction. When nobody will do business, they hoard cash, and everything implodes deepening the deflationary downward-spiral.
Today, it is rare for a policeman to ever be prosecuted for killing a citizen no matter how outrageous as in the Tamir Rice murder where the policeman kills a 12 year-old with a toy gun in 2 seconds. There is no question that anyone else would be charged and the jury’s job is to decide that question. Today, the police are simply above the law and are rarely held accountable if ever. This was precisely the same complaint Thomas Jefferson included in the Declaration of Independenceabout protecting agents of the government for murder:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
Supreme Court Chief Justice Roger Brooke Taney (1777–1864) was the 5th Chief Justice in American History presiding from 1836 until his death in 1864. However, he was previous a prosecutor and the 11th United States Attorney General. He is certainly infamous for writing the majority opinion in Dred Scott v. Sandford (1857), which ruled that African-Americans were considered inferior at the time the Constitution was drafted and were not part of the original community of citizens regardless whether they had been free or slave. Taney held that they could not be considered citizens of the United States.
Taney was a Jacksonian Democrat when he became Chief Justice and has been a slave owner who did free his slaves. However, he was a staunch believer in states’ rights and simultaneously the Union of the states to form the United States of America. His decision in Dred Scott created a real outrage among abolitionists and the free states of the north and no doubt laid the foundation for the Civil War. He believed that power and liberty were extremely important and if power became too concentrated as in the Bank of the United States as did Jackson, then it posed a grave threat to individual liberty. The source of his decision lies politically, rather than as a racist, in this position of state rights opposing any attempt by the national government to regulate or control matters would restrict the rights of individuals in the states. It is unlikely, given Taney’s own personal freeing of his slaves, that his decision was based upon a personal belief. Instead, it was politically motivated for he was also trying to prevent a war knowing that if he ruled in favor of Dred Scott, the south would clearly separate for he would violate state rights.
This decision illustrates the great problem we have with judges. On the other side of collapse in government, which will come, our primary goal will be how to rebuild from the ashes. Beginning in 1776, once the revolution began, the newly independent states dismantled the colonial court systems which were under the control of royal governors established by the King.
During the middle ages, the king and his Curia Regis held judicial power. Judicial independence began only to emerge during the early modern period. It was not until the 15th century when the king’s role in this feature of government declined moderately. Kings could still influence courts and dismiss judges and this was a power that the Stuart dynasty in Britain exercised quite frequently in order to overpower the Parliament of England. It was after the overthrow of Charles I with the Glorious Revolution of 1688, that some began to advocate guarding against royal manipulation of the judiciary. They demanded that King William III approve the Act of Settlement 1701, which established tenure for judges unless Parliament removed them, which he conceded.
It had been the shocking events of the 1290s orchestrated by England’s Edward I and France’s Philip IV, which illustrated the arbitrary power of the state produced by the philosophy of the “Divine Right of Kings” that set the political tone and still plagues us to this day. The US Supreme Court of the United States still upholds this Medieval doctrine illustrating that the those in power still regard themselves as ABOVE the law which is applied to the rest of us as the great unwashed. Today it has simply been renamed “Sovereign Immunity” where citizens cannot sue the government without their permission. Judges and prosecutors have ABSOLUTE IMMUNITY and can and do KNOWINGLY prosecute the wrong people for personal or political gain. This is the essence of tyranny. This applied to the President (Nixon v. Fitzgerald, 457 U.S. 731 (1982). If the government threatens someone to commit even purgery against another, the Supreme Court has held that all witnesses for the government also have absolute immunity (BRISCOE ET AL. v. LAHUE ET AL., 460 U.S. 325 (1983). This doctrine of Absolute Immunity was created by the Supreme Court in 1976 fearing what might happen if a prosecutor would ever be sued for wrongful conduct (Imbler v. Pachtman). This doctrine is entirely created by judges and flies in the face of the American Revolution and has no possible validity to have survive that event.
The same reasoning prevailed in my own case as written by Judge John Walker (Bush’s cousin). He actually wrote: “Thus, we have little difficulty concluding that the district court’s inherent power to order coercive civil confinement is of ancient and traditional origins. Armstrong’s statutory arguments, however, present the question whether the district court still retains this power. …. the exercise of the inherent power of lower federal courts can be limited by statute and rule … Nevertheless, the Supreme Court explained, “we do not lightly assume that Congress has intended to depart from established principles such as the scope of a court’s inherent power.” I got into the Supreme Court because Judge Sotomayor, now Supreme Court Justice, was on that panel and disagreed with Walker. Walker had the audacity to rule that there was no limit to the power of a federal judge to imprison anyone for life without a trial. Such people can only see the world through their own desire for absolute power. The decision in my case was no different from the lettres de cachet which sparked the French Revolution or the English Writs of Assistance that inspired the American Revolution proving history repeats perpetually. Walker wrote:
We believe that Judge Sotomayor advances a similarly mistaken argument in her concurring opinion by arguing that there is no practical difference between one who is “incapable of complying” and one who “simply chooses not to do so.” According to Judge Sotomayor, in either case, “there is a limit to how long [that person] can be incarcerated.” We disagree.
Judge Walker then drove from the court, I believe drunk, and then killed a policeman directing traffic in the middle of the road. Most news stories have been erased from the internet. It seems they missed at least this on Wikipedia:
On the evening of October 17, 2006, while driving home, Judge Walker’s Ford Escape automobile struck a police officer, Daniel Picagli, who was directing traffic in a rainstorm at a road construction site for AT&T in New Haven, Connecticut.[21][22] There were no construction signs or traffic cones marking off the site.[23] Picagli died four days later on October 21, 2006. “He had been wearing a black raincoat and a reflective vest”.[24] Police Chief Francisco Ortiz said the “officers did not feel it was necessary to test Walker for drugs or alcohol”.[24] Walker stopped immediately, and New Haven police have said the cause was not related to drugs or alcohol.[25] A police investigation reported that Walker “was traveling at a slow speed through the dark and rainy construction site.”[26] The prosecutor declined to press charges, saying nothing indicated “intentional, negligent or reckless conduct” by Walker.
The police conceded they never tested him for being drunk just saying he appeared to be OK. A judge can even kill a policeman since he is higher on the political food chain.
With the bankers controlling the New York Federal Court so there will never be a criminal prosecution of anyone, only those who oppose them, is not even a modern development. The Revolt of 1343 in Florence was a political backlash to the attempt of the merchant-bankers to control government through the same process of owning judges. The control of the courts and the appointment of judges promised injustice and no doubt perhaps further manipulation of the law regarding bankruptcies exactly as the bankers succeeded in getting the Clintons to exclude students from bankruptcy today. Thus, the revolt is often painted as simply a class uprising due to the failure to obtain political reform. History repeats. It is amazing how the very same plot always emerges, just the names change. To this extent, it is scary.
Back in the USA, during his trips to Scotland in 1759 and 1771, Benjamin Franklin became acquainted with most of the major figures of the Scottish Enlightenment, and he forged a personal friendship with Lord Kames. Franklin was a delegate to the Federal Convention and he brought Historical Law-Tracts and Principles of Equity with him when he returned to America in 1762. In a letter to Kames, Franklin wrote:
I am now reading with great pleasure and improvement your excellent work, The Principles of Equity. It will be of the greatest advantage to the judges in our colonies, not only in those which have Courts of Chancery, but also in those which, having no such courts, are obliged to mix equity with the common law. It will be of more service to the colony judges, as few of them have been bred to the law. I have sent a book to a particular friend, one of the Judges of the Supreme Court in Pennsylvania.
Unfortunately, American courts did accept Equity and Law, but they vestedBOTH (Chancery & Law) in a single judge who was then appointed by politicians. The Equity has allowed judges to ignore the law and visit upon the country Judicial Tyranny. There is no law passed by the people awarding ABSOLUTE IMMUNITY to government agents for the murder of our citizens, nor did the people ever consent to WORLDWIDE TAXATION of American citizens even if you do not live here or use a “fair share” of any government programs. These two tyrannical decisions are entirely judicially created and are thus UNDEMOCRATICsuppression of human rights. This is the essence of Judicial Tyranny which amounts to a dictatorship bordering on a monarchy for these people are there for life and cannot even be fired no less voted out of office.
Ben Franklin had also proposed that judges should be nominated by lawyers, and not by government. That safeguard was simply not accepted other than those in power wanted to secure their power. Understanding the error of our ways is absolutely essential, for when we fall off the cliff and try to pick ourselves up, we should learn from the mistakes of the past.
Merkel’s Refugee Position Has Been a Total Disaster
According to a recent poll, almost 40% of German voters believe that Angela Merkel should resign over her liberal asylum policy after almost 1.1 million newcomers arrived last year. Her decision is tearing Europe apart at the seams.
No comments:
Post a Comment