Monthly Archives: September 2017

Sep 18 2017

Canadian Perspective


Armstrong Economics Blog/C$

Re-Posted Sep 18, 2017 by Martin Armstrong

QUESTION: Hello Marty. I so appreciate your blog and Socrates, which is helping me steer through these crazy markets. I’m a Canadian taking care of all my family’s investment accounts, and knowing what’s coming down the road, I’m very concerned I’m going to take a misstep, especially with my children’s accounts. I haven’t been doing this long enough to have experienced a monetary crisis anywhere. What I can’t get my head wrapped around is what to do longer term from the Canadian perspective. We all have both USD and CAD funds in our accounts. I plan to increase the USD portion while the CAD is down. I’m also buying US investments in CAD (unhedged) to catch the rise in currency. But when the USD peaks and the crash and burn begins, my assumption is Canada has a boom in metals commodities while oil crashes due to lack of demand and we also go into recession due to lack of exports to the US and so lower employment. So what is a Canadian’s smart move when the USD peaks……cash out our USD investments and turn back to CAD and invest in commodities, etc. or would I be better off staying in the USD and buying inverse etfs and commodity stocks/etf’s that aren’t available on the TSX? Just trying to get a handle on what ultimately happens to Canada in all this. Thanks so much for any insight you may have on this topic.

ANSWER: We are in the staging process right now and that means we must push everything to the limit. In the case of the C$, that major point remains well above the market at 8840 level. It will require a monthly closing above that level to reverse the trend creating a bull market for the C$.
In order to create these big moves, we absolutely must push everything in a counter-trend move to its extreme in order to trap everyone and that provides the fuel for the next great wave. Everyone gets so convinced about any trend with just a brief rally like euro, pound, C$, gold or oil.  This is how markets suck people in to lose money. Trends are defined not by a single market, but by a group of markets that all are interlaced and confirm one another. This is the entire purpose of allowing access to our Global Market Watch so you can visually see the global trend unfolding together.
We are approaching the point-of-no-return when people wake up and begin to lose confidence in government. Until that happens, we remains treading water. The Dow has not broken out until the Phase transition begins. This is also why the metals rally but fail to really make impressive new gains
Sep 17 2017

Merkel Encountering Rising Violent Protests


Armstrong Economics Blog/Germany

RE-Posted Sep 17, 2017 by Martin Armstrong

Violent protest are starting to rise in Germany against Federal Chancellor Angela Merkel. Keep in mind that Merkel has never won 51% of the popular vote. She rules Europe solely by a coalition. DWN reports that she was confronted with shouts of  “Hau ab!”, whistles and “hatred”. They are appearing with poster reading “Merkel hatsten Deutschland”.  It is unusual for German to engage in such civil unrest.

When Martin Schulz  became the leader of the SPD, it rallied sharply to 31%, which was just one point behind the CDU/CSU at 32% back in March 2017. As people I know in the EU Parliament told me, wait until the Germans get to know Schultz. That threshold seems to have arrived.

CDU/CSU now polls at a staggering 16-point lead with 37% of the popular vote, compared to just 21% for the SNP. Meanwhile, the far-right Alternative for Germany (AfD) are trailing well behind the main parties at 11%, down from 15% back in January 2017.  However, the AfD is polling well above the five per cent margin required to win seats in Parliament. The party rose to prominence two years ago at the height of the European migrant crisis and the wave of populism that came partly as a result of the influx of refugees into Germany. Therefore, we are looking at the first time since WWII that a far right party even get one seat in Parliament.

The DAX is clearly targeting the week going into the election but the Euro appears to be ignoring the German election.

Chancellor Angela Merkel rules Europe by a grand coalition government in the German Bundestag relying on the FDP. While the CDU will win the majority of seats, it will still not be enough to rule alone. Note that the FDP has taken a sharp drop and the AfD has risen sharply. Therefore, Merkel’s grand coalition is not yet a shoe-in. There will have to be some backroom manipulation to keep the status quo.

Germany has a notoriously very complex voting system for electing its Bundestag, or lower house. The system seeks to combine the benefits of both direct and proportional representation while guarding against the electoral mistakes of German history, which saw political fragmentation during the Weimar Republic between WWI and WWII. While the turnout for the last two election fell sharply to just 70%, this election is far more heated and should see a sharp increase – which is not good for Merkel’s Grand Coalition.

A person casts their vote for two candidates, The German ballot is divided into two columns. The first column is black and the second column in blue, each representing a direct vote for a candidate and then for a political party. Worst still, Germans while on the surface you may be casing a vote with two choices – one for a district representative and one for a party, there is more to it than just that.
The first vote or “Erststimme” for the district representative, follows a first-past-the-post system like elections in the United States. The voter selects his or her favorite candidate to represent their district in the parliament. Every candidate who wins one of Germany’s 299 constituencies – which are divided up per 250,000 inhabitants – is guaranteed a seat.

To fill the other half of the 598 seats in Germany’s Bundestag, voters then cast their ballots in the second vote or “Zweitstimme.” This vote goes to a political party instead of a single candidate. It also determines the percentage each political party gets in the Bundestag.

Now comes the complexity. The ballot also allows voters to split their vote among parties!. So you can split your vote casting one for their local CDU candidate in the first vote, but casting their ballot for the Liberal Democrat FDP in the second vote. This is how Merkel maintains the Grand Coalition.

Therefore, we clearly have the risk of the AfD wining seats for the first time. So while Merkel will most likely still be Chancellor, the mix is going to cause some backroom deals.

Sep 17 2017

Farage at AfD in Germany


Armstrong Economics Blog/European Union

Re-Posted Sep 17, 2017 by Martin Armstrong

Nigel Farage Speech at AfD w/Q&A – 8th September 2017

Sep 16 2017

Horsepucky News Courtesy of Murdoch’s Wall Street Journal…


RE-Posted from The Conservative Tree House on September 16, 2017 by

This stuff is beyond ridiculous at this point.  Remember, there are trillions of dollars at stake and all of the vested financial interests, writ large, have positioned themselves to do anything possible to draw down the support for President Trump’s ‘America-First’ agenda.

Don’t kid yourselves or sell your intelligence short; it ain’t about Donald Trump per se’, the opposition is against the policies of President Donald Trump.  Trump’s ‘America-First’ policies are adverse to the interests of multinational corporations and the multinational financial institutions who underwrite those corporations. Yes, this includes Rupert Murdoch, aka “Mr. Wall Street”, the proprietor of the Wall Street Journal and all around self-indulgent billionaire.

The latest approach is for the Wall Street Journal to write an article about Trump reconsidering pulling out of the Paris Climate Agreement based on, wait for it…. the conversations with an “EU official”. Un huh.   “International Climate Officials” they say. Ohhh… Journalistic standards now dispatched and not even an inquiry to the White House prior to publication.  Go figure. {{{eyeroll}}}

Seriously folks, if we want to help President Trump and the agenda we voted for, then inoculate yourself -and your family- from this ridiculous corporate media ‘gaslighting’.

It’s lower than fake news, it’s horse-pucky news.

If President Trump was flinching, if president Trump was even positioned toward the place where flinching begins, I swear to you CTH would be all over it like bluebottle flies on a flattened possum.  He ain’t, and we’re not.

COMMENT – “I’m not an educated person. I never graduated high school. I got my GED because the Army wouldn’t let me join without either a diploma or a GED. Went to basic training at Ft. Benning when I was 17. Did a tour in Iraq when I was 18 and 19. It was not a pleasant experience. After my tour, I got discharged for what I will euphemistically call “medical reasons”, if you catch my drift.

Hard times followed. I was basically homeless for a while. Lived in a friend’s van for about a year. I felt like that guy in that “I’m as mad as hell and I’m not going to take it anymore” movie when he said, “Things just seem to get worse and worse and nobody knows what to do about it”. I felt like the Forgotten Man. I was hopeless. My spirit was crushed. I had pretty much given up.

That all changed for me in June of 2015. I saw a man and his beautiful wife come down the escalator. I saw a man who, like me, was as mad as hell. And he really really wasn’t going to take it anymore. I saw a man who stood up fearlessly against everything that was wrong in the world. I saw a man who gave up a life of luxury to be slandered and threatened every day. I saw a man who was a cheerleader, not for the lobbyists and donors, but for people like me. I thank God for sending this man. Things were getting worse and worse alright. But here was a man who knew what to do about it.

Day one I was hooked. I said, “This is it. This is what I’ve been waiting for. This is my guy. He’s fighting for me, so I’m fighting for him. I’m all in.” And since that day I have never seen that man waver. He has never let me down. And I hope I never let him down.

This movement has been an incredible journey. Everyday is a wild ride and I’ve loved every minute of it. And there’s so much more to come. I look forward to every day now. I wake up with a smile on my face every day because Donald J. Trump is my President.

Sorry to get so personal, but for me this is personal. I’ve never met the man, but Donald J. Trump is more than just my President. He’s my friend.

Call me a fanboy, call me a cheerleader, call me whatever you want. You bet I’m a cheerleader for my President, my friend. He lifted my spirit in a way I didn’t think possible. He gave me hope. He inspires me everyday. I intend to be his biggest cheerleader. It’s the least I can do. Frankly, I don’t know where I’d be without him.

I don’t feel like the Forgotten Man anymore. I have a friend. And he lives at 1600 Pennsylvania Avenue. I’m proud of my President. I’m proud of my friend. I stand with him 100%. (link)

Sep 16 2017

More Strange Gold Reasoning


Armstrong Economics Blog/Gold

Re-Posted Sep 16, 2017 by Martin Armstrong

QUESTION #1: Marty,

___ ________ makes the argument that if “the government” raised the price of gold to $5000/oz it would start and inflation that would wipe away the debt.

 

Don’t they have to ensure convertibility as well? He kind of skips over that. And isn’t that pegging the dollar to gold, and no peg holds? At that price the dollar would become incredibly cheap, and world demand for it would soar to arbitrage trade into goods, I would think.

 

Anyway, how does his proposal compare to the 1934 and 1971 devaluations.

 

Cheers,

EM

ANSWER:  This proposal is insane and it would not work anyhow. In 1934, it was the link of gold to the dollar that CAUSE deflation. When Roosevelt devalued the dollar, then inflation took place. If you suddenly fixed gold at $5,000, so what? He would be doing the opposite by creating deflation and then the national debt would become payable in gold.

The 1971 closing of the gold window by Nixon cut the link to gold ending Bretton Woods and then inflation unfolded. This is why Europe is in trouble for they keep trying to create a strong Euro which means assets decline and that produces deflation.

I just do not get the reasoning of these people. They clearly have no real world experience. They want to forecast markets without ever leaving their bedroom.

QUESTION #2: I have been bullish on gold until recently. It seems that to cheer gold we have to cheer the end of the world. If that is our fate for us all, then gold won’t matter. As you said, a $1,000 in gold in 1980 is worth $1350 today less storage fees. A $1,000 in the Dow back then is $22,000 plus all the dividends. Do you really think gold will ever go up? With North Korea fading out, what reason do we even have for gold? Deflation dominates the world and taxes keep going higher and higher so there is less disposable income. It does seem gold is on its deathbed. Any comment?

ANSWER: All of that is true. We have to wait for the next cycle. Tax reform is absolutely critical to the future. The next cycle things will chang

Sep 16 2017

The Confusion in Gold


Armstrong Economics Blog/Gold

Re-Posted Sep 16, 2017 by Martin Armstrong

QUESTION #1: [_____] says that the dollar will collapse because with the debt ceiling gone – no more buyers of Treasuries in the markets and only the Fed Reserve buying – inflation goes to the wazoo. All over USA. care to comment?

ANSWER: Total nonsense. The USA debt of $20 trillion is a tiny fraction of global debt at $160 trillion. This entire theory does not hold up. Just where is all the money going to run? Gold? Institutions do not buy gold and cannot function with gold, which is not legal tender for even paying your taxes. The only thing that matters is the general public confidence. When the average person on the street no longer trusts government, that is the tipping point.

There is a whole series of people given a choice between a bar of chocolate and a bar of silver. They take the chocolate. Kids line up in Starbucks and pay with their phone – not even cash. Not until you shake the confidence of these people will you see the explosion in markets. That is what took place in the late 1970s. I was there. OPEC created the image of wholesale inflation. People were hoarding toilet paper.

QUESTION #2: What will Fed Balance Sheet Shrinkage do to Gold?

ANSWER: The opposite of what people think. Shrinking the Balance Sheet will be anti-inflationary to the standard reasoning and thus gold should collapse with deflation. However, the Fed has turned away from QE because pension funds are at serious risk. They have run off to emerging markets and bought very long-term paper desperately trying to get their yields up. As the stock market rises because there is no alternative, the Fed politically will be forced to raise rates. They will end up creating inflation with rising rates that will blow interest expenditure through the roof.

QUESTION #3: Since we bounced off the reversal again, obviously this still does not negate a break of $1k and then the slingshot up. But it just seems as if gold is on its deathbed. If nuclear war could not get it to exceed last year’s high, is there anything left in this bag of fundamentals we have been hearing about forever?

ANSWER: I understand. This is what the Reversal System is good at. We stopped within a dime of that number. What will be will be. We are running out of fundamentals to keep buying gold. It’s like the fake news about the storm in Florida that a 15 foot wall of water would destroy the coast. It never came and many people are really angry at the media. How many times can they do this before people no longer listen. Gold is a confidence game – plain and simple. This number is just incredibly important far more than most people dare to consider. I will be doing the gold report soon. It is very critical at this point.

GCNYNF-GMW 9-16-2017

COMMENT: Marty, thank you so much for the past several years of WEC. You have taught me to keep my head in times like this. I bought the gold on the GMW and then sold it against the reversal with a stop just above as you did with the yen in 1998. I had two friends who were buying at the high expecting gold to breakout when I was selling. It was two against one. The majority must be wrong.

Thanks!

See you in Orlando.

ANSWER: The number of long positions verse net shorts in gold reached about 5:1 and you saw what happened – it simply bounced off of the reversal and did not exceed last year’s high. I am always amazed at how people get so bullish and say I am wrong and then within 2 days they lose their shirt. As they say, you can lead a horse to water, but you cannot make him drink. Some people judge the next 10 years by a few days of price movement. That is how the market separates traders from fools

Sep 16 2017

The Half Truth of the Islamic Golden Age of Spain


This August, Barcelona topped Baghdad for total number of global jihad victims, at 144 vs 73. Overall, Spain had 4 attacks with 159 victims. The dead and wounded were innocent people; many were tourists on vacation.

The jihad in Spain will continue as Muslims know their Islamic history and are called to regain that which is “rightfully” theirs—the lost territory of Andalusia. Islamic doctrine states that any land once conquered by Islam always belongs to Islam, even if it is later occupied by Kafirs (non-Muslims).

Spain, called Andalusia under Islamic rule for 700 years, was celebrated for its Golden Age, but what are the historical facts and what is the whole truth? Watch the video below to find out more about the “Golden Age.”

“The high point in human history was not the Golden Age of Islam” –Bill Warner

Sep 16 2017

North Korea – The Crazy Boast Nobody Takes Seriously Anymore


Armstrong Economics Blog/North Korea

Re-Posted Sep 16, 2017 by Martin Armstrong

Gold has now declined with the constant threats from North Korea. The lastest missile was fired over Japan and reached an altitude of about 770km (478 miles), travelling 3,700km past the northernmost island of Hokkaido before landing in the sea, according to South Korea’s military. The UN Security Council convened an emergency meeting, and unanimously condemned the missile launch as “highly provocative”but did not add new sanctions which do not seem to do anything anyway.

Meanwhile, Kim Jong-un said the test proved that the entire US was within striking range, yet experts warn that his missiles cannot accurately hit targets. However, this missile was launched at night perhaps to put on a show for their TV. Yet, this is the first missile fired from Jagang province, which now indicates a previously-unknown launch site is also operational.

There really is no indication that Kim Jong-un has any intention of actually starting a war – hence gold fatigue. This night launch clearly shows he is putting on a show for the people as a sign of strength. We will review the models on North Korea moving forward since he acted precisely on the last two target weeks.

Sep 16 2017

Trump Tower Meeting & Half Truths – Another Untold Story


Armstrong Economics Blog/Politics

Re-Posted Sep 16, 2017 by Martin Armstrong

Bloomberg News is reporting that there is an ongoing criminal investigation into a client of the Russian lawyer, Natalia Veselnitskaya, who met at Trump Tower with Donald Trump Jr., Jared Kushner, the president’s son-in-law and adviser, and Paul Manafort. The attorney  Veselnitskaya also had a client with  and undisclosed a U.S. criminal investigation into possible Russian Money laundering, which began back in 2013 but went nowhere. The statute of limitations has run out by now, which is 5 years. The twist is how they say she met with Trump’s people and thus somehow she met for all her clients – not just one.

Hermitage_Capital_Management

The Money laundering was involving Hermitage Capital, which Edmond Safra was the main share holder. That was the company Safra and his Republic National Bank was trying to get me to invest in but I declined.

 

This involved the attempted takeover of Russia, Yeltsin was shown how to steal $7 billion from the IMF loans and wired the money to Geneva. Republic National Bank steered the wire through Bank of NY and then ran to the Feds to report Bank of NY did a $7 billion Money laundering. The Feds rushed in and quickly found themselves trapped. I had a meeting with the prosecutors on that whole mess.

They were played for fools. I even told them it was the minister of the Russian Interior who was blocking them from getting information because it led to Yeltsin. That why the case never really went anywhere but went quietly into the sunset with nobody going to jail.

Safra-Berezovsky

 

I believe it was Safra with co-conspirators who were blackmailing Yeltsin to put Bereszovsky in as President of Russia and Yeltsin would step down. When Yeltsin realized it was a set up, he turned to Putin and that is how Putin became the head of Russia. Putin seized Hermitage Capital, which I believe was really a front to try to takeover Russia and the core of their Russian scheme to get the gold, oil, and diamonds. Safra’s connection with the US government have left a dark cloud over how far the US government was involved in interfering in the Russian election of 2000.

 

When you look at the plea of Bank of NY, the cover-up becomes obvious.  The two Bank of NY people were given house arrest. The $7 billion Money laundering they said was the ransom for a Russian business man and the judge never asked any name.

William Felix Browder seems to have obtained a political favor from Congress to try to get his money back by passing the Magnitsky Act. 

 

Now Bloomberg is spinning this loosely to try to implicate Trump based upon the fact that one of  Veselnitskaya’s clients is prejudiced by the Magnitsky Act. This is really getting very low and once again it is a half-truth to keep the fake news flowing.

Sep 15 2017

Supreme Court Backs Trump on Immigration


Armstrong Economics Blog/Rule of Law

Re-Posted Sep 15, 2017 by Martin Armstrong

 

COMMENT: Mr. Armstrong, you were correct. The Supreme Court supported Trump on the travel ban.

REPLY: The entire issue was political. The six countries were targeted by Obama to begin with. The President has absolute power over that issue and it was a joke that any lower court would dare to intervene. The 4th Circuit proved just how political courts can be in ruling against Trump they had the audacity to write that his travel ban “drips with religious intolerance, animus, and discrimination.”

The 4th Circuit is notoriously against civil rights and will never overturn a conviction based upon constitutional rights. Even the former Virginia Gov. Bob McDonnell’s conviction was upheld by the 4th Circuit denying that he did not receive a fair trial. Nobody overturns any criminal case in the 4th circuit. So for them to rule against Trump saying his order was religious discrimination was stunning when they are the least compassionate court standing along side of New York.

It’s very simple. Anyone with actual contacts and a green card cannot be banned. That was common sense. The entire issue was at first highlighted by Obama and Trump sought to put in only a 90 day ban pending review. Ask any immigration attorney – Obama deported far more people than any other president in history. That is never put in the press because it does not fit their agenda. Obama was even called in legal circles “deporter in chief”  it was that bad. Obama’s record against immigrants stands as the WORST in modern history, yet nobody says a word about it