The Business Cycle Wins Again


A shopper takes part in Black Friday sales at a Target store in Chicago, Illinois, United States, November 27, 2015. REUTERS/Jim Young

A shopper takes part in Black Friday sales at a Target store in Chicago, Illinois, United States, November 27, 2015. REUTERS/Jim Young

Reuters reported:

U.S. economy stalls in first quarter as activity weakens broadly

COMMENT #1: you been right on

COMMENT #2: Marty, your ECM is amazing. What is more amazing is how mainstream press is desperate to ignore your accomplishments.

COMMENT #2: Clearly, you have demonstrated time and time again that your ECM is the only way to accurately forecast the economy. Keep up the good work.

934-ECM 2011 - 2020

SheepREPLY: The huge problem is we are fighting against Marxism. Government WANTS to assume the power to herd you like sheep. The ECM proves that it is they who cannot alter society. The business cycle has defeated everyone from politicians to investors and goldbugs. No matter what you show these people, they refute it because they refuse to accept failure. They either ignore this or demonize it. They are incapable of altering their biases.

The Business Cycle will always win for only fools ignore it. Here we have Hillary promising the same Marxist text book, increase spending and raising taxes on the rich while hunting money for taxes except from bankers. Ronald Reagan and his “trickle down” economics the Clinton’s bash, produced a real 3.5% economic GDP growth during his administration. Barack Obama will probably come in at 1.5% GDP growth rate. No matter what you show these people, they do not get it because they DO NOT WANT TO. They cannot run for office without promising more of a failed political formula. They cannot depart from that mantra and as such we are moving in a profound economic decline that will not end well.

Is the Supreme Court Acting Unconstitutional?


US Supreme Court

QUESTION: 

Dear Mr. Armstrong,
Re: The Ted Cruz/John Kasich Conspiracy and your comments about the Constitution and USC
In your opinion, might it be a crime to deny registered independents the right to vote in a primary?
Pennsylvania, one of only 11 states remaining with this law, is a prime example.
Thank you for a life devoted to the education of those with inquiring minds,
JS

ANSWER: Absolutely. Because we have created these “primary” elections even though they are for delegates, once the state creates such a right, it cannot deprive you of it without violating your civil rights. Now here is the REAL MONUMENTAL problem. Does the Supreme Court even act constitutionally or has it also denied citizens the right to absolutely behead as declared by the Constitution itself? We hear all this yelling about the Republicans blocking Obama’s Supreme Court nominee. I specialized not just in history, but the rise and fall of nations and how this unfolds. I also studied law intensely and lawyers will often call me on constitutional questions. Why? When you go to law school, you spend very little time on the Constitution. The bulk of law concerns statutory law which is everything written and passed by Congress from civil rights to Obamacare. Very little cases end up challenging the constitutionality of a statue – merely the unconstitutional acts of government’s agents such as police and politicians.

I am going to make a statement here I have made to Constitutional Lawyers that makes their eyes pop-out and say – OMG! The Supreme Court has ABSOLUTELY no right to exercise discretion to hear any case. They must in fact hear EVERY case presented to them for that is dictated by the Constitution and cannot be circumvented by either a statute written by Congress or by its own rule making practice. The Supreme Court receives approximately 7,000-8,000 petitions for a writ of certiorari each Term (year).  The Court grants and hears oral argument in about only 80 cases in a country of over 300 million. That is outrageous and denies the people the constitutional guarantee of a tripartite government with each branch acting as a check and balance against the others. Let’s review what the structure of government crafted by the Founding Fathers created.

Marshall John Chief Justice - 1Chief Justice Marshall held in the landmark case Marbury v Madison, 5 US 137 (1 Cranch) (1803) in which he declare the role of the Judiciary branch; “It is emphatically the province and duty of the judicial department to say what the law is.” id/177. At the very beginning of the nation, the Supreme Court justices rode “circuits” meaning each justice heard cases in their assigned circuits traveling around the country. Article III, Section I of the Constitution expressly states: “The judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish.” The Constitution only guaranteed the Supreme Court no other! It gave the option to Congress to create inferior federal courts around the country, but this was by no means mandatory. The implications of this are quite profound for it means that Congress can close all the federal inferior district and appellate courts, but it cannot close the Supreme Court. The tripartite structure of government requires the Supreme Court – not inferior courts. Justice Reynolds explained this succinctly.

“The accepted doctrine is that the lower federal courts were created by the acts of Congress and their powers and duties depend upon the acts which called them into existence, or subsequent ones which extend or limit.”

Gillis v California, 293 US 52, 66 (1934)

Your absolute constitutional right to be heard is being DENIED. That right is being circumvented by demanding you go to a district court judge, then appeal to that circuit court, and then apply to be heard as one of the 7,000+ petitions when they only accept 80. What if a child cannot speak to their father who will only communicate to them by some nanny. Is there a relationship bond between the father and the child? Of course not. Inferior courts are under NO OBLIGATION to apply even a uniform legal code. Each have their own rules and precedents are unique to each circuit. There is absolutely no guarantee to EQUAL PROTECTION OF THE LAW when these circuit courts are free to do as they like.

Chief Justice Marshall also held in 1821 a very important decision holding:

“If the constitution does not confer on the court, or on the federal judiciary, the power sought to be exercised, it is in vain that the act of Congress purports to confer it…” 

Cohen v Virgina, 19 US 264 (6 Wheat) (1821) id/324

Therefore, regardless of the fact that Congress reduced the power of the Supreme Court eliminating the constitutional status of the court by injecting their discretion to decide if they want to hear a case in the Judiciary Act of 1925, that act is totally unconstitutional for no statute can amend the constitution. Any statute or rule created by Congress, a political party (Republicans right now), or whatever, it cannot circumvent the Constitution – PERIOD!

Judge Richard Owen

Owen Changing Transcripts

The inferior federal courts have become a joke. They are there to defend the government, not the people. In my own case, I confronted perhaps the most corrupt judge in New York City; Richard Own. He had the audacity to actually alter the transcripts in court changing the words people would say to support the government. I submitted an affidavit outlining whole sections he removed. There were so many people who showed up in court that day and lawyers were telling me I was crazy because you cannot accuse a judge of a crime. I responded, they all say he does that. They replied; yes, but you cannot say that in public. There were so many people there he became nervous. He admitted changing my transcripts but denied he ever made any material changes. The whole place went silent. When he refused to step down I appealed and the Second Circuit refused to even hear the case. Like police, they just all protect each other. Without a circuit court taking that appeal, I was denied the right to even petition the Supreme Court on that issue.

There is no honest rule of law in the United States. We are no different from some backwater court or a third world country. This is in direct contradiction of the rule of law. The federal court exists to protect individual citizen’s rights under the federal constitution and laws for it has been acknowledged that this is in fact the core purpose of their creation. (see Bivens v Six Unknown Named Agents, 403 US 388 (1971); Bell v Hood, 327 US 678 (1946), Marbury v Madison, 5 US 137, 177 (1803). Good luck. There is absolutely no right to anything because the inferior courts all know the odds of you getting to the Supreme Court are virtually zero.

In Marbury v Madison, Chief Justice Marshall also stated bluntly: “The very essence of civil liberty certainly consists in the right of every individual to claim the protection of the laws.” id/ 5 US at 163. Chief Justice Earl Warren  stated in 1967: “It is a judge’s duty to decide all cases within his jurisdiction that are brought before him, including controversial cases that arouse the most intense feelings in the litigants.” Pierson v Ray, 386 US 547, 554 (1967). None of this has any force of law unless the Supreme Court is returned to its constitutional role mandating that right to be heard.

Bank-Of-US

Princeton Bank ProofWe have no rule of law today all because of an unconstitutional Act of Congress known as the the Judiciary Act of 1925 (43 Stat. 936). This barbarous act reduced the workload of the Supreme Court of the United States and in effect denied the right to be heard by all citizens. From that moment on, your constitutional rights all became discretionary. Congress and the Supreme Court held you have the inferior courts. This is the same chaos created when Andrew Jackson closed the Bank of the United States and every bank began issuing their own money which all defaulted in the 1840s. Without a central bank controlling the inferior banks, we destroyed the financial system. The Judiciary Act of 1925 did the same to our constitutional rights. I was personally release ONLY because I won that lottery and the Supreme Court ordered the government to respond signally I made that cut – one of the 80 out of 7,000+.

The inferior courts are statutory, not constitutionally required, and as such exist at the pure discretion of Congress. We have 94 U.S. judicial districts which are organized into 12 regional circuits. They are not bound to a single unified rule of law or rules and that results in the denial of equal protection of the law. The ONLY court secured by the Constitution is the Supreme Court. That’s it folks! If you cannot be heard in that court, then you are denied your Constitutional right to Due Process of Law. Therefore, someone in the 9th circuit in California will be treated differently from the 2nd Circuit in New York. The Supreme Court is supposed to settle such differences, but it is not obligated to do so. This is what the Judiciary Act of 1925 pulled off – the undermining of our entire Constitution.

Previously, the Judiciary Act of 1891 created the United States courts of appeals and rendered a small part of the Supreme Court’s jurisdiction “discretionary” subject to grant of writ of certiorari. This began the process of reducing the workload of the Supreme Court, yet it remained obliged to rule. In December 1921, Chief Justice William Howard Taft appointed three justices to draw up a proposal to further reduce the obligation of the Supreme Court to hear cases. This became the Judiciary Act of 1925. It was Chief Justice Taft who pushed the passage of this bill in 1925, which rendered the majority of the Supreme Court’s workload discretionary.

Taft WilliamThe Judiciary Act or 1925 was clearly unconstitutional since Congress could not reduce the jurisdiction of the Supreme Court. Yet, William Howard Taft (1857 – 1930) served as the 27th President of the United States (1909–1913) and then became the 10th Chief Justice of the United States Supreme Court (1921–1930). It was Chief Justice Taft who lobbied with Congress to effectively reduce the role of the Supreme Court. This is up there with Goldman Sachs sending in Robert Rubin as Secretary of Treasury to eliminate Glass-Steagall which was enacted because Goldman Sachs lost more money than any public trust during the Great Depression. The Supreme Court was involved and has NEVER ruled on the constitutionality of the Judiciary Act of 1925.

The Dangerous Ability to Create Propaganda


The technology that has emerged to create political propaganda convincing enough to launch wars has crossed the threshold of becoming highly dangerous. The people who created this technology may not have had such an intent. Nevertheless, allowing such technology to get in the hands of government is extremely dangerous.

TechnologyTechnology in the hands of government, who also controls mainstream media, is perhaps the most dangerous combination ever dreamed of. We are doomed without an independent media outlet that actually investigates the abuse of government. Government can start a war and the media will just recite whatever they tell them to report. This is becoming a toxic

 

My comment to this re post is “Wag the Dog” on steroids.

Influence and Affluence – The Insurgent Campaign Effect….


I was reading another blog yesterday and within the writing was an interesting thought. Picking up on Sundance’s USA aircraft carrier analogy what if we knew that the present Admiral and the ship’s captain had the carrier on a course that would take it into a class 5 plus hurricane. The crew didn’t know they danger they were in but the ships executive office (XO) did and was trying to get the Admiral to change course. The ships Captain a loyalist to the Admiral was bucking to be promoted to Admiral as the present Admiral was about to retire. The ship’s captain an aggressive female would be the first naval Admiral in change of a fleet and so she was ignoring the hurricane danger as to bring it up would embarrass the present Admiral. So the XO was faced with conducting a mutiny to save the ship or letting the ship stay on course and let the captain deal with the potential loss. The quandary would be that if the mutiny happened after it was too late to change course he would be blamed for the loss — so what should he do.
Trump is now in the same position as the XO I just described we are headed for some really rough times and if he cannot communicate the issues properly like say Churchill did as Briton was entering WW II he would be faced with being blamed for the financial collapse that appears to be building. Just like Bush was blamed for the housing and market collapse in 2008 even though neither were his fault.

Surviving the Coming Transition


Business Cycle

QUESTION:  Dear Martin and co-workers,
Firstly, I want to express my appreciation for the writings at the blog (it opened my eyes! and I am very much awake now) and I read a daily. I am a stay-at-home-mother, artist, and I had never before gained knowledge about economics , it’s corruptive nature, and leading role in society. However Just a few months ago I saw the movie The forecaster. Martin you are truly an amazing guy!!! and I wish you the best!
My question:Do you have an advice or suggestion for people like myself. No traders, (middle income) families, living in Europe or the US, kids who would like to study. How can we accomplish that with just a little savings in order to the potential fall of the euro and collapse of the system?
P.S. I clearly understand that you don’t want to be a so called guru.
Sincerely, conny

hope

ANSWER: It is very difficult to see forward in such a manner. Tangible assets will make the transition to the next world of finance. There will be a new base of currency and it will most likely be electronic. The reason for this is political. The USA peaked as did Britain. The financial power will move to Asia, and Europe along with the USA will crash and burn because they are caught in this fictional world created by Marx. Russia and China collapsed under Marxism. It is just our time.

I would support some practical basket of currencies since Russia and China dislike having the dollar as the reserve currency. Likewise, with the dollar being the only practical currency standing, the USA is realizing that it may lose control of its domestic economy because of international considerations. Clearly, there have already been discussions of removing the reserve status of the dollar, but this cannot be accomplished unilaterally. Under no circumstance would I support placing the IMF in charge of this instrument. That organization is way too corrupt and my advice to China and Russia (where we also have this blog in their respective languages) is to reject any such attempt to hand this power to the IMF. We need a clean house to start such a project and the IMF has way too much baggage.

Education

Formal education is the way we perpetuate our mistakes forward. When I hire, I do not look at fake degrees. I look at the person and their thinking process. Samuel Butler (1835–1902) the iconoclastic Victorian-era English author, defined genius as “a supreme capacity for getting its possessors into trouble of all kinds.” If your child does not do well in school because they are bored rather than incapable of understanding such subjects, then they may be what people call a genius. Geniuses are often misunderstood in classrooms and are typically poor students whom teachers dislike because they are non-conformists. Studies at the University of Chicago and the University of Minnesota have found that teachers smile at children with high IQs and frown upon those with creative minds. When we had young people coming into the company who had to take their Series 7 exam, they would ask me questions. I quickly responded, “Do not ask me anything for if you do as I say you will flunk. Just memorize the answers, put them down, and then forget them and we will begin your REAL education in markets.”

The intelligent yet uncreative students accept conformity, never rebel, and complete their assignments quickly and perfectly. The creative child questions everything and accepts nothing. They are much more manipulative, imaginative, and intuitive growing up. They will often play one parent against another. In school, teachers dislike them because they will harass the teacher with questions that expose the illogical dogma they teach.

These genius children are often viewed as wild, naughty, silly, undependable, and lacking in seriousness or even promise. They even said that of Albert Einstein. Their behavior is typically distracting and they will often appear lazy, bored, and lacking any effort to try to advance, but in truth, they are absorbing everything around them. Such children will also give unique answers to banal questions because they are connecting the dots around them. Other children who are linear thinkers will typically reject these children which can cause them to be loners.

Ellis Paul Torrance (1915-2003) was an American psychologist who studied this subject and found that 70% of pupils rated high in creativity were actually rejected by teachers when picking a special class for the intellectually gifted. In a Stanford study, M.G. Goertzel, V. Goertzel, and T.G. Goertzel concluded that teachers would have excluded virtually everyone we consider to be a genius from Einstein and Edison to Picasso and Mark Twain. There is even a book on this called “The Price of Greatness: Resolving the Creativity and Madness Controversy” by Arnold M. Ludwig (1995) which explores the lives and achievements of over 1,000 extraordinary men and women. This book sought to answer the age-old questions about the relationship between mental illness and greatness. It also goes into factors that predict creative achievement in people. You will find a long list of very colorful stories about some of the most eminent artists, scientists, social activists, politicians, soldiers, and business people of our time.

Formal education is terrible. More than 60% of graduates cannot find employment in their field of study. Degrees are only useful to get jobs in brain-dead institutions that lack creativity themselves. Encourage your children to see the world dynamically and look for the connection between the dots. In ancient times, the key education was apprenticeship where you learned the field from the people actually doing the work rather than by those who lack experience. As they say, there are those who do and those who teach. I have been asked to teach at three of the leading universities. The problem is that I have no time. Those of us who really do things would find it boring and unfulfilling to simply stand up and teach a small class of kids. I might as well be a rock star singing the same song for 40 years (which is why rock stars need drugs to constantly do the same thing until they die).

If you understand what is coming, common sense will lead you to the answer. You are better off with tangible assets for the transition when it comes. From a European perspective, you are better off in dollars for now. The euro only gets interesting above 116. So you always have to define where you are right and wrong. Some people are keeping money in PayPal where they are not charged negative interest rates to simply have money there and they do not have bad loans on their books.

Illinois is Brooke and Cannot Pay the Politicians


Muger Leslie

I have warned that Illinois is on the brink of bankruptcy. Now, Illinois Comptroller Leslie Geissler Munger says she will delay monthly paychecks for lawmakers and statewide officials since there isn’t enough money to pay the state’s bills and other services should come first. This is really interesting. What will happen next when the politicians cannot get paid?

Who is the Bigger Manipulator of All Time?


Manipulation-3

QUESTION: Mr. Armstrong; You have stood up against the bankers for their manipulations when nobody else would do so and paid the price that these people who hate you never acknowledge. They even made a movie about you for standing up to these bankers yet these goldbugs do hate you for exposing their rantings. If they were not wrong, they would not be against you since you have even shown how you project $5,000 gold in the years ahead using real analysis not guessing. It is always kill the messenger. To me this reflects their lack of honesty. My question is simple. Who is the bigger manipulator, the banks or government? Since Hillary’s lack of trust is at 57% and Trump is around 60%, I suspect it is government. But I will defer to you.

Thank you for looking after us

JD

ANSWER: In my “opinion”, there is no question that government is the master manipulator. This is what Marxism and Keynesianism is all about — how to manipulate society to maintain political power. This is also coming to an end. The central banks have manipulated themselves into an impossible position from which there is no escape. This is what will make the metals and stocks rally. This has nothing to do with bank manipulations, hyperinflation or fiat; this has to do with the collapse in confidence within government.

Refugees Take over Paris Metro


Europe is being torn apart from the inside. In Paris, the metro station has been turning into a slum and war zone. Schools which had gyms in Germany have been turned into dorms for migrants. Kids have lost sports as a result of what is going on. This has turned everything just completely nuts. I have been told that many people see more on this site than they do in their local media on this subject. It is becoming increasingly disturbing as governments try to suppress the truth endangering their own citizens.

1936 Convention – 2016 Convention (both in Cleveland) – Will 2017 be like 1937?


1936 Convention

Perhaps it is just cyclical, but the Cleveland Republican Convention will be the first time that city has held a political convention since the fateful 1936 election just prior to the 1937 peak in the recovery from the Great Depression. This has the potential to be very bad for the city insofar as it will expose the downside of how unions destroy their own jobs by getting out-of-touch with the real boss – the consumer. The unions always see this as them against a corporation and fail to understand that if they price themselves out of a job, it is because the consumer is not buying it.

RMS_Queen_Mary_20Jun1945_NewYork

Once upon a time, New York City was the main port. The union demands were abusive and eventually the port of New York came to an end. There can be no monopoly be it a corporation or labor for the ultimate decision-maker is always the consumer.

1968 Democratic Convention Police AbuseThe prospect of Republican nomination going nuts remains rather high. We may yet see riots if Trump is denied the nomination evoking the memories of violent Chicago’s 1968 Democratic convention when backroom deals by kingmakers determined the nominee and that led to fistfights on the floors that stained the city as image for a decade as the events were broadcast worldwide.

The 1968 Democratic Chicago Convention saw massive protests about Vietnam. We are in an upward cycle now for civil unrest. We may begin to see a lot more chaos around the upcoming Presidential election from those trying to stop Trump and the silent majority who are supporting Trump against the corrupt insiders.

There was a major change in trend in 1937. It appears we are headed for that same change in trend come 2017.

We have 40% of Trump supporters say they will abandon the Republican Party and 30% of Sander’s supporters say they would never vote for Hillary. This is illustrating there is a tremendous amount of the political base on both sides that is just dissatisfied for politics as we know it today. By the time we come to 2018, this will grow to a nightmare for Washington insiders.

The Other Side of a Phase Transition


BoilingCurve

QUESTION:

Dear Marty,

Whether in a Phase-transition or a Slingshot Move in the Dow, you made it very clear that such moves will be driven by capital inflows to the USA due to the alternative flight to quality to the private sector, both internationally and domestically. It is now just so obvious, it is unfolding in front of our eyes.

The question, however, will be whether capital will remain parked there for long time, or else leave abruptly to go elsewhere? For as high as it can go, that market sooner or later will eventually run out of steam, just like any other system. We are now focusing on the flows towards it, but can you please shed a light on what will come next? Will there be a trade to the downside too? Where will all that capital go at that point, simply repatriate, go to Asia? Your knowledge and wisdom on this would be highly appreciated.

Thanks in advance.
SB

ANSWER: What goes up must also come down. A Phase Transition is the culmination of a collapse in public confidence which is now rising before our eyes.. The question really becomes rather blunt. Will we simply readjust? Or will we crash and burn? This appears to be the end result of socialism. Therefore, we are more likely to see at this time a collapse of the world monetary system. A rise in the dollar will break the back of the US economy and that is what is needed to create the next step toward monetary reform.

WorldEconomy

We are most likely going to see a new monetary system where the dollar will no longer be the reserve currency. That will probably become some form of a basket. This is the collapse of the West just as Communism collapsed and altered the course of China and Russia. Therefore, we are looking at the shift of the financial capitol of the world from the West to the East dominated in India/China. As we can see, the financial Capitol of the World always migrates.  After Rome and the fall of Byzantium, the capital moved to India. It then moved to China. When Christopher Columbus set sail, he was trying to get to India because that was where all the money was. You do not set sail to be to a slum in a third world country. Europe was rising, but it had been reduced to a third world status.

Priebus ReinceThe other side of a Phase Transition will be the fall of the West. That is just how things evolve. We are plagued with politicians who are incapable of making any changes to save the country because they are too busy grabbing the free soap in the hotel room. Republican National Committee chairman Reince Priebus responded to Donald Trump’s recent complaints that the nominating process is rigged against him by saying: “Give us all a break.” Priebus demonstrated by his response that the game is rigged. He said: “Nomination process known for a year + beyond. It’s the responsibility of the campaigns to understand it. Complaints now? Give us all a break.”  Priebus is an American attorney and politician so he is a trained and know how to lie when necessary. Note what he says: “Give me a Break”. He does not deny anything nor does he say Trump is wrong. He simply says they rigged the voting system more than one year ago so why complain now. This is a typical response designed to fool the majority as if Trump is wrong. All he is saying you knew this was the game so it is not fair to complain now after a year has passed. Priebus did not deny anything Trump had to say. He only said you did not complain soon enough. This is like someone who robs you and they justify keep your goods claiming you should have complained before. Yes, Priebus, give us a break from this clever double-talk. Unfortunately, this is the classic example of how dishonest politicians have become. There is no honor nor is there any accountability. They will distort and twist things around right before your eyes and do not care because the media will never analyze what they just said. This is why we just have to crash and burn. We cannot reform with people like this trying to maintain an unfair system.