World Economy Declines into 2035.8


QUESTION: Mr. Armstrong; You mentioned that we should expect a further decline in the economy. Do you have a target for that decline?

Thank you

KT

ANSWER: The world economy has been in a prolonged economic decline as taxes have risen and regulation has expanded. As government hunts money everywhere, they are bringing the world economy into a major decline since the 1970s. The bottom in nominal terms appears to be 2025. However, in REAL TERMS, we are looking for a decline into 2035.8

Goldman Sachs v JP Morgan


QUESTION: You mentioned that Goldman Sachs can take down the entire banking sector. Do you see this correlating in the future?

JF

ANSWER: Here is Goldman Sachs and JP Morgan. The first thing you will notice is that JP Morgan has been in a REAL bull market. Goldman has not. I am a firm believer that the markets instinctively forecast major future trends if you know how to read them. Now, look at the arrays. They both are showing the major target as the 4th quarter of 2020. JP Morgan shows the 2nd quarter of 2019 as a turning point. Look at the pattern difference with Goldman Sachs. There is no question that Goldman will do whatever it takes to try to survive calling in every political marker possible. However, because of this Malaysia scandal is worldwide involving four countries, pulling this off is not going to be easy. Its huge fees that were 10x that of any other firm to do this deal smells of something wrong. I know brokers who were denied the right to even bid on this project.

The bottom line is clear. Just go by the Reversals. Not even Goldman Sachs can overcome them.

Goldman Sachs Going Down on the Pi Target?


The Abu Dhabi sovereign wealth fund sued Goldman Sachs on the Pi Target, Wednesday, November 21st, 2018,  for allegedly conspiring against the Middle Eastern fund to further a criminal scheme by Malaysia’s scandal-plagued 1MDB. The suit, filed in a New York court on behalf of Abu Dhabi’s International Petroleum Investment Company (IPIC), names Goldman Sachs as well as former Goldman officials who were charged by the US Justice Department in indictments unsealed earlier this month. “This action seeks redress for a massive global conspiracy on the part of the defendants to defraud and injure plaintiffs,” said the lawsuit, which also named former executives from IPIC and its subsidiary Aabar Investments.

It was Alan Cohen who I believe was in charge of reviewing all deals as head of Global Compliance at Goldman Sachs and now he is at the top of the SEC. I believe he was given the job at Goldman Sachs because he threatened my lawyers to turn over all tapes I had of conversations with the various bankers including Goldman Sachs’ metal desk. It is now only logical that the Abu Dhabi sovereign wealth fund should also name Alan Cohen given he was the head of Global Compliance.

Here are just a few tapes that I found copies of. The bulk the SEC claimed were all destroyed in the 911 attack. There have continually been questions of the ethics inside Goldman Sachs. The entire crash in the world economy due to the Mortgage Back Securities were designed by Goldman Sachs. The major product they sold the day of the high of the ECM back in 2007 was widely touted as “Abacus 2007-AC1: Built to fail.”

As the Financial Post wrote: “Goldman has often been criticized for selling billions of dollars of debt securities, called credit default obligations (CDOs), filled with mortgages that the bank itself allegedly thought were overvalued.”

 

I believe it was Goldman Sachs who paid bribes to Russian politicians to recall Platinum from the market and temporarily stop sales to allegedly take an “inventory” of their stockpile. This sent prices soaring back in 1997. Russia stopped all shipments of Platinum and Palladium in December, was expected to resume exports. The hedge fund Tiger Management, a New York hedge fund back then, announced it sell some of its palladium holdings which it was believed held about one-fifth of the annual world supply of palladium (1.5 million ounces). This was followed by the silver manipulation in 1998 with most of the same firms involved.

The charging documents, unsealed in federal court on November 1st, 2018 refer to an unidentified Goldman executive as an unindicted co-conspirator who approved of the alleged bribery. The street rumor is that happens to be the executive Andrea Vella, who was Goldman’s co-head of Asian investment banking. Interestingly, Goldman Sachs suspended him the very same day that prosecutors unsealed the criminal complaints. It was also Andrea Vella was had to respond to cross-examination from Philip Edey QC, who was a lawyer acting on behalf of yet another government accusing Goldman Sachs of questionable dealings. That was the Libyan Investment Authority, which claims the investment bank took advantage of its financial illiteracy back in July 2008.

Let us not forget Goldman Sachs’ role in blowing up Greece and instigating the beginning of the Euro crisis. The crisis was created by a deal Greece struck with Goldman Sachs, that was engineered by Goldman’s CEO, Lloyd Blankfein. Blankfein and his Goldman team helped Greece hide the true extent of its debt, and in the process almost doubled it. The speculation back in 2015 was that Greece would file a lawsuit against Goldman Sachs for creating that debt crisis. There were the personal meetings between Greece and Gary Cohn to do that deal. When the client is a government, it ALWAYS involved the top people.

In 2001, Greece was looking for ways to disguise its mounting financial debt in order to just get into the Eurozone. The Maastricht Treaty required all Eurozone member states to show improvement in their public finances. Greece was heading in the wrong direction and Goldman Sachs came to the rescue. They arranged a secret loan of €2.8 billion and disguised it as an off-the-books “cross-currency swap” that was a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate. They made 2% of Greece’s debt magically vanish from its national accounts. Goldman Sachs charged €600 million euros which was about 12% of Goldman’s revenue for 2001 giving them a record sales year.

Then the deal turned sour in the aftermath of 9/11 attacks when bond yields plunged. They resulted in a huge loss for Greece because of the formula Goldman had crafted to their benefit dictating the country’s debt repayments under the swap. By 2005, Greece owed almost double what it had put into the deal and thus we see the European debt crisis unfold.

Until 2008, European Union accounting rules allowed member nations to manage their debt with these so-called off-market rates in swaps. In the late 1990s, JPMorgan enabled Italy to hide its debt by swapping currency at a favorable exchange rate, thereby committing Italy to future payments that didn’t appear on its national accounts as future liabilities. However, what Goldman did to Greece made Italy look like child’s play.

 

Goldman Sachs’ share price is going down hard into 2019. The 159 level will be critical on a closing basis for the year. If that is breached, then we could see very major implications for the firm whereby it may no longer survive. There is technical support between 174 and 164. From a cyclical perspective, Goldman Sachs has peaked as an institution as of 2017. It was founded in 1869 and 17.2 x 8.6 = 147.92. That means, in fact, the 2017 closing was the all-time high for Goldman Sachs and this incident is its Death knell. Goldman Sachs may be going down for the count.

  • August 2003 – Goldman Sachs creates Mortgage Back Securities & AIG Insures them
  • February 2006 – AIG Stops writing CDS on subprime mortgages
  • December 2006 – Goldman turns bearish on mortgage/real estate market
  • July 2007 – Goldman Sachs demands $1.8 billion in insurance from AIG
  • August 2007 – AIG posts $450 million as collateral
  • November 2007 – AIG posts $2 billion with Goldman on $3 billion demand
  • March 2008 – Goldman Sachs demands $6.6 billion from AIG
  • March 2008 – Bear Stearns collapses on 13th
  • August 2008 – Goldman Sachs takes a bearish view on AIG on 18th
  • September 2008 – Gov’t Bails out Fannie Mae on 7th
  • September 2008 – Lehman Brothers files for bankruptcy on 15th
  • September 2008 – Treasury Hank Paulson bails out AIG to save Goldman 16th
  • September 2008 – Paulson emails Congress with TARP 20th
  • September 2008 – Goldman Sachs & Morgan Stanley become banks 21st
  • October 2008 – Congress passes TARP on 3rd
  • October 2008 – Goldman Sachs demand another $1.3 billion from AIG
  • November 2008 – Federal Reserve creates Maiden III for Toxic Assets

Here we have 2007.15 when Goldman Sachs sells precisely at the top of the ECM back in 2007 ABACUS2007-ACI which was a $2 Billion Synthetic CDO. It was then on the Pi Target when the SEC charged Goldman Sachs with fraud back on April 16, 2010, for that very transaction. Any small firm is imprisoned and stripped of its license. But Goldman Sachs has the SEC and the DOJ in its back pocket along with the judges and politicians. Now again on the precise Pi Target Abu Dhabi filed a lawsuit against Goldman Sachs Wednesday (Nov 21) for allegedly conspiring against the Middle Eastern fund to further a criminal scheme by Malaysia’s scandal-plagued 1MDB.

Because we have 3 countries now bringing charges and/or suits against Goldman Sachs, it appears that this will mark the beginning of the end for the firm. When the Euro cracks, they will also be blamed for their role in Greece and the rest of Europe. Don’t forget that Mario Draghi is also ex-Goldman Sachs. When the Euro cracks, there will be a microscope applied to every communication that was ever carried out between Draghi and Goldman Sachs. Every trade they have pulled off will be inspected with its tentacles into the European bond market.

After the government took down Solomon Brothers back in 1991 for manipulating the US Treasury Auctions, Goldman Sachs began a program of buying protection. They allegedly began aggressively funding politicians and then began stuffing their people in key places of government. They have been known as “Government Sachs” among dealers and they have held a power-house political hand in their back pocket. Our model, at least, warns that day is NOW OVER!!!!!!

The computer would have shorted Goldman Sachs if it could. The Global Market Watch has pinpointed a high and it warned this stock was moving into a Waterfall on the Monthly Level. This is one stock to get out of. We will see major new lows next year.

Welcome to the Pi Target Day – 2018.89


Welcome to the Pi Target Day 2018.89. There is just so much going on it is hard to say which event is the critical target. These events are usually GEOPOLITICAL in nature. They have marked the day Hitler was offered the Chancellorship, the attack on the pound & the break of the ERM with the follow-through of Ireland, the attack on the World Trade Center 911, to the day Greece stated it would apply for help to the IMF. This one should be interesting because we have everything from BREXIT Crisis to the EU stating it will sanction Italy on the 21st and Russia announcing it is criminally investigating Browder which can lead to a real crisis of US interfering into the Russian elections back in 1999. So hang on. This should be interesting.

Greece & Food


QUESTION: Mr. Armstrong; When you were here in Athens you mentioned that we should use the new technology to grow food indoors. It has been the food argument why we should remain in the EU because we must import food. Do you still hold that position?

GD Athens

ANSWER: Yes. This is by no means something new. The Greek Dark Age was created after the fall of Mycenaean because that is when the energy output of the sun declined and the inability to grow enough food back then turned the Greeks into the Sea Peoples. This has always been a problem. Greece should begin to develop indoor farms. The technology is there – use it. Then the argument that Greece must remain captive by the EU is absurd.

November 21st, 2018 Pi Target


 

There are so many things happening in the political world it is next to impossible to figure out what is going to be the focal point for the Pi target since perhaps it could be a combination. The lastest hat being thrown into the ring is the European Commission is planning to enter their sanctions against Italy. As it stands currently, they have proposed disciplining Italy under EU fiscal rules on November 21st, 2018, unless the country’s government agrees to change its draft budget plan according to EU dictates. This could set in motion a drop in Italian debt which may force the ECB to buy more Italian debt or stand back and watch rates go crazy. This may also be the starting point of sending Italy into an exit position from the EU. In the weeks and months from now, we will be able to see that this was the turning point if this takes place.

The Modern Myth of “Global Markets”…


Reposted by request – There are massive multinational interests inherently at risk from President Trump’s “America-First” economic and trade platform. Believe it or not, President Trump is up against an entire world economic establishment.

When we understand how trade works in the modern era we also understand why the multinational control agents within the current system are so adamantly opposed to U.S. President Trump.  In essence, this is a structural economic battle that is being waged politically.

The biggest lie in modern economics, willingly spread and maintained by corporate media, is that a system of global markets still exists.

It doesn’t.

Every element of global economic trade is controlled and exploited by massive institutions, multinational banks and multinational corporations. Institutions like the World Trade Organization (WTO) and World Bank control trillions of dollars in economic activity. Underneath that economic activity there are people who hold the reigns of power over the outcomes. These individuals and groups are the stakeholders in direct opposition to principles of America-First national economics; for brevity these are called ‘globalists’.

The modern financial constructs of these entities have been established over the course of the past three decades. When we understand how they manipulate the economic system of individual nations we begin to understand why they are so fundamentally opposed to President Trump and their execution of a business plan to influence U.S. politics.

In the Western World, separate from communist control perspectives (ie. China), “Global markets” are a modern myth; nothing more than a talking point meant to keep people satiated with sound bites they might find familiar.

Global markets have been destroyed over the past three decades by multinational corporations who control the products formerly contained within global markets.

The same is true for “Commodities Markets”. The multinational trade and economic system, run by corporations and multinational banks, now controls the product outputs of independent nations. The free market economic system has been usurped by entities who create what is best described as ‘controlled markets’.

U.S. President Trump smartly understands what has taken place. Additionally he uses economic leverage as part of a broader national security policy; and to understand who opposes President Trump specifically because of the economic leverage he creates, it becomes important to understand the objectives of the global and financial elite who run and operate the institutions. The Big Club.

Understanding how trillions of trade dollars influence geopolitical policy we begin to understand the three-decade global financial construct they seek to protect.

That is, global financial exploitation of national markets.

FOUR BASIC ELEMENTS:

♦Multinational corporations purchase controlling interests in various national outputs and industries of developed industrial western nations.

♦The Multinational Corporations making the purchases are underwritten by massive global financial institutions, multinational banks.

♦The Multinational Banks and the Multinational Corporations then utilize lobbying interests to manipulate the internal political policy of the targeted nation state(s).

♦With control over the targeted national industry or interest, the multinationals then leverage export of the national asset (exfiltration) through trade agreements structured to the benefit of lesser developed nation states – where they have previously established a proactive financial footprint.

Against the backdrop of President Trump confronting China; and against the backdrop of NAFTA renegotiated; and against the necessary need to support the key U.S. steel industry; revisiting the economic influences within the modern import/export dynamic will help conceptualize the issues at the heart of the matter.

There are a myriad of interests within each trade sector that make specific explanation very challenging; however, here’s the basic outline.

For three decades economic “globalism” has advanced, quickly. Everyone accepts this statement, yet few actually stop to ask who and what are behind this – and why?

Influential people with vested financial interests in the process have sold a narrative that global manufacturing, global sourcing, and global production was the inherent way of the future. The same voices claimed the American economy was consigned to become a “service-driven economy.”

What was always missed in these discussions is that advocates selling this global-economy message have a vested financial and ideological interest in convincing the information consumer it is all just a natural outcome of economic progress.

It’s not.

The process is not natural at all.  It is a process that is entirely controlled, promoted and utilized by large conglomerates, lobbyists, purchased politicians and massive financial corporations.

Again, I’ll try to retain the larger altitude perspective without falling into the traps of the esoteric weeds. I freely admit this is tough to explain and I may not be successful.

Bulletpoint #1: ♦ Multinational corporations purchase controlling interests in various national elements of developed industrial western nations.

This is perhaps the most challenging to understand. In essence, thanks specifically to the way the World Trade Organization (WTO) was established in 1995, national companies expanded their influence into multiple nations, across a myriad of industries and economic sectors (energy, agriculture, raw earth minerals, etc.). This is the basic underpinning of national companies becoming multinational corporations.

Think of these multinational corporations as global entities now powerful enough to reach into multiple nations -simultaneously- and purchase controlling interests in a single economic commodity.

A historic reference point might be the original multinational enterprise, energy via oil production. (Exxon, Mobil, BP, etc.)

However, in the modern global world, it’s not just oil; the resource and product procurement extends to virtually every possible commodity and industry. From the very visible (wheat/corn) to the obscure (small minerals, and even flowers).

Bulletpoint #2 ♦ The Multinational Corporations making the purchases are underwritten by massive global financial institutions, multinational banks.

During the past several decades national companies merged. The largest lemon producer company in Brazil, merges with the largest lemon company in Mexico, merges with the largest lemon company in Argentina, merges with the largest lemon company in the U.S., etc. etc. National companies, formerly of one nation, become “continental” companies with control over an entire continent of nations.

…. or it could be over several continents or even the entire world market of Lemon/Widget production. These are now multinational corporations. They hold interests in specific segments (this example lemons) across a broad variety of individual nations.

National laws on Monopoly building are not the same in all nations. Most are not as structured as the U.S.A or other more developed nations (with more laws). During the acquisition phase, when encountering a highly developed nation with monopoly laws, the process of an umbrella corporation might be needed to purchase the targeted interests within a specific nation. The example of Monsanto applies here.

Bulletpoint #3 ♦The Multinational Banks and the Multinational Corporations then utilize lobbying interests to manipulate the internal political policy of the targeted nation state(s).

In underdeveloped countries the process of buying political outcome is called bribery. Within the United States we call it lobbying.

With control of the majority of actual lemons the multinational corporation now holds a different set of financial values than a local farmer or national market. This is why commodities exchanges are essentially dead. In the aggregate the mercantile exchange is no longer a free or supply-based market; it is now a controlled market exploited by mega-sized multinational corporations.

Instead of the traditional ‘supply/demand’ equation determining prices, the corporations look to see what nations can afford what prices. The supply of the controlled product is then distributed to the country according to their ability to afford the price. This is essentially the bastardized and politicized function of the World Trade Organization (WTO). This is also how the corporations controlling WTO policy maximize profits.

Back to the lemons. A corporation might hold the rights to the majority of the lemon production in Brazil, Argentina and California/Florida. The price the U.S. consumer pays for the lemons is directed by the amount of inventory (distribution) the controlling corporation allows in the U.S.

If the U.S. lemon harvest is abundant, the controlling interests will export the product to keep the U.S. consumer spending at peak or optimal price. A U.S. customer might pay $2 for a lemon, a Mexican customer might pay .50¢, and a Canadian $1.25.

The bottom line issue is the national supply (in this example ‘harvest/yield’) is not driving the national price because the supply is now controlled by massive multinational corporations.

The mistake people often make is calling this a “global commodity” process. In the modern era this “global commodity” phrase is particularly nonsense.

A true global commodity is a process of individual nations harvesting/creating a similar product and bringing that product to a global market. Individual nations each independently engaged in creating a similar product.

The production efficiency, the quality and capability of each nation, to produce the  product is independent and proprietary to the businesses within the nation.  In the natural course of national production, not all products are therefore identical; there are variances.

Under modern globalism this process no longer takes place. It’s a complete fraud. Massive multinational corporations control the majority of production inside each nation and therefore control the global product market and price. It is a controlled system.

The outputs are now almost identical regardless of the producing nation.  The processes used for a specific manufacturing sector output in the U.S. are now the same processes used for production in Mexico, or South Korea, or China etc.  Any technological efficiency gains are quickly purchased by the multinational and distributed internationally.

[Edwards Demming was a U.S. industrial expert who went to Japan following WWII and taught them the best processes for industrial manufacturing.  Japan embraced the teaching and instituted an improvement process called “Kaizen“.]

Back to lemons – EXAMPLE: Part of the lobbying in the food industry is to advocate for the expansion of U.S. taxpayer benefits to underwrite the costs of the domestic food products they control. By lobbying DC these multinational corporations get congress and policy-makers to expand the basis of who can use EBT and SNAP benefits (state reimbursement rates).

Expanding the federal subsidy for food purchases is part of the corporate profit dynamic.

With increased taxpayer subsidies, the food price controllers can charge more domestically and export more of the product internationally. Taxes, via subsidies, go into their profit margins. The corporations then use a portion of those enhanced profits in contributions to the politicians. It’s a circle of money.

In highly developed nations this multinational corporate process requires the corporation to purchase the domestic political process (as above) with individual nations allowing the exploitation in varying degrees. As such, the corporate lobbyists pay hundreds of millions to politicians for changes in policies and regulations; one sector, one product, or one industry at a time. These are specialized lobbyists.

EXAMPLE: The Committee on Foreign Investment in the United States (CFIUS)

CFIUS is an inter-agency committee authorized to review transactions that could result in control of a U.S. business by a foreign person (“covered transactions”), in order to determine the effect of such transactions on the national security of the United States.

CFIUS operates pursuant to section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment and National Security Act of 2007 (FINSA) (section 721) and as implemented by Executive Order 11858, as amended, and regulations at 31 C.F.R. Part 800.

The CFIUS process has been the subject of significant reforms over the past several years. These include numerous improvements in internal CFIUS procedures, enactment of FINSA in July 2007, amendment of Executive Order 11858 in January 2008, revision of the CFIUS regulations in November 2008, and publication of guidance on CFIUS’s national security considerations in December 2008 (more)

Bulletpoint #4With control over the targeted national industry or interest, the multinationals then leverage export of the national asset (exfiltration) through trade agreements structured to the benefit of lesser developed nation states – where they have previously established a proactive financial footprint.

The process of charging the U.S. consumer more for a product, that under normal national market conditions would cost less, is a process called exfiltration of wealth. This is the basic premise, the cornerstone, behind the catch-phrase ‘globalism’.

It is never discussed.

To control the market price some contracted product may even be secured and shipped with the intent to allow it to sit idle (or rot). It’s all about controlling the price and maximizing the profit equation. To gain the same $1 profit a widget multinational might have to sell 20 widgets in El-Salvador (.25¢ each), or two widgets in the U.S. ($2.50/each).

Think of the process like the historic reference of OPEC (Oil Producing Economic Countries). Only in the modern era massive corporations are playing the role of OPEC and it’s not oil being controlled, thanks to the WTO it’s almost everything.

Again, this is highlighted in the example of taxpayers subsidizing the food sector (EBT, SNAP etc.), the corporations can charge U.S. consumers more. Ex. more beef is exported, red meat prices remain high at the grocery store, but subsidized U.S. consumers can better afford the high prices.

Of course, if you are not receiving food payment assistance (middle-class) you can’t eat the steaks because you can’t afford them. (Not accidentally, it’s the same scheme in the ObamaCare healthcare system)

Agriculturally, multinational corporate Monsanto says: ‘all your harvests are belong to us‘. Contract with us, or you lose because we can control the market price of your end product. Downside is that once you sign that contract, you agree to terms that are entirely created by the financial interests of the larger corporation; not your farm.

The multinational agriculture lobby is massive. We willingly feed the world as part of the system; but you as a grocery customer pay more per unit at the grocery store because domestic supply no longer determines domestic price.

Within the agriculture community the (feed-the-world) production export factor also drives the need for labor. Labor is a cost. The multinational corps have a vested interest in low labor costs. Ergo, open border policies. (ie. willingly purchased republicans not supporting border wall etc.).

This corrupt economic manipulation/exploitation applies over multiple sectors, and even in the sub-sector of an industry like steel. China/India purchases the raw material, coking coal, then sells the finished good (rolled steel) back to the global market at a discount. Or it could be rubber, or concrete, or plastic, or frozen chicken parts etc.

The ‘America First’ Trump-Trade Doctrine upsets the entire construct of this multinational export/control dynamic. Team Trump focus exclusively on bilateral trade deals, with specific trade agreements targeted toward individual nations (not national corporations).

‘America-First’ is also specific policy at a granular product level looking out for the national interests of the United States, U.S. workers, U.S. companies and U.S. consumers.

Under President Trump’s Trade positions, balanced, fair and reciprocal trade with firm regulatory control over proprietary national assets, exfiltration of U.S. national wealth is significantly stalled.

This puts many current multinational corporations, globalists who previously took a stake-hold in the U.S. economy with intention to export the wealth, in a position of holding contracted interest of an asset they can no longer exploit (exfiltrate).

For durable goods: If the corporation wants the benefit of access to the U.S. market, President Trump applies price pressure (tariffs) which changes the ‘total cost of goods‘ dynamic and leverages the company interest to produce inside the United States.

Perhaps now we understand better how and why massive multi-billion multinational corporations and Wall Street institutions are aligned against President Trump.

 

RELATED:

♦The Modern Third Dimension in American Economics – HERE

♦The “Fed” Can’t Figure out the New Economics – HERE

♦Proof “America-First” has disconnected Main Street from Wall Street – HERE

♦Treasury Secretary Mnuchin begins creating a Parallel Banking System – HERE

♦How Trump Economic Policy is Interacting With The Stock Market – HERE

♦How Multinationals have Exported U.S. Wealth – HERE