The First BREXIT – 260AD


QUESTION: Mr. Armstrong, thank you for your excellent commentary. Could you comment on the monetary system in Britain during the period following Rome’s waterfall event? I would be especially interested in the period following the capture of Valerian I through the 9th century.

MG

Postumus AU Aureus as Hercules - R

ANSWER: I suspect that the purpose of your inquiry is the loose history taught in Britain that there was a usurper in Britain by the name of Carausius (287-293AD). Effectively, there was a previous usurpation which was really a separatist movement you can call ancient BREXIT. That was led by Postumus (260-268AD) who made his move for power upon the capture of Valerian in 260AD. Interestingly, there we 34 intervals of 51.6 years from 260 that brought us to 2014/2015 for the rise of BREXIT. At least cyclically, it was on time and this was just one component that the computer attributed to the success of the BREXIT referendum.

Image result for Constantius I gold medallion

I have written the full account of the rise of the next attempted usurpation by Carausius. While the first separatist movement failed when Postumus’s successor Tetricus I surrendered in 273AD ending the Gallic Empire, the next usurpation came into play 14 years later in 287AD with Carausius. This attempt at a separatist movement was ended by the father of Constantine the GreatConstantius I Chlorus. This is a medallion showing him entering London.

 

After the fall of Rome, we see gold Thrymsa appear in Britain around 620AD. There begins a debasement process and by 675AD what use to be gold vanishes and is replaced with silver. We see a brief political issue of gold under Offa(757-796). Other than that issue, gold does not reappear again until Henry III in 1257.

 

 

BREXIT Vote in Parliament


The House of Commons in the British Parliament will vote on Tuesday amid growing calls for the PM to go back to Brussels to renegotiate. Prime Minister Theresa May (PM) could remain in office even if the MPs reject her Brexit plan. The PM has come out and warned Tory rebels that their rejection could lead to a general election, and there was a “very real risk of no Brexit” which would really be far better. The EU will then suddenly witness just how important Britain is from the German car market on down. Britain is the Financial Capital of Europe and that is something Brussels just hates.

The withdrawal deal negotiated between the UK and EU has been endorsed by EU leaders but must also be backed by Parliament if it is to come into force. The whole sticky point is the EU wants a hard border in Ireland to prevent goods from moving with their pound of taxes.

So the votes will take place tomorrow and it looks to be rather interesting, to say the least. The deal May has made ties Britain to the EU forever without any rights whatsoever in the future. Britain will be ruled by Brussels and there really will be no BREXIT deal that the people voted for. May’s deal is being called a “huge step into the unknown.”

The computer has targeted the 11th as a Directional Change, which is the day of the vote. It also appears that the key target week will be that of the 17th with high volatility going into year-end. The fact that May had to be held in contempt to force her to provide the details of what they were to vote own shows clearly it is not a good deal for Britain and that is the only reason to have withheld it

Do Coins Reveal the Futility of our Times?


The study of coins, numismatics, has constantly expanded our knowledge of antiquity in recent decades through new discoveries which have proven so many old theories wrong and turned academics on their head when it comes to their theories. Without the consideration of the coins, many questions of ancient history would never be answered. Nevertheless, many ancient historians still have a great reluctance to deal with this special discipline and to use their often valuable results. Conversely, many numismatists fail to comprehend the vast importance money has played in the history of humankind. It becomes increasingly rare to find the two fields merged to answer important questions from a larger historical context.

I have written before how the academics declared Historiae Augusta fake because it listed people they never heard of such as Gaius Julius Saturninus. Then, two gold coins were discovered in Egypt with his name and suddenly that book was proven to be history. To this day, you will find still notes saying Historiae Augusta is questionable. Academics just hate to admit a mistake even when you prove it to any rational human being.

I have stated many times that we were all taught in school about the Decline & Fall of the Roman Empire. The seminal work by that name was of course written by the English historian Edward Gibbon. However, his work was the assembly of contemporary accounts with no real input from coins. His conclusions were primarily fundamental explanations based upon his opinion. Because of that, his work was highly criticized because of its view on religion since we have the rise of both Christianity and Islam covered in his work.

According to Gibbon, the Roman Empire succumbed to barbarian invasions in large part due to the gradual loss of civic virtue among its citizens of which included the role of Christianity. This certainly provoked an ongoing controversy about the role of Christianity historically. He did, however, also attribute weight to other causes of the internal decline of corruption in addition to external invasions from various barbarians in the north and Persians in the East.

Some have argued that the fall of the Roman Empire should not be a surprise but the question should be how did it last for so long. The military legions enabled the fall of the Republic and then they violated the authority of Emperors. The Emperors, looking to secure their power, in turn, overpaid troops to try to maintain loyalty which like love cannot be bought. This, in succession, reduced the dignity of the military corrupting the discipline which created internal enemies following a general in search of power, money, and the throne of glory. This, Gibbons asserts, enabled the Roman world to be overwhelmed by a deluge of Barbarians. We must keep in mind that Gibbon was influenced by the events of the 18th century as the British had entered a period of intense anti-Catholicism.

Roman decline silver content monetary system - Armstrong Waterfall effect

What was clearly missing from Edward Gibbon’s work was any bridge between ancient history and ancient numismatics. My work has been directed at eliminating human opinion. Where Gibbon was colored by the intense anti-Catholicism in Britain as a remanent from the Civil War and beheading of the Catholic King Charles I, my efforts are colored by simple economics. The background to the origins of the coinage is essential to comprehend the dynamics in the rise and fall of ALL great empires. The political dimension of the coinage is rarely taken into account. This failure has still left much of history in the dark.

I recreated the monetary history of Rome from the coinage for the simple reason to answer a question: How did Rome Fall? Was it gradual or a crash & burn? The coinage allows us to sort out the fact from the opinion. Gibbon clearly had a bias against religion for he saw how that tore Britain apart. He colored the fall of Rome with that bias. What Gibbon failed to understand was the economics came first and the capture of Valerian in 260AD sent a panic through the Empire. People turned to Christianity AFTER Rome was falling and prayers to their gods failed. The Christian persecutions took place at that time during the 3rd century AD because many took the positions the Empire was failing because the gods were angry at the Christians. The coinage reflects the economic crisis providing us with a timeline rather than just opinion.

The religious conflicts between Puritans and Catholics in Britain during the 17th and 18th centuries was rooted in a completely different mechanism. Even when John F. Kennedy was elected president in the USA, there were many who still took the anti-Catholicism position asserting that the Pope would then be running the United States. This was a divisionary attitude in Christianity (Protestant v Catholic) which was significantly different from the religious conflict in Rome during the 3rd century (Paganism v Christianity), not a question of a Pope usurping power over government.

Reconstructing history from coins provides a timeline that is definitive and not subject to speculation or opinion. In this manner, we can actually determine not just cycles, but why history repeats when given the same economic conditions, humans will ALWAYS respond in the same manner. We have used the coinage to reconstruct the entire monetary history of the world. When we accomplished this research effort, then and there we could suddenly see not merely how the rise and fall of empires, nations, and city-states was reflected in the monetary system, but the consistency across all political systems.

 

 

 

The cost of the Peloponnesian War and the loss of Athens to Sparta was clearly visible in its coinage. Two years before the surrender of Athens, its coinage was debased to bronze silver plated. The coinage stands as a witness to the same patterns of inflation created by war.

The Hoard of Athenian silver Tetradrachms we have used for study is from the period just prior to or at the beginning of the Peloponnesian War (431–404 BC). They are still of the finest silver and the condition of the coins is really exceptional. They have very little evidence of circulation confirming that they were stashed at the beginning of the war and were hoarded. Many still have underlying luster from recently being struck. Obviously, the person who buried then coins did not survive to reclaim them.

Coins may be purchased in our online store using this link https://squareup.com/store/ae-global-solutions-inc/

The cost of war has historically had always been inflationary. In Lydia, where coins were first invested, we can see the reduced weight as the cost of war increased against Cyrus the Great of Persia. In ancient times, the profits to the victor were often great. But the loss to the vanquished often led to their citizens being sold into slavery. Today, governments wage war more often for the private benefit of select groups rather than the state. The invasion of Iraq made billionaires out of Cheney’s friends and left the American people with endless trillions in debt that will last collecting interest to constantly roll indefinitely until the crash and burn.

Perhaps nobody wants to look at the evidence coins provide us because they do not like the conclusion. The one thing this research has provided is a glimpse of the futility of our situation and how governments will never learn anything from history.

Qatar Leaving OPEC


QUESTION: Mr. Armstrong; You are a personal friend of the royal family of Qatar. Would you care to share your inside knowledge of Qatar leaving OPEC?

KR

Sheikh Saud bin Mohammed Al-Thani of Qatar,ANSWER: Just for the record, I was a friend of Sheikh Saud bin Mohammed al-Thani who was a member of the Royal family of Qatar. We were probably the two biggest collectors of ancient coins in the world. He was always trying to buy me out, with a smile of course. Yes, he came to our office to see me with the royal bodyguards and the whole bit a few weeks before he died in 2014 and yes, I visited him at his home in London. Because of our friendship, he offered Qatar as the headquarters for our operation, but could not grant me a citizenship because I was Christian. We set up our office instead of in Abu Dhabi.

That said, Qatar is the richest nation on Earth on a Per capita basis. Abu Nakhlah Airport (Arabic:مطار أبو نخلة) in Qatar houses both the Qatari Air Force and U.S. Air Force as well as other Coalition personnel. It is also the headquarters of United States Central Command. Its conflict between other member states when the government supported Iran created a real feud. Even their airline was banned from other airports. That is a very complex issue that would take more than a blog to explain.
I have also written that the US desire to invade Syria had NOTHING to do with gassing people. It was simply about to get a gas pipeline through Syria to Europe in order to compete with Russia. The US wanted to choke off Russia from serving Europe. That is why Putin went into Syria and this is the real story behind the pretended human right nonsense. There are plenty of human rights issues in Africa we do nothing about because there is no profit or political gain. North Korea really had weapons of mass destruction yet we did not invade them as we did in Iraq because there was no profit to be had. Just follow the money. Those in power BELIEVE they can bullshit the people ALL THE TIME because the press is in their back pocket and will never report the truth. Mainstream media is no different than Pravda (truth) of Communist USSR.
Now the small, gas-rich state of Qatar state said that it will leave the oil cartel on January 1st, 2019 after nearly 60 years. Why? (1) there is the political conflict with its neighbors. (2) The country’s state oil company, Qatar Petroleum, said its withdrawal decision reflects “Qatar’s desire to focus its efforts on plans to develop and increase its natural gas production.”
Qatar has been under a diplomatic and economic embargo by its Arab neighbors, including OPEC members Saudi Arabia and the United Arab Emirates, for the past 18 months. In response, Qatar has actually been increasing its gas production in retaliation for gas, not oil, is its primary source of revenue – hence the gas pipeline proposal through Syria. In reality, OPEC is concerned about oil – not natural gas. It is only logical that Qatar would withdraw from OPEC based upon its output, but at the same time, there is the diplomatic and economic embargo dispute with other Gulf states. Qatar policy has been to further its position as the world’s leading supplier of gas. Its exports currently account for about 30% of global demand.

US Bank Reserves 10% – EU Bank Reserves 1%


QUESTION: What mechanism prevents banks from creating fraudulent electronic deposits of currency?
As an IT systems admin, I have the ability to add / subtract / adjust ERP systems inventory / costing outside the normal users ability. I could add widgets to the system at will, but fraud can’t be sustained very long, as the physical widgets can’t be sold, they only exist in the system. Electronic currency, however, is only a ledger entry, and since new currency units are created as loans – What prevents any bank from just changing the numbers in their systems to create more currency units at will? Can’t get my head around this.

Thanks for all you do from a little guy just trying to get by!

ANSWER: The creation of money electronically in the banking system is the degree of leverage. Reserve Requirement Ratio at the Federal Reserve was increased on January 18th, 2018. It required that all banks with more than $122.3 million on deposit maintain a reserve of 10% of deposits. Banks with $16 million to $122.3 million must reserve 3% of all deposits. They create money that is purely electronic and we do not see it. I deposit $100 and they lend it to you. Now we both have $100 on deposit and the reserve requirement will be $20 for most banks. They then lend it out a third time and there is now $300 on deposit requiring $30. They cannot create entries out of thin air. They are audited and the reserve ratio is strictly enforced in the USA. The Fed will raise and lower that reserve ratio as they see fit based upon economic conditions.

At the European Central Bank, things are substantially different. Eurozone banks are required to hold a specified amount of funds as reserves on AVERAGE in their current accounts at their national central bank in each member state which are called “minimum reserves”. Remember, each member retained its own central bank!  A bank’s minimum reserve requirement is set for six-week periods called maintenance periods. This minimum reserves level is therefore calculated on the basis of the bank’s balance sheet prior to the start of each six-week maintenance period.

Banks have to make sure that they meet the minimum reserve requirement only on an AVERAGE over the course of the maintenance period. This introduces serious risk. The bank can dip below the minimum reserve in the middle of a crisis and at the end of the six-week period, there can be no reserves remaining. So they do not have to hold the total sum in their current accounts at the central bank on a daily basis! Therefore, this is a flexible arrangement that allows the banks to react to short-term changes in the money markets, but it exposes them to tremendous risk in a financial panic. The design was claimed to help stabilize the interest rate banks charge each other for short-term funds. I totally disagree with this concept.

 

Up until January 2012, European banks had to hold a minimum of only 2% of certain liabilities, mainly customers’ deposits, at their national central bank. As the economic crisis has continued in Europe, this 2% level has been to 1%! The total reserve requirements for Eurozone banks stand at only around 113 billion euro currently.

Perhaps now people will understand why I have been warning about a MAJOR financial crisis starting in Europe and spreading thereafter around the globe. The general media and the public will NOT understand the reserve ratio disparity so a banking crisis in Europe will be assumed to be the same around the world. Unfortunately, what happens in Europe will NOT stay in Europe. This is also why I STRONGLY urge Europeans to create a stash in the US banks for now. The ECB is seriously looking at creating a cryptocurrency to defeat hoarding just canceling Euro notes. That will end hoarding and they will be able to then enforce negative interest rates. From the ECB view, they are concerned about the coming bank crisis in Europe so the best way to prevent a bank run is to eliminate cash! Europeans should open accounts outside the Eurozone before it is too late.

And Prime Minister Theresa May wants to stay linked to Europe. This is when we need people who REALLY are qualified to understand the world financial system. I cannot express how dangerous it has become with politicians who are clueless about how the world economy even functions. UK banks operate under a completely different scheme.

In May 2006, the Bank of England began paying interest on bank reserve deposits at its official Bank Rate. This inspired US banks to demand the Fed pay interest on excess reserves. The Bank of England had the ‘reserves averaging’ regime back then whereby the quantity of each bank’s reserves that the Bank of England would pay interest on was restricted to a range around a ‘target’ level of reserves that the bank was obliged to pre-declare. The used to be set on a daily basis but was changed at this time to an average over each monthly maintenance period. The objective was to establish a marginal cost of reserves to the banks which would remain very near to Bank Rate. However, this was dependent upon the provision if the Bank of England supplied the right amount of reserves to enable the banks’ reserve deposits to be within this range.

In view of the Bank of England’s desire that wholesale market rates should remain close to Bank Rate was considered to be an improvement over earlier procedures prior to 2006 when reserves were mot paid interest and the Bank of England then had to supply reserves in quantities that exactly matched demand. Consequently, market interest rates tended to move towards the boundaries of the corridor formed by the Bank of England’s deposit and lending facilities. Nonetheless, under the new reserves-averaging regime post-2006, the Bank of England still had to supply reserves in appropriate amounts to meet demand, but it was more flexible. However, the new regime was still ill-equipped to cope with the expansion of reserve supply that the Bank of England then undertook to overcome the breakdown of interbank markets during the financial crisis of 2007-2009. To maintain interest rate transmission within the reserves averaging regime, the Bank of England then widened the range of reserve deposits that they paid interest on from 1% to 60% trading around the Bank of England’s targets. This required the Bank of England to then take steps to reabsorb the excess reserves.

The introduction of Quantitative Easing, which began in March 2009, merely created another problem from the reserve perspective. Suddenly, Quantitative Easing caused another larger expansion increase in reserve deposits. Rather than trying to offset this by selling other assets or making further adjustments to the reserves averaging scheme, the entire scheme was simply suspended in favor of paying interest unconditionally on ALL reserve balances.

Consequently, I have stated NUMEROUS times before, all central banks are NOT the same!!!!!!!!!!!!!!!!!!!


Central Bank Reserve Ratios
COUNTRY Bank Reserve Ratio
ALBANIA 10.00%
ANGOLA 24-May-18 19.00%
ARMENIA 24-Feb-14 2.00%
ARGENTINA 28-Sep-18 44.00%
ARUBA 11.00%
AZERBAIJAN 1-Mar-15 0.50%
BANGLADESH 3-Apr-18 5.50%
BARBADOS 5.00%
BELARUS 16-Mar-16 7.50%
BULGARIA 28-Nov-08 10.00%
CAMEROON 7-Apr-16 5.88%
CAPE VERDE 16-Feb-15 15.00%
CEN. AFRICA REP 7-Apr-16 0.00%
CHAD 7-Apr-16 3.88%
CHINA 15-Oct-18 14.50%
DEM. 8-Apr-15 2.00%
REPUBLIC 7-Apr-16 5.88%
COSTA 15.00%
CROATIA 11-Dec-13 12.00%
CZECH REPUBLIC 20-May-99 2.00%
CURACAO 10-Oct-13 18.00%
DENMARK 2.00%
EGYPT 3-Oct-17 14.00%
EQUATORIAL 7-Apr-16 5.88%
EUROZONE 18-Jan-12 1.00%
FIJI 7-Jul-10 10.00%
GABON 7-Apr-16 5.88%
GAMBIA 19-Jun-13 15.00%
GEORGIA 13-Jun-18 5.00%
GHANA 12-Nov-14 10.00%
HUNGARY 1-Dec-16 1.00%
ICELAND 1-Jun-16 2.00%
INDIA 1-Jul-13 4.00%
INDONESIA 18-Feb-16 6.50%
IRAQ 1-Sep-10 15.00%
ISRAEL 6.00%
JAMAICA 1-Jul-10 12.00%
JORDAN 12-Mar-09 8.00%
KAZAKHSTAN 2.50%
KENYA 5.25%
KYRGYZ REPUBLIC 14-Dec-15 4.00%
LITHUANIA 3.00%
MACEDONIA 9-Sep-13 8.00%
MALAWI 23-May-08 15.50%
MALAYSIA 16-May-11 3.00%
MALDIVES 20-Aug-15 10.00%
MAURITIUS 2-May-14 9.00%
MOLDOVA 4-Sep-18 42.50%
MONGOLIA 23-Mar-18 10.50%
MOROCCO 21-Jun-16 5.00%
MOZAMBIQUE 26-Oct-17 14.00%
NEPAL 11-Jul-18 4.00%
NICARAGUA 15-Jun-18 10.00%
NIGERIA 22-Mar-16 22.50%
PAKISTAN 12-Oct-12 3.00%
PERU 30-Apr-17 5.00%
PHILIPPINES 24-May-18 18.00%
POLAND 31-Dec-10 3.50%
QATAR 16-Mar-17 4.50%
ROMANIA 6-May-15 8.00%
RUSSIA 27-Jun-16 5.00%
RWANDA 5.00%
SERBIA 19-Jan-11 5.00%
SOUTH 2.50%
SRI LANKA 14-Nov-18 6.00%
TAIWAN 1-Jan-11 10.75%
TAJIKISTAN 20-Mar-17 3.00%
TANZANIA 21-Mar-17 8.00%
TRINIDAD & TOBAGO 17.00%
TUNISIA 1.00%
TURKEY 13-Aug-18 8.00%
UNITED STATES 27-Oct-16 10.00%
URUGUAY 1-Apr-13 25.00%
UZBEKISTAN 1-Sep-09 15.00%
VENEZUELA 25-Oct-13 19.00%
VIETNAM 1-Sep-11 3.00%
WEST 16-Mar-17 3.00%
ZAMBIA 21-Feb-18 5.00%

 

Italy’s Certified Email System has been Hacked


There was an interesting major hacking event in Italy which gained access to thousands of Italian certified email accounts, including those of magistrates and security officials. These certified emails guarantee the validity of a sender’s identity, as well as the date and time of sending and receiving the email, giving them a clear legal status. This is a major hack and very important for it undermines the legal status of government emails. The repercussions can be extremely significant. This calls into question ALL legal emails from the government regarding taxes.

Why Has Farmland Exploded in Price? The Accidental Trend Correlation


 

Most people have little idea WHY big money was targeting buying farmland in Canada, USA, and Australia. It was more than just Chinese investment. With interest rates down to negative, capital has been looking for returns. They were buying farmland and then renting it out generally for 5%. This created what many call the farmland bubble which has now begun to burst in some Corn Belt states, such as Iowa, as interest rates begin to rise. In 2015, the average increase of 2.4% percent on the low end and up to 8% in some states where the crop yields were best. This has not been a small investor or spec market. This was driven by the big boys seeking yield thanks to particularly the European Central Bank (ECB).

 

The nominal high came in 1982 and the commodity boom peaked in 1980 and interest rates peaked in 1981. The rising dollar caused the correction in nominal terms declining into its low in 1987. The market began to recover while the days of inflation and goldbugs faded forging the final low in gold during 1999. As is often the case, people just never look at assets in terms of international value. The surge in prices of latter that domestic analysts have called a “bubble” truly reveal more of a Phase Transition type rally more than doubling in price when plotted in Euros. The key to any market lies hidden within the depths of international capital flows which are driven foremost by currency values.

The lack of individual investors infiltrating this market leaving the big agricultural bets being placed not on expectations of global food demand will increase over time, but looking simply for yield, has led most analysis astray. Institutions, like the pension fund TIAA-CREF, have been the big buyers throughout 2017. They have been looking for bargains as farm real estate values have started to decline. Small farmers are finding it difficult to borrow from the banks for a crop season which can involve loans into several millions of dollars. If crops are wiped out, then they have a real problem.

There have been stocks issued seeking to capitalize on the boom. Farmland Partners (FPI, NYSE) has been down about 20% since it was floated in 2014. It is a REIT which is a company that owns, operates or finances income-producing real estate. REITs were modeled after mutual funds to gather investors to collectively own valuable real estate and provide the opportunity to access dividend-based income and total returns. On its website, it states: “Farmland Partners Inc. is an internally managed, publicly traded (NYSE: FPI) real estate company that owns and seeks to acquire high-quality farmland throughout North America addressing the global demand for food, feed, fiber and fuel.” However, the play has NOT been the boom in commodities, but the yield from renting out the land.

Investors should be very careful with REITs because they tend to be illiquid and volatile.

 

 

When we look at the Array, we see turning points lining up for 2020/2021 and 2024 followed by 2026 and then 2028. The commodity cycle appears to be pointing to 2024. That is when we should see farmland values peak in real terms but keep in mind that it will all depend upon the particular region. The weather is going to kick in and that will reduce crop yields. Keep in mind that most of these REITs have entered this sector of the market for the wrong reason. It was not truly a commodity boom expectation as it was simply to get a 5% yield when interest rates were below that level. As interest rates rise above that 5% threshold, we will begin to see the big players bailout and begin to dump farmland at losses. Anyone looking to borrow against their land should use FIXED RATES only. If you decide to sell your land to the big boys while rates are still below 5%, the include a right of first refusal to buy it back at a reduced price when they decide to cut and run – which they will inevitably always do at the precise wrong time.

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.