The weather turned very cold this year as our computer has been forecasting. The importance of our model’s forecasts lies in determining what will be the next cycle focus. Each cycle tends to shift from one to the next sector. While we still risk a strong dollar rally into 2020 creating the economic recession through deflation as assets decline, the next 8.6-year cycle appears to be setting up to be a commodity cycle. As the climate changes to bitter cold, we have warned this is when FAMINE and DISEASE rise. The flu season is always when it turns cold – not warm.

It is important to keep an eye on the climate cycle and prepare for the next real bull market. This year, the wheat crop in Russia has failed because of the bitter cold with even April coming in as the coldest in more than 140 years. The people who want to believe in global warming are so enamored with this idea mixing up pollution with climate change that they fail to see the trend coming. As crops fail with colder winters, food supplies will decline and prices will rise. So look for the next 8.6-year Economic Confidence Model Wave to bring higher prices in food

A new study has come out taking issue with the entire climate change forecasts putting forth that it is at best 45% as intense as the prognostications put forth. The greatest flaw is just how poor these people do their research. They are TOTALLY ignorant of any cyclical trend and project that if the temperature rises 1 degree this year, then they project that will continue without change for decades. Honestly, they do the same in just about every field with the same results. Economists assume they cannot predict the business cycle so why bother. Projections for growth into the next year are always based upon the trend this year.

The entire EU Crisis began precisely on schedule on the Political Pi Turning point from the major high in 2007. Precisely on the day of the ECM turning point, April 16, 2010 (2010.29) Greece notified the IMF it was on the verge of bankruptcy. By April 22nd, the Euro fell to near year-low levels amid concerns about Greece’s debt crisis. The IMF activated the loan facility and Greece received its first €45 billion on April 23rd, 2010. Then on May 9th, the IMF approved a bailout package for Greece with the largest loan and exceptional, fast-track access. Of course, that turning point of April 16th, 2010 was also the first time the SEC charged Goldman Sachs with outright FRAUD is selling its Mortgage Backed Securities.

In dealing with Greece, the German head of state Chancellor Angela Merkel, had promised the German taxpayers that any loan to Greece they will be held to the fire and forced to repay. The polls were turning hard against Merkel as she was being bashed in the world press for Greece had forgiven Germany’s debt after World War II, but Merkel refused to provide any relief for Greece because of her campaign promise. The divert the press from here hardline policy on Greece, Merkel then summarily announced that she would take the refugees from Syria with open arms. That then began the European Refugee Crisis and Merkel then force the rest of Europe to share the burden she created unilaterally. The entire European Refugee Crisis was created by Merkel, and this has been at the center of the crisis which is tearing Europe apart at the seams. That came as the next ECM wave turned from its peak 2015.75.

Now as we approach the next political Pi Turning Point due on November 21st, 2018, which will be 8.6 years from when the Greek debt crisis began, the EU Commission has demanded from the Eurozone states that debt relief should be provided to Greece. “We need to find a mechanism that will ease the debt burden that is on the Greek people today,” EU Economic Affairs Commissioner Pierre Moscovici said Friday at a meeting of Eurozone finance ministers in Sofia. The creditors would have to show “solidarity with Greece” in order to secure the recovery of the long-term crisis country.

The Greek government creditors addressed by Moscovici are the taxpayers from those Eurozone states that had granted loans to the country in recent years – especially German taxpayers. With these loans, the Greek government paid the debts that it had with major international banks. All the loans in Christendom to Greece will not solve the debt crisis. The design of the Euro was seriously flawed. They implemented only a single currency and left all member states with their national debts instead of consolidating them. Then the Euro rose from 80 cents to $1.60 and suddenly Southern Europe saw their national debts double in real value. It was no different from borrowing to buy a home in Swiss franc to save interest and watching the Swiss double in value and now you owed twice as much on your home. Debt relief of 50% is needed on the entire national debt – not just the loans since 2010.

COMMENT:

Message: I am a great fan of your blog and read all with interest. I was surprised to read £10 notes have been canceled, as I still regularly get £10 and £20 notes and send them even though electronic money transfer is increasingly the norm

MR

REPLY: Britain introduced the new “tenners” last September. There was a period when both could circulate. That term expired here in the Spring of 2018. You can exchange them at a bank, but you must have an account. If you do not have an account like myself, the currency exchange operations charge 20%. The eliminated the paper one pound notes back in 1984. They will be doing the same with £20 notes. They have not yet announced any release date for that one. The speculation is that the £50 notes will be discontinued.

The Bank of England actually prints itself internally £1 million and £100 million pound notes. They are used only internally to back the paper currency issued by other banks such as the Bank of Scotland. They are used to back those notes which are exchangeable to Bank of England notes.

The head of the EU, Jean-Claude Juncker celebrates the 200th anniversary of Karl Marx in Germany. What is really stunning, is that Karl Marx is not merely the champion of Communism which he adopted from the French Commune experiment during the French Revolution, but he has ignored the little fact that no other person in history is responsible for killing tens of millions of people, more than all the wars combined, who gave their lives for his ideology.

To celebrate Karl Marx which advocates suppressing the people and taking all wealth from them and handing it to the state politicians is in itself a demonstration of exactly how the EU looks at its role today. We live in a very dangerous era for this is the collapse of Marxism and they will fight back with every ruthless means possible to save their theory of living off of other people’s money.

China is on its way to reaching the title of the Financial Capital of the World post-2032. However, that is also NOT going to be accomplished all on its own. In part, this is the moving trend and the shift our computer has been forecasting also because the West is in a Sovereign Debt Crisis and by raising taxes and imposing stiff regulations to try to keep the game going, GDP in the West will decline.

Nevertheless, China has some adjustment it must go through before it reaches that goal. It will surpass the EU, but the EU is hard at work of just trying to protect the jobs of bureaucrats rather than to actually make Europe a better place to live. Right now, China’s Debt to GDP stands at 250% mainly because to stimulate their economy, they actually lent money to people. The Western government bought their own bonds back to the “indirectly stimulate” the economy which never made it to the people. This is why Europe is still in deep trouble. The US took the bad loans from the banks and stuffed them in Freddie & Fannie. The EU left the bad loans on the books of the banks because it was seen as a bailout for Southern Europe. Now we have a banking crisis in Europe that never ends.

China’s debt problem is quite different. On the back of a boom in property prices, household borrowing has been climbing for the past 10 years straight. We are now approaching the correction point in this trend. The borrowing had expanded at a pace that exceeded the biggest speculative booms in the West. Now, some $6.7 trillion in personal debt also exists and this is now 50% of GDP. Private debt is now approaching crimping consumer spending power and therefore lies the recession ahead.

We will be focusing on China at the Singapore World Economic Conference in June 2018.

QUESTION: Okay Marty,

ANSWER: I just returned from Europe where I had meetings with some high levels of interest. The great concern in Europe is the end of QE for there is a serious lack of liquidity. This is part of what is behind the drive to take Euro trading from London and hand it to Paris. The problem is obvious. There are those in Brussels who think that if the free markets go against them, they will be able to freeze the Euro to prevent a crash. I explained that they would not be able to take it from New York, Tokyo, Hong Kong and Sydney without ending it as a free currency. When I asked if they intended to convert the Euro to the old Russian Ruble of Soviet days, I did not get a reply.

In the USA, there is the realization that it is NOT a good thing for the dollar to be the Reserve Currency. This has made the Federal Reserve the effective world central bank. That has resulted in the Fed losing the power to control the domestic economy because of lobbying not to raise rates from Emerging Markets, Europe, and the IMF because it will hurt their economies which are in worse shape.

It is IMPOSSIBLE to pass a law and declare that the dollar is not the Reserve Currency any longer. That is not a factor of anything that Washington can control unless they convert the dollar to a restricted currency much akin to the Japanese yen. Anyone can issue a contract or borrow dollars in any country. You cannot issue a note or bond in Japanese yen without going back to the Ministry of Finance in Tokyo for their permission.

  

The British have again canceled their currency up to the ten-pound notes. Try and spend a 10’er and you cannot. Go to a currency exchange and they will take it at a 20% discount. As for the coins, you can donate them to a charity who can exchange them but you can’t. This is why the US dollar is also the Reserve Currency – it has NEVER been canceled. Europe has always done this to prevent people from hoarding cash.

COMMENT: I read your piece on taking the profit out of prostitution to end kidnapping young girls. That has been a huge problem in Eastern Europe and girls were even getting kidnapped in Western Europe on vacation. Here in Italy, there was a huge problem of kidnapping people and demanding money from their families. The government passed a law that if a family member was kidnapped, they froze the accounts of the family to prevent people from paying. At first, it seemed cruel. But once it was no longer profitable to kidnap people, it stopped. I think your idea would probably work.

VSZ, Rome

REPLY: When they tried prohibition in the USA, it did not stop people from drinking. What it did do was establish the Mafia in the USA. Suddenly booze was profitable. When prohibition ended, the Mafia was well funded and expanded into other ventures. When you make anything illegal, it becomes tax-free and there is the incentive to expand whatever that business might be. We are talking about human nature. During a crisis, legal goods are suddenly going for a premium. They call it price gauging which is illegal in Florida but it still goes on in a storm.

They are now warning Americans traveling to some parts of Mexico for they are starting the same scheme – kidnapping people for ransom. If there is a profit to be made from any illegal activity, it will be exploited. It does not matter what the subject might be from drugs, booze, to prostitution. Just follow the money.

COMMENT:  Hi Martin, reading your article about the SPD imposing Marxism on Germany is horrifying. To see established political parties so greedy that they’re willing to partner with fringe parties to maintain control is nuts.

We’re currently seeing this in British Columbia where the Liberal party lost its majority due to a government formed by new Democrats and the Greens. Now, this handful of green party MLAs wield enormous powers. They’re impeding the expansion of kinder Morgan’s pipeline to Vancouver, despite FEDERAL regulatory approval.

How can so few, be so greedy, as to crush the economic activity and benefits that this creates for thousands of workers? Bring on the crash and reboot, I’m sick of this.

Mike C.
Calgary

REPLY: This is what is wrong with the Parliamentary System. There should be a run-off with a second election between the two top candidates. This is what they do in France. The systems employed in most other countries allow fringe groups to get control. Do not forget that Hitler won during the 1932 German election less than 36.8%. This is what is wrong with such political systems. You would think that we have learned our lessons from the past by now.