QUESTION #1: Sir,

You stated in your blog that Fed may fix 2 and 10 year bond rates. Doesn’t this negate the yield curve concept/ credit theory? Won’t this accelerate the distrust for government? Wont this further accelerate/aggravate the pension crisis?

Appreciate you teaching the little guys

See you in Oct

DK

QUESTION #2: Marty; What you are describing with the change in QE is clearly coming from your contacts behind the curtain. How do you think this will play out?

CB

ANSWER: It is clear QE is dead. However, at the same time it has trapped all central banks. I am preparing an important paper on this subject. It is complicated, but it is the very reason why the West will collapse and the financial capital of the world will move to China, who has come out and stated publicly that they will not engage in QE. As far as accelerating the distrust in government, this will be felt within the professional class. It will take time to filter into the general public and it will most likely take the form of another cause altogether. It is unlikely that the general media will even understand this subject matter.

As to how will this play out, I can only say get ready. This is most likely the last straw that will eventually break the back of the monetary system. The general press will not understand that this shift in policy was the last straw. They will not even understand the ramifications for probably two years.

We are facing a very interesting financial crisis that has never before been witnessed because this is how the Socialist Utopian Society will crash and burn. We are beyond all economic theories for nobody from Keynes back to Adam Smith ever contemplated what would happen with the deadly theory of Quantitative Easing constructed upon the Quantity Theory of Money. This is the backdrop as to why there has been no hyperinflation and why gold has floundered in the wake of what everyone was touting as hyperinflation.

We are simply off the charts, as they say, in terms of markets and economics. We are entering one of the most challenging periods perhaps in the history of financial and economic forecasting. So bring your thinking caps to this year’s 2019 WEC in Rome.

QUESTION: Martin,
Washington State DOT is planning to bond against toll revenue generated by express toll lanes on or highways here in Western Washington. These express toll lanes were created by our DOT by stealing a general purpose lane and turning it into a toll lane.

The pricing strategy is to keep the roads moving at 45 mph most of the time, so the toll raises as more people use the lane. Sometimes the toll gets as high as $10.

Is bonding against tolls something that governments do? It sounds like our DOT is borrowing money on congestion, aka our misery. So, if their job is to keep our vehicles moving, what incentive do they have now that they depend on tolling express lanes which people take to avoid congestion in the general purpose lanes? Don’t they now have an incentive to keep traffic bad?
Thanks,
A

ANSWER: This is a scheme to raise money. Originally, there were lanes people used to encourage car-pooling. This has given way to the idea that they can charge a toll. Then to raise money, they issue bonds backed by future expectations of tolls. Once again, this is a new scheme to get more money using the future right now. The problem is they do not think about the future. It is always whatever they can grab for the immediate budget. Next year becomes another scheme they come up with until they have borrowed against everything possible.

They are already confiscating property for taxes and then they bundle the tax-liens as selling them to investors who can then confiscate people’s homes based upon the back taxes owed. This has been taking place in New Jersey and Florida. The bonds are backed by tax-liens on private property.