QUESTION: Marty,
Big fat question for you regarding the UK and the SNP.
You seemed to support Scotland breaking away from the UK in 2014, but since then you’ve voiced your concern on the socialist policies of the SNP. I share that concern, as do a growing number of people here, in not so sunny Scotland.

Unfortunately, SNP seems to have introduced a few more taxes into the system in the last year. One of which is that the higher tax band in the rest of the UK has been raised to 50K, whilst in Scotland, it has been kept at 43k. The other latest tax is that if the company you work for have parking spaces and you drive to work and park your car there, you can be hit with around £450 per year.

Looking back on the history of UK general elections, the SNP hit a high point in the October 1974 general election, polling almost a third of all votes in Scotland and returning 11 MPs to Westminster. They then dropped to under 6 seats till the 2015 election, where they went from 6 seats (in 2010) to 56 in 2015. You could argue the rise to 56 seats was due to the fact people either wanted independence or voted for them as they were happy to be led by them in Scotland but not wanting to be independent. They dropped to 35 seats in 2017, primarily due to people being fed up with the independence record being regurgitated over and over.

To summarise then, the large rise in ’74 followed by a big drop in its support at the 1979 General election, followed by a further drop at the 1983 election. Will we see this again? Big rise in 2015, followed by a large drop in 2017 and the same again in the next election?

Personally, I think the tax rises will take a big toll on their support and they will get hammered in the next election.

Many thanks for your thoughts and wisdom.

G

ANSWER: I love Scotland. Every time I flew in to Edinburgh to do an institutional conference for a day, I was introduced as a 7th generation Scotsman – never an American. The separatist movement is separate and distinct from the SNP, which is one step to the right of communism. I was living in London when “Braveheart” came out. I remember going to the movies there, and on the way out everyone was saying how some member of their family was Scottish.

That said, the SNP socialist policies are brain dead and this idea that they must remain part of the EU is beyond stupidity even for someone who is dead mentally. There is absolutely no economic validity to remaining inside the EU. The British have NEVER won anything of significance in the European court. What will it take to make the British realize that they are not really welcome in the EU for resentment remains that it was the Brits who saved Europe from both Napoleon and Hitler.

The Scots voted for independence in a referendum which was clearly rigged by London and the EU. But that was the prelude to BREXIT, which the government is doing its best muck up again over this unwarranted fear over trade. The economy will turn down very hard in Europe in 2019 into 2020 before bottoming. This will alter the politics ahead rather significantly. In Brussels, they will be blaming the Brits, while the Italians will begin to voice their opinion that the Brits got it right after all.

Cyclically, the United Kingdom that was first created back on May 1st, 1707, under Queen Anne (1707.331). On the 309.6 year cycle of the Economic Confidence Model, we arrived at 2016.9315. The BREXIT vote took place on June 23rd, 2016 (2016.476). A referendum on Scottish independence from the United Kingdom took place on Thursday, September 18th, 2014 (2014.715). That meant the Scottish vote was 307.384-years from inception. This was cyclically a confirmation that BREXITwould, in fact, succeed in 2016.

However, the true Scottish Separatist/Nationalism Movement actually began back in 1934 during the economic hard times of the Great Depression. It was in 1934 when the Scottish National Party (SNP) was founded, making its primary goal the future independence of Scotland. The party gradually began gaining ground after World War II, which was propelled by the discovery of rich oil resources in the North Sea during the 1970s. Then in 1974, the SNP won 30% of the Scottish vote and 11 seats in Parliament after campaigning on the slogan “It’s Scotland’s oil!”

Of course, the first major step toward Scottish independence came in 1995. The first and greatest reason for creating a Scottish Parliament in 1999 was that the people of Scotland demanded and deserved the human right to democracy. The UK Government’s white paper on Scottish devolution, Scotland’s Parliament, was published in July 1997. It set out proposals for a new Scottish Parliament and drew heavily on the Scottish Constitutional Convention’s 1995 (see the report: Scotland’s Parliament, Scotland’s Right).

A referendum was held on September 11th, 1997 to ask the Scottish people whether they wanted a Scottish Parliament and whether it should have tax-varying powers. In that 1997 referendum, the Scots voted in favor of devolution of powers, which meant that although Scotland remained part of the United Kingdom, its government gained a broad range of new powers. It would have the power to set its own tax rates as well. Among these new powers was also the right to control education and healthcare. This lead to the creation of a Scottish Parliament for the first time since it was dissolved in 1707. At the peak of the economy in 2007, the SNP won an upset victory in the Scottish parliamentary elections, ending some 50 years of Labour Party dominance. Then the SNP leader Alex Salmond became the first elected minister of Scotland. He won a second term in 2011 and was able to use his party’s historic mandate to secure approval for a referendum on independence for Scotland.

It took just two 8.6-year cycles from 1995 to the beginning of the separatist movement in 2012. In 2012, Salmond and British Prime Minister David Cameron signed an agreement to hold that referendum in 2014. Subsequent negotiations lowered the voting age in the referendum for 16 and determined that it will pose a single question: “Should Scotland be an independent country?”

The problem the SNP faces is they have mixed up independence, socialism, and remaining in the EU rather than the UK. In this regard, they have truly lost their way and do not comprehend either trade of the fact that socialism is collapsing right in front of their face.

Hong Kong’s intervened to support the Hong Kong dollar for the first time since August 2018 after the exchange rate fell to the lower end of its trading band against the greenback. The Hong Kong Monetary Authority bought HK$1.507 billion ($192 million) of their own currency during London and New York trading hours on Saturday.

The Hong Kong dollar peg to the US dollar has come under a lot of pressure. The problem they face is simply that such a peg also imports the inflation or deflation of the currency to which a peg is created. As the Greenback rises in the political-economic sea of international finance, it will become impossible to hold the peg.

In 1863 the Hong Kong Government declared the silver dollar – then a kind of international currency issued by many nations – to be the legal tender for Hong Kong, and in 1866 began issuing a Hong Kong version of the silver dollar. The silver standard became the basis of Hong Kong’s monetary system until 1935, when, during a world silver crisis, the Government announced that the Hong Kong dollar would be taken off the silver standard and linked to the pound sterling at the rate of HK$16 to the pound.

In 1972, the Hong Kong dollar was pegged to the U.S.dollar at a rate of HK$5.65 = US$1. … Between 1974 and 1983, the Hong Kong dollar floated. On 17 October 1983, the currency was pegged at a rate of HK$7.8 = US$1, through the currency board system.

The problem Hong Kong will face is as the financial crisis in Europe erupts, this will push the Greenback higher. If Hong Kong keeps desperately trying to hold the peg, they will import DEFLATIONand turn their economy down very hard all because of international events. The models we showed at the Singapore Conference targeted 2019 for an important turning point.

We are progressing in uploading all the memory modules. Soon, we will have all modules plugged in. I had an interesting meeting with one institution. One CFO still questioned if there was any human involvement in the reports. He said that the writing was too good for just a machine and assumed someone had to be editing them. I laughed, and explained with covering over 1,000 instruments currently and about 9,000 more to go, I asked how many people would it take to do that? There cannot be any human involvement for the sheer size of the project would consume probably every person who has ever lived that was interested in analysis.

For example, Socrates will employ technical analysis itself and write its conclusions. Once again, there is no human behind this for it would be impossible to put out over 3,000 individual reports every day using humans. This is what it wrote for the Dow Jones Industrial Index on the daily level.

After the historical high was established during 2018, a major low was created on 12/26/2018 at 2171253 which was 51 days from that major high.

Meanwhile, the Downtrend Line from that major high of 2018 to the subsequent reaction high of 2627782 formed 26 days thereafter resides at 2404847. This had provided the original technical resistance which has been exceeded and can potentially become support going forward. The post high low was established at 2171253. We have not elected the two short-term Bullish Reversals from that important post high low on the daily level but we have elected both the long-term Bullish Reversals.

The more recent Downtrend Line constructed from the last high of 2624142 to the subsequent reaction high of 2615598 stands at 2608763 while drawing a channel provides us with support at 2557422. The market has already penetrated intraday this support provided by the bottom of the channel. However, the market has bounced back and closed above it warning that it is holding right now.

It is my hope that Socrates will provide the best management tool for society moving into the future. Kind of like the Biblical story of Joeseph and the Pharoh when he forecast 7 years of plenty followed by 7 years of drought. We cannot alter the cycles in motion and we should not try as Marx and Keynes did. We should understand the trends and prepare thereby living with them in harmony. The weather is turning toward global cooling. This is when disease increases (plagues) set in motion by malnutrition. If we understand the trend, we simply prepare for it instead of blaming everyone else but reality.

The BP Oil Spill was a disaster. However, any company that could show it had a loss in 2008 got in line with their hand out and were paid. They did not have to show any connection to the oil spill that caused their loss. The 2007-2009 economic decline produced losses by itself. There is always someone who has to be blamed.

The Red Tide of 2018 actually disrupted more businesses than the BP Oil Spill. But the Red Tide could not be blamed on a single company with deep pockets. You could not sue God or nature. A simple model on Red Tide demonstrated it was not farmers and chemicals but a 13-year cycle. On top of that, such events extended back to 1648 and predate chemicals or the Industrial Revolution.

While there are people in New York who hate our models because when they have lost big time in their attempts to manipulate markets like 2007-2009, they turn to blame our model claiming we are always too influential. They shift the blame rather than admit that their own corruption has led so many times to blow up the world economy. If we really understood the world and how everything is connected, we could manage the economy far better and even eliminate war which seems to rise as a means to shift blame to someone else when it is often our own governments that skew everything up.

This is what I hope to leave behind.

The Socrates’ Array on Vancouver real estate published back in 2015 picked the high in 2017 and the crash into 2019. The high in the top line was forecasting 2017 rather nicely. Note that things begin to change in 2020-2021. Not that prices in real terms rise, but this is lining up with the ECM turn in January 2020 and the start of a new business cycle. This next one will be more dominated by the decline in confidence in government and the rise of political tension that will be worldwide from separatist movements to the fracture of political parties.

No matter where we look, markets are beginning to reflect a new business cycle is approaching. While this will be one of the focuses at the upcoming Rome WEC May 3rd/4th, the shift in global trends is really amazing. We will also be providing a training session on Channel Moves, which in themselves, is rather rare.