Socrates wrote about a Rare Superposition Event took place last week in the Dow. They can take place at all levels of time and can be on a closing basis or on an intraday basis. This is the 43rd such event on the weekly level in the Dow since 1914. You can read more about them in our Research section.
QUESTION: Mr. Armstrong – thanks for your efforts on providing us with links to the Magnitski video. I began watching the video last night and then came back to it this morning and was truly amazed that the link was no longer active.
I’m curious. Was Magnitski ever charged with anything and or why were they holding him? Yes, you are living proof that one can be held without a charge, but in your case, they wanted something. What is it that they wanted from Magnitski? Perhaps it’s obvious and I’m hoping you can fill in that void.
Again, thanks for the efforts to provide us with a different ways to look and understand our world!
Best regards,
Steve
ANSWER: The director of the film, Andrei Lvovich Nekrasov, obviously began the film believing Browder. The more he dug into the film, the more the alibi of Browder did not make any sense. What he failed to do was actually investigate Hermitage Capital beyond 2000. If he did, he would discover that Browder was a MINORITY shareholder and Edmond Safra was the MAJORITY through Republic National Bank. Only after Safra was murdered, probably by Putin for allegedly blackmailing Yeltsin, then in the takeover of Republic National Bank, HSBC did not want to have anything to do with Hermitage Capital from an ownership perspective. They became the manager & trustee of the fund, which was very unusual to wear two hats if not unethical. That is when Browder gained his MAJORITY shareholding.
I believe Magnitsky was being held not just simply because of tax fraud in Russia by Hermitage Capital, but also for its involvement in the blackmail of Russia which ended up involving the Bank of New York $7 billion money-laundering case. CNN Money reported on September 1st, 1999 before everyone removed the theft from the IMF: “[They] funnel billions of IMF money meant to help transfer Russia’s communist economy into a capitalist one through a private company called Benex Worldwide Ltd. Eventually, the money went into and back out of Bank of New York (BK) and Republic National Bank, a unit of Republic Bancorp (RBNC), as well as several institutions in Europe, including the Union Bank of Switzerland AG and Deutsche Bank AG and its Bankers Trust Unit.” Nekrasov has had his hands full just trying to get the film shown. He is up against tremendous obstacles to shutting it down by Browder. (let’s see how long it takes them to remove the CNN story which states what I have been saying for years, they got Yeltsin to take funds from the IMF)
This is just the tip of the truth behind the entire case. I believe Magnitsky was being held in hopes that he would give evidence against the entire affair and that went beyond just tax evasion. What is really strange is that Browder resigned his American citizenship to escape worldwide taxation, yet he is able to get John McCain to sponsor his Magnitsky Act trying to get his money back from Russia. The US government has used the Magnitsky Act to demonize Russia and Putin and it has kept adding people to the list who cannot come to the USA even though they have NEVER been tried, charged, and had no connection with Magnitsky whatsoever. There is obviously duel purposes being served here and those in Congress just overlook Browder and his history
The rush to get into Europe for free welfare has led to a land invasion of Spanish territory in Africa. Around 400 African refugees stormed the beautiful Spanish exclave Ceuta on the border with Morocco just on the African side of the Pillars of Hercules. They have climbed over the double barbed wire fence which are over 18 ft tall (6 meters). They attacked guards throwing corrosive Quicklime at them, which of course burns. Quicklime is not a very stable material. Due to lime being an alkaline product, contact with skin can cause full scale burning. Attacking the border guard to get in is certainly not the type of person you want to offer shelter to under these circumstances.
Ceuta and Melilla, also a Spanish exclave, are effectively the only EU external borders on the African continent. Therefore refugees are simply invading like barbarians but want handouts. More than 850 refugees had crossed the border to Ceuta in a single month. Spain has recently overtaken Italy in becoming the number destination for newly arrived boat people. Almost 19,600 people arrived in Spain since the start of 2018, according to the International Organization for Migration (IOM).
Merkel’s nightmare is simply beyond description. Now that Europe is trying to at least deport some of these pretend “refugee” migrants from North Africa, the shocking reality is starting to surface. Now 50% of the “refugee” migrants cannot be deported from Germany because nobody can find them. According to a report, every second person to be deported is simply not found. By the end of May, of the about 23,900 announced repatriations, Germany could only find about 11,100 who were actually deported. Around 12,800 deportations that the government attempted could not be completed because the people could not be found. They have permanently infiltrated Europe and are not embedded deeply in the underground economy.
The entire movement in Britain where they called anyone who was against allowing wholesale “refugee” migrants into Britain were labeled “racists” and horrible people. There is now absolutely no way to even deport half of the migrants when the governments are absolutely clueless as to their whereabouts. These can be more than just rapists, now you have within this group the clear distinction of possible terrorists just waiting for the right moment.
The images of cute children were used to open the doors to Europe. But more than 70% were not families, but young men. Photos of boats from North Africa of migrants clearly show the lack of women and children. You would think that if this was a legitimate refugee operation, the people would have been limited to Syria and that ONLY families should have been allowed to enter. Was it really that hard to use a little common sense?
It has come out that a DMV employee in California slept on the job for 3 hours per day or more. A state auditor’s report of the DMV show a woman simply slept on the job and her supervisors failed to discipline her ever. This was despite the fact that they noted in her performance evaluations that she simply slept, as reported by the San Francisco Chronicle. Even in the US Post Office, the unions had managed to get as part of their contract that anyone who was going to check their performance had to give them notice of what day they would be checking. This is what they are raising taxes endlessly for to provide pensions for government workers that are not held to the same standards as those in the private sector.
QUESTION: Hi Martin,
I am a long time reader of your blog and a big fan of the tools that you have developed for investors. Thanks for all that you do and I wanted to reach out and ask about your opinion of the thesis that ——- outlines for the IMF implementing SDRs as world money during the next downturn? This type of scenario seems to make sense considering the current balance sheets of central banks and the current lack of demand for EU debt.
Nicky
ANSWER: I was in a discussion about that back in the 1980s (see the response from the White House rejecting SDRs). That was a day before the IMF became so corrupt. That was rejected countless times. The entire problem still stems from the cross-currency borrowing by nations. Even if the emerging markets borrowed in SDRs instead of US dollars, it really would not alter the world money system nor prevent a crash at the hand of a Sovereign Debt Crisis. What it would do is simply relieve the dollar marginally. The problem would emerge on how do you manage such a system. As long as governments issue debt, then once they issue that debt in ANY currency other than their own, RISK enters the game.
Even if we switched the reserve currency from the dollar to the SDR, the ONLY way to enforce it would be to restrict currency. For example, I could issue a bond in Japanese yen for years and sell it to you in Canada without it being approved by the Japanese Ministry of Finance. China still has currency controls where its people have to ask permission to send money out of the country. The only way to enforce an EXCLUSIVE SDR reserve currency would be for all debt to be denominated in SDRs. However, then every country would still have the risk of their currency fluctuating against the SDR.
The only way to practically reduce the risk is to prohibit governments from issuing debt in any currency but their own. That introduces yet another problem. Many pensions bought emerging market debt to get the higher yield, but they did so because they issued that debt in dollars to attract foreign buyers. As the dollar rises and rates rise, the value of emerging market debt declines and the risk of default rises as the US dollar rallies.
So you see, if we are really talking about revising the world monetary system, it is going to be far more complicated than simply replacing the dollar with SDR, gold, or clamshells as they issued during currency crisis of 1933.
QUESTION: Hi Martin,
in reference to the mailing of 500k in bank drafts to the US by a Canadian in Canada – I am wondering what your thoughts are in wiring > 50,000 (CAD) to a US brokerage account, as a Canadian citizen? Do you think there may be potential confiscation or holding of wired funds on either end ( to or from the brokerage account back to Canada) being a Canadian citizen?
A
ANSWER: When wiring money internationally, if it is going to an institution or business, then there is no problem. If you try to send money to an individual, that is when all rules are off. What I would do is ALWAYS test the method first. Sen like $1,000 and make sure it goes through OK.
They do not seem to mess with wires to businesses yet. Everything seems to turn on individual
An Ottawa man, David Saikaley, acting as executor of a will obtained a bank draft for $500,000 and mailed it to family members in the United States to settle an estate. Bank checks are regarded as “cash” and the money was seized by customs. Almost a year later, the money is still stuck at the border. This is highlighting the Hunt for Money which has simply gone totally insane. Governments now assume ALL money is illegal gains and they will confiscate 100% forcing the burden to you to PROVE it is yours and was obtained legally. If you are ever going to send money to someone overseas, you can mail a check from your account, but NEVER get a bank check/draft. If you are in the USA and try to wire money to an individual overseas, you will quickly discover the limit is not $10,000, but $3,000.
NEVER send anything of value internationally using FedEx. They will be extremely difficult to deal with, to say the least in trying to get things through customs. Even when the valuable item is not subject to tax, they want you to still fill out all sorts of forms to receive it plus give them your Tax ID number so the government will know you just received something worth whatever.
As if that is not bad enough internationally, now they want a PHOTO ID just to mail something domestically. What comes next? A DNA sample because the PHOTO ID is a possible fake? Where does all this insanity end? The only way to end this confiscation of money from innocent people is to ELIMINATE income taxes and customs duties.
The various governments are becoming so desperate for cash, we are losing ALL our liberty just for the privilege of being born. Whatever happened to the rights to that were articulated by Thomas Jefferson:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”
The interesting fact is that the majority of fund managers today have reduced their equity allocation to their lowest level since November 2016 according to Reuters. The reason for this is their focus of trade and their assumption that the Great Depression was caused by a PROTECTIONISM. According to yet a recent monthly report by Bank of America Merrill Lynch (BAML) where they conducted a survey of fund managers, the majority, some 60%, now fear a trade war. Clearly, the biggest concern out there is a trade war poses the greatest risk to the stock market. Another 19% fear excessively higher interest rates by the Federal Reserve. These two perceptions are the dominant reason we see consolidation.
However, our computer forecasted the consolidation for 2018 at the start of the year. This has sparked a number of emails asking how was it possible for the computer to forecast consolidation before the fundamentals? What I have noticed over the years in working with this model has been that trends will last ONLY for a specific amount of time. Like being cold all winter and suddenly the sun shines with Spring, we call it “Spring Fever” and everyone runs out at starts doing things when the weather changes. We respond similarly to cycles in markets. They will last only for so long and we get tired. It is NOT that specific fundamental that comes into play and causes the consolidation. Instead, the market trend shifts and people begin to look for explanations to explain it.
I have shown charts that demonstrate that rising interest rates are a market myth. The stock market has risen with higher rates and when the market crashes, demand-side economic means they lower rates trying to “stimulate” demand under Keynesianism which has never worked. The ECB has kept rates so low for nearly 10 years and they have destroyed the European bond market as reduced Europe to an economy that is ranked even below China. And as far a trade is concerned, I have shown that Trade Tariffs were a response to the currency and the collapse in agriculture due to the invention of tractors and electricity during the early 20th century. Like the internet today is displacing jobs, electricity reduced the jobs in the manufacture and the combustion engine expanded to tractors reducing employment in agriculture from 40% of the civil workforce to 3% by 1980.
Consequently, the computer is forecasting the trend. People try to explain the change in trend and fit the fundamentals to try to explain what took place. I have written before that the book I had to read in school on the Great Crash by Gailbraith, never mention the Sovereign debt crisis of 1931 because he was a socialist who wanted to blame corporations EXCLUSIVELY. Others actually claimed that Hoover embraced the rise of Nazis in Germany because he wanted to trade and ignored Russia. Hitler came to power in 1933 and Hoover lost the election in 1932. They will even alter timelines to support a predetermined conclusion.
The trend changes due to cycles for we can only endure a trend for so long before we just want a change as we do in politics. The cycles are not altered by the fundamentals. Commentators fit the fundamentals to explain the cycle. The sharp decline in asset allocation to equities has not been met with a collapse in market prices. This is a very interesting development for the majority NEVER manages to sell the high.
QUESTION: Mr. Armstrong; It appears that Putin also follows your model. He has been selling all debt significantly for it seems he is listening to you forecast that interest rates will rise sharply so get out of government bonds. Do you see his selling because of rate or politics as some are trying to say?
Thank you
KE
ANSWER: Putin is selling off debt very rapidly because of interest rates. The political bashing of Russia has been going on since the 2016 presidential election. It has contributed somewhat to the decision to sell, but honestly, if it were only political, then they would have sold their holdings by the end of 2016. The spin will be political, but the trend toward higher rates is the real driving force. Many countries/corporate/institutions that our clients, we have been advising to shorten maturity.
The crisis is building in debt rapidly. Even the ECB came out and said it would stop its bond-buying program and only a fool would expect rates to stay the same. I seriously doubt, based on my sources, that the ECB can stop buying bonds without a major global crisis. Draghi will keep buying until he is out the door come October 2019. I seriously question if Draghi will be able to hold it together beyond the First Quarter 2019.
Russia sold nearly all of its US Treasury holdings in May. It was an impressive sale reducing their holdings to almost zero in just two months. According to our sources, the Russian government reduced its US bond holdings from $ 96 billion to $ 48.7 billion during April and then down to $14.9 billion by the end of May. At the end of 2017, Russian holding of US debt stood at about $102.2 billion. That was not actually huge. They were in the top 33 countries holding US debt. They are certainly no longer in that list at all. The Russian sales pushed the yield slightly higher to 3.11%.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
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