The Fed meeting this week has triggered a turn in the dollar as US rates dipped on the 10-year to their lowest since Trump took office. As a result, the greenback is the weakest among the majors for the week thus far as we should expect for a decline near-term. Although there has been an impressive rally in EUR/USD, that currency has significant overhead resistance. The euro has not gained nearly as much as its major counterparts such as the Swiss and the C$.

While everyone will focus on interest rates, at the end of the summer we will see a refocus back on the structural problems in the Euro. Trump will be jumping for joy with a lower dollar for that will help in trade issues. The lower interest rates will also help to reduce interest expenditures on the national debt. So once again, we are looking at the calm before the storm.

Draghi has come out and said that is inflation will not pick up, he will do even more Quantitative Easing. I has warned that the central banks, particularly the ECB, are trapped. They simply cannot return to any normal economic model without blowing up the entire Eurozone. This is becoming extremely serious. The only option for governments will be to adopt the Modern Monetary Theory for it has become impossible for central banks to use interest rates to stimulate the economy when governments themselves are the biggest borrowers.

I have put this all out in a book which is off at the printers and I hope will be available soon on Amazon. I have dealt with all the controversial issues and why the economic theories all still taught in universities today are no longer practical or relevant. This is why there is a turn to the Modern Monetary Theory for they have nothing else on the table to consider. Here it is. I have tried to deal with all the issues people have been writing in about in an authoritative manner. I have done this because it is extremely important and I have been told that funding for another documentary to cover this topic has not been granted.

We will let everyone know as soon as it goes up for sale.

I have finished an important book which is just going off to press now for printing. This is an important work on how the central banks are trapped and how the manipulations of the World Economy are collapsing in upon themselves. The major central banks are now shifting policy from protecting the people and the economy to protecting the government. Not all are following this policy. Those that are burden with socialist programs are imploding. The more than 10 years of Quantitative Easing has destroyed bond markets and managed to get government addicted to low-interest rates that the private sector has been turning its back on. There have even been German bond auctions with no bid from investors.

This addresses the Modern Monetary Theory, its origin, and where it would leave us at the end of the day. We are at a crossroads in economic theory because ALL of the old theories has completely collapsed. Everything from Keynesian back to Marxism has crumbled to dust. Hopefully, this work will encourage real research and open the eyes in a subject that puts at risk our entire way of life.

Those attending the WEC in Orlando will be entitled to a hardbound autographed edition.

QUESTION: Central banks around the world are currently purchasing equities. If they continue to purchase equities, will we ever have a significant market downturn again? What happens when central banks acquire enough shares to control corporations?
PE

ANSWER: Yes. The central banks have been buying equities to try to diversify their balance sheets as they also see what is coming down the road. Still, they are not the major buyers to influence the market in that manner. Corporate buybacks have been a much stronger factor in the marketplace.

The reason why we will not have a major crash is simply because this time it is different — the crash is in the debt markets.

In Vancouver, if you have a property that someone else would love to tear down to build a high rise, the government has created a scheme to make you pay taxes as if you were a high-rise. Small businesses pay some amount of tax on the airspace above their businesses, which they have not developed. Yes, the B.C. government taxes property assessed on their “highest and best use” value. Essentially, a single-story building for a small mom-pop business is taxed as if they had sold out to a land developer and now own a multi-story commercial building.

QUESTION: Chicago real estate- is there any future before 2032 or do we hope for a Detroit situation as the only possibility for prices to rise?
Thank you!
Bob

ANSWER: Real estate will rise marginally but only when we see the shift from public to private. However, that will not be a rally in real terms. The crisis for Chicago is that there is no realization that the current system has failed. Instead, they continually try to impose new taxes and enforcement to sustain a system that cannot be maintained. Once we reach a point where the government realizes that this is a failed system, then and only then can we hope for change. The American Dream of homeownership is being destroyed in Illinois. There is just no chance for change until it results in major civil unrest.

QUESTION:

Hi Marty,

Knowing that the financial capital will likely move to China after 2032, since that would be the peak of the public wave, where will someone in the US put their capital?

Usually, the move from public to private would result in a move into sovereign debt and cash, but will the move after 2032 be different given the sovereign debt and monetary crisis we will be going through these next few years.

Thanks!

SB

ANSWER: Britain was the Financial Capital of the World until World War I. This chart illustrates what happened to Britain and how it lost that stature of being the Financial Capital of the World — it was debt. The people in Britain did not lose everything. What really happened was that the separatist movement emerged and the British Empire began to break up.

Look at the British pound during the American Civil War. It was the rally in the pound that began the breakup of the British Empire, as I have warned will happen to the US dollar. That rise in the pound exported DEFLATION to the British Empire and the economic conditions led to the start of separatist movements. Canada won its independence on July 1, 1867. The second major wave of separatist movements came with the end of World War II. India won its independence on August 15, 1947.

The United States will be at risk of also breaking apart under economic conditions, which will fuel both the religious and political battles between left and right. There will be a high probability that the United States will break into regional groups, probably four major regions in general. It does not mean life will come to an end or that we all have to run and hide in a cave. The British survived as will Americans. If we understand the cycle, we will be better positioned to survive with security

QUESTION: With the private vs public debt and interest rate discussion, nobody is mentioning things like government legislation to forcing people to buy government debt. For example 401’s, IRA’s… must have or be in government debt.

Your thoughts?

ANSWER: Governments have often resorted to forced loans. When Italy was in trouble, they took 90-day paper and converted it to 10-year paper. Most people are clueless about the German hyperinflation. They assume it was due to the government printing money. The spark was December 1922 when the government confiscated 10% of everyone’s property and handed them bonds as a forced loan. Confidence completely collapsed at that moment.

This is all part of the process of the decline in confidence in the government. This is why the system is unsustainable. We will be heading into a great monetary crisis very soon.