I was in Barcelona and was asked by many did I think the pro-independence parties in Spain’s Catalonia region would actually win. I told them it was inevitable for this is the global trend in motion. The vote for Catalonia is in – the separatists have won an absolute majority in regional elections. It looks as though the separatist alliance and a smaller party won 72 seats in the 135-seat regional parliament. They have declared that this will now allow them to declare independence from Spain unilaterally within 18 months.

The Spanish central government in Madrid has pledged to block any unilateral independence moves in court. Why? Politicians are no different than kings, dictators, or emperors. This is not about what the people want, it is all about maintaining power.

This vote is just the BEGINNING of the separatist movement around the world. Centralized government is dying. Society has always swung back and forth between centralized government and regional government. Once a centralized government grabs power, it will always expand until it consumes all power.

This is why I say that TAXES ARE NO LONGER NECESSARY. Money is no longer a commodity and the value of any currency depends entirely upon faith. Even gold has no value unless you believe someone else will accept it from you at some mutual agreed value. This is also why money cannot be a store of value for it requires ending the business cycle and life itself.

Why do we pay federal taxes? What is it really providing for the people? Taxes are necessary locally where governments cannot create money. Yet where government creates the money no longer tied to anything tangible but really the collective capacity of the nation (GDP), then there is also no need to tax nor is there a need to borrow constantly with no intention of paying anything back. Now we have interest rates at near zero and governments need rates at virtually zero or the cost of government will explode. So it is them against the people always. Retired cannot live off of their savings and pensions are going broke all because government is the biggest debtor and it stupidly assumes it can raise or lower interest rates to steer the economy when they themselves are the biggest debtor upon which their own tools have no influence on fiscal responsibility. We live is a world that has totally gone mad and nobody will sit down and just look at how this structure is functioning.

The separatist movement is the breaking up of federal governments and the return of power back to regional governments. This is being fueled by taxes and the diminishing trend in employment and lowering of the living standards.

The Catalonia vote comes right on target with the Economic Confidence Model. This turning point is PROFOUND, for it is not the crash in stock markets, commodities, or the private sector. This is the BEGINNING of the trend which will see the fall of governments and the rise in demands for political change EVERYWHERE.

November 28th, 2018 will be the major target moving forward for political chaos. On the last two important wave formations, 1998.55 and 2007.15, this Pi turning point produced to the day the 911 attack and the day Greece asked for IMF help starting the sovereign debt crisis. So 2015.75 is the BEGINNING, and not the end of a new trend that will be very profound for our political future.

Jeremy Corbyn, the new head of the British Labour Party, is really a Communist. He is not championing a minimum wage, but a MAXIMUM WAGE. He is advocating that no individual should be allowed to earn more than whatever he feels is appropriate. These people view one simple fact: whatever money you earn is not yours, it belongs to the state. I was in Canada and there was some socialist woman on TV being interviewed and she said that openly. It is not your money, it belongs to the state. They merely decide how much you are allowed to keep. I was dumbfounded she actually said that in public whereas I hear that all the time behind closed doors. Nothing belongs to you is their actual true belief.

These Marxists want to suppress freedom and cannot see that we are all different and have a God given right to pursue our own dreams. Some people want to produce while others do not. All these people do is drool over what other people have and demand they have been cheated because they are entitled to the same.

What Corbyn cannot understand is that this is no different from robbery. If you walk down the street and a man points a gun at you, demands your watch, all your cash, and justifies it by saying that he has nothing you have everything, then what is the difference between that and writing a law to accomplish the same thing? Where can we go to be free of people who just want to rob whatever we have because they are lazy or incompetent to ever have an original thought? This may be the final end of the British Empire. After all, it is getting close to 443.76 years from Elizabeth I (51.6 * 8.6). A very precarious event that may indeed signal the shift from the West is underway to China.

The motto of the ECB is plain and simple: why reform when we still have some power? Governments will fight until the last drop of blood is spilled; they assume it will be your blood, not theirs. We will see the opposite of transparency unfold along with a rush to eliminate cash. This will force Europeans into electronic money for that is the solution to prevent bank runs. The head economist of the Deutsche Bundesbank warned that the ECB cannot afford to tell the people the truth about banking for it may lead to bank runs.

The banking crisis in Europe is huge because bank reserves are a mixture of sovereign debt from each member state. The only way to prevent this potential banking failure crisis is to withhold the results of bank stress tests from the public. The ECB is most likely going to follow this advice to prevent the public from knowing which banks are in the worst shape. If you do not know whom to trust, human nature will distrust everyone.

The rumor mill has been nonstop. The crushing blow to Europe will be the failure of Germany’s biggest bank: Deutsche Bank. Just about every circle is quietly discussing how the bank is facing bankruptcy. The rumors have flown since March when Deutsche Bank failed the U.S. regulatory stress test, which was followed by the resignation of its head in June. A collapse of the Deutsche Bank is profound and very likely to impact Europe to the point that everyone behind the curtain is now calling for a new Lehman moment. Sources tied with the Fed’s decision not to raise rates fear that they will be seen as the cause of its failure. Germany clearly faces a major shock; if this combines with Volkswagen for the turning point next week, well, here we go again.

The potential financial chaos to the other side of 2015.75 is just mind numbing. Since Germany has been regarded as the primary driving force holding the euro and Europe together, one can only close their eyes to vision what comes in the aftermath. So pay attention here. These are critical indications within the core economy of Europe. We are not talking about Greece here. The structure of the euro undermined the entire banking system of Europe far more profoundly than in the United States, where reserves are only in U.S. federal debt, not the debt of all member 50 states. This is the major difference between European banking and U.S. banking.

Gold’s rally into the target weeks for the ECM appear to be linked to the potential crisis in European banking. This has nothing to do with the dollar, fiat, inflation, or whatever. The only reason gold rises is the hedge against real crisis and uncertainty.

Gold may not be sustainable. We really need to see a weekly closing above 1188 to think that there is some sustainability short-term. We need that signal to reach the technical resistance in the mid-1200 level. We have a crisis in confidence and a crisis in German banking during the ECM target on Sept. 30/Oct. 1, which will shake the tree of public confidence on a major global level.

Yellen has inherited a complete nightmare. Thursday’s decision to delay yet again the long-awaited liftoff from zero interest rates is illustrating that the world economy is totally screwed. There is a lot of speculation about why the Fed seems so reluctant to “normalize monetary policy”. There are of course the typical domestic issues that there is low inflation, weak wage gains in the face of strong job growth, a hike will increase the Federal deficit and then there is the argument that corporations that now have $12.5 trillion in debt. All that is nice, but with corporate debt, our clients are locking in long-term at these levels, not funding anything short-term. Those clients who have listened are preparing for what is to come unlike government which has been forced to shorten the average duration of their debts blind to what happens when rates rise, which will be set in motion by the markets – not Yellen.

In the Middle East, the banks are trying to convince the Gulf States to begin issuing debt even if there is no need to borrow, simply so they have a market to trade. Governments should never listen to bankers for this always becomes a conflict of interest with respect to national debts. The sooner government wakes up to the Sovereign Debt Crisis, the soon their particular country will be saved.

When you say we are entering a “Sovereign Debt Crisis”, people automatically assume that debt will just default. Governments NEVER like to admit a mistake, so an outright default may be limited to the emerging markets the further you move away from the core economies. What may also take place is the mandatory conversion of debt extending the maturity. You may buy 90-day paper and suddenly wake up to find that the government has converted 90-day paper into 10-year bonds. Always remember, they have the tanks and guns — never forget whom you are dealing with.

In Italy, the period 1919–1922 was one of very little progress on debt and deficit reduction. Despite a levy on wealth that was introduced to tax the rich, as always, the tax faced tremendous opposition as well as implementation difficulties. Consequently, Italian fiscal deficits remained high, and inflation increased along with the money supply rather significantly. The Italian government engaged in a mandatory debt conversion, known as “conversione forzosa” during 1926, which they would again impose during 1934. They forced debt holders to extend their debt by lengthening the maturity. This seriously impacted the full faith and trust in the Italian government. During the post-1926 years and then again after 1934, the mandatory conversione forzosa effectively was seen as a partial default by the government, which made it extremely difficult and costly to borrow on a short-term basis thereafter.

You must be careful in the post-2015.75 era. Owning even short-term government paper can result in a conversione forzosa, which is the usurpation of capital by sheer force. This is one form of default that people need to realize has also been a means of default. The City of Detroit suspended all debt payments between 1937 and 1963. Britain entered a moratorium in 1931 on its debt, resuming years later.

Consequently, defaults, suspensions, moratorium, and conversione forzosa are different types of defaults whereby you lose access to your capital. There are many different flavors of a Sovereign Debt Crisis.