Of course, the 1929 high took place on September 3rd, the day everyone came back on Tuesday following the summer holidays. It has been a long-standing joke that after spending time with the family, they come back and just sell everything without reason.

The 1987 high was on August 25th just before Labor Day. In both instances, the panic low was October.

The array picked the high for the week of August 15th and we have Directional Changes that were appearing the weeks of September 12th and 19th.

As we move forward in time, the movement of recent trading being to alter some aspects of the array, but the primary targets tend to remain the same. They will differ mostly in intensity. The week of 09/05 was a turning point in the first array being the end of a trend with the lowest bar on the top plot calculated in July. A month later, we see the project for the week of 09/05 start to rise to the strangest target in September.

I have explained before that the plotting in this array is proportional to the hits within this slice of time. Therefore, back in July looking 12 weeks forward, the week of 08/15 was the biggest target. Then as we get closes and the weeks thereafter come into play, the size of the bars will change even if the same number of hits are present should there be another bar coming into this window with more hits.

This is suggesting that we should pay attention this week.

If you look at the calendar, the months that have 31 days are January, March, May, July, August, October, and December. The only two months with 31 days back-to-back are July and August. Why? July was named for Julius Caesar. Augustus, meaning “father of the nation,” died on August 19, 14 AD, and was probably poisoned by his wife. So they named August after him before his death. But of course, August had 30 days and that would be slighting Augustus relative to Julius who had 31 days. So the solution was obvious. They took the extra day from February which was only named for a feast day known as the Februarius or Februa, the feast of purification, and renamed the month with 31 days equal to July.

January was named for the god Janus and March was named for Mars. You certainly didn’t want to make them angry. May was named Maius taken from the Greek Maia, or the goddess of spring. June could not be touched since that was named after the goddess Juno, the queen of the gods. July’s original name was quintilis or the fifth month in the early Roman calendar, so renaming that for Julius Caesar did not offend anyone. August was originally named sextilis or the sixth month in the early Roman calendar. September was the seventh month in the early Roman calendar and October was the eighth. November was named the ninth month and December (decimal) the tenth month.

Therefore, February was an easy month to take days from since it was named after a feast and nobody had to offend the gods

The roads in Illinois are in decay. This may be the first state to go bankrupt. The question is not if, but when. State unions are so greedy that they are destroying the very state. This is exactly how Rome fell — government employees against the people.

Seven states have constitutional provisions that state employee pensions must come BEFORE everything, including debt payments. Since the legislature in New Jersey was Democrat, they fought Governor Christie on pension reform. Their solution? On the ballot in November, there will be a provision to amend the state Constitution to put employee pensions before everything else. The people are generally kept ignorant of what that means to property taxes and the future of the state. Therefore, the average person will say, “Sure, I should get my pension, so they should also.”

Illinois should declare bankruptcy. It is simply inevitable. There is absolutely no hope for Illinois whatsoever. Every year they will have to pay more and more. If the state who manages the pension money loses, well, the taxpayers have to cover those losses as well. The governor tried to stop the downgrade of expectations for earnings in the pension fund from 7.5% to 7%, which means they have to raise taxes and/or cut service by almost a half-billion.

It’s time to just turnout the lights in Illinois. Welcome to the Sovereign Debt Crisis. This is the contagion you will finally start to hear about, but only after the elections. Why spoil the party?

QUESTION: Sir,

You mentioned in your blog post that money market funds now have to be in government bonds as per SEC ruling. You have said we are going through a sovereign debt crisis which means government bonds are at risk. If I’m trading and my money is now parked as “cash” before I make another trade in a money market fund, does this mean outside of a trade, my money is now at risk when government bonds crash?

Thanks for all you are doing

DK

ANSWER: Yes. There are two types of funds. One is marked-to-market, so there will be no guarantee you get back 100%. The other will be fully invested in government bonds. There, you will be told you lost nothing, but in reality, you may not be able to sell. When the crisis comes, the only buyer will be the central banks and if they stop buying, look out below.

Personally, if I were in the business I would create a corporate bond fund only that prohibits all government paper. That may not be “politically correct” but neither are politicians.

We are monitoring confidence in the banking system as reflected by cash withdrawals. The sale of home safes has exploded in many countries. I previously reported that one in ten currency notes in Switzerland being printed is now the 1000 franc note. In fact, there is some 41.6 billion in Swiss francs now in circulation in 1000 CHF notes exclusively. The ECB is truly brain-dead for they thought by moving with negative interest rates, people would spend their money and that would rekindle inflation. They are correct that people would not want to pay negative interest rates. However, they totally never guessed that they would withdraw their money and hoard it rather than spend it. The trend toward hoarding cash really became in 2011. It started to make the news in 2012. Now the German savers are buying home safes as well and pulling out cash. Of course, they attribute this primarily to negative rates. However, the concerns that Deutsche Bank may be in serious trouble is also helping matters.

We are witnessing this trend around the world throughout Asia as well. Japan has been printing 10,000 yen notes like crazy. The Japanese are also withdrawing cash and keeping it at home. Even Americans began hoarding cash also back in 2011, which began to make news by 2014. In fact, 43% of Americans keep their savings in cash these days for interest pays nothing. Yet, an amazing 53% of those cash-hoarders “plan to hide bills in a secret location at home.”

Everything is going as our model has projected. The peak in trusting banks and government is in place. From here on out, all we have is the collapse in public confidence and the 2016 elections bring that home.

All we are waiting for now is simply the Crash & Burn. This will be a serious topic for this year’s WEC in Orlando.