East Coast Internet Hubs Down with Cyber Attack


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There was a massive cyber attack on one of the main hubs for DNSs traffic on the east coast, bringing down several websites, some including Amazon, Visa, Netflix, and Twitter, to mention a few.

Sovereign Debt Crisis is Percolating – Greece Asks for Debt Relief


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Greek Prime Minister Alexis  has come out today and bluntly warned that failure to agree on a debt restructuring for Greece would push it into a perpetual spiral of borrowing from Europe. But it is actually much worse. Greece is being persecuted because its old debt was converted to euros and that made the debt increase. These politicians are simply brain-dead and cannot comprehend currency.

The Sovereign Debt Crisis is indeed percolating. We are headed into a dark abyss for politicians cannot understand that there is no reason to borrow if you have no intention to every pay off the debt. We inevitably reach this conclusion that sovereign debt is the worst of all because there is no possible plan to ever pay it off. In the end, it is always just written off in debt relief. This is what caused the massive Great Depression as sovereign debt defaulted wiping out savings. That money was just gone! Welcome to the dark world of DEFLATION.

Aleppo: a New Provocation or Just Another War Crime?


This administration could and would do this including the killing of civilians to further its cause — which is getting to look like that they want a full scale war in Syria. Given the the Russians are also there!

Why are we Stuck with Under 2% growth?


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QUESTION: Mr. Armstrong; I have a very basic question. With all the trillions of dollars of stimulus in Europe, USA, and Japan, we are in the age of deflation as you have pointed out. The Federal Reserve itself predicts less than 2% economic growth so that is probably optimistic yet the best in the western world. This all seems to defy logic and you explained it is confidence and not the empirical level of money. The various explanations running around focus the cause on being the 2008 crisis as the main culprit. That appears to be bit shallow. Could you put your two cents into this nonsense?

I respect the fact that whilst you were one of the billionaire hedge fund managers and even won hedge fund manager of the year and are clearly not with the bankers. Your public track record showed you had the lowest draw down of anyone in the management field. What they did to you proves you are not one of them. It is becoming terribly obvious that it takes a global perspective to comprehend this mess. There are too few real big international hedge fund managers left these days and they seem to be in league with the bankers donating to Hillary and not very trustworthy.

I appreciate you speak with experience and distinguish opinion from fact. You are truly alone when others remain silent or just buy government.

Thank you; See you in Orlando

PM

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ANSWER: The crisis of deflation has very loose ties to the 2007-2009 crisis, but its tentacles spread far and wide. It is also a direct factor of the decline and fall of western society — our moment with destiny. The entire structure of government social programs is predicated upon a Ponzi scheme that uses Marxism to justify robbing one generation for the previous one. Stir in Keynesianism, and you have a lethal cocktail we cannot survive.

To start, the leveraging of housing was far more significant than just real estate. For example, people would often take home equity loans for various purchases in many categories that were expensive like a piano. To this day, pianos are anywhere from 25% to 50% below 2007 price levels. There was a bubble in this market as well because people could get easy home equity loans with no problem. Those days are gone. Many high-end things of this nature are off considerably since the ability to borrow easy money on your home came to an end.

Consequently, the 2007-2009 crash in real estate impacted other markets beyond just housing. We have seen a contraction in many areas that relied on home equity loans for financing. So the days of easy money came to a terrible end. The collapse in that leverage is not fully appreciated.

The shift to Asia can be also demonstrated with pianos. The top name is Steinway and Weber. Both were German. They are now mostly manufactured in Asia. Japan began to make pianos, and eventually the Japanese improved quality. Now the top names in pianos are Yamaha and Kawai. Pearl River may be the biggest manufacturer in the world. They are in China and they manufacture for other brands. So first product manufacturing migrated for the better price, but that manufacturing improved and actually became a top brand. This is the path all products follow.

 

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Then there is the crisis in pensions mixed with the crisis in demographics. All the pension systems were based upon a Ponzi scheme whereby the assumed population would always increase, so the young would pay for the old. Obamacare was constructed on the same fatal flaw. Note that the trend in lower interest rates did not begin with the 2007-2009 financial crisis. Pension funds WRONGLY assumed that government debt was safe, and as a result, many pension funds simply bought 30-year bonds in an effort to match maturity dates for pensions. That led to a strong bull market and the break-even was 8%. They kept bidding to try to lock in rates for pension payment in the future and their lack of management skills led to this 35-year bull market. Rather than picking stocks, they just believe government is the best thing since sliced bread. Now, they can no longer survive with rates this low, which is why the Fed keeps saying we must “normalize interest rates” for we will see a massive wholesale collapse in pensions. Yes, the 2007-2009 crisis helped create the final Phase Transition into a major long-term high in bonds (5,000 low in rates), but it obviously is not responsible for the 35-year bull market in bonds (decline in rates).

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Taxes have risen sharply. Back in 1980, the tax rate was 70.0% on $600,177 for married couples filing jointly. What Clinton calls “trickle-down economics” actually worked. The top tax bracket under Reagan dropped to 50.0% on $203,661 in 1982, and it fell to 38.5% on $181,189 in 1987 for married couples filing jointly. In 1988, in response to the 1987 Crash, the rate was cut again to 28.0% on just $57,738. It then began to rise in 1991, reaching 31.0% on $138,481. Then in 1993 when the Clintons came to power, they raised the tax rate to 39.6% on $397,221. It fell back in 2001 to 39.1% on $385,487, and in 2002, it fell to 38.6% on $391,867 followed by 35.0% in 2003 on $389,249. It was raised again in 2013 to 39.6% on $440,876.

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When we look at the annual growth rate in the economy using GDP, nothing even came close to the surge in economic growth during Reagan’s administration. If you look to buy a car and one dealer wants full sticker and another gives you a 5% discount just 5 miles away, I think you would drive the 5 miles. Lowering the tax rate from 70% to 28% by 1987 produced the biggest surge in modern history. Yet all we hear is that trickle-down economics failed.

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The growth in the national debt was steadily declining, demonstrating that trickle-down worked. The debt soared during Cheney’s war. This clearly shows that it is a fallacy that war is good for the economy. True, it worked with World War II only because 40% of the workforce had been farmers displaced by the combustion engine and the Dust Bowl.

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The other fallacy being totally overlooked is that under Obama, the interest expenditures have soared despite the fact that interest rates have declined. Under Reagan, the national debt was $1.029 trillion, and under Obama, as of September 2016, it stands at $19.528 trillion. If interest rates today were 8% as they were under Reagan, the interest expenditures along for the year would be $1.6 trillion.
Hillary will raise taxes again. Every Democrat has done that except Kennedy, who also cut taxes like Reagan. Government is growing and it is consuming all the productive forces within the economy, and regulation like FATCA is destroying international trade. There is nowhere to go but down. This was not set in motion by 2007-2009. That was simply the catalyst, but not the total cause.

Frank Gaffney: Clinton, Obama Have Given Us ‘Much More Dangerous Kremlin and Putin’


The world view of the Trilateral Commission is that all governments must be dissolved and only the intellectuals of their selection will be allowed to rule. A war with Russia appears to be a part of their plan as that allows them to consolidate their power. They think they can control a war but no one can control a war so it will turn out bad.

Is DNC “Operation Black Pod” Real, or Just Creating a Self Fulfilling Prophecy?….


On October 11th a rather odd political memo appeared on the internet seeming to describe a democrat political/operational outline for Pennsylvania congressional district PA-08 (Bucks County and sur…

Source: Is DNC “Operation Black Pod” Real, or Just Creating a Self Fulfilling Prophecy?….

Will World War III be Nuclear?


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QUESTION: Marty, do you think nuclear weapons will be used this time?

PDH

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ANSWER:  History is a road map to the future because human nature remains the same. People are far too often foolish. They attribute guns as the cause of violence as if humankind was peaceful before the invention of the gun. At an ancient battlefield site in Scotland, archaeologists unearthed the largest cache of Roman lead sling bullets ever discovered. You see, the Romans also had bullets. They used powerful slingshots to propel them instead of gunpowder. So, even the idea of shooting someone with a lead bullet is nothing new.

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It is true that technology advancements have aided conquests. The Turks took Constantinople, which had been impregnable, because of the invention of the cannon, which depicted in the painting of the fall of Constantinople. The cannon was invented in China where they discovered gunpowder. This replaced ancient siege engines and battering rams. Today we have nuclear weapons. The weapons themselves are not evil, only the people who push the buttons to launch the weapons are evil.

A weapon by itself does not kill. Even biological weapons must be deployed, which is by no means a modern unique development. Lord Jeffrey Amherst, for whom Amherst Massachusetts was named, was indeed the commanding general of British forces in North America during the final battles of the French & Indian war (1754-1763). He won the wars, but his reputation was a bit tarnished in the end. Amherst’s name became associated with germ warfare. He approved giving smallpox-infected blankets to the American Indians. This was reported in Carl Waldman’s “Atlas of the North American Indian” (1985). There are surviving letters, such as that from Colonel Henry Bouquet to General Amherst, dated July 13, 1763, concerning the distribution of blankets to “inoculate the Indians.”

History repeats ONLY because people repeat the same patterns with whatever technology they have available at that moment in time. World War I was notorious for the use of chemical weapons, which infected about 1.2 million people and killed about 90,000. The chemical weapons used produced very slow-moving or static gas clouds over the battlefields. Additional chemical weapons included disabling chemicals, such as tear gas, but also included lethal chemicals like phosgene, chlorine, and mustard gas.

If we indeed see World War III, this time all bets will be off. I would expect the use of tactical nuclear weapons on the battlefield. Hopefully we are not looking at intercontinental nukes.

The Winds of War are Blowing


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Capital flows are intensifying. This is why oil is up, gold is up, euro down, US share markets up. Things are shifting quietly. Norway reports that Russian ships are on their way to Syria. Obama may get his wish all before the election in hopes of boosting Hillary.

World Capital Flows


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QUESTION: Marty, can you say what the actual capital flow number was per month?

ANSWER: The net foreign private inflows were $113.0 billion, and net foreign official outflows were $39.3 billion for August on securities. That is cash, minus trade. So this is the amount of money running into money instruments.

Trump v Hillary White House


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QUESTION: Marty; As you have always said you are not Republican or Democrat because both parties are corrupt and the scandals seem to be endless on both sides. Hillary scandals involve money and Trump women, not unlike Bill. In many ways, this is like the Clintons, sex v money. So what do you really think would be the difference between a Trump White House and a Hillary White House?

Thanks

BM

trump-white-houseHillary Button 2008

ANSWER: The powers that be are filling every media outlet with the story Russia will hack the election, so if Trump wins, it will be declared a fake. There is no possible way they will allow Trump to enter the White House. Trump is against nation building, which is the only real power these crazy people want. They are blaming Russia to set the stage for war. There is no way to identify a true professional hacker. So it cannot be proven that it was Russia. This is the excuse to deny Trump the White House regardless of the vote. This is the real agenda. It’s in play right now. Open your eyes. They need the media to sell this story.

That aside, the candidates are anything but traditional and far from ideal. They are trying to paint Trump as a sleaze as they did to Bill with Monica, despite having nothing to do with his qualifications. The peak in government was clearly on time 2015.75 and this is part of the crash and burn. Hillary has abandoned the “America’s First Family” pitch from 2008 as if they were royalty. It doesn’t fly with Bill’s escapades these days.

To run for office today, you really have to be out of your mind or you cannot care what people think about you I suppose. The joke with Hillary is we might as well vote for her because she will not die; she will keep running until she becomes the first woman president if it kills Bill. Trump, they say just wants to put “Trump” in neon lights above the White House.

Meanwhile, I have been warning that Trump’s rise has been all about corrupt government — the outsider v establishment. Now, USA Today has reported a poll that reveals the number one concern in America is none other than “corrupt politicians.” This is what we get, and we deserve it, for there are still people who believe in Hillary simply because she is a woman or a Democrat. At least inside the Republican Party it has been outright civil war.

Although the computer shows Trump should win against all odds, this is obviously like BREXIT. The polls are rigged, 99% of the media is bought and paid for, and it is to the point where CNN hands questions to Hillary in advance. Nevertheless, I remain skeptical that they would allow Trump to take office. Look, the computer projected BREXIT would win. I was personally skeptical about that for they were trying to rig that vote as well. The computer was correct and I was wrong. Career politicians have way too much to risk. They are afraid Trump will go on TV and tell the truth about various bills they stuff in compensation for their friends and family. Trump is too much of a wildcard for them to allow him to take an office with a veto pen. I would vote for Trump only to see such chaos unleashed on Capitol Hill.

Hillary will do whatever the establishment dictates. She will go along with World War III and I do believe Obama is ratcheting up the stakes as he tried in Syria and lost. So this time he needs Russia and a direct confrontation to get the backing. Emails have come out showing that Saudi Arabia and Qatar have been funding ISIS. Why? I explained in the Cycle of War Part II that this is a civil war in Islam — Sunni against Shia. ISIS is Sunni and they are trying to topple Syria and Iran because they are Shia. Plus, there is more oil in the Golan Heights than in Saudi Arabia and that may be occupied by Israel, but it is Syrian territory. What oil company is involved? Genie. Who is on the board of directors of Genie Oil? Dick Cheney.

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So what I see as the big difference between a Hillary v Trump White House is W-A-R. It looks like Obama is already poking Russia to intentionally goat them into a confrontation. He called Russia a “regional power,” deliberately trying to demean them. Some people have said Trump would spout out something stupid and start a war. Well, the alarmists about Trump in this regard are just too biased to open their eyes. Obama is deliberately trying to provoke war which is a hidden agenda going on here as well. This reminds me of Mark Anthony in Shakespeare’s Julius Caesar: “Cry ‘Havoc!’ and let slip the dogs of war.” The main difference is Trump is anti-nation building and that is why the establishment hates him so much. It appears they will start a war to ensure they continue this policy of nation building that gave us Vietnam, Iraq, Afghanistan, and Syria.

One Hillary diehard writes that Trump is a “buffoon” and war is coming anyhow so Hillary is our man. Well, get ready then, because this war will require a lot of boots on the ground and the talk behind the curtain is that the draft will be reinstated and the age limit will be 40 since the birth rate has declined. Some have even suggested with Hillary in charge, feminists will rule since they think women can a do whatever a man can do, so get ready for the draft applying to women as well. So you better start jogging and get in shape. You will get your wish.

The problem with this dream coming true is that it is really a nightmare. We are not the only species to wage war. Some ants storm rivals and take their young to be slaves, which sound like the Romans. Perhaps war is simply tucked deep inside human nature and leaps out now and again like swarms of locusts who come as solitary individuals that suddenly swarm together. They say serotonin in the brain triggers a dramatic set of changes that cause locusts to breed abundantly and then swarm. Perhaps we have the same problem as a species!