Armstrong Economics Blog/Religion
Re-Posted Nov 23, 2017 by Martin Armstrong
QUESTION: hi martin
QUESTION: hi martin
QUESTION: Dear Mr. Armstrong, Thank you for your work in “educating” us in your “University of the Conscious Investor”! My question relates to your “Trading a Vertical Market” report. I am slowly digesting this report which is truly fascinating and a must read for any rational minded investor. My experience tells me (and you have reaffirmed this within your report) that being able to trade correctly for the market is critical. In analyzing the correct actions we must take I have reached the conclusion that we must also investigate deeply the trading company we use and how any wild ride will impact their ability to actually fund the successful trades we have managed to get into and out of. I recently was issued new T&C’s for my accounts to accept and that makes for scary reading in the light of any major reset or mammoth gap or moves we anticipate. How would you recommend we evaluate the companies actually holding the bag to be able to pay up at the end of the day? This appears to me to be a most crucial question in the light of what Socrates is pointing out.
ANSWER: Yes, you are absolutely correct. Your broker/clearer is an additional risk.
The kind of market conditions we are about to face will force questions beyond extreme volatility, no bids and the gapping of price and trade. What Traders must realize is that these extreme price actions themselves trigger increased margins, which again could trigger a liquidity crisis. Under such panic moves, prices can gap ‘without’ a trade and is worth remembering people sell what they can not what they should. This forces other markets to move just to raise cash. If market movements are violent everyone is pulled into the mix.
This is when you have to hope that every one of your fellow account owners (under the broker/clearer you are using) is liquid enough to honor margin requirements. This type of information is rarely going to be available to all and so makes many remain vulnerable.
Just to make you aware, it is possible that your money is vulnerable even if you do not have an open position and is just sitting with your clearer if they were to fail.
Merkel faces the worst crisis of her career and many behind the curtain are starting to wonder if she will even survive. The German Federal President Steinmeier could not actually order new elections immediately. The procedure in this regard is quite complicated in Germany. The earliest possible alternative would be to hold new elections come the spring of 2018. It is likely that the AFD is likely to gather even greater support from new elections. Nonetheless, the CDU will continue to support Merkel at least right now. However, the CDU has been severely weakened by the election and if we do not see new elections until the spring, there is a distinct possibility that Merkel’s support even within the CDU could collapse if they see the AfD will win even greater support.
The head of the Federation of German Industries (BDI), Dieter Kempf, has chastised the political leaders calling on the SPD, FDP and Greens to form a coalition. The price that the SPD will demand is that Merkel leaves before they would consider any compromise. There is just bad blood now between the SPD and CDU. Of course, this makes it even more likely we see and even more difficult Brexit. The practical crisis is the fact that Merkel must attend to domestic issues and will not truly have the time or authority to assume a leadership role in Brussels.
This turmoil in German politics is actually shifting the stage to Macron. The uncertainty in Germany may be opening the door for Macron to reform the EU and the Eurozone pushing Germany to second place. The political fortunes for the EU may be far more uncertain than many suspects.
From a market perspective, political uncertainty in Europe still creates uncertainty in markets rather that confidence.
Stunningly even Chancellor Merkel herself admits her immigration intransigence is the leading reason for her inability to form a coalition government. Yet she is so committed to the ideology of ‘open borders‘ she will tender no compromise.
In an effort to leverage political blackmail against her opposition Merkel prefers the route of another election rather than trying to govern from the minority position.
BERLIN (Reuters) – Chancellor Angela Merkel said she would prefer a new election to ruling with a minority after talks on forming a three-way coalition failed overnight, but Germany’s president told parties they owed it to voters to try to form a government.
The major obstacle to a three-way deal was immigration, according to Merkel, who was forced into negotiations after bleeding support in the Sept. 24 election to the far right in a backlash at her 2015 decision to let in over 1 million migrants.
The failure of exploratory coalition talks involving her conservative bloc, the liberal pro-business Free Democrats (FDP) and environmentalist Greens raises the prospect of a new election and casts doubt about her future after 12 years in power. (read more)
It really is remarkable the level of entrenched ideology amid those who carry a far-left world view. The position of Chancellor Merkel is reflective of visible authoritarianism within a democratic assembly of government. There is apparently no limit to what Merkel is willing to do in order to retain her individual political outlook without concession.
Not surprisingly, the media fail to call out this representative reality; behavior which is, ironically, exactly what media falsely accuse President Trump of doing.
After the failure to form a new government, Chancellor Angela Merkel has made it clear she has no intention of withdrawing from the race. New elections in Germany are looking ever more likely. Merkel appeared on TV on ZDF and said that she had not thought of resigning. Federal President Frank-Walter Steinmeier urged the parties to make a new attempt to form a government. The SPD, however, reiterated it will not agree to a grand coalition.
The most serious forecast that we see from our computer models has been a rise in agricultural prices caused by Global Cooling – not Global Warming. Crops cannot grow without the sun and water. Historically, when the weather turns cold, the crops fail.
There is no question that food prices will rise during periods of war when crops cannot be planted and armies require food on a priority allotment.
However, Mother Nature sticks her finger into the pot to stir things up. The famine cycle is also an 8.6-year frequency, but the volatility aspect comes in units of 12 rather than 6.
Our database on wheat from 1259 forward (excluding our data on the Roman Empire grain prices), reveals that there is a serious risk of famine from 2020 onward. It appears that we may very well enter a 12-year rally into the year 2032. Our Bifurcation Models are reflecting also a gap in time between 2020 and 2031 suggesting a trend appears to last for that period of time.
The downside of taxation, and particularly inheritance taxes, has driven farmers to sell their land to conglomerates just to pay the inheritance taxes. This has resulted in genetically altering crops to increase yield. While genetically altered crops do not really appear to present a major health concern as many seem to argue, the real danger is the fact that during the past 100 years, 94% of the world’s edible seed varieties have vanished.
The downside of socialism which has attacked the rich, we have sacrificed the historical model in our food supply for corporate decision making that bribes politicians handing them their needed money to remain in office with each election. The consequence of this corruption has been the concentration of our food supply into an ever-shrinking basket of diversity. Today, 75% of the world’s food comes from only 12 plants and 5 animal species (see source). This lack of biodiversity has seriously increased this risk of widespread crop disease, and throw in the climate change turning colder, corporate decisions are not the way to protect society. Corporate boards are typically dominated by lawyers and accountants. They are not scientists nor do they even make proper decisions for investment or currency hedging. Corporations will never be able to cope with a sudden change and then make decisions that will impact the world. Major companies, such as Monsanto, could find themselves in control of the fate of human existence with the decisions being made by lawyers and accountants fixated on their bottom-line.
The period ahead, 2020-2032, appears to offer something much more different. While politicians keep pushing Global Warming because they can tax emissions, the risk of a monumental human disaster lies in the opposite direction.
The entire theory of Ice Ages emerged after the discovery in 1772 of wooly rhinos and mammoths were frozen in ice with plants still in their stomachs. Suddenly, science woke up and came to the shocking realization that climate can change drastically with no notice.
We have the technology today to drow food inside without even soil. This is something one should consider to put in your basement as 2020 approaches on the horizon.
Chancellor Angela Merkel said on Monday her efforts to form a three-way coalition government had failed. Merkel only received 32.5% of the vote, which is probably the lowest vote of any major world leader. The FDP pulled out of negotiations thrusting Germany into a political crisis and ever closer to a possible new election.
Meanwhile, German hoard of cash is escalating and the cities debt burdens are exploding in Germany. The entire game4 was to hide the debt crisis in Germany until after the elections. With the failure to form a government, new elections are appearing likely extending this Year from Political Hell.
This is becoming the political crisis that just will not go away. Politics around the world remain in turmoil and as our computer had forecast, this would contribute to the collapse in public confidence. The fate of the Euro hangs in the balance.
Reid Wilson via The Hill provides a list of “Congressional Office of Compliance releases year-by-year breakdown of congressional harassment settlements and awards”:
*Note* Democrats took over Congress via elections in November ’06 for congressional year 2007. Republicans retook Congress via elections in November ’10 for congressional year beginning 2011.
The Yemeni Civil War is an ongoing conflict that began in 2015 between two factions. Each is claiming to constitute the Yemeni government. This is really a proxy war between Saudi Arabia and Tran. The Houthi forces control the capital Sana’a who are allied with forces loyal to the former president Ali Abdullah Saleh backed by Saudi Arabia. They are opposed by Yemen’s Shiite rebels who are loyal to the religious government of Abdrabbuh Mansur Hadi, based in Aden, supported by Iran.
To grasp what this is all about, one must understand Islam. Saudi Arabia in Sunni that boils down to a separation of church and state. They are fighting the Shiite forces of Iran, which believe that religion should control the state. Therefore, the ballistic missile fired by Yemen’s Shiite rebels toward the Saudi capital was manufactured by Iran as if this should be any surprise given that Iran is their backer.
This conflict in the Middle East is religious based. This is similar to the threat of Russia back in the Cold War days when Nikita Khrushchev ruled Russia and the ideology that Marxism would conquer Capitalism was the entire issue. Here we have Iran which is similarly a threat to the world political structure because this is where religion should rule the state. Christianity went through that where the state was ruled by religion and to circumvent religion, kings appointed their political allies as priests, bishops, and cardinal. That led to the Investiture Controversy which was the major conflict between the Pope Gregory VII and the Holy Roman Emperor Henry IV during the 11th century.
Emperor Henry declared Pope Gregory was no longer pope and the Romans should choose a new pope because of political disputes. When Pope Gregory heard of this he excommunicated Henry IV, declared he was no longer emperor and absolved his subjects from the oaths they had sworn to him. This was the battle of kings to control the Church for political gain.
Even if we look at England and Henry VII’s break with the Catholic Church, one need only just look before the headline. Henry’s Queen was Catherine of Aragon (1485–1536) who was the aunt of the Holy Roman Emperor Charles V (1500–1558) and was originally Charles I of Spain. Charles V had imprisoned the Pope Clement VII (1478– 1534) following the Sack of Rome in May 1527. Correct, the Holy Roman Emperor invaded Rome to take control of the Church and imprisoned the Pope. There was no way Charles V would allow Henry VIII to annul the marriage with his aunt. Once again we have evidence of kings controlling religion for political purposes.
What is unfolding in the Middle East is similar to the war between Protestants and Catholics, which was really for political and economic power. The corruption in the Church was not the design of the Pope when it had been the kings who appointed people in their domain to run the Church – not the Pope. Nothing could illustrate this point more than the case of Saint Thomas Becket (c. 1119–1170), who was a personal drinking buddy of the King. When he appointed him as Arch Bishop of Canterbury, he suddenly found religion. He then stood up to the King and he was slain right at the Altar.
This is a similar nature where here it is the religious Shite seeking to take control of the Middle East and overthrow kings. The recent Saudi Arabia incident of shooting down the Iranian missile on November 4th, 2017 near Riyadh’s international airport, illustrates just how confrontational this really is. Why Obama cut any sort of a deal with Iran given their political beliefs, is truly beyond contemplation.
QUESTION: Mr. Armstrong, I greatly appreciate everything you do. I was moved when you ended you WEC in Orlando explaining that you see this as we are all in this together. You really make an effort to pass along sound advice without strings attached to solicit money. A very admirable effort I wish others would follow.
My question is this. At the 2015 WEC when Russia invaded Syria on the precise day of your model, you said this would be an important event moving forward. The entire refugee crisis began from that date and now they seem to be winning the war against these jihadists. Now the tensions are rising between Saudi and Iran. Is this part-II of the Middle East crisis? You said back in 2015 that the mere fact Russia entered Syria on the very day of you model signaled this will be the region we should watch. So will this escalate now?
ANSWER: Yes. I wrote in the 2015 War Cycle: “It is extremely disconcerting that on the very day of the peak on the Economic Confidence Model, September 30, 2015 (2015.75), Russia began bombing forces trained and funded by the United States to overturn the Syrian government of Assad.” In 639 AD, Muawiyah I (b. 602–680 AD; r. 661–680 AD) was appointed Governor of Syria as it fell to the Muslim Conquest. We are now in the 26th 51.6-year wave from that event which is a major turning point.
The focus is turning to Idlib, which is a city in northwestern Syria. It is the capital of the Idlib Governorate, which is about 59 kilometers southwest of Aleppo. Because the Syrian government wants to evacuate all jihadists to Idlib, this will present a problem to Turkey which it borders. The Syrian state has offered to give the jihadists safe conduct and let them go to Idlib. For about one to one and a half years, jihadist terrorists from all parts of Syria are being transported to Idlib.The majority of these militant fighters appear to belong to the al-Nusra Front. These terrorists are well armed and have between 30,000 and 50,000 tanks. They also have missiles, chemical weapons, and other assorted war equipment.
In Turkey, the fear is that they will eventually flee Syria and enter Turkey. At least half of the terrorists are from Chechnya, Dagestan, Central Asia and other areas of the Russian Federation. They are not even Syrian. They have been a foreign invading army in Syria driven by religion. Under Trump, the USA has agreed with Russia that Idlib needs to be cleared by al-Nusra terrorists. There is a serious cooperation between Russia and the US regarding Idlib, which did not exist under Obama.
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