Is it Time to Hold Journalists in Contempt of Court for National Security Reasons?

On Tuesday U.S. officials, under the guise of anonymity, leaked the name of the suicide bomber responsible for the attack at an Ariana Grande concert in Manchester before the British police had officially named him causing greater skepticism for allies sharing intelligence with the United States. There is something seriously wrong in the intelligence community and it borders on TREASON.

American journalists published the name before the British journalists. The British police had not confirmed the identity of the attacker, Salman Abedi. Since it was an ongoing investigation, the British government had indicated it may not release the name at all and then the American press reported the name.

The case of Judith Miller, the New York Times journalist at the time, became embroiled in controversy after her coverage of Iraq’s Weapons of Mass Destruction program both before and after the 2003 invasion. The New York Times later determined Miller’s stories published in the paper were inaccurate. She acknowledged in The Wall Street Journal on April 4, 2015 that some of her Times coverage was inaccurate, although she had relied on sources she had used numerous times in the past, and had won a Pulitzer Prize. Miller further stated that policymakers and intelligence analysts had relied on the same sources claiming that Iraq had huge stockpiles of Weapons of Mass Destruction. Some argue that it was her stories in the New York Times that supported the entire invasion of Iraq.

All of this aside, Miller was also involved in the Plame Affair where her status of a member of the Central Intelligence Agency (CIA) became widely known compromising her position. When Miller was asked to name her sources, she invoked reporter’s privilege, which does not exist in any absolute manner, and refused to reveal her sources in the CIA leak. The Supreme Court made it clear that testimonial privileges “are not lightly created nor expansively construed, for they are in derogation of the search for truth.” United States v. Nixon, 418 U.S. 683, 710 (1974). She was held in contempt of court and spent 85 days in jail protecting her source, which turned out to be Scooter Libby who was the leak source. Miller later was forced to resign from her job at the New York Times in November 2005.

Libby went to trial and was convicted of one count of obstruction of justice, two counts of perjury, and one count of making false statements. Between 2003 and 2005 Libby had “leaked” classified employment information about Valerie Plame to New York Times reporter Judith Miller and others. He then lied and tried to cover-up his leaks.

In the Grand Jury, Libby testified that he met with Judith Miller, a reporter with the New York Times, on July 8, 2003, and discussed Plame with her. He had signed a “blanket waiver” allowing journalists to discuss their conversations. Miller maintained that such a waiver did not serve to allow her to reveal her source to that grand jury. After refusing to testify about her July 2003 meeting with Libby, Miller was sent to prison on contempt of court on July 7, 2005. Her lawyer, Robert Bennett, told her that she already had possessed a written waiver from Libby all along and there was no privilege. Miller then agreed to testify and was released on September 29th, 2005. She then appeared before the grand jury. Miller produced a notebook from a previously undisclosed meeting with Libby on June 23, 2003. Libby was convicted of obstruction of justice and two counts of perjury in his grand jury testimony and one count of making false statements to federal investigators about when and how he learned that Plame was a CIA agent.

It seems that contempt sanction are now warranted as a matter of national security to get at those within the government as to who is leaking information about private conversations between world leaders all the way down to leaking names of terrorists to obstruct investigations. That is what the contempt power was really supposed to be – the refusal to comply when you can compl

Shari’ah Standard on Gold to Replace the Dollar? Really?

QUESTION: Mr. Armstrong; I have read where some people are claiming this “Shari’ah Standard on Gold” will become the new “reserve currency” and this seems really just nuts. I understand there are 2 billion Muslims in the world, but they seem to forget that this is once again wild speculation. Any thoughts?


ANSWER: No. This is really rather absurd. First of all, not even the Euro could displace the dollar nor the Japanese yen, Chinese yuan and yet some meager 2 million average citizens will do so? I really hate to burst these people’s bubble in La-La-Land, but I have been in meeting and there are people in Washington who are trying to figure out how to get the dollar to be replaced somehow. The last failed attempt was the Plaza Accord in 1985 intended to push the dollar down and the Euro was born there and then. This is when James Baker encouraged Europe to create a single currency to “PLEASE” compete with the dollar. Every Administration has wanted a lower dollar to increase exports. Trump is no different. Sorry – they ALL HAVE FAILED!!!!!!!!!!!!!!!!!!!

Secondly, this is really nuts and the very same hype I recall from 1975 when Americans were for the first time legally going to be able to buy gold starting January 1st and that is when gold futures began as well in New York. What happened? The hype drove the price of gold up to nearly $200 and on January 1st, 1975, it began a crash by almost 50% into 1976 for 21 months. They said the same thing about China and how the Chinese demand would make gold soar. Then they said the same thing about India and now its the Muslims. They keep switching groups to sell people gold like some used car salesman. In any other field it’s called consumer fraud.

Gold will rally ONLY when people begin to see that governments are failing. I am not talking about my readers. We all see what is coming. I am talking about the AVERAGE person on the street. Then you will see the gold breakout. We are getting closing. Patience is required when it comes to gold

Schiller Cyclically Adjusted PE Ratio (CAPE) – Real or Mislead?

QUESTION: Hi Martin,

Long time… perhaps you can reflect on the indicator of the Shiller CAPE ratio?
Not that it is a predictive sell/buy signal in itself, but it is an indicator showing history

ANSWER: The Shiller Cyclically Adjusted PE Ratio known as CAPE,  is a particular PE ratio invented by Robert Shiller of Yale University. Unlike his index on real estate, this one tracking the period of 1870 to date is not very good. True, on will arrive at one of two conclusions that either the CAPE today is near the same level as in 1929, or it is higher today than it was just before the Panic of 2008. Does this really mean anything? Absolutely not!

When we filter this purely domestic view through the currency and capital flows, these two events are exactly opposite of each other. In 1929, the capital inflows were pouring into the USA whereas in 2008 then were exiting. The 2000 Dot.COM Bubble took place with a capital inflow.

The important difference is always the currency. Great bubbles unfold only when foreign capital is pouring into a domestic market. This is when the Japanese Nikkei Bubble took place in 1989. The capital left the USA as the Plaza Accord was pronouncing they wanted the dollar down by 40% to help trade. The swing in capital back to Japan looks like the brain wave of a real crazy person.

There is a risk of correction in the US Share Market after May. But this has nothing to do with the PE Ratio. We are looking at capital flows and that is the real key. The attempt by the Washington Post and New York Times to stir up a coup to oust Donald Trump will have far greater impact on the dollar and US assets than the PE Ratio, which is a very myopic domestic view.

Research – Where to find it

QUESTION: Mr, Armstrong; I read the research you provided for the Hong Kong WEC. I tried to see if I could find some of the Harper’s Weekly articles you photographed and perhaps others. They are not on line. May I ask, where do you get access to such material?

ANSWER: I have a very extensive library of bound volumes of newspapers from the USA as well as Britain. This has enabled me to conduct real research and see the thinking process and how it has evolved with the markets. First of all, I have to use the original source. Far too often when you dive into it, you find that people have made up quotes to support a predetermined agenda. This way, I can quote directly and not rely upon others.

Interest Rates Up & Bonds Up?

While the Fed may be raising rates, there is still a flight to quality underway that is giving a bid to US Treasury issues. Low Treasury yields may remain the norm even if the Federal Reserve raises rates again. At about 2.25%, 10-year yields have dropped to 2017 lows, even with the central bank signaling an imminent rate hike. Many still see the stock market crash and that also supplies a bit of an underlying bid right now. However, The Fed has also made it clear it will maintain a gradual approach to shrinking its massive bond portfolio thereby reversing the Quantitative Easing. We are in never-never-land where the Fed tightening will not yet have a direct impact upon the bonds on a one-for-one relationship.

When we compare the 10-year to the 30-year, we see strikingly different patterns. The high on the 30 year is 2016 in price (low in yield), whereas the high on the 10-year in price (low in yield) remains 2012.

Now look at the 2-year rate bottomed in September 2011 (high in price). Clearly, 2-year rates have been rising gradually for 6 years already.

Now when we look at the 30-year on our Proprietary Perpetual 30 Year Contract back to 1798, we gain true perspective in how rates have performed in the long-term. We are clearly looking at a bond bubble, but the breaking point appears to be 2018. Because of the extreme flight to quality, we can still see a pop up in the 10-year before this is all over. This depends entirely upon the capital flows.

Catalonia to Separate from Spain?

QUESTION: Mr. Armstrong, when you were here in Barcelona, you said that Catalonia would vote to separate from Spain. Most thought you would be wrong. I myself confess I was not sure you would be right. Well you were right, or your amazing computer was correct, and the fever to separate only grows bolder. Do you still see this and the ultimate end of the EU?

ANSWER: Yes, but this is a process that is slow. The speed will being to pick up next year and it appears to be increasing in velocity between 2018 and 2022. El Pais ran a story: “Catalonia to immediately declare independence if no referendum held” with the leaked excerpts from what appears to be the Catalonian regional government’s road map to independence. The secret document included a plan where the region would unilaterally break away from Spain if Madrid tried to prevent its citizens from holding a referendum on independence in the fall. The proposed question is straight forward:

“Do you want Catalonia to be a state that is independent from Spain?”

I reported back in 2015 that Barcelona was preparing to issue its own electronic currency. Since then, the city is still moving forward with a plan to introduce its own currency, despite warnings from Spain’s central bank. The new so-called “social currency” would be used to buy local goods and services at a discount while having a one to one parity with the euro. This is plan B in order to set up for separation. Catalonia is the richest region in Spain and is supporting the rest of the country. So it is very much like Margaret Thatcher once warned, that Socialism works until you run out of other people’s money. That is exactly what is taking place in Spain. They have been bleeding Catalonia dry.

The real question is what will Spain do? Spain is the Eurozone’s fourth largest economy. It is distinctly on the verge of breaking up. Spain and the EU seem intent upon not letting that happen. If there is any attempt by force from Madrid under the pretense of a police action, then the gloves will come off.

Madrid will take drastic actions, including that will most likely first attempt to invoke article 155 of the constitution, which will effectively put an end to all forms of Catalan self governance. Will the people tolerate that? This will not merely strengthen the resolve of Catalan separatists, it could very well lead to a civil war erupting between 2018 into 2020, but the latest we should see the separation is by 2022.

The previous Spanish Civil War took place between 1936 and 1939 lasting about 3 years. It broke out when the Spanish army in Morocco led by General Francisco Franco, rose up against the democratically elected Republican government, presided over by Manuel Azaña. Typically, there will be a divergence and split within the military. That is how these things erupt. We may see this in the USA also around 2022, which may be a contagion at that time. The potential for the collapse of the EU looms on the horizon for 2022.

Obama Administration Intervened in Canadian, British, and French elections

There is a very serious hypocrisy over this whole issue of Russia trying to influence the 2016 election when the Obama Administration directly intervened in Canada, Britain, and France and is expected to do so again in Britain and Germany. The New York Times, Washington Post, and just about every other mainstream media, are biased and are NOT REPORTING THE TRUTH. They act as if this is something unusual and sinister yet Obama has continued in this very posture even after leaving office with respect to the French elections. Obama also intervened to overthrow Israeli Prime Minister Benjamin Netanyahu and failed as he did in BREXIT. The United States routinely interferes in foreign elections. So what is the big deal with Russia? Mainstream Media is not telling the truth that this is standard operational procedure. The United States has far too over stages coups to overthrow leaders they dislike. The propaganda about Iran and weapons of mass destruction is but a recent example. The Vietnam War was also a hoax with President Johnson is famous for saying in 1965: “For all I know, our Navy was shooting at whales out there.” There never was any attack to start that war and Johnson made a very deceitful speech of August 4th, 1964, while New York Times editorial writers cheered and proclaimed that Johnson “went to the American people last night with the somber facts.” The recorded American soldier deaths for the Vietnam War was 58,220 U.S. military fatal casualties.

The New York Times has deliberately misled everyone with its latest story once again: “Top Russian Officials Discussed How to Influence Trump Aides Last Summer”. They wrote that two of Trump’s people “had indirect ties to Russian officials” and after all the ifs, possibilities, and perhaps, they conclude “It is unclear, however, whether Russian officials actually tried to directly influence Mr. Manafort and Mr. Flynn.”

We all know that Obama sought to influence the British BREXIT vote telling the British if they voted for BREXIT, they would have to get queque . We all have watched the video intervening in the French Election for Macron. However, what has not been widely know is that the Obama Administration intervened in Canada with operative and money to overthrow the conservatives.

The real question is what is going on with the New York Times and the Washington Post? They both endorsed Hillary and this seems like a desperate act to claim that Trump is not a legitimate president and he should be overthrown. In the years of research studying the economy and the press accounts over the centuries, I have never seen such a totally dishonest level of reporting than we see today. They have devolved into a biased media that withholding the truth to shape opinions as they desire. This, in my view, is the ultimate treason against the sovereignty of the people. The Washington Post boldly claims as their motto: “Democracy Dies in Darkness” which is exactly what they are doing. PRINT THE TRUTH!

US Pension Crisis Picking Up Full Speed

The Pension Crisis is serious and is the catalyst that will bring everything down. Nearly 600 State & Local governments are now in the hole and has reached nearly $1.2 trillion of unfunded pension liabilities in FY 2014. This reflects total pension liabilities of $4.798 trillion and total pension assets (or fiduciary net position) of $3.607 trillion. This staggering number is nearly 25% of the annual GDP and accounts for roughly 97% of all public pension funds in the United States. California is raising taxes to cover the short-fall for now, but this is going nowhere fast. Government pensions are what destroyed the Roman Empire and history is going to repeat.

I have stated before that there are people on Capitol Hill who support confiscating all private 401K plans in the country and replacing them with an allotment monthly. We know what will happen to that one, so you better have something else besides cash. The government cannot meet the promises for its own employees and they will turn to increasing taxes and confiscating private property.

Fed Rates & Minutes

Minutes from the Fed’s May policy meeting showed board members thought that if jobs growth remains healthy with a rebound in investment and consumer spending then rates could rise “soon”, which many took to mean June. The economy has shown some signs of weakness, the Fed still thinks its broad strength would justify winding down its balance sheet, essentially sucking cash out of the system and putting upward pressure on borrowing costs. As long as rates rise, it shows the economy is still holding.

The Fed is more concerned about the stock market. A correction would help ease the upward pressure, but the Fed also realizes that it has to get rates back up because of the looming crisis in State *& Local pension funds.

Keep in mind that as rates rise, so will the problems with fiscal budgets both on the Federal and States levels within the United States and externally it will hurt emerging markets and Europ

New Argument to Raise Rates – Rent Inflation!

There are those in the Fed who are desperate to find an excuse to raise interest rates. The one being bantered about is the Fed needs to raise rates to help the poor. Yes – you heard correctly. To protect the poorest Americans, the argument is that the Fed needs to raise interest rates faster according to Federal Reserve Bank of Kansas City President, Esther George. She said “inflation is a tax and those least able to afford it generally suffer the most.” Her twist is focused narrowly on just rental inflation, which she said will continue to rise if the Fed doesn’t take steps to tighten monetary conditions.

The idea of inflation as a tax that hits the poor the hardest is by no means a new theory. Of course you must ignore the fact that interest the poor pay on just about everything is far higher because the Fed wanted to fight inflation back in 1980 and had to abandon the usury laws in order to raise rate to 14%. As always, they never put back whatever it is they suspect for some solution. The Fed is responsible for the poor paying interest rates at over 20% to live on credit cards.

If the Fed really cares about the poor, knock off the BS and restore the usury laws. Oops! The banks would like that now would they!