Throughout history, there has NEVER been a market manipulated TO ALTER its long-term trend – PERIOD. If this were remotely true, then communism would not have collapsed since that was the attempt to eliminate the business cycle. The Swiss peg would not have collapsed, nor would Bretton Woods have collapsed, or anything else in history that has attempt to eliminate the business cycle.

It is total nonsense that people even dare to entertain the idea that anything can be manipulated to alter its long-term trend. In the movie “The Forecaster”, a former employee said that before he joined the firm he did his due diligence and called the people at Goldman Sachs to ask about me. They said that they “thought” they could “crush” me but I “usually won.”

All the banks lined up to manipulate silver to the upside in March of 1997. My models clearly showed silver would decline, and their attempt to run it up would fail. I stood my ground and took on the whole group. Their attempt to manipulate the market failed. I believe this is when PhiBro ran to Warren Buffet and convinced him to hand them $1 billion to try to manipulate silver up.

PhiBro walked across the ring in September, and this time showed me their orders for Buffet to try to convince me to join them. My models showed that a pop was possible at that time. I did not join, and instead, stepped away. I warned our clients that the target was $7 by January. Their manipulation succeeded, but it forced Buffet to come out and admit he put in $1 billion to buy silver and then quietly sold out afterwards.

The evidence that was a SHORT-TERM manipulation that still could not alter the long-term trend is demonstrated by the charts below. Yes, silver rallied, but gold declined. Claims that silver is manipulated today because it has declined more than many other commodities are nonsense. Evidence of a manipulation must be a counter-trend move. Even the Japanese government lost $1.3 trillion trying to support the Nikkei. They failed. The Chinese government has tried to support their stock market. It has failed.

The amount of capital that will trade against anything that moves against its long-term trend is endless. If you really believe all this nonsense, then you better trade a different market. Why buy something that is manipulated and can never rally? It makes no sense.

There is no secret plot to keep gold down to pretend inflation is lower. Gold has NEVER correlated with inflation and it is such a tiny market that it has no relevance to concerns of inflation when we are in a massive deflationary mode. Just look at all commodities.

Get over it if you really want to survive the years ahead. If you do not invest on reality, you will never exit and will hold on to losing positions because people are swearing they are right; it’s someone else that makes the market decline. This is not the way to survive.

The Guardian has obtained documents showing that the Internal Revenue Service (IRS) is now listening to people’s phone calls and this is showing it has to do with money – not terrorism. The IRS is now also has sophisticated cellphone dragnet equipment known as Stingray, where without search warrants, they are targeting people to get them hiding money..

QUESTION: Mr. Armstrong; If I understand you correctly, should the IMF accept the yuan as a reserve currency, this will have zero impact other than political. Correct?

RH

ANSWER: Correct. The IMF will decide in November whether to expand the current composition (US dollar, euro, yen and British pound) of Special Drawing Rights (SDR) with another currency.Whether this takes place is really irrelevant. The Euro is already in there and that has done nothing to kill the dollar, the yen is not a viable place to park international capital and the pound is too small. The hype people are associating with this is really stupid. Whether the IMF includes the yuan in the SDR is meaningless for the reserve currency must bee deep and a place to park big money. That has not yet been established for the yuan. It should help to get the dollar bears all short so they can add the fuel for the next rally.

Eventually, the yuan will emerge as a real reserve currency. However, it is not yet ready for prime time. This is a political issue that is necessary right now because the Chinese economy is turning down and that is impact the emerging markets and will help to turn Europe into a real depression. So this is political at this time and it to try to help support the yuan which is under serious pressure with massive capital outflows.

QUESTION: Mr. Armstrong; What do you think of the Biblical forgiveness of debt which this time was due with the turn of your model?

ANSWER: Debt cancellation or forgiveness actually was a tradition that began under Sumerian rule in Mesopotamia. The Jewish tradition appears to have been adopted from the Sumerian. Do not forget that Abraham came from the Sumerian city of Ur. Therefore, he would have grown up with that tradition.

Consequently, the debt cancellation practice began in Mesopotamia and can be traced back to 2400 BC extending into 1400 BC. The noted historian on this subject, Michael Hudson, I believe is absolutely correct when he states that general debt cancellation was one of the principal characteristics of Bronze Age societies in Mesopotamia. There were numerous debt cancellations in the Mesopotamian cities which used the words for these debt forgiveness decrees or cancellations such as amargi in Lagash (Sumer), nig-sisa in Ur, andurarum in Ashur, misharum in Babylon, shudutu in Nuzi.

(See:Michael Hudson’s Debt Cancellations)

However, we are way beyond such a solution thanks to SOCIALISM. Countless people now rely entirely upon pensions and social security type systems for their retirement. Many such programs by decree must invest “conservatively” in government debt. To default will set off a blood-bath if not a Mad Max event. During the Bronze Age, debts were private and did not tend to be expectation that you would be taken care of for life. So the debt structure was entirely different. Today, such a debt forgiveness would cause total economic meltdown. This is why we have proposed the solution we have. There is no option to cancel of default without major civil unrest if not revolution.

The debt cancellations of the Bronze Age can be distinguished as PRIVATE. They were not PUBLIC debts borrowed from the people that they just never paid back. This was a debt forgiveness within the private sector. I might add that during the civil war that ended the Republic of Rome, the people cheered Julius Caesar and assumed he too would cancel all private debts. He adopted a different resolution forgiving all past interest applying that to capital with revaluing property and money to the same purchasing power parity. Clearly, the people were aware of the debt forgiveness ideas in that region. (See Anatomy of a Debt Crisis).

(Note: We have collected economic text from Mesopotamia as part of our research project in reconstructing the historical economic history of civilization. Here I hold one Sumerian cone from our collection. I funded archaeological digs that would further our knowledge of the past in order to reconstruct the history of the world, much of which the academics will not explain for reasons it will contradict prior theories. Then there is their communistic approach to knowledge.

I was asked to fund the dig at the House of the Papyri near Pompey in Herculaneum. Half of this villa has still not been excavated. This was a villa of a book collector and the Greek part of the collection is still buried. Here is all the lost books of Greek historians waiting to to uncovered. The Italian government lacks the money so 20 years after I was asked to fund this project, it still remains undone.

Additionally, the latest issue concerns material that arises on the black market rather than a archaeological dig. For example, during the first Gulf War in Iraq, the bombing uncovered a city previously unknown. The archives of all the text appeared on the black market. Academics boycott such things rather than trying to save them. They object to private people using private funds for research and treat the subject as if it were a communistic state that only they should have such cache to play with. Something I seriously disagree with for there is never always public funds available for such projects.

In this particular case, thousands of tablets were on the black market. I bid to get the entire collection. There was a Norwegian collector of documents, Martin Schoyen. I do not recall what my bid was but it was many millions of dollars. Martin and I met in Zurich for dinner. Since he was a specialist in documents, we reached an agreement that my interest was economic. Martin even had an original Magna Carta. So the deal we struck was that I could use the economic text in return for bowing out of the bidding.

What made this find so valuable was it contained legal code predating Hammurabi who academics teach was the first legal code. Here we have the Legal Code of (ca. 2100BC) which is the oldest known, written law code that predates Hammurabi’s law code by about 300 years. The translation of this legal code was provided by Martin Schøyen, a Norwegian collector of manuscripts containing over 13,000 documents. His private efforts have contributed greatly to our knowledge base when government funding for translation is lacking and academic lack the funds to save material on the black market. When the Legal Code of Hammurabi (1792-1750BC) was first discovered in 1901, his laws were heralded as the earliest known examples. Subsequent to that discovery, older collections of legal codes have been unearthed. There are even older Babylonian copies of the Legal Code of Ur-Nammu (ca. 1900-1700 BC).

When I say we have THE largest database known to humankind, I am not exaggerating. You cannot create models if you lack the data to input. How can you forecast a debt crisis or list the possible outcomes without understanding how such a crisis has been resolved throughout history or how they appeared in the first place. People can pretend to do what we do, but how is that possible without the data?

The IMF has come out and warned that Saudi Arabia may go bankrupt within the next five years if the government maintains its current spending habits. Some emails are asking if the IMF is now copying our projections for they have the same timing. Who knows. I would assume the economic numbers are the numbers, but they do seems to be getting bolder in their forecasts.

There are 30 million people living in Saudi Arabia, but only 5.5 million are actually employed. Out of the 5.5 million people in the workforce, 3 million of them work for government, which is part of the problem. Most financial jobs are given to imported foreign labor. The crisis in Saudi Arabia long-term is that they are following the same model as Spain. True, Spain and its treasure ships from America made it the wealthiest nation in Europe. But they squandered their wealth and failed to invest domestically to create an economy. French were imported to unload ships and the Spanish simply enjoyed life. In the end, their spending habits led to the country defaulting on its debt seven times.

Things have changed. In the Middle East, governments simply spent money for there was no end in sight. Then oil prices dropped after they bumped up their spending and now the revenues are collapsing.

Things are changing out there on this cycle. The USA peaked softly in 2015.75, but the rest of the world peaked in 2007 and has been declining (including China). The USA recovery has been very shallow. We see high-end real estate and the share market at new highs, but not wages or middle class housing in most areas. So the slide from here will be much different than anything we have experienced in our lifetimes.