QUESTION: Mr. Armstrong; You model called for a Panic Cycle on the 8th and Directional Change in the Dow. Then a rise in volatility starting the 9th, So the difference is the Panic Cycle was an outside reversal and then the direction change cemented that as the high. The volatility then kicks in which the break. I have that all correct? This is just amazing how you pick the day of the high every time. But you can pick these wild days and then forecast volatility as well. This is far beyond anything out there.

Definitely see you in Orlando.

PD

ANSWER: Yes, that is correct. Panic Cycles are either a big move in one direct, or they are outside reversals that exceed and penetrate the previous low. That is distinguished from the three main types of volatility.

Behind the Curtain, there seems to be no government going completely nuts more so than Australia. They are doubling taxes on all foreigners who own property, which is a violation of international law, and then they made it a crime for a foreign to even buy a house undisclosed. On top of all of this insanity, that they are planning to strip consumers of their legal protections if they pay in cash and fail to get a receipt. If an Australian pays for anything in cash, they suspect he is hiding money.

This outrageous proposal is clearly exposing the Australian government as a leftist goose-stepping authoritarian regime going complete insane hunting Australians for taxes. They are even following children to school and then check the school as to how they are being paid. This is real Hitler stuff. That is why the Swiss created number accounts because he made it illegal for a German to have any account outside of Germany.

This anti-free society the Australian government is establishing is just off the charts. They set up a Black Economy Taskforce to hunt down their own citizens. This is becoming very dangerous. Can you imagine a government staking your children? This gestapo agency is indeed spying on its own citizens in every aspect just as did the NAZI government in Germany. They have put forth 35 recommendations contained in the interim report where they are arguing the need for “consumer-focused action” to crack down on cash payments.

The Black Economy Taskforce has turned its attention from the businesses to  consumers they now say are “part of the problem” adding that “[w]e intend to examine the merits of consumer focused sanctions, including the loss of consumer protections, warranties and legal rights for people who make cash payments without obtaining a valid receipt,” They are out to change the entire culture of Australia because the government refuses to see itself as the spendthrift causing the entire problem. They wrote: “This is not simply of matter of imposing new penalties, but part of a wider cultural change agenda.”

They are looking to impose penalties if a consumer pays cash and FAILS to get a receipt so they can end the underground economy. They are expecting to change the culture by forcing consumers to ask for a fiscal receipts when paying cash for anything.

Obviously, Australia is hunting its own people as if this were a fox hunt. Those who are looking to adopt children should consider adopting from Australia to save them from a government that is going down the path of a totalitarian regime

QUESTION: Mr. Armstrong; I attended the Paris conference of the BIS when you were the keynote speaker. You delivered a forecast that was probably too far ahead for its time. You said the euro would go through and it would first drop but then peak with deflation in 2008 after the markets crash from 2007. You elaborated saying currency rises during a crash when people run to cash. You also said the euro would then decline for 13 years into 2021 before a new system will emerge.

That stuck in my mind and I watched it fall then rally into 2008 and the crash of 2007 you forecast some 10 years in advance. My question is simply this. You said, if I remember correctly, that the dollar would soar thereafter and we would see another monetary crisis as we did in 1985. Is this your Monetary Crisis Cycle you will reveal in Orlando?

I, and a few others from that conference, have bought tickets. I hope to shake your hand this time for a job well done for they would not have tried to stop you forecasting if you were like everyone else who are usually wrong.

All the best

HJW

ANSWER: Oh yes. I remember that event. I sat at the head table with all the central banks of Europe and the French host was upset how the table began speaking English because it was the one language everyone knew. He was so pleased when I ordered my meal in French.

To answer your question, the Monetary Crisis Cycle has two phases. There is a short series and a long series. These are frequencies that result in major upheavals in the world monetary system but each results in a slightly different outcome and we are converging between the two. They have brought governments to their knees. This is the culmination of fiscal mismanagement since World War II as we prepare and go through the pains of labor before a new system emerges.

All of these things are connected. This is the most hated bull market in history. April 2017 was 97 months from the start which was the length of the bull market into 1929. After 97 months, the majority were bearish not bullish. Only now are retail investors starting to come back. I have warned that threshold was 23,000 on the Dow. We can see that happening right now.

Our forecast back in 1985 that the 2016 election in the States would be the first time a third party could rise was on point. Trump effectively pulled off a coup and took over the Republican Party. The elites didn’t get it and said all these people voting Republican for Trump were not “real” Republicans. They are too corrupt to see that they are indeed the problem and it is not Trump as a personality that won, it was part of the birthing process that we are in before a new system emerges. The old elites will be dead soon and a new age is dawning. Yet they will not go quietly into that light – they will rage against the coming of the light as they say. I have warned that the start of the Private Wave in 1985 meant that confidence would shift away from government and this would be one day seen as the Crisis in Democracy wave.

The US sanction voted on by Congress against Russia are outrageous and an act of War that history will write as this may have been the line in the sand crossed by the USA to punish Russia for Hillary’s loss. Clearly, the new sanctions have important implications for Europe because they target any company that contributes to the development, maintenance or modernization of Russia’s energy export pipelines. This sanction reeks of politics that is really a trade war disguised as national security and pride. We have to dig deeper to see who is getting paid by the American energy industry now and for the next election.

These sanction would surely affect a controversial pipeline project between Russia and Germany known as Nord Stream 2, which is owned by Gazprom but includes financial stakes from European companies. The project aims to carry Russian natural gas under the Baltic Sea, bypassing countries like Ukraine, Poland and the Baltic States. When US President Donald Trump visited Poland in July 2017, he said that the US would increase its liquefied petroleum gas supplies (LNG) to Europe, which was very enthusiastically supported by the Poles. This was obviously a statement that was a direct competition with Gazprom that would distort competition for the European energy market.

The entire Middle East Crisis is all about gas. It began with demanding to run a pipeline through Syria to compete with Russia in Europe. This has been the underlying nonsense from the start. Crimea was historically Russian territory and the Eastern Ukraine was settled by Russian who even speak Russian in the East. If Japan tried to kick the USA out of Okinawa, the USA would send troops. This is all about gas – let us not kid ourselves.

There are competing US and Russian gas suppliers in Europe. At first sight, Gazprom has an advantage: Russia has large gas reserves, low production costs and a developed energy infrastructure that supplies gas to Europe. The US producers, on the other hand, have to freeze the LNG gas, load it on ships and then ship it. LNG gas is more expensive than Russian gas and this is where the sanctions may be inspired.

This trade war disguised as sanctions will have a continued effect of fueling not merely Europe, but deflation. Russia must adapt itself to making decisions because of more competitors in the European. Russia must adjust to a price competition while defending the market position. The second alternative is that Russia is throttling its gas production in order to drive prices up. Yet that will open the door to American competition. So welcome to the trade war disguised as sanctions for helping Trump with something our computer projected would happen back in 1985.