QUESTION: Hello Martin,
Thank you very much for opening my eyes to what is going on in the world. As you well know the public here in Germany is not informed about any problems concerning pensions, banks, economy or trade whatsoever, so most of the people I have spoken to are convinced that “we have never done better”. Everyday news report on the forming government – since the elections.

My first question is: will the Eurozone be in worse trouble than the European countries not belonging to it – if I understood right they can debase their currencies & thus make their goods cheaper. Or shall the worldwide distrust in banks ruin any trade advantages?

My second question concerns my great WORRY, as I´m not a German native, that when the things get worse the foreigners might not be as welcome as they are now. Would it then be better to leave the EU & go back to one´s home country (in the Balkans) or is this idea completely nuts?

Thank you in advance. I hope I´m not taking up too much of your time. Do keep informing those who are ready to listen what to do & when – YOU ARE THE CONSCIENCE OF THE WORLD!!!!

All the best
EZ

ANSWER: Yes I am well aware of what is going on. I appeared on a TV show there and the most curious thing took place. There was a girl who came in dressed in jeans. She appeared to be part of the camera crew, but she was just listening to me. She was not actually working. When I was done, she walked out of the high-security facility, hopped on a scooter, and drove off. She was there to monitor what I would say about government. The same in France. I have been in Europe this week for meetings, both public and private. I have probably spent at least 1/3rd of my life in Europe.

The problem with the single currency is that the policy of austerity creates deflation, causing higher unemployment, and lower economic growth. The idea is that money should retain a store of value quality, which historically has NEVER been the case. This conflicts with the debt issued in Southern Europe and it all about the federalization of Europe. As you are well aware, the AfD is rising and the likelihood of new election come March/April 2018 appears very good.

Now concerning the safety of foreigners. Unfortunately, the rise of the AfD is due to the refugee crisis. What happens as things get worse is that society will turn against ALL foreigners. During the Sovereign Debt Crisis of 1844, there were riots against the Irish immigrants. People viewed their unemployment was caused by foreigners coming in and taking jobs.

In China, there was the Boxer Rebellion (拳亂), which was a violent anti-colonial movement that expanded into an anti-foreign and anti-Christian uprising as well. That took place in China between 1899 and 1901, toward the end of the Qing dynasty.

History warns that when you turn the economy down, people will turn against the foreigners. That is the entire reason the AfD is rising.

Hackers have managed to get $70 million worth of Bitcoin, revealing the risk of all electronic forms of money to which cryptocurrencies are not exempt. The prices keep soaring and requests to add it to Socrates have been coming in so we are complying. With the futures about to begin, this should make it a more transparent market. The problem now is a single trade can be registered just buy one coin to put up prints that do not reflect volume. A future contract will help reveal the true depth of a market.

If we accept the quotes as real, then Bitcoin’s market capitalization is now larger than that of major US banks Citigroup or JP Morgan standing at about $ 220 billion. The problem that emerges is the reclassification legally of Bitcoin. Because it is pretending to be a currency rather than a stock, governments can simply take the latest print and declare that to be a profit and tax you on that number. If the governments would accept Bitcoin as legal tender in payment of taxes, that would be fine. However, if they demand their own currency (dollars) which then forces one to sell Bitcoin to pay the tax, then the price will collapse and they will force you to pay the tax on the inflated number. You can claim you lost money selling it below that figure and they then allow a tax credit but spread out over 10 years. Bitcoin should swap everything to shares and that will eliminate the clash with the government. 

Meanwhile, we will let Socrates generate the Reversals and the timing arrays for the forecast as we do with any instrument. At least it is a computer with no bias. So far, it indicates we are only in a Phase Transition.

However, this run-up began with the November 25th ECM turning point from the 8,000 level, Interesting that the ECM date has market such a Directional Change where Bitcoin and the stock market have taken off marking a clear shift in trend took place.

QUESTION: You wrote: “Once you begin to see the entire universe is governed by the 8.6 frequency, the doors to a hidden order spring wide open.” What do you mean?

ANSWER: The journey of our solar system around the center which revolves as the earth does around our sun annually, takes 25,800 years which is three times 8.6. Now, one solar day is 24 hours. If we take that 24 hours times 60 minutes, we end up with 1440 minutes. Now multiply that by 60 seconds in a minute and we arrive at 86.400 seconds in a day. There is a lot more hidden order in this 8.6 frequency than meets the eye. The key to moving forward in our knowledge is to understand the significance of cycle frequency when absolutely everything has a frequency.

You can kill people with sound. The military has been developing weapons simply using sound waves. This video demonstrates that they can also repel mobs with simply a sound cannon. There were the sound weapons used in Cuba to attack US and Canadian diplomats and their families. This is all about using cycles.

QUESTION: Do you support Trump increasing the debt by a trillion dollars? I thought you were conservative?

PY

ANSWER: Well the first thing you have to do is get a grip on what is a reality. Governments around the globe borrow every single year with absolutely no intention of ever paying off their national debts. So what is the difference? If you think giving the money back to the people is wrong and it is better going out the back door for political contributions, then sorry, I oppose that.

There is no “conservative” v “liberal” when it comes to the debt. They all spend more than they take in and nobody cares about paying off the debts. So I do not care what political persuasion you are, we will end up at the same place when the dice stop rolling. BROKE!

I support cutting income taxes to ZERO. The government should just create the money it needs to cover its expenses. Let’s get real here! All national debts, including Germany, show that on average 70% of the debt is just accumulative interest. So that is money out the back-door.

Rome never had a national debt and the first 500 years they existed by creating money to pay their expenses with minimal inflation because of the economic growth. About 80% of their budget was paid with the creation of new money.

Even the Bible said giving 10% was realistic, not 40% to 60% as we have under the current Marxist style governments in the West.

The first country that wakes up and abolishes income taxes will blow everyone else out of the water. All they have to do is say they will adopt the way the United States became great. There were only indirect taxes between 1792 and 1913. If the nation survived with no income taxes, we can do it again and let the people spend their own money. You will see massive job creation and governments will stop competing with the private sector to borrow money.

The top story in Britain is the collapse of BREXIT negotiations thanks to the stupidity of Northern Ireland. If Northern Ireland wants to remain inside the EU, we already have Scotland saying they would want the same deal and the Mayor of London adds his two-pence to the issue think he will save the City of London financial system.  Of course, none one of these people understands the first thing about economics no less they are surrendering power to Brussels. The Brits have always come in dead last in everything inside the EU. BREXIT was the only thing that would save Britain of it too will be dragged under by the failure of the Euro.

The Danish Central Bank has come out to warn that there is another financial crisis ahead. The central bank identified several indicators that point to growing risks from its analysis perspective. It is recommending that the banks in Denmark begin to raise their capital risk buffer.

The primary concern centers on household credit where banks have lent out money to gain interest in the midst of negative interest rates. The drive to create income has led the banks to lend to people with poor credit ratings. They also fear that the banks have lent too much to companies that suffer from the business cycle.

This is the consequence of negative interest rates. The banks lent out money at higher rates to those who have poor credit. As I have warned, every solution sets up the next crisis.

The risk with Bitcoin is that the government could simply change the definition of money. That is what they did to me back in 1980 because I was one of the three main market-makers in gold (perhaps the biggest). It was all a hunt for taxes, not concerning me but my clients. I have explained before why I retired from making markets in gold — the IRS declared me to be a BANK!  When gold was legalized in 1975 and began trading on the COMEX in New York, the New Jersey Senate asked me to write the law on gold to make sure it would not be taxable to buy and sell gold bullion. I worked with Senator Foran and developed the language that “gold was not taxable unless converted to use.”

I was making the market to buy gold scrap from all the stores you see with “WE BUY GOLD” signs. They buy the jewelry and it has to be refined. To do that, you needed a minimum lot of 100 ounces, which was the contract size on COMEX. When gold was $800, that meant one 100 ounce bar was valued at $80,000. The refining period was 6 weeks. Therefore, all of these small operations could not afford the float. If they bought 100 ounces per week, then they would need $560,000 in working capital. That would not work for most of these small shops buying gold.

I made the market. The shops could ship whatever they bought that day and I would buy it at the daily price. I gathered all the gold sold by countless stores. The gold was shipped by armored cars to Englehard for refining (PhiBro or Philipps Brothers who eventually bought Saloman Brothers). I was doing tens of millions per week back then and refined a mountain of gold.

First, the NJ tax authorities walked in and declared me to be a merchant. I said gold was not taxable unless converted to a usable product. They said their “interpretation” was that the “use” was investment.  I refused to pay and opted for a trial. Of course, you do not get a jury, just a judge who rules always for the government. I was not allowed to testify at my own trial for they said whatever the Senate had asked me to write, I may have misinterpreted their intention. Senator Foran was so angry that he demanded to testify at my trial. The government objected and he was allowed to testify ONLY as a private individual citizen. I moved to subpoena the full Senate. The judge denied me, and I lost.

Simultaneously, the Feds walked in and declared me to be a BANK. They then declared that I had to file forms to report when my clients bought or sold more than $10,000. Their interpretation was that gold was NEVER formally declared not to be money in 1971, so I was a BANK. They threatened me saying that the fine was $50,000 up to the full amount of every transaction I failed to report. They said they knew I perhaps did not “realize” I was a BANK and would forego the fines if I would allow them access to audit all my clients. I had no choice. They set up shop in my office. I walked by, noticing that they were pulling out names of those whose transaction were even $5,000, and I asked what was going on. The agent turned to me and said very aggressively, “You have a problem, keep your mouth shut!” The next day in rolled the vans and they took all my business records and began an audit over 3,000 of my clients for the next three years.

That is why I retired. I neither wanted to collect sales taxes on bullion nor be a BANK and report on my clients. Since I was the biggest, they were starting with me. People doing business outside of New Jersey would not have the sales tax problem and the IRS was interested in me because of my size. They would not do the same for small shops. So it was time to get out of the business. Clients wanted the research to continue, so that was spun-off as a new company in 1981.

Now comes Bitcoin. The Judiciary Committee of the United States Senate is currently working on Bill S.1241 that aims to criminalize deliberate concealment of property or the control of a financial account. The bill was submitted in June, and the law would change the definition of “financial account” and “financial institution,” and thus also cover digital currencies and digital exchanges. Who is pushing it? None other than California’s Senator Dianne Feinstein, who maintains that the bill is needed to update existing money laundering laws because of terrorists.

This means that the miners of Bitcoin will become a “bank,” as I was declared. The operators of the trading platform Coinbase were forced by court ruling to notify the IRS of the identity of over 14,000 investors who were trading $20,000 in Bitcoin. Users were affected if their trading volume had exceeded $20,000 at the beginning of 2013 by the end of 2015. So this is NOT a single transaction, but accumulative. The IRS will now “presume” tax evasion. This is what I warned would happen. Been there done that! They can shut down Bitcoin in the blink of an eye by simply defining anyone who is a miner to be a financial institution.

The bill will change the definition of “financial institution” in Section 53412 (a) of Title 31 , United States Code. The text will read:

“An exhibitor, a redeemer or a cashier of prepaid access devices, digital currency or a digital exchanger or a digital currency.”

The regulation will remove the anonymity of Bitcoin and other cryptocurrencies defeating this idea that there is an alternative-financial-universe separate from government.

COMMENT: Mr. Armstrong; It is so clear you understand the basic human response that drives the economy. It is amazing why the entire world does not listen to you. Within 24 hours, German companies are demanding tax cuts to compete with the Trump tax cuts. They realize what you have been saying. The USA will suck in all the business with a low corporate tax rate and they cannot compete. As you say, this is not Noble Prize-winning analysis. Perhaps you should get the Noble Prize even if it is so basic an idiot should understand it.

KL from Germany

REPLY: Good point. I suppose what you are really saying is that common sense is actually rare. I am in Europe for the week and requests for meetings have suddenly skyrocketed. Following the approval in the US Senate for the Trump tax reform, alarm bells are blaring from the German economy. The industry association BDI has come out and already warned on Sunday no less that there will be massive disadvantages for European companies. It is fundamental. The more you raise taxes, the higher the unemployment, and the lower the economic growth. But if you are a politician, it puts more money in your pocket. So they act only in self-interest.

Those countries which do not engage in structural reforms in corporate taxation will watch their economies implode over time. It will be a very hard time ahead into 2021.

The tax cut critics are really just morons if not outright evil people who just want to rob anyone who has more than them. Their analysis put the bill’s total price at $1 trillion, contradicting the Republican argument that the measure would essentially pay for itself. They act as if this is somehow different than Obama, who increased spending that went into the pockets of the bankers.

Obama took the budget in his first year from a $459 billion deficit to $1,413 billion and that was OK. His deficits dramatically increased the national debt in his first four years 400% times greater than the Trump tax cut. So why do these people hate tax cuts and constantly point to the rich?

As long as the socialists are taking bribes from the rich and the money goes out the back-door, that is OK because it is not in your face. As soon as we talk about giving the people a DIRECT tax break, then the socialists just cannot stand letting the people actually benefit directly just for once.