QUESTION: Mr. Armstrong; Your forecast that the capital flows would shift from the EU to the USA I believe has been confirmed by both the European bond markets and share markets. The German DAX is trading below the low created in 2017 while the USA is trading above it. Is this confirmation that your models are indeed correct on global capital flows?

HJG

ANSWER: Yes. It is amazing to me that people will argue with me and claim I am wrong yet they never bother to just look at the charts. The Dow and S&P500 index, however, are trading below the 2017 high. The capital flows have been rather intense. Because interest rates have been negative in Europe, the capital has been fleeing around the world. Spanish banks were buying Turkish debt and pension funds were running to buy farmland in Australia and then rented it out to farmers at 5% annually Lowering interest rates to negative by the ECB has created one huge mess in international capital flows. The capital went everywhere BUT Europe and the ECB ended up buying the bulk of government debt because they singlehandedly destroyed the European bond market. Just total insanity!

What I have found totally shocking is that the British government under Prime Minister Theresa May is this need to surrender all rights just to remain in the customs union. She has not figured out that the UK has been at the top of the list of the European Union’s ‘Big Four’ economies in terms of economic growth ever since it has voted for BREXIT. The third-quarter Gross Domestic Product (GDP) growth grew by o.6%, while Germany’s economy shrunk by -0.2% and France came in at 0.4%, according to estimates published by Eurostat. Italy saw ZERO growth.

It is really astonishing how Britain cannot negotiate to save its very life. Under May, the negotiations are tieing the UK to a sinking ship and there is really nothing any rational person seems capable of doing. Meanwhile, Brussels is so desperate to punish Britain to set an example in hopes of deterring others from leaving. The UK is the BIGGEST market for German autos in Europe. We are looking at the economic decline of Europe into 2020 which may even be a rather hard landing.

QUESTION: I could not attend the WEC. Cannot wait for the video and materials. I understand you said the US share market was poised to retest the underlying support into 2019. Can you elaborate?

Thank you so much

PY

ANSWER: The target and timing will be on the Private Blog. But generally yes. We will retest support before reacting to European events coming up near-term.

COMMENT: Mr. Armstrong; I just wanted to write to say thank you. You saved my marriage. My wife insisted I listen to you because you were right and got me out of gold. You also got me out of Bitcoin and I cannot thank you enough. These crazy people were touting a new age of knowledge and Bitcoin was going to kill the dollar and become the new reserve currency. Then one real nut said it was going to $250,000. You are right. When something spikes up like that, it grabs the emotions and you lose everything.

PF

ANSWER: There was no possible way governments would EVER hand over such power to Bitcoin. These people have no clue about the age of knowledge, for they are trapped in the age of stupidity. A monthly closing below 2950 will confirm the long-term trend is turning down. A year-end closing below 4150 will point to a drop back to 775 area. It was a trading vehicle – not an investment class for the long-term. With the IMF telling all central banks to create their own cryptocurrency and the introduction of Blockchain in experimenting with tax collection, we face a very different future due to technology. However, it will not be a world of free-market cryptos that bring governments to their knees.