While those in Washington like to blow their own horn claiming the American President in the “leader of the free world”, all they do is talk among themselves and journalists who are covering politics in Washington without actually investigating anything. Let’s just look at this chart as if it were a market. Notice that the Democrats (blue line) peaked with FDR and the Great Depression. They have been making lower highs and actually have made new lows. If this were a market, we would call this a BEAR MARKET for a bull market requires making higher highs and higher lows. The Republicans crashed and burned into the Great Depression. They have only been making a REACTION HIGH, which is defined as trending higher, but it has not made NEW HIGHS.

The lack of a BULL MARKET trend since 1933 is significant for it is showing the gradual decline in the confidence of government. Look closely, the Democrats actually peaked in a failed attempt to rally with Jimmy Carter going into 1980. This is when Reagan comes to power. As this Economic Confidence Model turned in 1985, the Democrats have been declining despite both Clinton and Obama. As part of the accusation that I manipulated the world economy, the government blamed me for the takeover-boom because I advised many of the takeover guys. Our forecasts that the Dow would rise to 6,000 from 1,000 people thought was nuts back then. But look at the chart on book value. This bottomed in 1977. With the shift starting in 1985 from Public to Private, the Dow finally broke out breaking through the quadruple top at the 1,000 area and it was off and running. They attributed this to the takeover boom and the government blamed me ignoring the fact that all I was doing was pointing out the market was UNDERVALUED because you could buy a company, sell its assets, and double or even triple your money.

This breakout in 1985 was clear evidence of a Public v Private Wave shift where people ignored the private sector for 51.6 years until the Public Wave peaked 1981.35. When we correlate everything, notice the shift in politics that has taken place also since 1985. Neither party has scored a bull market type of trend. Both are dying by slow torture but the majority is not looking at this closely at all. They do not even realize that this is by no means a bull market for the two-party system.

1964 Lyndon Johnson Democratic……  61.05%
1936 Franklin Roosevelt Democratic..   60.80%
1972 Richard Nixon Republican……….  60.67%
1920 Warren Harding Republican……   60.32%

Above are the elections which scored over 60% of the popular vote victories. We have never seen a real landslide (defined as 75%+). The Democrats and the Republicans have their core constituents who will vote for them because they lack any objective reasoning. Less than 10% of the voting public THINK before their vote. The rest indeed pretty much regurgitate whatever they are told.

What is obviously taking place is that the demographics are changing. Less and less of the younger generation act without thinking. Just as newspapers and mainstream press are dying, we are witnessing the same trend among voters. The elderly begin to die off and with their exit we are observing the core indoctrinated believers of Party politics are diminishing.

Sanders and Trump are demonstrating this shift and the establishment does not get it; they only get mad. The say Trump is bringing in new people but among real Republicans, he is not so popular. This demonstrates their arrogance and ignorance of what this trend is all about and how the two-party system is dying of old ideas and too much corruption. The establishment blame the individual candidates like Sanders and Trump and never themselves. They are incapable of looking in the mirror. They cannot see the trend and always see themselves are far more intelligent and the people as the stupid Great Unwashed.

What is unfolding here is terribly important for in order to get that Phase Transition, a Slingshot Move as we did with the beginning of this Private Wave in 1985, or even a rally in gold, the key is the collapse in confidence among the MAJORITY not just the core believers in something like gold. This is the shift from Public to Private and as it unfolds, you can see the trend before your eyes if you are not biased. I have constantly stated that if you just step back and look objectively, the markets reveal the future. Despite all the nonsense, neither the Republicans nor the Democrats have score any new high post-Great Depression. Hence, the Phase Transition in politics, the crash and burn for Republicans in 1932, came precisely at the turning point between the previous Private Wave and the new Public Wave which then peaked into 1981.35. We saw a Phase Transition i8n 1985 with the beginning of that wave and the breakout of private assets.

When we look at the Senate, the Democrats crashed and burned into the Civil War since they were the slave owners. They then became cross-dressers and amazingly became the party of socialists peaking with FDR. They they changed dresses against amount the slave owner party became the champion of minorities. The Republicans were the religious right in the Civil War, became anti-socialist part into the Great Depression, and then became a confused coalition of everything from the religious right to libertarians.

The talk is a flurry in Washington and the plan seems to be centered around a brokered convention in the Republican camp. Ted Cruz is disliked and they hate Trump to the core. According to the talk in circulation, it is between Mitt Romney or Paul Ryan being drafted as the Republican nominee. The elite see no problem with this and point to their rules that the people really do not vote for the candidate; the party does. They have convinced themselves that the Great Unwashed will return to soap operas and sports and after they bitch and moan it will be business as usual.

It is looking more and more like a brokered convention. If Trump goes to the Libertarian Party, then we may see this decided in Congress. In that case, expect a Republican victory.