Tag Archives: world bank

Dec 17 2015

Everything has cycles!


Economists do not Try to Forecast the Business Cycle

Re-Posted on December 17, 2015 by

 

QUESTION: Marty, it was fantastic to meet you in Berlin and the conference really opened my eyes. Can’t wait for the sneak preview of the Trader level in Socrates. The Investor level is amazing providing a long-term outlook written by the computer. Your staff said the computer was writing daily trading reports in the Eighties, but you never told people it was the computer back then.

This brings me to the Bloomberg interview of Larry Summers who was still arguing against a rate hike before yesterday. The interesting point was his admission that economists cannot  forecast the business cycle as you said at the conference. Why do they not even try and then hold up the silver cross and hope you go away?

BR

ANSWER: Traditional Economics is incapable of forecasting for to start with, economists have no real world experience. It takes a trader to even see that there are patterns with markets and by no means are they some random walk if you use technical analysis, Elliott Wave, Gann, or whatever. Each type of analysis, other than fundamental, begins with the realization that this is not some random walk of a drug through the park. That theory of Random Walk was developed to explain their inability to forecast. You might as well say who knows if the sun will appear tomorrow, it is too complex to try to figure out how the havens move. There are too many planets and stars to track.

Observatory-2

All the turning points in the Economic Confidence Model which it has forecast in my lifetime alone, even to the precise day, demonstrates that there is no such thing as a random walk. Yes there is complexity masquerading as chaos within which there are definitive patterns. Even the Maya discovered time. They studied the heavens as did the Babylonians. Economists seems to be unable to observe patterns and then claim anyone who does must be the devil. This is illustrating that social sciences, even if you dare call them a science, are living in the Dark Ages and you burn at the stake alive anyone who disagrees.

Keep in mind that if you can forecast the economy, then you alter politics. How can politicians run for office vowing to alter the future if they cannot manipulate the business cycle? Communism and socialism have failed because they attempted to alter human nature to manipulate the business cycle. Most modern Economists all accept as a general rule that they can manipulate society and the economy. Therein lies their self-interest and this is why they do not even want to examine what we have revealed exists. I do not care if we are not 100% correct. Being better than 50/50 consistently is impossible as pure luck or coincidence..

As for the pretense that 100% of the people would make reality take place if you could forecast is absurd because they would all act the same. The evidence of proper management is the story of Joseph from the Bible warning the Pharaoh there will be 7 years of plenty and 7 years of drought.There will always be two forces as in politics. This is an excuse why not to try. If we assume there will always be plenty and no cycle, then we are plain stupid as a society.

ECO-1895-MA

Some schools are starting to teach the Economic Confidence Model. It is the way to the future.

Dec 16 2015

The FED has created another bubble and its … YUGE


Financial Instability & the Fed

Posted on December 16, 2015 by

Federal reserve

 

The argument that the Fed should do nothing for it will be harder to correct a rate rise than to do nothing because there is no bubble anywhere, demonstrates that we have the most serious BUBBLE in history. Retail participation in markets is still off by 50% from 2007 highs. People have invested in fixed income and now there is a crisis is fixed income hedge funds. The BUBBLE is is low interest rates (GOVERNMENT) rather than the markets. This is what our computer has been projecting for 2015.75. It is right before everyone’s eyes, yet they cannot articulate what they cannot see.

The crisis has been created by the ZERO interest rates. This has wiped out the elderly and destroyed the so called American Dream. The middle class has been collapsing for government taxes them under the pretense that Social Security is a savings for their future. when in fact it is just a tax. If that money had been invested in equities when the down was 1,000, there would be no crisis today. Pension have have chased long-term rates driving them lower and lower trying to meet their future obligations.

China poured more concrete in 3 years than the USA did in nearly a century.  This has driven the commodity markets and that has come to an end. China thus is blamed for the slow down and for the decline in its currency they call a war and manipulation. The trend has simply changed.

Combining these elements does not speak well of the future. The FED is between a rock and a hard place. It will be blamed no matter it does. Nobody seems to understand the dynamics of the trend in motion.

Dec 16 2015

The people of Poland have it right the EU is dead!


Why Europe Will Collapse: Schultz’s Outrage at Poland

Posted on December 16, 2015 by

A huge protest against the Europe Union has taken place in Poland. When I was there, everyone I spoke to was against joining the euro. They all said that the euro would destroy Poland as it did in Greece and the rest of Southern Europe. European Parliament President Martin Schulz (SPD) has said that the protests in Poland have a “coup-character” because they are realistic and against the policies of Brussels, whom refuses to review or admit that the euro has been a complete disaster for Europe as a whole.

Poland has responded with indignation, making it clear that the people have a democratic right and have acted within the rule of law. Prime Minister Beata Szydlo demanded on Monday for an apology from Schulz for his statement. But Luxemburg’s Foreign Minister Jean Asselborn warned on behalf of the EU presidency that independence of the judiciary and the media in Poland is threatened. Indeed, the threat to any democratic right comes from Brussels.

Schulz said on German radio that “right-wing populists” are the greatest threat when they argue against his policies and take government into their own hands to accuse external forces to interfere in the internal politics of their country. These comments from Schultz are dictatorial in nature, as they say that anyone who disagrees with the federalization of Europe going into the hands of Brussels is a threat.  A threat to what — freedom? There is no hope of trying to reason in Brussels. This is beyond hope. We must crash and burn until the end for they will NEVER admit the slightest error in their ideas.

Dec 16 2015

This is statement on Austria is a very a real possibility!


Austria — It Started the Collapse in Great Depression. Will It Do so Again?

Posted on December 16, 2015 by

Credit-Anstalt

In 1931, the sovereign debt crisis and banking system collapse began in Austria with the failure of Credit Anstalt, which was partly owned by the Rothschilds. The bank was forced to absorb another bank and a secret loan was created in London off the books to hide the insolvency to do the merger for political purposes. When that failed to be enough, the whole scam was exposed and a CONTAGION spread as people wondered what government had manipulated behind the curtain.

Now the International Monetary Fund (IMF) has come out and stated that Austria’s banks need to increase their capital buffers urgently. The capital buffers in Austria are thin and cannot withstand a crisis. Furthermore, the banks are still active in politically and economically risky countries, which is typically carried out to increase profits. In reality, the IMF led to the loans granted by the banks in Swiss francs, which caused many borrowers to lose 30% when the peg broke. In some Eastern European countries, the potential losses by a state arranged forced conversion of Swiss franc into local currencies could be massive. This is being done because the borrowers now owe 30% more than what they borrowed due to currency risk. This situation will not magically evaporate for they are private loans.

The Austrian banks are typically banks engaged in RELATIONSHIP banking rather than TRANSACTIONAL. Therefore, they rely on customer deposits short-term and lend long-term. These are not big investment banks as in New York. They have lost a fortune because of the Swiss/euro peg collapse.

The three major banks are Erste Group, Raiffeisen Bank International (RBI), and UniCredit subsidiary Bank Austria. These are the biggest lenders in Eastern Europe as a whole who have gotten caught up in the currency nightmare. The RBI has recently announced their withdrawal from certain markets following a serious currency related loss that the bank has written in the past year for the first time. Bank Austria checked the sale of its branch business.

This coming banking crisis is all currency related. It is, of course, thanks to Brussels and their irresponsible design of the euro. Politics and economics do not go together. They will blame the bankers, but they will never blame government. Hence, this is why we can no longer afford career politicians for they will NEVER accept responsibility for screwing up the economy for political gain.

Bill-Hillary-shutterstock_13713790

The Clintons are responsible for removing ALL restriction from the Great Depression upon the banks. They then eliminated the right to declare bankruptcy on student loans. Yet, the press will NEVER ask Hillary anything about that or the fact that her biggest contributors are the banks in NYC.

Dec 14 2015

Basic Economics that no Politicians understand!


Are Negative Rates Fueling Deflation?

Re-Posted on December 14, 2015 by

IntRate-Manipulate

Those in power never understand markets. They are very myopic in their view of the world. The assumption that lowering interest rates will “stimulate” the economy has NEVER worked, not even once. Nevertheless, they assume they can manipulate society in the Marxist-Keynesian ideal world, but what if they are wrong?

By lowering interest rates, they ASSUME they will encourage people to borrow and thus expand the economy. They fail to comprehend that people will borrow only when they BELIEVE there is an opportunity to make money. Additionally, they told people to save for their retirement. Now they want to punish them for doing so by imposing negative interest rates (tax on money) to savings. They do not understand that lowering interest rates, when there is no confidence in the future anyhow, will not encourage people to start businesses and expand the economy. It wipes out the income of savers and then the only way to make and preserve money becomes ASSET investment, as in the stock market — not creating business startups.

So lowering interest rates is DEFLATIONARY, not inflationary, for it reduces disposable income. This is particularly true for the elderly who are forced back to work to compete for jobs, which increases youth unemployment.

Since the only way to make money has become ASSET INFLATION, they must withdraw money from banks and buy stocks. Now, they are in the hated class of the “rich” who are seen as the 1% because they are making money when the wage earner loses money as taxation rises and the economy declines. As taxes rise, machines are replacing workers and shrinking the job market, which only fuels more deflation. Then you have people like Hillary who say they will DOUBLE the minimum wage, which will cause companies to replace even more jobs with machines.

Keynes-5

Democrats, in particular, are really Marxists. They ignore Keynes who also pointed out that lowering taxes would stimulate the economy. Keynes, in all fairness, did not advocate deficit spending year after year nor never paying off the national debt. Keynes wrote regarding taxes:

“Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance, than an increase, of balancing the budget.”

Keynes obviously wanted to make it clear that the tax policy should be guided to the right level as to not discourage income. Keynes believed that government should strive to maximize income and therefore revenues. Nevertheless, Democrats demonized that as “trickle-down economics.”

Keynes explained further:

“For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more–and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss.

TAX-CYC

This is the logic employed by those in power. They are raising taxes and destroying the economy; when revenues decline, they raise taxes further. The evidence that politicians are incompetent of managing the economy is simply illustrated here. Now, we have Hillary claiming that she will raise taxes on corporations, but that will reduce jobs for she will only attack small businesses and never the big entities and banks who fund her campaign.

Bill Murry on Taxes

So when it comes to sanity on interest rates or taxes, we really need to throw out of office anyone who is a professional career politician before they wipe out everything. The balance sheet is, as Keynes said, “ZERO on both sides.”