COMMENT: I had assumed you were just a Trump supporter. It has been emphasized that I was wrong and that you are in the middle of forecasting the events economically. I was told you recently said that Trump could go down as Herbert Hoover and that he cannot prevent the recession from occurring. Would you please elaborate on this and why you are in the middle to begin with. That is rare these days.

Thank you for your time.

Doug

ANSWER: The computer forecasts all of these elections worldwide, and it has never been wrong because it is not partisan; it just follows the economics. Plain and simple. Any unbiased analysis will always show that if you turn the economy down, the people will vote them out of power regardless of the party. It has always been as they say, it’s the economy stupid.

I am anti-Marxist. I went  behind the Berlin Wall before it fell, and I was called in by China during the 1997 Asian Currency Crisis. So, what I have seen has shaped my personal beliefs. Like weather, too much heat or too much cold and you will die. The same is true in economics. Go into hyperinflation and you get Germany turning to Hitler, or deflation you get the Great That is why I am in the middle of the road, I suppose. I see government as always the problem, for they presume they can manipulate We the People always to retain power. They are dead wrong.

Now, as for Trump becoming Herbert Hoover II, I am by no means a Democrat and at times, I am barely a Republican. We are heading into a recession that will turn into a Depression for some countries because we have a Sovereign Debt Crisis that will not remain silent for long. Trump and his people have grabbed the scepter, and they become mesmerized by the power and think they, too, can dictate the economy. Sorry, there is something we call the business cycle, which is global. The first recognized global contagion was the Panic of 1857. We cannot ignore the economic conditions externally. Trump wants these tariffs to end the trade deficits. That is old-school thinking, and it will fail. Raising tariffs will cause deeper recessions outside the USA and that means the US exports will decline. As that declines, it will create a global economic contagion and that will come back to engulf the US economy.

I can preach until I am blue in the face. They will NEVER listen to me BECAUSE they are all caught up in their own power. It is like a guy has a gun, and he says your money or your life. Are you going to lecture him that guns are illegal without a permit? Good luck on that one.

With all due respect for Trump, this is just the wrong time with the bad ideas because the crisis is beyond just the United States. Unless you understand the world economy as a whole, this will not end well. Trump will hit the ground running and may score some success into 2026. Thereafter, things will get serious. Yes, the political system and the rule of law is complete garbage. This will help post-2032 with the reform and creation of a better political-economic system.

This is how the business cycle will unfold. It really does not matter who is president. The global economy will turn down. Kamala and the Democrats would have been a total disaster and we would be in World War III very fast. The Democrats said they were defending democracy against Trump. They were actually stating their own agenda.

Biden was a placeholder – nothing more. He was not the president making the decisions – that was, I believe, the Neocons led by Antony Blinken no different that Dick Cheney was really president under Bush Jr. The Neocons have usurped American foreign policy and did everything to push us into World War III. This was a coup against the American people that the press would NEVER cover, no less investigate. Biden was in a role for which he was unfit because he could be controlled by the Neocons. They picked him, which is why you had Republicans for Kamala to keep that power play. The Democrats replace Biden with Kamala who would be another placeholder who never one a single delegate in the previous presidential primary. She lost every battleground state. All the time, the Democrats pushed Biden off the ticket and made her the nominee without giving voters the slightest say, yet had the audacity to claim this election was about Democracy.

The Democrats would lie to your face that Biden was OK. Had the shoe been on the other foot, the Republicans would have done the same. Rule #1 in politics is NEVER admit a mistake. I have dealt with more governments than probably any analyst or all of them combined. I have seen inside the belly of the beast, and I cannot mindlessly be in either party. It will always come down to the realization at the end of the day that it will be government vs. people, and history will attest to that statement. If a commentator only supports one party, you are listening to a fool.

A reader from France elaborated on the real motives behind Macron’s wanting to send troops into Ukraine, knowing this would start World War III. He looks at this from a personal power perspective, like any dictator fearing a loss of power. The reader wrote:

“To follow up on the Post “Macron Considers Sending Troops to Ukraine” on which I added a comment, I wanted to share with you Macron’s possible strategy behind his reiteration of sending soldiers to fight in Ukraine.

Through this, France would officially find itself at War. In fact, Macron will be able to apply Article 16 of the constitution. The President of the National Assembly and the Senate is already there! “

There is a lot going on with these California fires. Newsom denied a rate increase to State Farm for fire insurance, so State Farm had just previously canceled fire insurance policies. Then there is the question of whether Smart Meters with Lithium Batteries that the state approved yet seem to start fires. Newsome tried denying there was no water and that there would never be an objective investigation of the Smart Meters. Do Insurance companies bring suits against California?

On top of that, Newsom created a system where other areas not impacted will have their insurance raised to pay for fires elsewhere. Then Blackrock is reported to be going door-to-door trying to buy properties. And this guy wanted to lead the nation? He would certainly cure the migrant crisis for real Americans would migrate to Mexico is a fair exchange. This guy would have had all the life preservers on the Titanic removed to be clean before it set sail without them because they did not meet his regulation.

While the temperature on Monday in DC will be in the 20s thanks to Global Warming, of course, Trump said on Truth Social that he ordered the inauguration to be moved inside the U.S. Capitol rotunda. The Joint Congressional Committee on Inauguration Ceremonies (JCCIC) said in a statement Friday that they’ll honor Trump’s request. Those who would have viewed the inauguration outside on bleachers are to be moved inside as well at the Capital One Arena in downtown D.C. where they can watch President-elect Donald Trump’s swearing-in ceremony and inaugural address.

As I have stated, yes, I was invited, but I declined. I am still concerned about major demonstrations by Democrats, but there are also terrorist cells that many assume are intent on assassinating Trump, his team, and even his family. Moving inside makes sense because of the rumors circulating about an assassination attempt again.

President Trump’s Make America Great Again Victory Rally in Washington, DC, is scheduled for tomorrow at 3PM, Sunday, Jan 19., 2025. For the life of me, I do not know why he is doing this before swearing in. I do not think it is a smart move when the Deep State is still very much in control of DC. Our computer is showing in many markets a shift in trend as of Monday. Let’s hope it is not because the Deep State pulls off a fast one to blame on Iran to retain power. The Neocons and the Deep State are an Existential Threat to our nation and the world.

QUESTION: On Friday, the UK FTSE and DAX closed at new all-time highs, so clearly money is flowing into these indices yet euros and Pounds seem to be flying out the door as they prepare for lower lows and thus this seem confusing.  Added to the confusion is that Europe is where the sovereign debt crisis SDC) is likely to begin, so why is capital flowing into these markets?  I suppose better to hold UK or German equities vs. their sovereign debt and thus will those equity markets continue to rally during the SDC?

SR

ANSWER: A number of questions have been coming in about the European markets. Keep in mind that we are in the throes of geopolitical and political upheavals, not to mention the entry of Trump and his old-school nonsense about lowering the dollar to sell more stuff overseas and imposing tariffs. Those ideas I have dealt with constantly over the course of the past few decades. It is confusing without question. The press does not understand currency, not even those in government. Absolutely everything has an international value, and this has led to the overwhelming majority getting things wrong. Many ask why mainstream media will not interview me on such important topics as this. The reason is simply – it is too confusing for them as well.

I have told the story at conferences about my Ferarri Trade and how I bought a 308 Ferrari when I lived in London in 1985 when the British pound fell to $1.03. The Italians were getting $60,000 for the car in the States back then. It was still priced in pounds when the pound used to be $2.40. I bought the car for about $35,000 when converted. The Italians could no longer sell these Ferarris for such a price in London. Hence, they doubled the price in British pounds based on $1.03.

Over the course of the next couple of years, the pound rallied and went to $1.90 again by 1988. I drove the car for 2 years, sold it used for £40,000, and virtually doubled my money. Then, people were buying Ferraris as an investment, thinking it was the car that appreciated when, in fact, it was just a currency play. If you did not look at the currency, you missed the whole point.

In fact, I was buying German cars throughout the 1970s as the dollar was declining. A Porsche was $8,600 in 1970, and by 1980, it was $27,700. I would drive the cars for 2 years and then trade them in and get my money back, so cars never cost me a dime throughout the 1970s. I understood it was all just currency – not the cars themselves. My father took the family to Europe for the summer of 1964, which taught me about currency as we traveled from Sweden to Italy and all around. We had to change currency every time we crossed a border. I learned that CURRENCY was actually a mental language. I would listen to the price in Italian lira and convert that back to dollars in my mind to asses if the value was a fair price.

I was really the only true foreign exchange analyst. I was dealing in billions in the early 1980s. Clients would even put me on a speak in the middle of an OPEC meeting. I was being called in around the world all on currency crises. That’s how I became friends with Margaret Thatcher. I was being touted as the highest-paid analyst in the world, all for currency. When I was opening an office in Geneva in 1985, I was going to use some European names to blend in. I went to lunch with the head of one of the top main banks in Switzerland, who was a client and asked his opinion of what European name to use. He asked me to name one European FOREX analyst. I was embarrassed for I could not. He then explained why everyone was using my firm. He said there were no European analysts because they each would tout their own currency because it was a political issue. He explained everyone was using my firm because I did not care if the dollar went down or up. I said it was just a trade.

By 1985, I was summoned to the US. They were arguing to force the dollar down by 40% to reduce the trade deficit as that theory today is espoused by Trump. That was the Plaza Accord, and I wrote to President Reagan and warned that they would cause a crash within two years, and that became the 1987 Crash. The Presidential Commission then called me in for that one. They just do not teach this stuff in school and that seems to be the problem.

In 1997, Robert Rubin, former head of Goldman Sachs, was also trying to talk the dollar down for trade. Again, he did not really understand currency and its impact on markets. The Asian currency Crisis unfolded weeks later. He may have been at Goldman, but that was more related to debt. To one person, a stock rally can look like a bull market, and to another, a bear market. When you get into currency swings of 10%-40%, it alters the perception of value because they still do not teach this stuff in school. We are clinging to old theories like Keynesian economics from the period of fixed exchange rates. Politicians are making the wrong decisions and investors are confused because these concepts are never taught.

As the greenback rallies, then the European share prices will appear cheap, just as Ferarri did in 1985 when the pound fell to $1.03. You will have domestic movement away from public assets as we have seen corporate rates move below that of government rates in France. Here is the FTSE in pounds and then in dollars. While you see new highs in pounds, the FTSE has not made new highs in dollars and has backed off, showing that the rally in the FTSE is not keeping pace with the decline in the pound.

This is why, in Socrates, you can plot any instrument in a host of various currencies. The definition of a bull market is something that rallies in terms of all the key currencies. When it is rising only in terms of the local currency, it is simply a domestic shift and not international.

We do NOT see a major Crash on the horizon in shares, commodities, gold, silver, etc.

The greatest risk of a crash will be in government debt.