The Russian press is now reporting that the Russian Defense Ministry intends to turn the Crimean peninsula into an impregnable fortress. It will be not only a military outpost of Russia in the Black Sea region, but also be able to defend themselves, even when cut off from the mainland. Russia is now deploying a complete and self-sufficient military force in the Crimea. Russia is also recalling all its students in the West. They are being told to get out even if their classes are not complete. The Ukrainian press is also reporting that Russia is preparing for a major war. They say the only question is the timing – when it starts. At home, Russia is reconstructing and preparing bomb shelters for the possible nuclear war.

This, I suppose, is why Obama was given the Noble Peace Prize not to create peace, but to kill it once and for all. Our models on time are showing up with the same targets of November and January in the Ruble itself. This is curious as our models in so many markets are correlating to these time periods suggesting we are dealing with global contagion effect.

We will obviously begin to pay closer attention to our war models as we move into position. Capital Flows pick up the changes in movement that appear in advance of war. Our proprietary models are critical in this regard for they are the only thing out there that monitors the global capital flows. This is obviously going to be very important.

Right now, we have been tracking capital being withdrawn from South America and Europe moving back into Russia.  Capital is on the move in accordance with the rise in tensions geo-politically.

Even in Asia, we are witnessing a contraction in capital moving back into China from South East Asia as well as Japan. Curiously enough, even from New Zealand, although it appears to be moderate at this time.

We have even seen capital withdrawing marginally from Switzerland, and more aggressively from Britain.

We will continue to monitor these trends for they are disconcerting to say the least.

COMMENT: You are certainly correct, the money hunt is escalating and it’s becoming ridiculous.  I deal with it on a daily basis in the office.

What a bunch of fools.

J

REPLY: This hunt for money is costing business vast amounts of resources and reducing world trade. In banks and brokerage, the back office typically now employs more people than the front office all due to regulation. This is part of the economic decline for the West. I told PayPal that because they were fined, they too have gone over the deep end. I cannot recommend dealing with PayPal. They have crossed over into insanity paranoid about every client from overseas who might be on some watch list. Once this process is unleashed, PayPal has peaked and will begin its slide down. The back offices will always imagine risks that do not exist to justify their existence in every organization. This is part of the process of how major companies slowly die.

At our last Conference in Philadelphia, we were originally booked at the Philadelphia Convention Center. The demands kept getting worse by the day and never stated up front. First came the terrorist insurance we had to buy to cover the convention center, city of Philadelphia, and State of Pennsylvania. Then the film crew was not allowed to work in Philadelphia because they were not union. Then, anyone driving to the WEC we would have to verify they had car insurance to park in their garage. I called the Marriott and asked if they had space. They said yes. They then commented: “Was it the terrorist insurance?” If you park your car in any public garage, you do not have to prove you have insurance to enter. Only government can do stupid insane things like this and when such regulations are forced on business, it will slowly die.

A friend bought a house. They had to explain every single check that had been deposited regardless of the amount. In our case, they imagine “risk” because they do not know who may be buying a report from overseas. So what is this world coming to? Do you have to produce ID to buy something even for cash? And people wonder why international trade is in free-fall. World trade recorded a 1.1% decline in the first quarter of 2016 increasing over the same quarter in 2015. The decline is beginning to escalate.

So we apologize for this insanity. Speaking to various credit card processors they say their tolerance for foreign transactions is no more than 5%. There goes the global economy. FATCA is really destroying world trade at an alarming rate. We are setting up at least two processing services and we may have to establish a separate one entirely for Asia. This is just insane. When you cannot use a single processor because they are afraid of fines from the government for some new regulation, the end is near. With January 1st, 2017 looming on the horizon and G20 will begin collecting data and sharing it among each other to enable greater tax collection, they cannot see that this is destroying world trade.

The Republican Party is in self-destruct mode. Even the most recent polls show that 76% of Republicans think the party is hopelessly divided. This is clearly the result of the career politicians who prefer Hillary and the status-quo to any outsider coming in to upset the apple cart. This is a very serious development, for the old elite guard want war to divert the American people to maintain their control of a very corrupt system.

The vicious attacks by the Republican elite upon Trump demonstrate that their self-interest and corruption comes before the country. Never before in history has a party worked so hard to undermine its own candidate. The trend for the Republicans in the Senate looks rather poor and we will see a sharp tax increase under the Democrats for Social Security goes negative next year. This appears to be setting up the stage for the worst possible outcome for party politics in 2018 where we just may see Congress entirely overthrown as took place in Scotland.

QUESTION:  Hi Marty,
I have a question for you on the movement of the financial capital. Is there a reason it moved to NY (as apposed to VA, MA, or MD) in 1914? Also is it possible to predict what region in china it will move to, or can we just assume it will move to Beijing.
Thanks for all your hard work. I read your blog for breakfast.
-AM

ANSWER: Philadelphia was the financial capitol of the United States. That is where the Bank of the United States began, and to this day, you can go to dinner on Chestnut and Walnut Streets at many fine restaurants that were once banks. That was banker’s row until the state sovereign debt crisis of the 1840s, thanks to Andrew Jackson. The Second Bank of the United States is now a museum. This was the bank that Jackson attacked.

Jay Cooke was the first “Primary Dealer” to sell government debt for the Civil War, and he was the real financier of the Civil War. He is considered to be the first major investment banker in the United States. Cooke embraced technology by adopting the telegraph and thereby establishing the first wirehouse firm. He used the railroads to distribute bonds to people around the nation. This is why Lincoln went to Cooke to sell debt. The Panic of 1873 ended Jay Cooke & Company.

With the collapse of Jay Cooke & Company, the field opened. The next man to fill that role was none other than J.P. Morgan, who also began in Philadelphia. J.P. Morgan moved the financial capitol of the United States to New York City. It was from there that he organized the gold loan for the United States during the Panic of 1896. That is why New York is New York. It was not Wall Street and the stock market, it was the banking center and insurance center that was given life by J.P. Morgan.

There has always been a rival against New York for it sees itself as the real capitol of the United States since that is where Washington was sworn in. The capitol moved south after Alexander Hamilton struck a deal with Thomas Jefferson to allow a national debt. Jefferson demanded the capitol move to his state, Virginia.

As far what city in China, it is all pointing to Shanghai. Bureaucrats in Beijing, money in Shanghai.

Well, of course not. NOBODY is willing to run for office that you would say is truly qualified. The other crazy aspect is that people really think electing a president could change something. Hillary is the corrupt politician gone wild. Not that she is the only one by far. She is just the poster-child for everything wrong in Washington. Can Trump stop the downfall? No possible way. He might slow the process a bit. He is an isolationist and is against NATION BUILDING, but that may prompt the Obama Administration to orchestrate a war with Russia BEFORE January.

So the ONLY thing Trump might bring to the table is a veto pen. The other thing is sending a message to Washington that the party is over. It appears more like 2018 will be the watershed political upheaval in Congress regardless of who gets in. If they rig the election to prevent Trump from taking office one way or another (BOTH PARTIES AGREE ON THAT), then we will probably see a rise in civil unrest within the United States. November may be far more important than many suspect. This is why we made the WEC this year one week AFTER the elections.

So this is the card we have been dealt. They appear to be right on time. If there is a Trump victory, they may very well blame Putin rather than give up their power, even if Putin has nothing to do with it.

We are planning to launch Socrates hopefully with the WEC in November. Because of the constant problems with PayPal getting fined for various things from deceptive practices to allowing money to be transferred to people on sanction lists, the response back has been excessive scrutiny to the point of absurdity. PayPal is also not accepted in many countries and this presents a huge problem for our international client base. The “risk” is considered different for overseas clients and this presents a huge problem.

We are disconnecting PayPal and switching to a more accommodating service providers. Because of the hunt for money globally, this is having a direct impact on restricting international trade. Apparently, the “risk” tolerance for a international business is no more than 5%. Since we have international clients, we are well over that threshold and this restrict international clients tremendously. We will have to split payment options between a domestic provider and an international one. We are in the process of setting up these facilities and we are doing our best to accommodate all clients around the world who do not want to use or cannot use PayPal. Hence we will have to have two separate systems altogether for USA and International.

So we are in the process of changing all links for direct credit cards. DVDs etc will continue to go through AMAZON and conferences go through a separate company and we have not used PayPal for those clients because the problems with international payments. With January 1st, 2017 reporting requirements among G20 nations, this is not going to be easy to service everyone internationally as we have. We are turning on other links to accommodate clients globally and disconnecting PayPal. We will have two payment pathways, one for United States, and the other for international.

Thank you for your understanding. This hunt for money is simply going too far.

Another weak session for the Nikkei despite a brief run at the psychological 17k mark just ahead of lunch. However, it wasn’t to be and the sentiment from a weak US session finally penetrated what euphoria there was and eventually saw the Nikkei close around 1% lower on the day. In mainland China the Peoples Bank of China set the Yuan rate at 6.7258 as the trend continues to play out and the Shanghai index closed with a marginal loss (-0.2%). HSI closed weaker (-0.6%) as US and European futures were indicating weaker openings.

European indices fell on the back of oil and bond price declines as markets await the FED minutes. Core eventually closed down around 0.5% (DAX, CAC and FTSE, whilst the Spanish IBEX finished just 0.1% lower). One of the main talking point throughout both European and Asian trading sessions was the rally seen in GBP after Theresa May stressed the UK would seek maximum opportunities towards trading with the EU. Cable saw an immediate bounce to mid 1.23’s from the 1.21 lows but did see the selling return as we approached the end of the days trading in the US. The DXY was last seen trading at 98.00 up 0.4% as the GBP bounce was balanced by the EURO and JPY weakness.

Most of the US trading session was spent waiting for the FED minutes and the implications surrounding them. So, upon release the market now talks December the trigger month which was obviously acceptable as far as the markets are concerned since we rallied back into positive territory. One market that is sure in which direction it wants to go and that is the Treasury market. The US curve steepened in todays trading with 2’s closing 0.86% but watched 10’s fall to 1.77% (2/10’s at 91bp). In Europe, still concerns around possible ECB tapering weighs on the market but more because its not working and especially if you start to see the FED increasing rates at a time when the EURO and GBP are also losing ground. 10yr Bund closed this evening at 0.065% closing the 10/10’s spread at +170.5bp. Italy closed 1.42% (+4bp), Greece 8.15% (+2bp), Turkey 9.69% (+7bp), Portugal 3.38% (+3bp) and UK Gilts at 1.04% (+4bp).

Wikileaks has produced an email that shows Hillary Clinton routinely discussed things that should have been on a secure server. Hillary sent an email to her campaign chairman John Podesta back in 2014, who was then-counselor to President Barack Obama. In this email, she said Saudi Arabia and Qatar were both giving financial and logistical support to the Islamic State and other extremist Sunni groups demonstrating that indeed this has been a civil war between Sunni and Shia. This email, dated August 17, 2014, was an eight-point plan to defeat ISIS in Iraq and Syria. Clinton’s email said that the United States should support Kurdish forces on the ground with U.S. military advisers and avoid the use of a conventional ground operation. She said we needed to bring pressure on the governments of “Qatar and Saudi Arabia, which are providing clandestine financial and logistic support to ISIL and other radical Sunni groups in the region.” 

The differences between Shia and Sunni is to be found in their interpretation of the hadiths and sharia law on how Muslims should define and govern themselves. But for the most part, the religious differences are really superficial for the conflict and violence is truly driven by political power, which intertwines with theology. There have been protests in Saudi Arabia following execution of Shia there. This is the nature of the civil war which is brewing (see War Cycle Part II).

This really raises serious questions when in fact Saudi Arabia is one of the countries donating large amounts to the Clinton Foundation.

COMMENT:  Mr.Armstrong,
I am wondering why you haven’t commented on the recent Trump scandal about the video with Billy Bush? Constantly seeing articles on how corrupt Hillary is but obviously you are biased towards Trump winning for not making a statement about his misogynist comments about women!
Sincerely,
PH

REPLY: There is a huge difference concerning statements from more than a decade ago and the countless financial frauds of Hillary. But Hillary is not the only “evil” person in Washington. A tape was given weeks in advance to Paul Ryan and elite Republicans and he never told Trump. This is part of the conspiracy between career politicians of both parties. I wrote: “Trump having a vulgar discussion about a number of women is indeed over the top and something you would expect from a locker-room banter.” That is far different from the rest on Capitol Hill who just line their pockets and you are their target. Yes, a tape that involved Billy Bush means he is being fired from the Today Show for banter more than a decade ago. However, other tapes show it was more the nature of Billy on a regular basis. This is what society has become.

Today. there is ZERO TOLERANCE for anything and the problem is that the human race is anything but perfect. Anyone who says they have never done or said anything wrong ever, is an absolute liar. The polls do show that even the majority of Republicans do not think tapes from more than a decade ago are relevant. Who hasn’t changed their mind from their youth or was Trump responding to a macho attitude of Billy Bush? Who knows? The Secret Service have revealed Hillary’s gutter mouth, violent temper, and she even called one agent “you Jew bastard”.

What either one has said is not really the issue. Will this be about ending corruption or furthering it? Emails have surfaced showing Hillary gave preference to Bill’s friends trying to get a piece of the action in Haiti. We already know that the donations to Haiti were ripped off.  Nevertheless, if you want to vote for Hillary because of this single incident, have a nice day. This is the Political Year From Hell. It will all be down hill from here into the future. Just send Hillary more money and whatever you would have left any kids in the future while your at it. The next trade you lose, consider that a donation to the New York bankers as well. Since they own Capitol Hill, it should be considered a donation for tax purposes. After all, the poor bankers have to eat too.

There is far more out there about the Clintons I do not rehash and I don’t bother to comment on. However, I also warned: “It will NEVER be the same after this election.” What you fail to grasp here is President Kennedy was notorious for having affairs. However, the Press did not cross that line between personal and criminal. Nixon was driven from office for having tapes and trying to cover up, which is exactly what Hillary has done. By equating personal issues and banter with criminal activity means that nobody in their right mind would run for office who is even qualified. Who wants to subject themselves to that? If you told some former lover something and they then call you a rapist piece of shit, unless you are Bill Clinton with white shining armor, good luck.

Is Trump the knight in shining armor? Of course not. This election is by no means Republican v Democrat or even Trump v Hillary. Those days are gone and strangely enough, most people are oblivious to the change in trend here. This is the peak in government and the total collapse is unfolding right before our eyes. Trump cannot reverse that trend. He might slow it down a bit if he was even allowed to take office, which I seriously doubt. They are conniving every possible scheme to ensure he does not win, and if he does, they will blame it on Russia and deny him the position. The Republican elite are dead against Trump.

This battle is really the PEOPLE v CAPITOL HILL. It is a shame it has to be Trump leading the charge. Hillary has raised $516.6M with almost 30% coming from Super Pacs. Trump has raised only $168.2M with only 1% from Super Pacs. About 99% of donations to Trump come from small people. Hillary has the bankers, lobbyists, and hedge funds. Don’t you even bother to ask why? The world behind the curtain is an all out war against Trump. Even the top three media outlets have instructed their employees to “destroy” Trump. This is also the end of the press. They have lost all credibility. It’s over! We should just turn out the light!

If you want to say I am biased, fine. But not for Trump as a personal candidate in the traditional Marxist contest. I am biased against the system for it is corrupt, disgusting, and hopelessly beyond repair and that includes Republicans and Democrats. This is what our computer is projecting and it has no personal bias. It simply says we have to crash and burn and then just maybe, if there is the slightest glimmer of hope, perhaps, we can rise from the ashes like the phoenix and redesign this mess all over again to leave our children something better than we inherited.

Otherwise, quite frankly, I have no personal desire to live in a world that is this far gone. I am glad I have seen the majority of my life pass me by. That is my personal selfish view.

Like Star Trek, P-L-E-A-S-E! “Scottie, beam me up!” I have seen way too much thank you.

What I do, I am compelled to do, but not for me; for who I leave behind.

The choice for president has never been so bad. The latest polls show 63% of voters said Clinton is overly secretive, 55% said she was corrupt, and 52% said she was “extremely liberal.” This is very interesting since the only presidents since 1900 to be elected with greater than 60% of the popular vote were Lyndon Johnson in 1964  after the Kennedy Assassination,  61.05%,  Franklin Roosevelt in 1936 with 60.80%, Richard Nixon in 1972 with 60.67%, and Warren Harding in 1920 with 60.32%. Therefore, Hillary beats everyone with the highest rating of distrust.

The polls are being rigged as they were in Britain for BREXIT. But plan B is clearly being put into play already preparing the public for the accusation that should Trump win, the election will be called a fraud because of Russian hackers. The Washington Post, a big Democratic Party mouth piece, ran the story that Russian hackers target the Arizona primary. CNBC is carrying the story that Russia will hack the elections. Obama has outright accused Russia of targeting the Democratic National Party (DNC) claiming two Russian hackers were discovered. This is the story being carried even by the BBC, yet the specialist called in was Shawn Henry, the chief security officer at company called in Crowdstrike, who is himself a former executive assistant director of the FBI.  It was even bantered about in the second debate between Hillary and Trump. The New York Times is jumping in also carrying the story. Reuters is now reporting that there is no question that Russia was behind the hacker at the DNC.

Democrats are now warning foreign governments and hackers that cyber attacks against the U.S. will be treated like any other, even if it leads to war. DNS hijacking or DNS redirection is a common practice. This amounts to subverting the resolution of Domain Name System (DNS) queries. This can be achieved by malware that overrides a computer’s TCP/IP configuration to point at a rogue DNS server under the control of an attacker. It can even modify the behavior of a trusted DNS server so that it does not comply with internet standards. However, the hardest problem in finding the source of these attacks is really attribution. Each data packet sent over the Internet contains information about its source and its destination. Yet the source field can be changed [spoofed] by an attacker to make it appear as if  it is coming from someplace it’s not. This is standard operational procedure. Consequently, I serious doubt that a professional hacker would have left a trace.

I cannot stress strong enough that there is no way they will allow Trump to enter the White House. It appears that should he win, like BREXIT against the odds and the polls, Obama will not leave and the election will be declared a fraud. Obama will most likely step down and hand it to Joe Biden. Our models are showing November as a rather important turning point and this seems unusual insofar as that it would be limited to merely an election. Something else may be in the wind.