Did something happen on the October 28th, 2016 turning point? Just maybe what clicked yesterday was the tipping point against government. The Bundys, who were the armed antigovernment protesters led by Ammon and Ryan Bundy, were acquitted precisely going into the 28th of federal conspiracy and weapons charges. Since the Federal government’s abuse of “conspiracy” where they do not actually have to prove you committed a crime just wanted to, their conviction rate has soared to over 98%. To be acquitted of these charges is a mind-blowing event when it is virtually impossible to win in court when juries just assume the government walks on water.

The protest at Malheur National Wildlife Refuge over the government’s claim to land ended in bloodshed and the police shot and killed unarmed man getting out of his car and then were shooting at women and children in their car. The attitude of some police has degenerated to the point we are the enemy to be hunted and killed for their pleasure. The FBI effectively just murdered one individual. The FBI special agent in charge, Greg Bretzing, said, “They had ample opportunity to leave the refuge peacefully.” He continued, “And as the FBI and our partners have clearly demonstrated, actions are not without consequences.” Well the jury has acquitted those who stood up against this government’s outrageous abuse. Where the blacks are going wrong with Black Lives Matter, they are isolating themselves. They should create a movement that ALL LIVES MATTER and then there will be greater strength in numbers across all races, religions, and genders.

Why do I see this verdict on the very day of the Economic Confidence Model important and not just a passing moment? The ultimate revolution against monarchy that gave birth to the United States and the French Revolution, began with juries standing up against government abuse. It just may be that history is repeating here as well.

The most famous trial where a jury stood up refusing to find the defendant guilty in the face of a corrupt government, was that of William Penn, the founder of Pennsylvania. In 1670, William Penn held a worship service on a quiet street, which was attended by a peaceful group of fellow Quakers. Penn and another Quaker, William Mead, were arrested on a charge of disturbing the king’s peace and summoned to stand trial.

As the two men entered the courtroom and the bailiff ordered them to place their hats back on, which they had removed. Then the judge held them in contempt of court for being in the courtroom with their hats on. Penn demanded to know upon what crime he was being charged for preaching. The judge refused to supply any information whatsoever as to his crime and instead referred vaguely to the common law. When Penn protested that he was entitled to a specific indictment, he was removed from the presence of the judge and jury denied the right to defend himself. Penn could neither confront the witnesses who accused him of preaching to the Quakers nor ask them questions about their charges against him.

Finally, after the testimony the court concluded, the judge instructed the jury to find the defendants guilty as charged, dictating what verdict he expected. Penn tried to protest, but was silenced and again sent out of the courtroom. The jury, for its part, proved sympathetic to the two defendants and refused the judge’s command to find the defendants guilty just as we have seen in the Bundy case. The judge at this point became enraged and sent the jury back to reconsider their verdict. When they returned with the same verdict, the judge criticized the jury’s leader, Bushnell, and demanded “a verdict that the court will accept, and you shall be locked up without meat, drink, fire, and tobacco…We will have a verdict by the help of God or you will starve for it.”

Thereafter, the jury was sent back three more times, but returned with the same verdict. Finally, the jury refused to reconsider. The judge then fined each member of the jury forty marks and ordered them imprisoned until the fine was paid. Penn and Mead went to prison anyway, held in contempt for obeying the bailiff’s order that they put on their hats. Later, the members of the jury won a writ of habeas corpus and were released from prison. Penn and Mead left England after their release from prison, having a taste of justice, and sailed to America. (Earl Warren, “A Republic, If You Can Keep It”, p. 113-115)

The Case of William Penn was a major turning point. Just perhaps, yesterday’s verdict will be viewed as a tipping point in our struggle for freedom from a growing abusive and intrusive government that has lost its way and drunk with power.

As we now head into the next turning point next November, we will have the French and German elections. If both incumbents lose, we may be looking at the final break-up of the EU.

The markets are coiling and do not know what to make of all the scandals being released. A Reuters polls shows that 70% of Republicans believe the election will be rigged. This is what the computer has been projecting that 2015.75 was the peak in government. Trump has risen to the top not for any personal quality or that he is the best person for the job. This really has nothing to do with Trump as a person. He just happened to be there at the right time.

Trump has brought in more people to the Republican Party who just never bothered to listen to the people to begin with. You hear people talking about revolution if Hillary is elected. This chatter is rising and I am really surprised for I have personally encountered people talking openly about this waiting in line just at Starbucks. This too the computer has forecast, not that a “revolution” will take place, but a rise in civil unrest.

Trump has tapped into disenfranchised people from several groups. There were the fiscal conservative Reagan Democrats, the Tea Party, the Henry Ross Perot supporters, Pat Buchanan supporters, and people who simply ignored politics of both parties.  The Republican Party took them in, but said shut up and listen. John Boehner held his introduction to Capitol Hill when all the Tea Party people were elected. They refused to knuckle down and that was really the beginning of this new trend that is really a populist movement.

While I personally would like to see a fair and honest government, that is like a girl winning Miss American and wishing for world peace. The computer simply has been correct that this is the start of the political meltdown. It is astonishing that the Democrats did not put Joe Biden up rather than Hillary, who is really the poster child for everything gone bad in politics. Unfortunately, there is nobody else other than Trump to lead the charge right now and he has merely fueled the the diehard Democrats who see everything Hillary does as a conspiracy against her. They refuse to even realize that 65% of Americans do not trust Hillary and that is a greater percentage than anyone has ever been elected by since 1900. So just how crazy is this getting?

Hillary is so bad and dishonest it is hard to know just how bad the world economy will turn down. We may simply move into a Waterfall type event for what appears on the horizon is a Phase Transition. We have a 5,000 year low in interest rates so there is no place to run in the debt markets. Sure there is gold. But that is really for the individual, not the big money. Real Estate is coming under massive regulation and the Dodd Frank regulations have made it harder now to get mortgages and that will simply weigh heavily on a market unable to recover. The only thing left in town for the majority of people and big money will be equities. There is simply no other place to hide.

A Trump victory would bring to the table a whole different battle. He is for term limits for Congress and that is essential to clean things up down there. But let us face the facts. There is no way Trump can reverse the economic implosion so we are going down anyway, it is just with Hillary we may plunge into 2020 really hard. It is unlikely that Trump will succeed in changing Capitol Hill, and the two talked about scenarios behind the curtain are the martial law using a Trump victory and blaming it on Putin, or the Electoral College will still hand it to Hillary, which may cause even more of civil unrest. Any way we slice this mess, there does not appear to be a nice calm solution on the horizon.

All the scandals, conspiracy theories about murders and money, this simply reflects how far we have fallen in our respect for government.

This is the second election in the Year from Political Hell. We have two more – France and Germany. The markets are creating a base and that is what is essential to create a Phase Transition. You must coil first and then pop. The markets are coiling as everyone holds their breath waiting for the result.

So why I have reported the scandals and tried to show what both sides are saying from FOX News to MSNBC, this is important to always understand the thinking process even when you do not agree with how they reason to reach some logic. My father was a colonel under General Patton who beat Romul in North Africa because he read his book on tactical tank warfare. If you understand what the opposition is thinking, you will understand how to react. All this news and scandal puts flesh on the bones and helps us see just how nuts this really is going to get.

We had a turning point in the ECM yesterday. Is this the shift in sentiment that begins and will be manifested in the vote? We will soon see.

In a 2011 memo, an aide to Bill Clinton laid out the unethical relationship between the Clinton Foundation and Bill’s sudden wealth. Bill’s personal interests were linked as was Hillary selling influence. The memo details how some foundation donors paid Clinton to speak and provide consulting services.

Hillary has said that the Foundation will continue to operate when she is president. Meanwhile, Chelsea is on record saying she will remain running the Foundation if Hillary is elected. Bill says he will leave the Foundation, obviously he will be busy having coffee with world leaders wives. Not sure if that is letter a kid run a candy store. This is a real scandal. We will have a President running a pay-for-play deal for access to the President of the United States. This level of corruption is really just beyond contemplation.

The U.S. polls are clearly being rigged just as they were for BREXIT. Here is a Podesta email revealing how it is done. They take samples from specific regions and markets and pretend it is the national poll. They then feed this information to the media to create what they hope will be a discouraging atmosphere that deters Trump supporters from voting. If Trump’s supporters assume they will lose, what is the point in voting?

The Italian Prime Minister is calling for immediate help with the refugees. The EU refugee crisis is becoming a huge nightmare and Brussels refuses to simply admit it has made a bad decision. Italy is overwhelmed by the influx of refugees and is now calling for a fresh review. Italy cannot cope with a similar number of incoming refugees this year. Prime Minister Matteo Renzi has said he would resign if the upcoming Constitutional Amendment is rejected on December 4. He realizes the vastly unpopular influx of refugees must be stopped or he may have to resign. The Italian coastguard rescued more than 6,000 people from the sea, and this year alone about 155,000 refugees have arrived by sea in Italy. They are pouring in from Libya where operating traffickers send refugees to make large sums to get them to Italy.

Renzi has now threatened that if other EU member states refuse to accept refugees he will veto the EU budget. Renzi pointed out that Italy pays the EU 20 billion euros and gets back only 12 billion. He has come out and stated that this system “does not work.”

QUESTION:
Mr. Armstrong:

I hope you are well. I ask you:

1. What were the contributions to the economy and international trade, of the great bankers of the modern history, such as, Medici, Fugger, Welser, Berenberg, Rothschild and Morgan?

I look forward to hearing from you as soon as possible.

Sincerely,

J.E.M.V.

ANSWER:The contribution was to facilitate the advancement of society by enabling the free movement of capital and thus the integration of commerce. Of course, people will immediately disagree with me by citing the Rothschilds who did lend to the governments of Europe. They were more of the exception rather than the rule.

The Medici were different. Raymond de Roover, who became a Professor of history at Brooklyn College, wrote “The Rise and Decline of the Medici Bank,” which was first published in 1966. It remains the seminal work on this period. He had access to contracts and internal documents. A special clause was entered into the core contract of the Medici bank “to deal as little as possible with the court of the Duke of Burgundy and of other princes and lords, especially in granting credit and accommodating them with money, because it involves more risk than profit.” (id/ p 343)

Obviously, Raymond de Roover makes it clear that the Medici did not wish to lend to the princes of Europe, for there was no way to collect a debt from a sovereign. The contract continued by warning that “many merchants in this way fared badly…our fathers have always been wary of such involvements and stayed aloof, unless it was a matter of a small sum lent to make or to keep friends.” The Medici policy was “to preserve their wealth and credit rather than enrich themselves by risky ventures.”

Indeed, later generations ignored this command, and once they lent to government, that was the end of the Medici. The Fugger’s were the German bankers wiped out by the default of Spain, which was rather stupid since they had previously defaulted after wiping out the Italian bankers.

Banking has always furthered the economy and raised the standard of living for all. When the bankers get in bed with government, society is placed in a dangerous position.Goldman Sachs is not a true banker and was rescued transforming them into a bank so they could be part of TARP. They are wheeler & dealers, not true bankers. They are in a class by themselves and should not be looked upon as even with the same stature as the Medici.

Merkel wants to regulate real estate loans in Germany. The Federal Government is planning to implement extensive regulations on real estate loans. Among other things, debtors will be required under certain circumstances to repay their loans within a given period. The Federal Government said on Monday that the draft law should be followed by recommendations from the German Committee on Financial Stability.

While there is no real estate bubble right now, it appears they are concerned about further capital inflows, perhaps caused by the failed euro. The new hurdles to be imposed for new loans may have the negative impact of making sales of property in Germany far more difficult as a whole. Such schemes have tended to have a negative impact upon price.

Yes, the Hang Seng lost 1% and Shanghai was lower by 0.5% but the volatility was in the Nikkei that managed to reverse the opening trend with a healthy bounce. Many traders tell us they feel something is hovering in the wings and are therefore taking very few overnight positions! However, the day was generally heavy and so we saw Europe open with a negative bias.

European stocks opened marginally weaker, on the back of oil’s price decline but it was the credit markets that most influenced stocks as government started to slip. Recent fixed-income issuance is starting to have an impact outside its own market as central bank figures warn they would rather not have interest rates so low for so long. This didn’t help matters for bonds obviously, but it also weighs heavy on the stock markets too. In the UK the FTSE could not find the enthuses needed to turn things around and so we closed around 0.9% lower on the day. The DAX and CAC both closed around 0.35% lower. IBEX actually managed a small positive close at +0.4%.

US stocks had a heavy opening following Europe’s weak morning session but managed a healthy recovery upon economic data when we saw PMI jump from 52.3 to 54.8 and New Home Sales were up 3.1%. However, the action was very much in the bond market where we saw possibly the start of sell-off begin. the US curve steepened after 2’s gained 1.5bp to close 0.87% while 10’s gained 4bp closing at 1.79% (2/10 curve at +92bp). Germany started the selling as dealers started the hedge into supply. 10yr Bunds gained 5.5bp to close 0.085%; closing the US/Germany 10yr spread at +170.5bp (2.5bp tighter than yesterday). Italy 10’s closed 1.46% (+7.5bp), Greece 8.09% (-11bp), Turkey 9.7%, Portugal 3.17% (+2bp) and Gilts 1.15% (+6bp).

The Wall Street Journal broke the story on Sunday night about the connections surfacing between the Democrats and Jill Mcabe’s run for the Senate who is the wife of one of the top FBI investigators into the Hillary emails. According to the Journal, the finance records show Virginia Gov. Terry McAuliffe’s PAC gave $467,500 to Jill McCabe’s 2015 state Senate campaign. Then the Virginia Democratic Party itself spent an additional $207,788 on her campaign. McCabe, who ended up losing to the Republican incumbent, is married to Andrew McCabe, the FBI’s deputy director.

On top of all that, now an email from 2015 reveals Hillary’s top aide and lawyer Cheryl Mills wrote to Podesta, “we need to clean this up,” referencing the communications between President Obama and Hillary Clinton where she was clearly using her private server. “He has emails from her – they do not say state.gov,” Mills wrote.

In a CBS interview in March 2015, Obama was bluntly asked when he first learned about Clinton’s private server that she used as Secretary of State. He answered: “The same time everybody else learned it through news reports.”

However, Obama clearly signed this memorandum to which Hillary would have been a party. Her claiming it was allowed is plain out right a lie. There are emails from Obama to Hillary’s private server, proving he knew what she was doing. Clinton keeps trying to dodge the criticism and distort the degree to which the rules have changed since previous secretaries of state were in office. On August 24, 2012, Obama signed a directive to the heads of the executive departments, which would have included Hillary (Directive to Hillary 2012 m-12-18). Hillary was Secretary of State between 2009 and 2013. Therefore, Obama knew she had a private email server and sent this directive, which she IGNORED. This latest email from Mills to Podesta shows Hillary was outside of the rules and law.

Podesta wrote in return to use Executive Privilege to cover-up the issue just like Richard Nixon. “Think we should hold emails to and from potus? That’s the heart of his exec privilege. We could get them to ask for that. They may not care, but I(t) seems like they will.” 

Indeed, the New York Post exposed that Obama used a fake name to communicate with Hillary on her private server obviously because he KNEW what she was doing.

Unquestionably. Trump is right. We have to “drain the swamp” in Washington, DC.