The Tunisian migrant/refugee Anis Amri hijacked the truck to kill people in Berlin in the Christmas market. He managed to escape Berlin and got through France and finally down to Milan. He was shot and killed in Milan early on December 23rd, 2016 when he was asked for identification only because he appeared suspicious. The 24-year-old shot a police officer in Italy before he was killed in a shootout.

Amri got to Europe on a refugee boat in 2011. He ended up in a Sicilian prison but the Tunisians would not take Amri back. So the Italians simply released him in 2014. He made his way to Germany a year later and applied for asylum, which he was rejected. The Germans could not deport him, either, because he had no passport and the Tunisians simply refused accept him back.

One December 20th, Amri drove the hijacked truck into the Christmas market killing 12 and injuring nearly 50 people. What has emerged is the shocking fact that this 24-year-old was put under covert surveillance by German authorities for more than six months. They had a tip that he may be planning a terror attack.

This is the problem with many who have infiltrated Europe. They are single young males. It is one thing to help real families. It is entirely something different to accept young males especially when they are pretending to be children.

What’s so nice about Christmas has always been the one time of the year when everyone is pleasant to one another for the most part (except in Washington [lol]). You do not have to be Christian to enjoy the season.  I have Jewish friends who still put up the Christmas Tree along sing of the Menorah. For one brief shining period, we tend to be pleasant. It would be nice if this were the way things really would be all year on.

QUESTION: Hi Marty, How does the model’s call for deflation (earlier blog posts) fit in with the likely major cycle low in interest rates (per your recent posts)? Can there be general price deflation and yet interest rates increase significantly?

ANSWER: Yes. Rates can soar to outrageous levels during the collapse of a system, which reflects a collapse in confidence that causes a simultaneous deflation in assets. Look at the highest levels of interest rates that reached nearly 200% in 1899. That was not a reflection of speculation in the markets. This was when J.P. Morgan had to arrange a gold loan to bail out the government.

Normally, interest rates are the price of inflation in a normal growth environment where confidence exists within the system as a whole. You can get hyperinflation if confidence in government collapses, but when you are on a gold standard, you end up with hoarding and the velocity of money collapses and causes the interest rate to soar like with a loan shark.

You can see we had the biggest asset rally into 1929, but this was the lowest spike in interest rates because the confidence was with the dollar as Europe, Asia, and South America defaulted. The key is where the confidence resides. That’s why I called it the Economic Confidence Model.

I took this picture at the beach. At first glance, it is hard to tell if it is a sunrise or a sunset. For the record, it was a sunrise – the dawn of a new day. What we face can be disastrous but it also can be the dawn of a new era. Government is our worst enemy because it refuses to relinquish power to save society. Like Hillary – it’s always just about them.

This Presidential election has exposed the tremendous deep divide of the nation and the world for that matter. We are headed into the eye of the storm in this battle between left and right. The left is all about punishing people who have more. They are really the people who would break into your house and rob you under the pretense that they deserve it because you have cheated them in some way. This uprising always comes from the left; i.e. China, Russia, and Europe. The uprisings that spring from the general population are directed at government and not the rich class warfare stuff. Those are the revolutions such as the American and French of the 18th century.

The future is dark and sinister if the majority remain silent against the left. Keep in mind that the left have the press in their pocket. This historically has always made them the most dangerous. The left will rise up in class warfare and that takes various forms. Even the uprising in Germany that targeted the Jews was based in class warfare. Kristallnacht, also referred to as the Night of Broken Glass or “crystal night”, symbolized this was really a class warfare incident that began with the idea that the Jews were the bankers and evolved into getting all the Jews who were often the store owners as well. Kristallnacht was the looting of the Jewish stores and robbing them of their property. Yes it targeted the Jews. But the ethnic origin masquerades the class warfare.

So what do we really face? We are looking at the Sovereign Debt Crisis beginning in Europe. Why? Europe has been excessively left. They have the highest levels of taxation and the ability of a government to function is dependent upon the level of taxation. When you reach the maximum point of tax extraction from the people, you see economic deflation sparked by hoarding rather than investment, which the European Central Bank (ECB) has been fighting without success since 2008. The ECB has been the buyer of state debt and there is now no reversing the process. If the ECB stopped buying government debt, government would quickly discover no bid for their debt and then interest rates would explode. Government would chase money rather than restructure until the entire facade collapsed in their face. This is just how governments always collapse when they are debt burdened as we have today. Thus enters the Sovereign Debt Default.

The Trump Revolution will breathe life into the U.S. economy and suck in capital from around the world. Capital is like water. It will flow to the lowest tax combined with security, and skilled labor. The United States has a top federal tax rate of 39.6% compared to Europe over 50%. With Trump lowering taxes, the economy will recover faster, but at the expense of the rest of the world. The United States is not at the same tax level as Europe so it is not in the same desperate position – YET. The Trump Revolution may buy us some more time. But the tax code of the United States illustrates this perpetual battle between the left and right. Business cannot function with the tax code constantly changing. This is the NUMBER ONE reason why jobs leave. It is not purely for wages – it is the chaos of politics creating uncertainty for the future.

The left hate the rich because they want a piece of that pie without working for it. In Australia, the Green Party is being moved to the extreme left led by NSW Senator Lee Rhiannon dedicated to the “fight to bring about the end of capitalism”. No matter how many times the left has tried to create utopia and failed, they never give up.

The left always hates anyone who produces. They are the cancer within society and the key to its total destruction. They have been the sole culprit that stands behind the massacre of hundreds of millions of people.

So we face a crossroads – we go left or right. This is the real battle we face. If we can overcome this leftist movement, then we can step forward into a new era for once and shred the cloak of democracy that hides a republican pretend representative form of government. It is always government that self-destructs.

The Tree of Liberty has been cut. The question becomes, which way will it fall? I can give you the date for the end of this era – 2032. We all can see that the system as is, cannot possibly survive. With each 8.6 year wave, the intensity rises or in market terms volatility. We can see this rise in intensity with the 2016 election – the Year From Political Hell.

So while others yell about hyperinflation and the quantity or money, these are NOT the real dangers we face – only symptoms of the political convulsion that lies ahead. Such forecasts lack depth. As if gold will rise to $10,000 and investors will become rich and somehow life goes on and they survive. Good luck. For such a price swing in gold even to $5,000, requires political chaos and economic instability. It’s just not that easy if we consult history.

I am frequently asked, why do I do what I do? Why not relax on a beach? That question incorporates the assumption one can simply ignore the political changes coming. I too have a family. I may not be around by 2032 – we all have expiration dates. What I do, I am compelled to do. I am at least trying to leave behind a better place for my posterity and on the other hand, I am curious if humanity can learn from the past and make that one step as Neil Armstrong said when he set foot on the Moon:

As we approach 2017, the euro appears far worse than anyone could imagine. The biggest hypocrite is actually Mario Draghi who is outrageously managing the European Central Bank (ECB). To make this as plain as possible, the ECB is the largest individual creditor of the euro countries, and is thus a bank that is undermined completely by the poor creditworthiness of the debtors. If the ECB were to apply its own rules to the banks in Europe that say bail-in, not bail-out, then by its own supervision rules, the ECB is insolvent and should be shut down.

Just look at the data. The ECB has been buying government bonds through its Quantitative Easing (QE) program and the failure of that expanded into other securities that now include corporate junk bonds. Looking at the balance sheet, the central bank currently has receivables amounting to €1,627 billion, of which €1,220 billion are directly attributable to government bonds.

Let’s begin to dive deeper. Of the 19 countries of the Eurozone, the total debt is €9.816 billion. Together, all the Eurozone banks hold €1,695 billion in government bonds. Additionally, there are €1,100 billion in outstanding bank loans. The ECB is already the largest individual holder of government debt as is the Bank of Japan. Neither have anything to show for their QE efforts but failure. Draghi is continuing to buy even more questionable debt to the tune of €80 billion a month, dropping down to €60 billion.

The presumptions that government debt is RISK-FREE is built entirely upon this idea that they can tax. But taxes are at their highs and history warns we have a tax revolution on the horizon. Government debt cannot be looked upon as free of risk when there is no further room to raise taxes. Draghi has placed all his eggs in one basket. Governments NEVER pay off their debts, they only spend more and more. This is a major crisis that seems to be out of focus for the majority of the world and certainly the press who are bought and paid for.

The bottom line: this is not going to end nicely. Draghi has no way out and there is only one end result. As the Eurozone breaks apart, so will the assets of the ECB. Under their own rules, the ECB should now be declared INSOLVENT. The Federal Reserve is not in the same position as the ECB or Japan. Nevertheless, it too will be insolvent if it attempts to follow this path. The Fed only has Federal debt, not state debt which would be more like the ECB.

To make it clear, India is not going door to door to confiscate gold any more than FDR did. The reason so many $20 gold coins have survived is because there was no door to door confiscation. Banks and corporations who had records of gold were forced to turn their gold over and then FDR superseded all contracts overriding what was known as the “gold clause” in contracts. In 1935, the Supreme Court heard constitutional challenges to the abrogation of gold clauses in contracts and Treasury bonds. Gold clauses guaranteed that creditors would receive payment in gold dollars as valued at the time a contract was made. Due to the deflation that followed the Great Depression, this meant that debtors were forced to pay back much more than they owed originally in purchasing power.

To stop a looming wave of bankruptcies, Congress passed a Joint Resolution declaring all gold clauses null and void. The Supreme Court did not hold that the gold clauses must be enforced. With respect to Treasury Bonds, however, a plurality of the Justices concluded that the Joint Resolution was unconstitutional and that the bondholders were not entitled to relief in Perry v. United States 294 U.S. 330 (1935). The Court held that there is a clear distinction between the power of Congress to control the contracts of private parties when they interfere with the exercise of its constitutional authority and a power in Congress to alter or repudiate the substance of its own engagements when it has borrowed money under its constitutional authority. It further held that Congress cannot use its power to regulate the value of money to invalidate the obligations that the government has issued in the exercise of the power to borrow money on the credit of the United States. Clearly, the court used some very strange logic to ensure that FDR got away with his actions. This is why judges should NEVER be appointed by politicians.

The demonetization of the currency and the attempt to set limits on the amount of gold one may own is a two-prong attack on the cash economy in India. There is no confiscation of gold owned by banks, corporates, or individuals when they can CONFIRM and prove that the gold was purchased with above-ground taxed money. Therefore, the line in the sand is drawn between the underground and above-ground economy. The limits are applied to individuals in the cash economy to prevent them from buying gold with the cash to “launder” the money.

India was the fastest growing major economy in the world prior to the currency cancellation. The economic boom in India is more likely to abruptly halt for the last quarter of 2016 following the insane announcement of November 8, 2016, that India was scrapping the 500 and 1,000 rupee notes. This action has caused a collapse in the velocity of money, which is normally indicative of a depression. This brain-dead decision has drained billions of dollars worth of cash from the economy. Prime Minister Narendra Modi’s crazy action was aimed at tax evasion, which rendered about 86% of Indian banknotes effectively worthless overnight. This has to be the worst economic decision of the past century.

Indians are scrambling to banks with their old notes by December 30, 2016, but the tax implication have others just writing their money off or funneling it through the black market and spreading the money around by using individuals to try to cash in some portion.

Modi’s decision led to a stark US dollar rally for three weeks as the Rupee collapsed by about 4%. The Indian society relies on cash for more than 90% of transactions, and nearly every aspect of daily life has been effected. This was a bold action to force the economy into a fully taxed society all for the benefit of the government, of course. The gold ownership is allowed provided you PROVE you bought it with taxed money.

QUESTION: Well Marty, I am actually baffled at what is happening in the United States. First, the demonstrations, the recount, the campaign to derail the electoral college vote, the continuous blaming of Russia, the fake news furore et al… Is this the end of the United States as we know it? Are Obama, Clinton and co realise that they are actually destroying their country… Is this the type of democratic model successive administrations have been exporting in Afghanistan, Irak, Libya..and now Syria. This ongoing nonsense is so disgraceful and disrespectful to people who voted for Trump.

ANSWER: This is all about losing power. They even solicited the CIA to try to create a coup to overthrow the election. This is Marxism in the raw. Historically, the left is by far the most dangerous group. These are the people who would have no problem killing opponents because they see themselves as righteous in their madness.

The sad part is how many people voted for Hillary, showing their complete stupidity. How could they even dare to think Hillary was not corrupt and cared about them? All you had to do was follow the money. All the establishment backed Hillary. Why? Would she really reform the bankers? I cannot believe how stupid these people really were. They seem to be just indoctrinated to assume Democrats are for the middle class and Republicans are for the rich. Then why did all the rich cronies in Hollywood, hedge funds, and the bankers along with Soros, back Hillary and oppose Trump? It just shows they are not independent thinkers and/or really do not care.

Everything is coming unglued.