India is moving now to confiscate gold after going after the cash. Currently, each married woman is entitled to 500 grams, each unmarried woman 250 grams, and each man 100 grams of gold. Everything that goes beyond is classified as illegal possession and thus will be confiscated. There is no restriction on the possession of the jewelry only if the jewelry was purchased by inheritance. Prime Minister Narendra Modi is giving more power to tax authorities rather than dealing with corruption. They will be shaking people down for money. Unlike FDR who confiscated gold from the banks, Modi is allowing the tax people to go door to door.

This is the problem I have been warning about with gold. It is losing it safe haven status for it is getting to the point you cannot travel with it, keep it in a safe deposit box, or show gold with jewelry. In Italy, if it looks like you have excessive jewelry, they pull you over and weigh it at the border.

This is all part of the Hunt for Taxes. India is setting the tone. The danger will be if others follow. Trump would stand in the way of such policies in the United States. But in Europe, we may see the same policies take effect to different degrees. All they need do is claim that terrorists are using gold to fund their operations.

Everything is still on target for the move under $1,000 into next year.

Geert Wilders’ Freedom Party soars ahead in polls and would win if the election were held today in the Netherlands. The political world is still in denial. Discussions circulating on Capital Hill are taking the route that Reagan was an outsider, so they just have to train Trump how this has to be done. Around the world, the political elite just do not get it. This is not a trend in a single country that can be analyzed from domestic rhetoric. We are in the middle of a global upheaval for this is a PRIVATE WAVE and we will see government be rejected more and more as we head into 2032.

This is not racism. This is standard anti-immigrant. The riot against the Irish in Philadelphia in 1844 was a gun battle. That was the sovereign defaults of states and an economic decline. People naturally begin to blame immigrants for working cheaper and taking jobs. The Irish were white. So there was no racist issue. It was plain economics.

On July 11, 2016, the 30-year bond peaked on the nearest futures at 177110. The 30-year Treasury yield fell to 2.088%, and on that day, the Swiss government actually found some real suckers to buy 50-year bonds at negative yields out to 2076. The buyers will not be around to experience the official default, so why would they really care. This was the end of the bond bubble, and despite all the banter and opinions, this is a major, major, major peak in government. There is NOWHERE to go but down from here on out. If you own any bond fund, you better get out. This is a real game changer, and of course, every bond fund manager will tell you the stock market will crash so buy bonds.

The yield on the 30-year bonds peaked in 1981 with the precise high in the Economic Confidence Model. This was a perfect 35-year decline (the gap on the chart is when they stopped issuing 30-year bonds). The 2015 closing was 15340. We closed yesterday at 151060. What is the significance of this? A lower closing for 2016 after making a new intraday high will technically be the kiss of death.

Here is the yearly chart of the 30-year using our recreation and extending the data series back to the beginning of the United States. We have important technical resistance at 159610 and 157205 for the closing of 2016.

Then 2016 was our target for the high and you can see this was also a Directional Change. We should expect to now see the bonds fall over the course of the next two years going into 2018. This will most likely be accompanied by a rising dollar and stock market with interest rates. We can see that the volatility will start to really become pronounced in 2018.

QUESTION:

Hello Martin,

every day I read your blog. Today was about All Roads Lead to the Dollar and manipulation:

First you say that the system cannot be manipulated:
(“the system, which is crumbling before our eyes, cannot be manipulated. This is why BREXIT, Trump, and now Hollande in France are stepping out and Italy rejected the EU referendum. The cycle has changed and all of this is beyond government or banks to control the outcome. They are not intentionally doing this, for they cannot even understand human behavior no less manipulate it.

But then your say:
“Trump took it to the people the elite just assumed were sheep to be manipulated. Trump showed that the silent majority are starting to demand they be heard”.

So it seems a bit of a contradiction?

If I try to connect the dots together, it forms this:

The system can be manipulated by “the elite” (government, big coorporations etc) to a certain extent.
That is, UNTIL humans are fed up.
This is predictable human behaviour (enough is enough, fed up with corruption, many examples in history, so measurable and predictable).
THEN, when people had enoug, THE CYCLE CHANGES.

Is this correct?

Kind regards, and I am very thankful for your education.

Kind regards, C

ANSWER: Part of the cycle is that the general public allows the government to become corrupt because we do not hold them accountable. It is not that the elite successfully manipulate society; it is more that society is complacent, and when it finally gets bad, they respond as they just did with Trump, BREXIT, and in Italy. People like Hillary have been scamming the system the entire time. To them, they think, “Well no one said anything when we stole $1,000, $10,000, and then $100,000, so why are they angry when I take $1 million?”

What I mean insofar as the system cannot be manipulated, is that nobody can alter the major trend against the cycle. The people will allow corruption up to a point. But those in power cannot manipulate it to the extent that they are capable of preventing the uprising; i.e. Tiananmen Square 1989. Even China and Russia learned that lesson where the socialist/Marxist agenda is to subjugate one group for the pleasure of another.

The elite and bankers can assume they have the power to manipulate, but they are just fools; drunk with their own importance. When they were wrong, and our forecasts were correct, like the collapse of Russia in 1998 which resulted in the Long-Term Capital Management collapse, they said I manipulated the world economy because I had more people than they did and my clients won while they lost. They judged me by what they were trying to do — rig the game. So in other words, they would have won, but for me. That was really absurd, but understandable when someone is drunk with power. Blaming me relieved them of failing to manipulate the system to prevent the crash. They preferred to assume I had more people than they did so the solution was eliminate me. They even went to the extent of then claiming I stole the idea of Pi from a movie that came out in 1998 in Australia. They even lied about the timeline and assume people are stupid and won’t bother to look at dates. I suppose I also had a time machine, when forward, and then took it back to 1985. They will say whatever they need to to try to discredit people to further their own power.

When Goldman Sachs had a programmer they accused of stealing their code, they warned that this was dangerous for he could manipulate markets. Of course, they would NEVER do such a thing. They only do “God’s work.” Every commodity has been manipulated within the trend for short bursts. It never is enough to change the major trend. They take their profit and then run to the next. They DO NOT manipulate markets systemically like suppressing gold to help the Fed or whatever. Those ideas are even more off the planet. They play markets for a quick profit – in out – goodbye.

The power that be in New York City could not prevent the crash in 2007 despite the fact that own all the regulators, politicians, and the courts. Even Goldman Sachs needed to be bailed out. So the all-powerful was not so powerful after all was said and done.

This is why I say nobody can manipulate the business cycle to prevent anything from Russia, China, to the Fed and the bankers. The cycle rules and that, with time, will end the illusion that they are in charge. When it does, things will crumble. When Credit Anstalt failed in 1931 in Austria, it began the banking meltdown.  In the United States, 9,000 banks failed during the decade of the 30s. It’s estimated that 4,000 banks failed during the one year of 1933 alone. By 1933, depositors saw $140 billion disappear through bank failures. Why did the Austrian bank failure set off a global crisis? One of the shareholders was the Rothschilds. When that failed, the idea that the elite are above everything crumbled to the ground in dust. We will see the very same thing happen this time around.

So beware. The downside of this conspiracy theory that these people at the top can manipulate society comes with a price – when it crumbles, the confidence vanishes and people are rudely awakened by the fact that nobody is in charge. We are at the judgment of fate. Therefore, you are correct. When the people had enough, the cycle changes.

The Nikkei closed today at its highest level for the year which included a well behaved Yen. Closing up +268 points (+1.45%) certainly puts it in good shape for the year end rally. Shanghai and Hang Seng were mutually off-set (+0.2%/-0.2%) with many just waiting for the ECB rate decision and being led by the bond market. As that was the key talking point lets just move on to that now.

The ECB managed to surprise the market today after it announced the possible tapering of the amount of monthly purchases it takes from the market from €80bn to €60bn beginning March 2017. Bonds were drifting lower (in price) into the announcement but this really did shake dealers around the world as we saw aggressive selling of all bonds;10yr Treasuries took a hit with yields climbing from 2.34% to 2.41%. Bunds traded from 0.35% to 0.44% on the news. As the news conference continued we heard additionally that they may reduce the tenor of these purchases from 2yrs down to 1yr. the one sentence that seemed to escape the limelight was, “The risk for deflation has largely disappeared”. If you were to put that with the €20bn reduction and that leaves bonds extremely vulnerable. Prices did recover into the close on both sides of the Atlantic but the bond market trades nervous for sure. The EURO lost over 1.25% today bringing it back towards the fearful 105.50 level.

Equity markets in Europe reflected the growing optimism by producing yet another strong performance. IBEX was over 2% better, the DAX and FTSE MIB both finished around 1.7% firmer with CAC up 0.9% and FTSE +0.45%. It will be interesting to see how these markets perform next week after the announcement by the Federal Reserve. US stocks set yet more records ever since the election vote. Initial Claims today were roughly in-line but the cash sitting on the side-lines has decided to move, it would appear. All cores closed between +0.25-0.45% higher on the day.

10yr US closed 5bp higher at 2.40% steepening 2/10 by 4bp (2’s closed 1.10%). In Germany 10’s recouped much of its losses to close 0.38%, closing the US/Germany spread at +202bp. Italy 10’s closed 1.99% (+11bp), Greece 6.53% (-2bp), Turkey 10.90% (+13bp), Portugal 3.70% (+23bp) and UK Gilts 1.38% (+2bp).

Private Blog Update on the Dow

Government is on the verge of completely destroying the economy all because those in power are incapable of managing even a bubblegum machine. Local cities are desperate for money as their own pensions keep moving closer to collapsing. Instead of dealing with the problem, of course, they always choose to just tax the stupid people. Pasadena city officials are considering whether to tax subscribers of Netflix, Hulu, and other video streaming services under an existing municipal utility tax code that was initially designed for taxing cable television users. Sacramento and dozens of other California cities have similar codes that they are looking to use to tax video streaming in addition to their cable tax.

The tax burden will only rise as more and more cities begin to tax the internet to line their own pockets to keep their insane pensions and free healthcare alive.

COMMENT:  I love your site and read your blog daily – thank you! Regarding the polls, I have a friend who lives in San Diego, CA. She and I spoke just before the election and she said that for the past week to ten days, she had been receiving several calls every evening asking how she was planning to vote. When she would answer that she planned to vote for Trump, the “pollster” then asked her whether she had heard the latest news or scandal about Trump. When she replied that she didn’t believe it and was still going to vote for Trump, they would argue with her to try to change her mind. It would seem they weren’t so much polling as trying to influence her vote. Perhaps that’s why they got it wrong – they weren’t really polling!

REPLY: Quite a few emails have come in from California saying the same thing. Keep in mind that historically the left is always the most violent. They tend to see themselves as victims and that justifies attacking the right. This is how the revolutions in China and Russia began, as well as the 1918 German Revolution. The American and French Revolutions were against societies being repressed by government.

Therefore, the two primary actions that are behind rising discontent is a Socialist/Communist rebellion or the oppression of government. When Trump won, the Socialists were rioting and setting things on fire because they lost. Nevertheless, the press will continue to feed that movement and will bring about the fall of Western Society as we move forward in time. We are facing the final uprising of the left as they desperately try to create utopia for themselves – the Marxist dream.

Creating external wars for profit tends to emerge from the right. They are driven by money whereas the left sees themselves as victims who seek vengeance upon anyone with more than they have.

TIME managing editor Nancy Gibbs wrote the essay naming Trump the Person of the Year. “So which is it this year: Better or worse? The challenge for Donald Trump is how profoundly the country disagrees about the answer.”  TIME had ran a piece titled: Here’s Why Newspaper Endorsements May Matter This Year. Of course, they were wrong. While TIME did not give an endorsement, they appeared to give credence to why those endorsements would matter. Clearly, the press conspired against the people of the United States in droves by all trying to persuade the people to vote for Hillary and to promote the left agenda.

Gibbs also wrote: “For reminding America that demagoguery feeds on despair and that truth is only as powerful as the trust in those who speak it, for empowering a hidden electorate by mainstreaming its furies and live-streaming its fears, and for framing tomorrow’s political culture by demolishing yesterday’s, Donald Trump is TIME’s 2016 Person of the Year.”

Given the headline on the cover: President of the Divided United States, reading between the lines, TIME appears to be really endorsing the division. They celebrate the division of the country and thus take the other side. They do not encourage calm or to just wait and see if there will be unity. They in effect subtly endorse the cry of socialist protesters, Trump is Not My President. They are thus feeding into the very cycle of civil unrest that will lead to the breakup of the United States.

Unfortunately, as we move forward, this is what our War Cycle is all about. The sharp rise in civil unrest is pointing to the fact that this is going to be a serious confrontation between left and right. Trump is merely the symbol of the right saying enough is enough. The press and the left are not about to allow unity and will constantly attack him and the right every chance they get.