Sources on Capitol Hill are saying that Paul Ryan will step down after the election, otherwise known as Eddie Munster from the Adams Family on the Hill. His anti-trump position has not gone well with the new core Republicans and he does not believe he would get the 218 votes to remain as speaker. Ryan is looking like the first casualty of this election regardless of who wins. There is a growing resentment of him among the new real Republicans who reject the establishment including the Tea Party who have always been marginalized first by Boehner and now by Ryan.

Trump has changed the Republican Party is a silent coup restoring the Reagan Democrats (fiscal conservatives) who have been ignored. With all the new groups coming to the Republicans, this is not the GOP of McCain and Ryan to put it mildly.

Wikileaks has also revealed that the Clinton Foundation, which is the closest thing to a Racketeering Organized Crime Family, is being investigated by the IRS. However, sources also say that the FBI investigation of the Clinton Foundation is far more serious than did she have classified info on private emails.

The internal war we have warned is unfolding with Intelligence and Law Enforcement standing against Obama and the corrupt DOJ under Lynch is really heating up. The FBI realizes that Lynch’s DOJ will protect Hillary at all costs and will never allow her to be criminally charged. They have no choice now but to leak everything they can to show the corruption going on in the Department of Justice (see Daily Mail).

There are 650,000+ emails on Weiner’s laptop. Meanwhile, Huma Abedin is preparing for her own criminal charges of obstruction of justice. She did not turn over that laptop when ordered to do so. She is now crying “she doesn’t know how her emails wound up on her husband’s computer” according to the Washington Post. She is saying that and it is not plausible. She had to be using that computer. Oh she may try to claim that her husband hacked her emails to escape the criminal charges. But that will get really messy. It would also mean there was a MAJOR breach of security.

Now the FBI is letting the press know that Clinton’s server was hacked by at least five foreign intelligence agencies. There are now also two additional investigations into Hillary on that score. State Department has revealed there were 10 attempts to hack Hillary in just 2 days. Let’s face it, if Hillary is elected, she will most likely be IMPEACHED as was her husband, but this time she would be removed. This is not a Monica deal.

This election is going down in history as the tipping point for the United States. It has revealed how corrupt Congress really is. We have even former Bush Sr saying he will vote for Hillary. He just lost all my respect for he has chosen the status quo to save the politicians rather than his country. This is just over the top. Even Podesta began a lobbying firm with his brother, which now collects $120,000 PER MONTH in a fee from Saudi Arabia.

Hillary has tried to slander Assange saying all these hacks came from Russia. Assange has come out and bluntly said the hacked Clinton emails didn’t come from the Russian government. They may be coming from sources inside the USA. Do not forget, to my surprise, there is one source that has EVERYTHING. Hello – NSA! Anyone remember they are storing everyone’s emails, text messages, and phone calls? Nobody wants to order the NSA to turn it all over because it will reveal treason, where Hillary took money from foreign government and they approved arms deals. It would also confirm Snowden was right.

If Hillary is elected, it will be by rigging the election. Our computer has NEVER been wrong on this score. So if she takes office, this will be the worst administration in history and may very will set in motion the phase transition where capital flees to bonds and we see a significant rise in civil unrest. The capital will shift from PUBLIC to PRIVATE. Watch the stock market after January.

The British court ruled that Parliament, not the “people”, must vote on BREXIT. If Parliament overrules the people, we are looking at massive civil unrest in Britain as well. The whole world is just going nuts and what the people vote may mean absolutely NOTHING. So much for Democracy.

Our forecast for this Crisis was first made back in 1987. This is the sad fate of how governments die. Once they go against their own people, they cease to be valid governments and cross that threshold into the land of authoritarianism. This is the REAL DANGER we face. The extinction of democratic forms of even pretense in the West and this will be the driving force for capital to migrate eventually to Asia forging a new Financial Capital of the World. The refusal to charge Hillary by the Democrats who control the Executive with Obama demonstrates how there is no rule of law. This is all becoming a joke.

We have to understand that fundamentals mean nothing. How many times have we seen a market decline with good news and the explanation is flipped to say it was not “good enough”. Markets are driven by BELIEF, not fundamentals. The pound crashed because those in the financial sector believed their own nonsense and sold. The Guardian reported after BREXIT “Economists at major City investment banks have cancelled forecasts of a Brexit-inspired recession amid fresh data showing the economy performing more robustly than expected. … Goldman Sachs, Morgan Stanley and Credit Suisse are among the major banks that have now withdrawn earlier predictions that Britain is likely to enter recession.”

The markets will decline as Trump narrows the gap and a Trump victory will more-likely-than-not result in an initial drop, but November is a turning point so it may be a buying opportunity as the majority of the pundits get this one wrong as well.

Here are the charts and Array for the election. Note that the S&P500 has fallen technically harder than the Dow Jones Industrial Index. This is the reflection of capital flows. We still see foreign capital buying dips in the US blue chips, but domestically there is the fear-mongering about a Trump victory. We have back-to-back Directional Changes for the 7th and 8th. We should see a 3 day reaction following the election.

So grab your socks. We are off for a bit of volatility. Keep in mind Trump would be great for a domestic market rally. Cutting corporate taxes to 15% will bring home $3 trillion to say the least. The Reagan Tax Cuts resulted in the Dow rising 600%. Tax increases, have ALWAYS resulted in declines. That is the blunt reality that Washington fights.

We are looking at the complete collapse in the rule of law. There is no other way to put this. The Department of Justice is so compromised with Lynch at the head it is getting to be absurd. Peter J. Kadzik is the Assistant Attorney General for Legislative Affairs at the Department of Justice (DOJ). Clearly, there is an internal war going on as I reported. Now that the FBI has over the 650,000 emails uncovered in Anthony Weiner’s notebook, which Huma Abedin failed to turnover to Congress claiming she had no idea how they got there. The US Justice Department announced it is now also joining the probe to dedicate all necessary resources to quickly clear Hillary, up pops the conflict of interest. In the letter to Congress, the DOJ person to aid this investigation to clear Hillary by the election, is Assistant Attorney General Peter J. Kadzik who wrote to the House and Senate lawmakers.

This is Podesta’s friend for dinner who goes to his house. Plus, Peter Kadzik donated $250 to Hillary also noted in Podesta’s spreadsheet. Kadzik and Podesta were classmates at Georgetown Law School back in the 1970s and have been good friends ever since. In fact, Kadzik represented Podesta during the Monica Lewinsky investigation and Podesta wrote that Kadzik was a “fantastic lawyer” who “kept me out of jail.” It was also Kadzik who lobbied Podesta for Marc Rich to obtain a pardon for a fugitive when you have to show remorse to get a pardon. Never has a Pardon been granted to a fugitive in this manner. Then Kadzik’s wife, Amy Weiss of Weiss Public Affairs, worked on the 1992 Clinton/Gore Campaign as a Press Secretary. She was the Communications Director for the Democratic National Committee, and on top of that, she was White House Deputy Assistant to the President Bill Clinton. It gets better. Another email sent on May 5, 2015, Kadzik’s son asked Podesta for a job on the Clinton campaign. This is the independent person appointed by Lynch to clear Hillary? Come on! This is outright in your face corruption.

Why would the DOJ pick such a conflicted person? The answer is obvious. They want to CLEAR Hillary no matter what. Kadzik is there to now counteract anything Comey does because there is really an internal war waging in Washington. The screams from behind the curtain are getting deafening. It is so disgusting that we are witnessing the complete collapse of anything pretended to be the rule of law. The status quo, including George Bush Sr, are all backing Hillary so there is NOTHING that will change and they all live fat and happy off of our taxes and legal oppression. This is really becoming a battle to save the country from the privileged establishment. They milk us like cows and send our boys into battle with lies and propaganda to enrich themselves. I lost half my school friends to Vietnam when Lyndon Johnson even said in 1965 the Vietnamese never attacked us; “For all I know, our navy was shooting at whales out there.” (source)

Perhaps a vote for Trump is the slap in the face these corrupt people need. What a complete mess we are in.

QUESTION: Mr. Armstrong; You have pointed out that both Republicans and Democrats have voted for wars and they really seem to have no differences on this issue. You have said they use the social issues to distinguish themselves, but war and economics they seem to always agree. Do you have any insight on this phenomenon?

ANSWER:  The Pentagon was unable to reconcile over $2 trillion in accounts and Rumsfeld promised an investigation the day before 9/11. The plane that struck the Pentagon magically honed in on the room with all the records. Now that number is over $6 trillion. They even lost track of $12 billion in cash sent to Iraq. Then they rigged a missile-defense test so that an interceptor could easily hone in on a target. They have lied to begin EVERY single war (see: “Cycles of War”). This is by no means a coincidence.

War is first and foremost a profitable racket. Even Lyndon Johnson admitted the Vietnamese never attacked us to start that war. He commented that for all he knew they were shooting at whales that night. This is how they line their pockets and wash their hands in the blood of our boys who are told the same sort of lies as the terrorist organizations. OK, they are not expecting a herd of virgins, but they are told that they are fighting for God and country. During World War II, Japanese kamikaze pilots were told the Emperor was God and they would be the divine wind that protected Japan — so they should crash planes into the American ships.

Just follow the money. When Trump said no more “nation building,” the military called him dangerous because they might not be able to start wars by playing with their toys.

COMMENT: Marty, the gold bugs are at it again desperately trying to say you are wrong as always and just misrepresent whatever they can. They acknowledge you called for new highs in the Dow, but claim even that was not until 2013 when I read about your forecast back in 2011 in Barrons. They seem to be so desperate to try to prove you wrong yet they have never been right. They do not understand anything about markets. You are correct. They are as bad as politicians preaching the same nonsense and then misrepresent your record to tell lies. They do not mention you said gold would rally up to 1362 and back down. Unbelievable how dishonest and unethical these people are especially ——–.

Thank you for being straight up

KW

REPLY: The gold promoters have a single agenda and are not students of the market. They are just wrong on their theories, and you are right, they are like politicians. Every election is vote for me for change. It seems like vote for me because I have been less wrong than my opponent. They cast everything into right or wrong and shun trying to learn anything the markets are telling us. They cannot learn because they have a predetermined fixed image of how the world should be. They only focus on gold and cannot see what else exists in the world or how everything is connected. They function the same as central bankers who try to talk markets up by giving false impressions of reality. It’s a shame how many people they ruin because they are fixed on one scenario (And yes, the forecast for new a high was made at the bottom of the ECM back in 2011 when Barrons reported that forecast). The lift-off for the Dow to move to new highs with our first target 18500 could NEVER have been correct if gold did not also peak in 2011 and turn down. They have fought that decline all the way.

Look. We need fools on the other side of reality in order to trade against them. They are the fuel that makes markets move. It’s a shame how many people lost money lining the pockets of bankers because of these people. Nothing happened on October 1 when the world was coming to an end because the IMF included the Chinese yuan in the SDR. They thought that Shanghai would start trading “real” gold, not paper, and that New York would have collapsed by now. Their scenarios are childish and absurd to say the least. They have no respect for people. They are like Hillary: it’s all about them.

This is a battle of us against them. They are on the side of the establishment, preaching the same story that made the bankers rich and selling into every high they chased up the flagpole.

As we continue to digest news that Trump may well be leading in some polls, the nervousness surrounding markets is apparent. However, that is the case for international markets where Asia saw the Nikkei and Hang Seng lower by around 1.5%, whilst the Shanghai lost just 0.6%. We even saw a rally in gold of almost $20 (over 1%), whilst the concerns around global growth continue to unsettle markets. Given these moves we saw a return to safe-haven assets and in Asia that is the move back into the JPY; which almost saw the 102 trading in late European trading.

Europe watched oil decline on the back of inventories but also growing fears of slowing growth after the largest shipper (Moller Maersk) saw its stock decline over 7% following poor results (-30% on expectation) due predominantly to slowing freight and rates. Banks and energy stocks also hit prices together with sentiment but prices were interesting ahead and just after the FED’s announcement. Europe closed lower across the board with declines of over 1% for the core and with IBEX closing down 1.9%. The rush back into bonds was the game ahead of the FED but in late US trading has seen a little profit-taking enter the market. The Euro and GBP recovered some recent lost ground but much of that was returned having seen a no-change from the FED but sees the market increase the December hike possibility.
By the close the US core tended to drift lower in the uncertainty and in what could be difficult and volatile days ahead, given BOE tomorrow and the NFP on Friday. However, the US markets certainly held-up better than most and as we approached the close although we drifted, others lost more ground with the benefactors being USD based. Gold returned half of its intraday gains, as did the DXY and bonds.

Treasuries were supported more than most as we saw the 2/10 curve flatten into and out of the FED. 2’s closed the day 1bp lower at 0.82% with 10’s lower by 4bp at 1.78%. This in comparison to Europe where the German 10yr Bund closed 0.13%, which puts the US/Germany spread at +165bp. Italy closed 1.66% (-9bp), Greece 7.76% (-19bp), Turkey 9.97% (+8bp) Politian’s further distancing themselves from Turkey joining the Euro area, Portugal 3.21% (-11bp) and finally UK Gilt 10yr closing 1.17% (-11bp).

QUESTION: Mr. Armstrong; So many people keep calling for a stock market crash. At the same time, it has hung on to the 18000 level in the Dow for dear life. Do you see such a devastating crash as even possible?

PJ

ANSWER: No possible way. Retail participation is at near record lows. It has just started to lift begrudgingly. Even the Gallup poll on Americans shows the same thing. Retail participation is at best 55% down from 65% in 2007. Liquidity, however, is still off by 50%. This does introduce the likelihood of Flash Crashes and Flash Rallies. Such events are by no means because of a pending major crash. Just where do you put money if bonds are dead and banks a questionable? Of course some will yell gold. But gold is for the individual. Pension funds and institutional investors with billions and trillions cannot invest in gold bullion with no yield. Gold stocks, yes, but bullion no.

Gold should bounce and rally to test the 1340 level by year-end. We need a weekly closing above the 1336 level to show some sustainability. Resistance begins at 1308 and we need a daily closing above 1319 to be impressive.

Keep in mind that this is the Year from Political Hell. The second election will be the USA and it is clearly a contentious race with the Bush family saying they will vote for Hillary proving that they too would screw the country to save the political status quo. This is like Obama going to Britain telling the Brits if they vote for BREXIT, screw you, get to the ‘back of queue‘ for the USA will prefer dealing with the French and Germans than British.

November is a Directional Change and then our next big target is January. We will be doing a Gold Video Update tomorrow.