A number of emails are coming in about how, even in a panic, the Reversal system held. The Dow crashed only within a two-day reaction. It elected the first minor Daily Bearish at 17434 on Friday. We saw the Dow fall to 17063 intraday and close at 17140.24 while holding the 17120 level. We warned on June 25, “With the closing on Friday below the first Minor Weekly Bearish at 17434, the Dow should move a bit lower now to test the 17120 level. “

Holding the 17120 level for the close yesterday implied a failure and thus a bounce. We now require a daily closing back above 15752 to imply that the low will hold for now and another retest of resistance should follow.

COMMENT: Soros has been long gold and sold all his stocks. He made a fortune.

REPLY: No professional trader tells people what he will do in advance. Those announcements were made AFTER Soros took a position. I believe they were stories to create his exit. You get people rushing in who think they are joining him when they are being used for the exit.

George Soros is reported by Bloomberg to have been on the wrong side for he was long in the pound before Britain’s vote to leave the European Union on Friday. That means he probably sold the gold positions and used that hype as the exit. He clearly assumed BREXIT would not happen. However, Soros is generally a bear in world stock markets and this is the majority of the crowd. Soros also donated $8 million to Hillary along with the worst of the worst from Wall Street.

I previously reported on June 15, that Russia hacked Hillary’s emails. That is now starting to surface in the press, but naturally outside the USA where the press is more interested in attending her coronation. The notorious Bill, Hillary, and Chelsea Clinton Foundation was among the targets of Russian hackers. There is no question about it —Hillary is a real traitor. She clearly sold her influence to countries, granting arms deals if they donated to her foundation.

While Russia may release these emails, the burning question is where is the NSA? They have everything no matter what Hillary erased. If the NSA fails to release this and come forward, then they too are conspiring to betray the nation as part of the cover-up. The evidence never surfaced to prove that Nixon ordered the break-in of Watergate.

Early in the morning of June 17, 1972 (1972.46), a few burglars were arrested inside the office of the Democratic National Committee (DNC), located in the Watergate building in Washington, D.C. The burglars were connected to President Richard Nixon’s reelection campaign. They attempted to wiretap phones and steal secret documents. Nixon took steps to cover it up afterwards by raising “hush money” for the burglars, trying to stop the Federal Bureau of Investigation (FBI) from investigating the crime, destroying evidence, and firing uncooperative staff members. If Obama tries to stop the FBI investigation or directs the Justice Department not to indict Hillary, he is committing the same crime as Richard Nixon.

There now appears to be links to Obama as well. 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.

The entire issue will become a nightmare. If the Russians have the emails and release them, it will expose Obama as well. This is just the type of scandal we need to really start cleaning up Washington. It was August 1974 when Watergate came to the surface. We do not have the same honest type of press anymore. They would never expose Obama or Hillary. That would never come to their minds for they too would not be part of the conspiracy. Members of the press and the Democrats led by Nancy Pelosi tried to disband any investigation into the email scandal.

It is certainly on time for another scandal. The 43-year cycle from 1972.46 brings us to 2015.536, which was July 15, 2015. As of May 2016, no answer had been provided to the public as to whether 31,000 emails deleted by Hillary Clinton as “personal” have been or could be recovered. The Obama Administration is clearly blocking this issue.

Nonetheless, as early as 2009, officials with the National Archives and Records Administration (NARA) expressed concerns over possible violations of normal federal government record-keeping procedures at the Department of State under Secretary Clinton. At the time Hillary became Secretary of State, there was the State Department’s written policy that emails generally be conducted on an “authorized” computer with adequate security measures. She never received any exception to this policy and did not seek permission in advance. Then in December 2012, a nonprofit group called Citizens for Responsibility and Ethics in Washington filed an FOIA request seeking records about her email. The Obama Administration a responded in May 2013, stating, “No records responsive to your request were located.”

It turned out that emails sent to Clinton’s private clintonemail.com address were first discovered in March 2013, when a hacker named “Guccifer” distributed emails sent to Clinton from Sidney Blumenthal. Guccifer obtained Blumenthal’s email account and demonstrated that emails dealt with the 2012 Benghazi attack and other issues in Libya. This revealed the existence of her clintonemail.com address. Blumenthal did not even have any security clearance when he received material from Clinton that has since been characterized as classified by the State Department.

In October 2014, the State Department sent letters to Clinton and all previous Secretaries of State back to Madeleine Albright, requesting emails and documents related to their work while in office. On Dec. 5, 2014, Clinton lawyers delivered 12 file boxes filled with printed paper containing more than 30,000 emails. Clinton withheld almost 32,000 emails deemed to be of a “personal” nature.

Finally, on March 2, 2015, New York Times’ article broke the story that the Benghazi panel had discovered that Clinton exclusively used her own private email server rather than a government-issued one throughout her time as Secretary of State.

If Russia releases the emails or has them, is Obama cutting some deal to prevent them from being released? This is far bigger than Watergate for there are a lot of people conspiring to cover this one up.

 

While Scottish politicians are very vocal about staying in the EU, they have really lost their minds. Their hatred for the Brits has clouded their intelligence to the point one must wonder if they even have a brain that can be turned on or if they are totally brain-dead. The greatest problem with the whole membership in the EU is the broad assumption that it is all about free trade. The EU stole the British fisherman’s rights from their own coast and handed them to the Dutch. If you just look at the data, economic growth has steadily declined since joining the EU.

Scotland would sacrifice the bulk of its trade with Britain for an over-regulated, pretend common market. Give me a break. According to figures released in January, Scotland’s non-oil and gas exports to EU (other than the UK) were £11.6bn for 2014. Now, let’s put that in perspective. Scottish exports to the rest of the UK were £48.5bn. Trade with the UK has increased in the past year by 3% on the year while it declined 8% with the EU (excluding Britain). We clearly have politicians destabilizing markets with total bullshit for they do not understand anything.

Despite the recent gains of Sturgeon’s pro-independence Scottish Nationalist party, it may be true that most Scots voted to remain, but that does not equate to a choice between Brussels and London. The politicians may be making a lot of noise only to discover in a subsequent referendum that they too reject Brussels.

An independent Scotland is in the cards — not one that chants, “The king is dead, long live the king!” or worse in Brussels where they have no right to vote whatsoever.

 

Sources are talking about desperate times in Brussels. The reaction in Brussels is never reform, but rather more draconian measures. A nine-page report exists discussing how the leaders of Germany, France, and Italy met in Berlin for BREXIT crisis talks. The solution? They want to shut down any democratic possibility of disagreement, as they know these leaders have an approval rating below 20% and are facing eight countries who may follow BREXIT with their own referendum.

The new blueprint is to do away with all individual member states sovereignty, directing EU members to radically surrender the right to have their own army, rule of law, taxation systems, central banks, and effectively transfer all power to Brussels. This will end everything that once identified European culture — the ultimate state with one size fits all. The German people and French people would probably object or revolt over this one. THEY REFUSE TO LIMIT THE EU TO WHAT IT BEGAN AS — A COMMON MARKET AND NOT A POLITICAL UNION.

 

As we expected weekend headlines would dictate Monday’s trading and that is exactly what we have seen. The GBP continues to fall spreading uncertainty and confusion around the globe. In the UK the opposition party (Labour Party – known as the Shadow cabinet) saw ten members resign on Sunday and an additional nine members resign today. All are calling for Jeremy Corbyn’s resignation. Asia saw safe-haven demand from the open with JPY (hearing targets in the street of 95), Gold and US Bond(s) strength but also good demand for the Nikkei (up 1% at the open) and a steady Shanghai stock market. In late US trading, the China300 and Nikkei are off another 1% with HSI suffering an additional 2% decline.

Asia saw safe-haven demand from the open with JPY (hearing targets in the street of 95). Gold and US bonds strengthened but also good demand for the Nikkei (up 1% at the open) and a steady Shanghai stock market. In late US trading, the China 300 and Nikkei were off another 1% with HSI suffering an additional 2% decline.

By the time Europe opened GBP and euro had not bounced and so as London opened GBP was down 2% with the Euro 1% lower. As the markets opened the UK Chancellor, George Osborne, attempted to settle things by addressing the press and claim there was a contingency plan and everyone should “Stay Calm”! Hmm, didn’t really have the desired effect and GBP lost another 2% closing around 131.80. Late in the day, S&P downgraded the UK’s credit rating from AAA to AA. DAX lost around 3.1%, FTSE lost 2.55% and IBEX and CAC lost 1.8% each. Again we saw bank shares hit with Barclays and RBS both down around 17% with house builders and travel (Easyjet -22%) companies around 15% lower.

The US market was weaker from the start as confidence continues to be hit following the BREXIT hit. Sellers from the open eventually saw the DOW over 300 points lower at one stage. We did bounce a little but the broader S+P played around the psychological 2k market only to settle almost exactly on it -1.8%. Economic data really is falling into insignificance as the uncertainty persists, driving money further into the bond markets.

The US curve flattened even further today taking the 2/10 down to 84bp (10’s closing at 1.44%). This moves the US/German 10yr spread to +155bp (German 10yr Bund yields -0.11%). Italy closed 1.50% (-4bp), Greece 8.48% (+17bp), Turkey 9.29% (-20bp), Portugal 3.26% (-4bp) and UK Gilt 10yr at 0.93% (-15bp) 10yr under 1%.

 

While everyone is busy blaming the Brits, the real culprit is the EU. The audacity of various EU ministers demanding immediate withdraw is akin to a spouse who just discovered their partner was cheating. They may say beware of a woman scorned, well it looks like this applies to male politicians as well. The brain-dead morons cannot grasp that they crossed the line and embarked upon a political union in which they have denied any democratic process because they assume the people are too stupid to see what they see.

The markets will settle down and then flip. The smart money will figure out that London will remain as a financial center, as will Zurich. But there will be no such center within the EU because the politicians have a mechanism in place to outlaw short-selling at their discretion whenever the markets say they are wrong. BREXIT is the survival of Britain, not its demise. The crisis brewing in eight member states will ultimately follow Britain and hold referendums. Brussels may be the most hated political entity exceeded only by Venezuela.

We can easily see from the technicals that the pound has not quite broken the broad trend moving into a panic. It has held the technical support, which warns that everything can flip against the EU come early July. We have also been warning of a coming dollar rally that will make the dollar bears’ noses bleed from vertigo. The critical monthly closing support remains at 13660 in the cash pound against the dollar. A June closing beneath this level will confirm the dollar rally is beginning in a broader trend.

 

When we turn to the long-term chart (Yearly 1791-date), we can see technical support at 13755. This has been broken intraday, but this is critical from an annual closing perspective. We have breached the critical support long-term and a monthly closing below 13660 will confirm that the pound will retest the 1985 low at the par level. This, in part, will be the result of European politicians ignoring the problem, which has been them and their elitist views.

The attempt by Brussels to create the United States of Europe and the arrogance of allowing uneducated “refugees” into Europe to interbreed to create one mixed race is just insane. They looked to the USA and saw interbreeding of European nationalities and they saw a single currency. What they overlooked was a single language. Once everyone spoke English, then the intermarriage process began. These elitists are insane and do not understand what they have done.

 

 

Things will be moving into August/September. June was a Directional Change and that seems to have been on target along with our computer’s forecast years in advance.

 

      

 

Now, when we turn to the euro/sterling we get a different picture. This shows us clearly that the problem is by no means Britain — it is the EU. While the euro rallied on the first knee-jerk reaction, it did not breach the major resistance at the 85999 level. In fact, the euro fell against the pound and has been making only a reactionary rally. If Ireland and Scotland want to leave the UK and join the Euroland, they will be major shorts. Anyone with assets in those locations will need to convert to dollars.

 

 

August looks to be rather chaotic. We should begin to see other countries move more rapidly for referendums. As this process begins, we should begin to see the realization that the euro is in crisis; not the pound.

 

 

We can see that the Yearly Bearish we elected at the 116 level at year-end 2015 has proven to be dramatic. We rallied back to retest the 116 level, which took a little longer, but it has fallen sharply and we can see the trend is in motion for a big dollar rally.

QUESTION:

Sir,

Pondering the patterns that you have found in history, I have been mulling over the crossroads that lie in front of us in the next few years. You noted that sovereign debt crises occur about every 86 years or so. You also noted that civil disturbance goes hand in hand with those events. You also noted that it cycles between government/public to private and private to government/public. Am I understanding correctly that the civil disturbance that occurs when it flips between government/public to private is more intense than when it flips from private to government/public?

Thanks for all you do and see you in Nov

DK

ANSWER:  Yes. This is because the government is a single entity. They will fight against the people to retain power. Make no mistake about it; government will always massacre the people to retain power. All such events in history unfold when the people seek to overturn tyranny. However, there are rebellions even during public waves, but these tend to be continuations of a grievance from the previous wave. There were 69 years between the two, big English tax rebellions of 1381 and 1450. They do tend to be more intense during private waves. You will notice that in a private wave they tend to come early, whereas in a public wave they come late and typically spill over. This is because the rebellion aspect is really a separate function of the War Cycle. Therefore, the overlap produces the intensity. Currently, that turned up in 2014.

Political wisdom over the centuries was purchased with the blood and bitter experience of generations upon generations. In England, the king had no right to tax the people. The people had to consent and that was the reason to call Parliament to consent to taxation. The first tax revolt was the Wat Tyler’s Rebellion, also known as the Peasants’ Revolt, which was a tax rebellion following the Black Death as a result of high taxes to fund the war against France (Hundred Years War). This took place beginning in May and ended in a massacre by November 1381. Then there was William (Jack) Cade (? – 7/12/1450) who led a tax rebellion that took place in May 1450, which was the subject of Shakespeare’s play of Henry VI in in which he wrote his famous passage: “The first thing we do, let’s kill all the lawyers.” (King Henry VI, part II, Act IV, Scene 2, Line 72). The lawyers were not “lawyers” as we see them today. The king was the only person allowed to have a lawyer, so they were really prosecutors taking people’s property and imprisoning them for profit.

In France, there was the French Revolution in 1792 over taxation, but there was also a rebellion in 1851. The first tax rebellion in France was when King John was captured by the English in September 1356. King John was transported to London in April 1357. He was compelled to surrender most of southern France to the English. On October 9, 1360, John was released to raise the balance of the ransom while hostages, including his own son, took his place. When John’s son escaped, John had little choice and returned to England as a prisoner on his own volition where he died.

In 1358, we find the first tax uprising known as “Jacquerie” because the nobility had called all peasants “Jacque” and the demands for taxes were outrageous. Taxes were even demanded to rebuild castles of the nobility. The English had plundered the country and these demands led finally to an uprising on May 21, 1358. The peasants destroyed numerous castles in response and massacred all inhabitants. With the king captured, confusion reigned and the nation was plunged into civil war. The peasants were eventually defeated and massacred.

Even in China, the minister Chao Cuo (? – 154 BC) under the previous emperor Ching-ti (Liu Ch’i) (157-141 BC), earned the hatred of other ministers after he introduced 30 new laws. The outrage was so intense that he was dragged out and executed in his judicial robes in the town marketplace.

The abuse of the rule of law knows no bounds. When Edward I (1272-1307) returned to England in 1289, corrupt judges who had been bribed by special interests confronted him, but he dismissed them summarily. Then in 1290, Edward I seized all the property of the Jews and expelled them from England. Kings, dictators, and professional political classes have always exploited the rule of law for their personal gain.

Massacres of the people in a revolt against government exist throughout history. We should expect our modern governments to act in the very same manner. They are now arming themselves and they have converted the police forces into military domestic units.

 

Many comments and emails are pouring in that our model correctly forecast BREXIT years in advance. Here is the picture for the next big chaos period — the US Presidential Election in November.  You can see that 3 out of 4 models show a Republican victory. Two of these show 60%+, which is unheard of. What we have just seen in BREXIT is a prelude to the US election. People are very anti-establishment, anti-immigration, and fed up with stagnant wages thanks to rising taxation.

Tony Blair’s comment was very elitist, saying that the people really are stupid and the government should not rush to leave. He says it is too complex to split, but it is also too complex fix. He just doesn’t get it. People want REAL change and are tired of listening to how stupid they are.

 

We also saw the biggest turnout in Britain ever for such an event. Trump has already gotten more votes in the primary than any Republican candidate in history. This is reflecting what is coming. We should also see a record turnout in November in the US elections.

 

BREXIT was the first of four major elections and our computer has been projecting a strong anti-establishment uprising that is building on a global scale. Our targets have been focused on 2016/2017.

 

 

The peak in the euro against the British pound was 1985. The day of the low in the pound was February 26, 1985 (1985.156). Even the pi cycle from that date was 2016.556 or July 22, 2016.

Our model on the European Union projected the high in 2004 and its collapse into 2008 when the euro peaked over 1.60 to the dollar. Now we are in. This raises the potential of the EU becoming extinct by 2029.

What lies ahead is going to be amazing. Nevertheless, this is all set in motion by the incompetence of government intermixed with their pervasive corruption.