A choppy session in Asia saw the Nikkei open strong but close almost unchanged while HSI and Shanghai spent the majority of the day negative only to close small positive. Focus remains on oil, currency as the JPY remains around the 110 handle, continued disappointing data and todays G7 meeting. China set the mid-point at 6.5552 today while off-shore trades 6.5605 in late US trading. Japanese PM Mr Abe’s opening comments at the G7 warned of a crisis on the scale of Lehman Brothers. Was mentioned in Europe but strangely did not find it that significant for the US markets.

Mixed session in Europe with the DAX and CAC producing a similar steady trading pattern, whilst FTSE and IBEX both closed lower. Spain suffered as Banco Popular fell 25% at the open after its declared a plan to sell an additional 2bn shares. G7 headlines did not move markets meaningfully and so we were left awaiting US data in the afternoon. Having seen the $50 Brent most of the day we did dip into the close and that, along with continued fixed-income demand nerved markets and we drifted into the close.

Ahead of tomorrows data and Janet Yellen’s speech the markets just failed to hold the trend. NASDAQ did manage to string three days of positive momentum together but sadly the DOW and S+P did not. All eyes will be on tomorrow GDP data where expectations are for a 0.9% and a Core PCE 2.1%. A little later we will see the final U. Mich – Sentiment where expectations are for a 95.4 print (where previous was 95.8).

Gold rejected the $1230 level in early trading and currently stands a little under $1220. Next Tuesday’s close (Month end) will be crucial in highlighting future direction. DXY closed a little lower at 95.20 as JPY and Euro clawed back some much lost ground. There is a lot of talk surrounding the SAR (Saudi Riyal) Forwards as it appears speculators are attacking the currency in order to break the peg. Saudi has apparently requested more information fro their banks in relations to this market. SAR Frwds have traded from 320 to 660 within this past month.

The uncertainty within today’s numbers pushed money back to chasing yield and hence we saw buyers chasing the Bond market. The 2/10 curve closed this evening at +96bp, with 10’s closing 1.84%. In Europe German Bunds also saw renewed buying and closed 0.145% (puts the US/Bund spread at +169.5bp. Italy closed 1.37% (+2bp), Greece 7.03% (+5bp), Turkey 9.68% (-15bp), Portugal 2.99% (+6bp) and Gilts 1.41%(-4bp).

QUESTION: Mr. Armstrong, what do you think the British will do? Stay or go? Will you be here for the vote?

ANSWER: I will be there. It looks more like urgent meetings forming after the vote; not before. I would say that the odds of a BREXIT vote to leave are not looking good. It is hard to predict this because I expect the vote to be rigged just as they rigged the vote in Austria claiming they had to count the mail-ins and suddenly the establishment won by 31,000 votes. Hofer may be telling people to be calm to prevent violence. But everything points to fraud as it did in Scotland.

We will publish the BREXIT report next week. If the Brits vote to leave, Europe collapses. The EU needs Britain desperately. Why keep the pound at all? There is no point. They should just jump in pool. Why just put your big toe in? This is the 43 year target for the Britain joining the EU back in 1973. This may end up as the final nail in the British coffin of empire. They even paid S&P to say if the Brits vote to exit, they will remove the pound as a major reserve currency, which is a joke. Why? The S&P are always paid and say whatever the highest bidder demands. Cameron has pulled out absolutely everyone to say Britain must stay. Unfortunately, he is betraying his own country. S&P’s statement is meaningless. They are a rating agency who has joined the “club” and their performance in 2007 giving AAA ratings to junk bonds that blew up the world proved that. I personally believe the S&P is not to be trusted.

Here was the computer projection for the 1992 and 1996 Presidential elections showed that the Democrats should have won the popular vote. Clinton won both elections.Now look at the 2000 Presidential election. Our model projected a Democratic victory which would have been Al Gore over Bush. As we know, they refused to recount the Florida vote and it ended up in the Supreme Court which ruled along party lines.

After the election, the votes were correctly counted. They indeed showed that Gore should have won. Our model does not forecast the rigging, but who should win. I can say in the case of Scotland, Austria and the upcoming BREXIT, all three should have been against the EU. That said, the likelihood of allowing the British to leave is highly doubtful for Brussels will collapse.

That is why so many are chiming in to keep Britain in the EU. All their reasoning is nonsense. This is a very sad day for Britain. It will see its independence slip away into thin air. You cannot save the EU. This is like someone falls off the cliff so you jump as well to hold their hand on the way down.

The EU is a total failure. This federalization of Europe is a deliberate utopia for politicians with high paying jobs, tax exemptions, and the people have no possible ability to ever vote for a policy change. This is the most anti-democratic structure ever thought of in Western culture.

We will issue a special report on THE FATE OF BRITAIN. This will be available next week. It is a very important report looking at Britain and what lies ahead covering the pound, pound/euro, and the FTSE.

 

Our sources in France are unanimously warning that a major socialist union uprising is building in France and could erupt rapidly. The unions in France are notorious for being the most socialist, highly Marxist, in the entire world. To get their demands, they will go anything. They even kidnapped the head of Goodyear until he yielded to their demands. They act more like Stalinist rebels who ignore laws and it is always just about them. Employers are evil capitalists in their book.
This time the uprising is building over proposed labor regulation reform supported by Hollande, who is a socialist himself. President Francois Hollande’s government realizes that France is doomed internationally and unemployment will only rise. His labor reforms are designed to make it easier for companies to hire and fire employees. As it stands, it is next to impossible to fire anyone. As a result, companies are not hiring.

Even the socialist MPs refused to vote for it. In France, if Parliament does not do what the President commands, he need not rely upon them. Prime minister Manuel Valls employed a constitutional tool that allows him to bypass the parliament altogether. This has now resulted in rising social unrest. A real confrontation is building. The question is can France become competitive globally at all?

The trade unions are beginning to block fuel supply to shut down the country. They managed to shut down five refineries. They are also looking to suspend nuclear power plants until they get their demands. If you are looking to fly to Paris, forget it. They will shut down the airports, the trains and all the public transports in Paris as well. Even the
agricultural unions may join the movement. The unions are promising unprecedented violence the first week of June.

Hollande is losing support and he is also unlikely to survive elections next year. The French, like everywhere else, are fed up with government. Th unions do not want to give anything back in France so this will contribute to the overall bearish view for the Euro moving ahead.
The fraud in Austrian elections that the “establishment” candidate wins by a mere 31,000 votes to keep Austria in the EU is also fueling the sentiment throughout Europe that any hope of a fair election to regain one’s country is not realistic. The French are worried that the 2017 elections will be rigged as well.

All our direct sources in France are warning that the country is disgusted by Hollande and the “establishment” government in power.

My TED Talk. They reworked the sound which for some reason had problems originally.

Following a strong day in the US all core Asian Indices opened firm and with the exception of Shanghai, did not look back. China could not hold on to the mornings gains and eventually closed small lower -0.25%. The Nikkei and Hang Seng produced great one day returns of 1.6% and 2.7% respectively. In late US futures trading the Nikkei has rallied an additional 1% with both HSI and China 300 adding an extra 0.5%. The JPY has behaved trading the majority of the day around 110. Yuan moved 2.5% today as cover was given by the broad USD strength.

Europe took a while to get going but eventually joined the party and by the close saw IBEX up 2.3% and DAX gain 1.5%. The CAC and FTSE were also stronger, around the 1%, but not matching the DAX. German IFO was marginally better than expected (est 106.8 actual release was 107.7) and that set the trend for the rest of the day. Talk of the BREXIT campaign moved further away on reports GBP could possibly lose reserve status – according to a new S+P release! Greece was approved an additional €10.3bn and so the market closed the day in a happy space with good solid gains. Best performing sectors were Energy, Materials and Financials, while Retailers took the brunt of some poor news. Marks and Spencer reported better than expected results but warned of an overhaul a key area of the business and warned of short-term implications hitting the bottom line – shares lost over 10% today.

The feel good factor warmed the US market also and by lunch all core indices were making good ground. Home Prices and a better than expected PMI encouraged the stock romp despite dealers still questioning the two day rally. One cause for concern is still that volume is light but lets us see Friday weekly close (followed by month end) and we will see what the numbers are telling us. VIX closed lower and was last seen at 13.8. DOW, S&P and NASDAQ all around 0.75 higher on the day. The DXY continues to move positively, all be it slowly (last trade seen 95.50) and oil plays dare devil with the psychological $50 level.

US Treasuries lost ground following the broad stock rally. We saw the 2/10 curve steepen 1bp to close +95bp (2’s at 0.91% with 10’s last seen 1.86%). In Europe we still see the ECB bid supporting most core, peripheral and credit markets especially as the approval was given for Greece. Bunds closed 0.175%; closing the spread at +168.5bp. Italy 10yr 1.42% (-6bp), Greece 7.02%, Turkey 9.79% (-35bp), Portugal 3% (-5bp) and Gilt 10yr at 1.47% (+2bp).

Ahead of listening the Janet Yellen on Friday (who will continue to say watch the data) we will watch data Thursday. Therefore, the rumors and suspense will be traded tomorrow ahead of any clues provided by Yellen. Durables are always a volatile number so try not to get too carried away watching data that closely! Meanwhile, the ECB is getting a lot of flack and is hinting that rates will move higher rather than lower, especially with Germany screaming behind the curtain about pension fund failures on the horizon.

Gold collapsed under 1220 reaching 1217. It has become more like Kryptonite that nobody wants to touch right now. Yet, after 17 days down, if it can close back above 1231, then we can consolidate. Keep in mind 1240 will become critical next Tuesday.

QUESTION: Dear Mr. Armstrong,

(a) You say that the world is losing confidence in governments and I do not question that for a minute.

(b) BUT you also say that the dollar will strengthen for various probable sounding reasons, which it is presently doing. (whereas many think it will collapse).

For the collapse theory: it appears the petro dollar is being dumped which bodes ill for the dollar remaining the prime reserve currency. ——– does not think it will and that SDR’s will replace it. Surely as this eminent position of the petro dollar declines, there will be further debasement? (loss of purchasing power) – the opposite of a stronger dollar.

These two factors (a) and (b) seem to be very much at odds with each other. Does not a strong and growing stronger currency boost confidence in government? or at least keep it in power.

We have a debased dollar as per the examples you gave re the silver content of our coins from 1964 till now and we see what happened to the Romans who did the same thing, so it is hard to wrap your head around the fact that our debased dollar is growing stronger. (understood that its strength is relative to other currencies). Is this because no matter whether confidence is lost confidence in government, the money is all people have to hoard in deflationary periods which makes paper money become more valuable for a time (only)?

I also understand that the bad situation in Europe will drive money over to the US which is on the plus side for the dollar.

Whereas a collapsing currency often spells a collapse of government. (watching Venezuela)

Exception: we see in the case of Zimbabwe, that although its currency collapsed, Mugabe still has the money to pay his army which keeps him in power. I expect Mugabe gets US dollars from what is left of the country’s exports and somehow has nationalized the businesses that produce those dollars – in order to get his hands on them. Just guessing.

The US has not yet reached this point, although examples of mismanagement become more evident by the hour.

I believe Milton Friedman when he said”put government in charge of the Sahara and sooner or later there will not be any more sand”

I also keep in mind Greenspan’s quote: “There is no place to hide”.

I hope you are going to tell us in due course where to hide when so many of our assets are just numbers on a screen. Understood is the importance of asset allocation, but that does not take care of investments in brokerage accounts. Perhaps it is not possible to protect these.

So … it is the seeming inconsistency of the (a) and the (b) that I wonder if you could/would shed some light.

Best,

RH

ANSWER: The facts you are putting together are old and out of date. The US dollar has nothing to do with oil. The days of the petro-dollar are long gone. The USA is now exporting energy and electric cars are here. I bought one myself. It is a hybrid that gets 75 miles to a gallon. That is slightly better than my sports cars when I was a kid where 8 miles a gallon was fantastic. Saudi Arabia is in serious trouble. They have all had to pump more just to make ends meet because they are now forced to borrow money to fund budgets that expected $200 oil forever.

Your scenario about confidence and a currency is a bit skewed. As an economy declines, the currency rises because people stop buying assets and seek to go to cash. This is why the dollar rallied during the Great Depression as well and the deep recession from 1980 into 1985 forcing the government to create the G5 (now G20) at the Plaza Accord in New York. The yen rallied dramatically into 1995 falling to 75 to the dollar when the country was also doing terrible. It rallied again into 2011 when all looked rather bleak. In all of these cases, there was no concern that the government would collapse. Demand for the currency rose in each affair. This is not on par with a collapse in confidence in government to the point of hyperinflation. To produce that result, nobody is willing to buy the debt so all they can do then is print. In that instance, it all flips. You spend the money to buy assets. A normal correction you sell assets that crash to go to cash.

Yes we peaked in government 2015.75 and have begun a downward cycle in public confidence. We are witnessing this on a GLOBAL scale at a far greater pace than within the United States. This is a game of musical chairs. Capital is moving from one to the next until there is just one standing. Then the final shoe will drop. Read Herbert Hoover’s memoirs for 1931 and you will see what he described was the same behavior when Greece was in trouble starting in 2010.

The USA will be the last to fall. I have been warning this is simply how things will play out for years because the USA is the core economy like Rome in ancient days. The disease always begins in the limbs and then moves to the chest and finally strikes to heart. So dollar up as the disease is in the limbs. Then the rise in the dollar will force political change on many levels. Not the least will be a new monetary system, but that is the end-game once it hits the chest. We are not there yet. It’s coming.

As for SDRs, I proposed that back in 1985, The White House responded to me with a two-page letter stating that such a system would mean the government will lose domestic policy objectives for international. That is happening right now any way. The Federal Reserve is becoming the central bank for the world because it is chaos everywhere else.

Today, however, I would oppose the IMF SDR system for the IMF is way too corrupt. I have told how I was invited by Edmond Safra to the IMF Washington Dinner he put on for the IMF renting the entire National Gallery. Everybody was there from politicians to Paul Volcker. I was told bluntly to join the bankers “club” back then. I was invited to demonstrate to me that they had the IMF in their pocket. They poured money into Russia and the IMF was to keep the loans going. When they could not, the whole mess collapsed. That produced the Long Term Capital Management crisis and the first Fed bailout.

Because the London Financial Times had reported on the front page that at our London WEC in July 1998, I delivered the forecast that Russia would collapse in a matter of weeks, that began this whole mess alleging I manipulate the world economy because I must have more people on my side than they did on their’s. People judge others by themselves. The “club” tries to manipulate the world paying bribes and controlling mainstream media. When my forecasts become correct despite all their machinations, they scream I am the one manipulating the world because they lost. Nobody can manipulate the world and if these fools do not figure that out, all I can say is they are not even at the dumb and dumber level of stupidity.

To break the world monetary system, that will ONLY take place with a rising dollar. But with a declining outcome thereafter. You are just missing that part that FIRST the dollar must soar to screw up the world to create the change in the monetary system and that illogical proposition is in fact what makes it happen. Forget about petro-dollars. They are history. Measuring confidence is key. The confidence is turning against government now. We can see that with Trump and Bernie. The masses are not so happy. They are rising up everywhere you look.

In Europe we have 2/3rd of Germans against Merkel. In France, the biggest union uprising is forming against Hollende. We have Greece in trouble, Britain voting on whether to stay or go, Catalonia voting to separate from Spain, Austria rigging the election claiming write-in ballots of just 31,00 decided the election, and Brussels is trying desperately to prevent any democratic vote because they know the people are turning against the whole euro idea, which is the federalization of Europe.

Don’t worry. Just go with the flow. It’s happening fast. Just let go off the old-world theories. The reserve status of the dollar cannot be changed by pricing oil in even rubles or yuan. The reserve status is created by the fact BIG MONEY can park in US debt. It cannot park in European debt which remains in chaos outside of Germany. Britain, Canada, Australia are too small, Japan is too restrictive, and China as well as Russia are not quite ready for prime time. The debt has to turn belly-up in the fish bowl to change reserve status. It is not even something the USA, China, or Russia can decree. This is created by the Invisible Hand which is beyond the control of governments. People who have no real world experience in trading or seriously advising in the big leagues have way too much time on their hands to come up with theories that amount to just sophistry. You would not ask someone to operate on your brain because they smile nice or sound good but happen to be a piano player instead of a doctor. There are just some things you cannot understand without experience. That is why school is so bad in the social sciences (economics) beyond reading, writing, and math. It teaches theory – not reality.

Clinton Cash is coming to a theater near you. This film is so explosive that there has remained talk that they may try to indict Hillary to allow Joe Biden to save the day. This talk keeps circulating especially since Bernie will not step down. He knows a lot more about the Clintons than he can even say publicly. He too knows this film was shown at the Cannes Film Festival in time for the US elections. The film exposes how the Clintons go from broke when they left the White House in 2001 to amassing in excess of $150 million with $2 billion in donations to their foundation in only a few years. What this film is playing directly into is the overwhelming corruption that has engulfed politics.

Trump has come out calling the Vince Foster “suicide” very “fishy” to say the least. It has long been talked about behind the curtain that Vince Foster was murdered in the White House and his body was then moved to a park to ensure the non-controllable police would not have jurisdiction. The murder was neatly called a suicide claiming Foster was prescribed the anti-depressant medication Trazodone over the phone by his Arkansas doctor, but a small dose that would not have helped. The next day, Foster was found dead in Fort Marcy Park, a federal park in Virginia where jurisdiction could be controlled.

Vince Foster was from the Rose Law firm and knew everything about the Clintons. He was very upset about the investigation into them and was deeply afraid of having to testify. He appears to have been murdered in the White House and his body was then moved to the federal park. Foster was found with a gun in his hand and gunshot residue on that hand. An autopsy determined that he was shot in the mouth and no other wounds were found on his body. But that was just the start of the cover-up. What was withheld, according to investigators I personally know on Capitol Hill, was the fact that a piece of his head where the bullet came out the back was not there. This suggested his body had been removed. But that was just for starters.

Patrick Knowlton is the man who found Foster’s body who disagreed with the “official” facts of Kenneth Star, special government prosecutor investigating the Clintons.  Star actually objected to allowing Knowlton’s comments being made as part of any report trying to suppress anything that disagreed with the “official” version.  Judge John D. Butzner wrote to Judges Peter Fay and David Sentelle after Knowlton submitted a motion that his comments be included as part of an appendix to the final report.

Judge Butzer wrote: “I suspect that if we deny this motion we will be charged as conspirators in the cover-up,” and concluded “I suggest we let the motion and attachments speak for themselves.” Judge Peter Fay argued that Knowlton’ comments completely  contradicted “specific factual matters and takes issue with the very basics of the report” filed by Ken Starr who was trying to suppress any evidence that disagreed with his position. Knowlton’s comments were ordered to be included as part of the official report on September 26, 1997. Two days later, Ken Starr filed a motion to appeal that the comments by Knowlton should be stricken. This demonstrated the cover-up and calls into question everything Ken Star really did as a claimed independent counsel besides getting rich on the deal. The very next day, Starr’s motion was denied and Knowlton’s comments were included as part of the final “official” Report on the Death of Vincent W. Foster.

FBI Agent Lawrence Monroe had interviewed Patrick Knowlton and falsified the report changing what he told him. Much of the controversy was the fact that Vince Foster’s car was not parked in the lot until after Foster was found dead. Knowlton was there and had not interest in the matter. Starr attempted to cover-up the entire affair because the very man who found the body disagreed with the sloppy clean up of Ken Star to pretend it was a suicide rather than a murder to prevent Foster from spilling the beans.

There were strangely no photos of the crime scene. I seriously doubt there is any case in history where a dead body is discovered after World War II without photographs of the crime scene. Recent discovery of further suppressed documents show there was a second wound on Foster’s neck. Then there are questions that the FBI altered the statement of also Lisa Foster claiming she recognized the gun as that belonged to Vince, yet no record of him buying the gun. Then there were reports that Hillary’s aids ransacked Foster’s office telling the FBI to stand down. Within hours of the death of Vince Foster in July 1993, chief White House counsel Bernard Nussbaum removed documents, some of them concerning the Whitewater Development Corporation under investigation that Foster was to testify about. These critical documents were removed from Foster’s office and Nussbaum admits he then gave them to Maggie Williams, Chief of Staff to the First Lady Hillary. According to the New York Times, Williams placed the documents in a safe in the White House for five days before turning them over to Hillary’s personal lawyer. Hillary was even subpoenaed over that one.

Some tried to spin a conspiracy that Foster was killed merely because he had an affair with Hillary. That is highly questionable and part of the cover-up sex motive rather than corruption. I suppose its better to pretend Hillary murders her lovers than kills people who are about to testify against her. Hillary’s fingerprints were all over this mess, not Bill’s. Assistant Attorney General Webster Hubbell said on July 20th, 1993 as cited by Esquire Magazine in November 1993: “Don’t believe a word you hear. It was not suicide. It couldn’t have been.”

Then just like Hillary’s emails she hid from the State Department, when subpoenaed for billing records from the Rose Law Firm she was at before the White House where Foster also worked, she reported that such records were missing. However, almost two years later, the subpoenaed billing records of the Rose Law Firm were discovered in the Clintons’ private residence in the White House by a staffer. Oops! Mn. Obstruction of justice?

This and so many other things have tagged along with Hillary like going to the bathroom and walking out with toilet paper stuck to your shoe. Between the cattle futures scandal to being caught in bed with another woman, emails she deletes claiming they were personal when Bill says he may have sent one email in his life, the list is just endless. If she becomes president, everything is for sale based upon her deals as Secretary of State.

The interesting question is why would anyone ever vote for her with so many highly questionable incidents that she never explains? Even when asked for her speeches at Goldman Sachs, she simply says she does not think the people are interested in such things. The email scandal should land her in prison. But she also knows being the presidential candidate gives her the privilege to violate anything for the Democrats are too stupid to see the handwriting on the wall. It is not that the Republican elites are now suddenly agreeing to back Trump, it is Trump is remaking the Republican party and it is out with the old and in with the new. It’s all about corruption and cronieism who get jobs for the twice removed cousin and former mistresses. Hillary represents political corruption simply gone wild. Then we have mainstream media willing to betray their own country for favors.

 

QUESTION: Dear Mr. Armstrong,

(a) You say that the world is losing confidence in governments and I do not question that for a minute.

(b) BUT you also say that the dollar will strengthen for various probable sounding reasons, which it is presently doing. (whereas many think it will collapse).

For the collapse theory: it appears the petro dollar is being dumped which bodes ill for the dollar remaining the prime reserve currency. ——– does not think it will and that SDR’s will replace it. Surely as this eminent position of the petro dollar declines, there will be further debasement? (loss of purchasing power) – the opposite of a stronger dollar.

These two factors (a) and (b) seem to be very much at odds with each other. Does not a strong and growing stronger currency boost confidence in government? or at least keep it in power.

We have a debased dollar as per the examples you gave re the silver content of our coins from 1964 till now and we see what happened to the Romans who did the same thing, so it is hard to wrap your head around the fact that our debased dollar is growing stronger. (understood that its strength is relative to other currencies). Is this because no matter whether confidence is lost confidence in government, the money is all people have to hoard in deflationary periods which makes paper money become more valuable for a time (only)?

I also understand that the bad situation in Europe will drive money over to the US which is on the plus side for the dollar.

Whereas a collapsing currency often spells a collapse of government. (watching Venezuela)

Exception: we see in the case of Zimbabwe, that although its currency collapsed, Mugabe still has the money to pay his army which keeps him in power. I expect Mugabe gets US dollars from what is left of the country’s exports and somehow has nationalized the businesses that produce those dollars – in order to get his hands on them. Just guessing.

The US has not yet reached this point, although examples of mismanagement become more evident by the hour.

I believe Milton Friedman when he said”put government in charge of the Sahara and sooner or later there will not be any more sand”

I also keep in mind Greenspan’s quote: “There is no place to hide”.

I hope you are going to tell us in due course where to hide when so many of our assets are just numbers on a screen. Understood is the importance of asset allocation, but that does not take care of investments in brokerage accounts. Perhaps it is not possible to protect these.

So … it is the seeming inconsistency of the (a) and the (b) that I wonder if you could/would shed some light.

Best,

RH

ANSWER: The facts you are putting together are old and out of date. The US dollar has nothing to do with oil. The days of the petro-dollar are long gone. The USA is now exporting energy and electric cars are here. I bought one myself. It is a hybrid that gets 75 miles to a gallon. That is slightly better than my sports cars when I was a kid where 8 miles a gallon was fantastic. Saudi Arabia is in serious trouble. They have all had to pump more just to make ends meet because they are now forced to borrow money to fund budgets that expected $200 oil forever.

Your scenario about confidence and a currency is a bit skewed. As an economy declines, the currency rises because people stop buying assets and seek to go to cash. This is why the dollar rallied during the Great Depression as well and the deep recession from 1980 into 1985 forcing the government to create the G5 (now G20) at the Plaza Accord in New York. The yen rallied dramatically into 1995 falling to 75 to the dollar when the country was also doing terrible. It rallied again into 2011 when all looked rather bleak. In all of these cases, there was no concern that the government would collapse. Demand for the currency rose in each affair. This is not on par with a collapse in confidence in government to the point of hyperinflation. To produce that result, nobody is willing to buy the debt so all they can do then is print. In that instance, it all flips. You spend the money to buy assets. A normal correction you sell assets that crash to go to cash.

Yes we peaked in government 2015.75 and have begun a downward cycle in public confidence. We are witnessing this on a GLOBAL scale at a far greater pace than within the United States. This is a game of musical chairs. Capital is moving from one to the next until there is just one standing. Then the final shoe will drop. Read Herbert Hoover’s memoirs for 1931 and you will see what he described was the same behavior when Greece was in trouble starting in 2010.

The USA will be the last to fall. I have been warning this is simply how things will play out for years because the USA is the core economy like Rome in ancient days. The disease always begins in the limbs and then moves to the chest and finally strikes to heart. So dollar up as the disease is in the limbs. Then the rise in the dollar will force political change on many levels. Not the least will be a new monetary system, but that is the end-game once it hits the chest. We are not there yet. It’s coming.

As for SDRs, I proposed that back in 1985, The White House responded to me with a two-page letter stating that such a system would mean the government will lose domestic policy objectives for international. That is happening right now any way. The Federal Reserve is becoming the central bank for the world because it is chaos everywhere else.

Today, however, I would oppose the IMF SDR system for the IMF is way too corrupt. I have told how I was invited by Edmond Safra to the IMF Washington Dinner he put on for the IMF renting the entire National Gallery. Everybody was there from politicians to Paul Volcker. I was told bluntly to join the bankers “club” back then. I was invited to demonstrate to me that they had the IMF in their pocket. They poured money into Russia and the IMF was to keep the loans going. When they could not, the whole mess collapsed. That produced the Long Term Capital Management crisis and the first Fed bailout.

Because the London Financial Times had reported on the front page that at our London WEC in July 1998, I delivered the forecast that Russia would collapse in a matter of weeks, that began this whole mess alleging I manipulate the world economy because I must have more people on my side than they did on their’s. People judge others by themselves. The “club” tries to manipulate the world paying bribes and controlling mainstream media. When my forecasts become correct despite all their machinations, they scream I am the one manipulating the world because they lost. Nobody can manipulate the world and if these fools do not figure that out, all I can say is they are not even at the dumb and dumber level of stupidity.

To break the world monetary system, that will ONLY take place with a rising dollar. Bot with a declining on. You are just missing that and forget about petro-dollars. They are history. Measuring confidence is key. The confidence is turning against government now, We can see that with Trump and Bernie. The masses are not so happy.

In Europe we have 2/3rd of Germans against Merkel. We have Greece in trouble, Britain voting on whether to stay or go, Catalonia voting to separate from Spain, and Brussels trying desperately to prevent any democratic vote because they know the people are turning against the whole euro idea.

Don’t worry. Just go with the flow. It’s happening fast. Just let go of the old-world theories.