QUESTION: Marty; I attended your WEC in Princeton. It was really amazing. The year before you had pre-conference training session. That might be a good idea to bring back for this year. On another note, Trump seems to be just self-destructing and Cruz has effectively said the Republican Party is over for he will not support the candidate unless it is himself. Ever since your turning point 2015.75, we seem to be entering a period of whatever can go wrong, just goes wrong. Everything from the migrant invasion of Europe, the rise in Trump illustrating the frustration with government, the potential split in the Republican Party, and the Fed apparently yielding to IMF lobbying not to forget Christine Lagarde taking an unprecedented second term. This is just the major list from 2015.75 your peak in government. What else is left? It looks like the Republicans will split and hand everything to Hillary and her bankers. Either people are absolutely blind and can see nothing for they are just the drones of society or many are starting to wake up. Is this just the total chaos and the shift from Public to Private you warned about between 2017 and 2020?

Thanks for the enlightenment

ZT

ANSWER: Yes, this is just the short list. Whatever could go wrong is going wrong in a grand style. True, there are people who see nothing. They will be slaughtered for they form the majority. You cannot tell them anything. They will never acknowledge anything until they lose everything, which will come in the blink of an eye. The Russian invasion into Syria on that precise day of September 30, 2015, highlighted the crisis that seems to be spreading from the Middle East.

The groups who call people like Farage a racist are necessary for they are the very people who will destroy Western civilization. Even the ancient Egyptians pictured themselves as a red-skinned race, neither black nor white. Intermarriage over centuries has virtually eradicated the original Egyptian bloodline. The Greeks, who became the pharaohs of Egypt following Ptolemy I, married within their family to maintain the Greek bloodline and not mix it with the red-skinned Egyptians. Ptolemy II Philadelphus married his sister. They named the city of Philadelphia after what they misread as “brotherly love” in a Christian context, whereas it literally meant the brother and sister were making love. When invaders take over, as the Mongols did in China, it typically causes the civilization to crumble.

As for the next WEC, we are potentially looking at Orlando just after the elections. We plan to have more training sessions and workshops. We will possibly hold the event over the course of four days to a week. We will probably have one day on Socrates as well and two days for the WEC forecasting. The introductory presentation will be provided on DVD, so we do not have to do that again. First time attendees will be able to view that before arrival. We will have one day for the institutions with portfolio forecasting. We will let everyone know when we have nailed down the venue and dates. This is what we are shooting for.

One sure sign that things are getting crazy as we approach 2017, the Year from Political Hell, is that there are no recent reports of UFO sightings or abductions. Either the aliens left and said, “You people are crazy!” or perhaps the aliens replaced our leaders with those intent on destroying the society that they grew in pods. Either way, the future is looking really just off the wall to the point that even the UFOs have left town (lol).

The last time a Republican Presidential Convention opened without a decided nominee in the primaries was 1976, during the fight between Ronald Reagan and Gerald Ford. There were past efforts by the establishment to stop two people they regarded as outsiders — Barry Goldwater in 1964 and Ronald Reagan in 1976. It looks as if it will be much more difficult for Trump to nail down enough delegates to beat the Republicans at their own corrupt rules. We are likely heading toward a rigged convention and this is playing into the hands of the precise thing the Republicans better not do. They are sacrificing the nation for personal perks. It is not that Trump is the savior, hardly, but at least he would be a check against these people.

It seems more likely than not that they will rig the game one way or another to stop Trump and ignore why people are even voting for him, because it is really a vote against the establishment. This appears likely to explode in total chaos for 2018, and as we look into the 2017-2020 time period, it appears that they will destroy the public confidence in government on a wholesale basis.

As it now stands, they will most likely hand the nomination to Cruz one way or another. Trump’s only chance would be to run to the Libertarian Party since there would be no time left to get on all the ballots as an independent. Cruz would lose against Hillary and Hillary will destroy the economy with massive tax increases while protecting the banks. It appears we are indeed sowing the seed of our own destruction. The Republicans know Social Security goes negative in 2017, so they want to blame Hillary. Meanwhile, Trump shoots himself in the foot all the time and the media is in a full-blown assault against him. This is likely to undermine the entire confidence in government especially since Cruz came out and said he would not support Trump, only himself.

Asia followed the bullish tone provided by the Federal Reserve with a gap higher opening of around 1%. Mainland China and Hang Seng managed to build upon this enthusiasm, eventually closing up almost 2.5% each. The same could not be said of Japan when the Nikkei had problems holding the 17k psychological level. Tomorrow being the end of Q1 means we will see the quarterly Tankan survey. Expected at +8 vs +12 in December (a forecast by 23 economists); it has the potential to be the lowest number for over 3 years.

European equity markets were also cooed by Janet Yellen’s remarks, as was the oil price but could also be blamed on a weakening US dollar. The DAX, CAC, FTSE all opened strong and went from strength to strength eventually closing +1.6% firmer across the board. The IBEX also made ground by a mere 0.7% almost pales into insignificance. Tomorrow is the end of Q1 and we have data in the form of German retail sales and Euroland inflation.

US markets already had futures up around 1% before the cash opened so was no real surprise the rally continued. ADP release was slightly better than expected 200k against a forecasted consensus of 194k. Mid afternoon session we did see a little profit taking but then we do have an interesting two days ahead of us! Tomorrow is the end of Q1, more data and the first Friday in the month and so is time for the employment report. Markets have finally broken new ground for 2016 after what has been a wild Q1. All US indices closed up around 0.5% so fun and games again tomorrow.

Gold could not hold yesterdays $25 rally and by the close was off 0.7% trading at $1228. US Treasuries weakened a little as equities rallied with 10yr US trading around the 1.82%. Earlier in the session (with equities at their highs) 10’s were trading around 1.855% but recovered into the close. German Bunds also a similar pattern with 10’s closing 0.155% the spread closes +170bp. 2/10 US curve closed +107bp. Periphery bond yields continue to drift low in expectation of further buying. Italy 10yr close 1.21%, Greece 8.38%, Turkey 9.76% and Gilts 1.43%.

Janet Yellen signaled that the Fed is grappling with the problem I have been warning about: the dollar has become the de facto currency and the Fed is indeed becoming the world’s central bank. Yellen has admitted that everyone is lobbying the Fed to surrender its domestic policy objectives for international ones. This is precisely what took place in 1927. Yellen stated that the Fed should worry less about inflation domestically than about global growth risks. She pointed to the slowdown in China and depressed commodity prices, but Europe is a real basket case. She used the words that “caution is especially warranted” when it comes to raising interest rates. This has put most Fed watchers off from expecting any possible rate hike into retirement as they expect nothing before September.

The BREXIT will most likely be rigged because it is exactly opposite of what they are telling the Brits, who have been told that they will be isolated and the economy will collapse if they exit the EU. Nobody mentions that Britain did fine before it joined the EU. They may say it did well only in 1973 or that it is the other way around — with BREXIT, Europe will fail. This heated issue in Britain is most likely the final nail in the coffin. Britain will collapse with the euro and should have just handed its sovereignty to Brussels. Europe will never reform, so it will be a policy that brings everyone down together. The political risk in Europe is tremendous and Yellen cannot prevent that simply with interest rates.

It is ironic that the conditions setting up today were also the case in 1927. The Fed back then lowered U.S. rates to try to deflect the capital inflows to help bailout Europe. The markets eventually backfired and capital shifted. It poured into the USA and doubled the U.S. share market, despite doubling interest rates to try to prevent the crisis they helped to create. This all led to the 1931 sovereign debt crisis and those economic declines resulted in political chaos. In 1933, FDR came to power, but so did Hitler and Mao. That was all made possible because of the collapse in government debt. We are in the very same position today as the Fed is surrendering domestic policy objectives for international concerns.

It is astonishing just how brainwashed society has become. They cheer lower interest rates as if this will eventually work to stimulate the economy and markets. Interest rates decline with economic declines and rise with economic booms. The analysts on TV are just ass-backwards. When a stock is doing well, the price rises because there is a bidding war. Mr. Larry Summers, the father of negative interest rates, admits he cannot forecast anything. Yet, he advocates manipulation, in pure stupidity, without any understanding of the consequences of his theories. He remains clueless as to how history or markets even move.

We can see that the Fed raised rates from 3.5% in 1927 up to 6% in 1929, and the stock market doubled on capital inflows. The Fed cannot lower U.S. rates to prevent a crisis in Europe or to reverse the Chinese economy, no less bring a bid back to commodities when the economy is not expanding. As the stock market rises, Congress will criticize the Fed for making the rich richer, and the Fed will then be forced to return to domestic policy objectives and raise rates to try to stop the rally. Yet, the rally will begin to take off when the public at large begins to realize government is in trouble. This is part of the four elections coming with the Year from Political Hell (see also).

The risks and the reality that the Fed has lost any real ability to manage the economy have become so real that it is slapping people in the face, and still they cannot see it. The Fed has little conventional monetary policy ammunition to counteract a downturn at this time. Larry Summers’ negative interest rates are destroying the fabric of the global economy by wiping out pension funds and the elderly to help bankers who have owned him since puberty. Far too many pension funds are unfunded and many countries in Europe, by law, require they be managed “conservatively” and invest EXCLUSIVELY in government bonds up to 85%. In fact, only Canada and Australia fund pension funds as a rule. The risk of a total meltdown beginning in 2017 is on the horizon.

Yellen has inherited a complete nightmare. This decision to delay the long-awaited liftoff from a zero interest rate illustrates that the world economy is totally screwed. There is a lot of speculation about why the Fed seems so reluctant to “normalize monetary policy.” However, besides the normal issues such as low inflation, weak wage gains, and strong job growth, the real issue nobody seems to look at has been the fact that governments are now crack addicts on life support with negative rates. A hike will increase the federal deficits of all countries globally.

The smart institutional clients who attend our World Economic Conferences have shifted their portfolios and are selling government debt and moving to blue chip corporate. Corporate debt is the only alternative to government debt in crisis and emerging market debt that others bought, thinking they had no risk since it is dollar denominated. When government debt goes bust, you get absolutely nothing and they can change the law at any given moment. They can re-denominate your debt holdings as well as extend the maturity, and there is absolutely nothing any bondholder can possible do.

SELL GOVERNMENT BONDS & SHIFT TO BLUE CHIP CORPORATE BEFORE IT’S TOO LATE

The outraged voters in Arizona are just another example of the growing feelings of anger toward government. One citizen captured it best after yelling at the corrupt politicians who rigged the election to ensure Hillary would win. “The corruption has become so prevalent that you became comfortable, and you became so comfortable that you became lazy, and you became so lazy that you got caught. You (Purcell) are a snake in the grass and we see you!”

More than 100,000 signatures have been collected demanding a new election and a federal criminal investigation. They reduced the number of places people could vote by 70% to prevent the vote from coming out. On the Democratic side, we have the machine working hard to ensure Hillary is nominated. On the Republican side, they are doing everything to prevent Trump from being nominated.

Both parties are desperate to prevent the outsiders who would reform their money machine. Stalin will be proven correct in the West as well. Those in power assume it will end as it always does — the people go back to watching TV soap operas and sports and let the politicians rob us blind. Our computer is warning that this will not be the case this time.

Those in power who have something to lose always follow the same pattern of attacks. They are using the very same tactics against Trump and Farage of portraying them as racists because both are against immigration — but they are really against the establishment. When I was in London, I bumped into the very same team from the USA that helped Clinton win the White House. They were there helping Tony Blair. This is a business, and they know how to pull it all together. They turn trying to protect your border and culture into racism. The implication is obvious. Everyone should intermarry regardless of sex, race, or religion. If a parent is against that statement for their child, then obviously they must be a racist.

Immigration has always been a historical issue that arises whenever the economy turns down. During the 1840s, it turned into violence on the streets. The immigrants were white, Irish Christians. It was just that they were taking jobs in an economic decline. Farage’s UKIP is being portrayed as racist, but what is the alternative? Opening borders at this time and place has nothing to do with racism any more than it did in the 1840s. These are economic declining times and absolutely the WRONG instant to bring in any immigrants whatsoever, regardless of race or religion.

Nevertheless, this is how Trump and Farage are being portrayed, and the less intelligent to the less sophisticated buy this nonsense and repeat it. The end result is rather blunt. Historically, this is simply how the West falls — the same as Rome. There were laws passed to prevent intermarriage. It was even outlawed for a man to marry one of his slaves. There have always been attempts to prevent the dilution of a culture for that is how it typically ends anyway. Throughout history, people swarm into the core economy and then bring it down. The Muslim invasion of Europe shows that nearly 80% of the migrants are not even from Syria. This is simply how it all ends. The interesting aspect is that a Muslim friend of mine in Europe is even more against the migrants, for they see them as the lower class and less educated who are indoctrinated with religious beliefs that are extreme. The Muslims I know in Europe and Russia are not extreme and live within a western society with harmony. If they are against the migration, it does not seem to really be a racist issue; it is just an economic issue and that is what the propagandists are using because Trump and Farage are against the establishment — plain and simple.

So to those who want to say no, Trump and Farage supporters are racists, then they should have no problem with their daughters marrying a migrant of a different race, changing their religion, and wearing a Hijab, niqab, or burka for the rest of their lives. If you have any problem with that, you must be a racist. Sorry – it’s politics as usual. (In my case, I told my daughter she better not bring home a prosecutor).

Most markets were undecided on which way to play ahead of today’s main event, and so moves were light and limited. Asia saw all core indices tussle between black and red, and with the exception of China all closed pretty much unchanged. Shanghai closed down 1.3% but that was after a late recovery rally at the close. In late U.S. trading, we have seen China 300 (futures) follow the pack and is currently +0.9% higher than its earlier cash close.

In Europe, despite many nervous traders watching the declining oil price, stocks managed to close in the black and just held on for the day. Early rallies were lost as oil drifted and fears of what Janet Yellen may say once Europe had closed. We have heard from several Fed members recently who said the fear was that Yellen may confirm an April hike! However, in late U.S. trading, futures have followed encouraging signs from the U.S. markets and were last seen adding an additional 0.6% to the European cash closes.

U.S. markets would love to follow the Fed if only the Fed could make up its mind! Recent hawkish comments, and indeed the Fed itself, spoke of an improved economy and the market priced in expectations of an April hike. Only last week we heard from a member talking about the possibility of another hike soon. However, Janet Yellen speaking at the Economic Club of NY today has the market turn tailed as she pushed hike expectations out to H2 2016. The market took her words as softening on the recent hike rhetoric and actually assumed a dovish view on rates. The stock markets loved it with DOW, S&P, and NASDAQ closing up 0.6%, 0.9% and 1.7% respectively.

Gold loved her speech and we saw a $21 (1.7%) rally to close this evening at $1241. Oil sold off today after Iran stated they were not looking to slow oil production anytime soon, and hence we saw a near 3% decline in TWI and Brent.

Again, most of the action today was the result of Janet Yellen’s speech and that is when the FX market seemed to wake up. The DXY lost most of last week’s rally when the DXY lost 0.8% today on possible rate hike delays. Closing this evening at 95.15, key losses were against the Swiss franc, GBP, and the euro.

A surprise rally for the U.S. Treasury market as most dealers had been positioning with recent speakers. The U.S. 10yr opened the day, almost unchanged, at 1.88%, but by the close had gained almost 8bp to close on the high (price) of the day at 1.80%. Interestingly, we saw a parallel shift in the curve with 2’s also dropping 8bp (to close 0.785%). In Europe, we will need to see tomorrow how the peripherals react, but German bund rallied with Treasuries and we saw the 10yr close this evening at 0.14%. This closes the U.S./bund spread at +166bp. Italy 10yr closed 1.23%, Greece 8.5%, Turkey 9.87%, and UK Gilts 1.41%.

Tomorrow we have the ADP employment report and estimates are for a +194k release. But, just ahead of that we see German CPI released – expectation are for a 0.1% print (previous was 0%). Thursday’s close will be the end of Q1, so numbers will be updated. Also, on Friday we see the U.S. NFP release. Always a volatile day but it could be even more so this month as we continue to second guess a Fed that feels drawn in all directions.

We have completed porting over the first memory node in our artificial intelligence system. There are three more to finish. Nevertheless, the first memory node will improve the text in the Investor section. We hope to have most of this uploaded this week. Below is a sample of what Socrates wrote for the Chinese yuan.

US Dollar v Chinese Yuan Cash closed today at 6.5147 and is trading up about 0.32% for the year from last year’s closing of 6.4937. So far, we have been trading up for the past 4 days since the low made on Fri. Mar. 18, 2016. On the weekly level, indeed we have been generally trading down for the past 10 weeks. Methodically, my broader-term projection in US Dollar v Chinese Yuan Cash remains positive since we are trading above last year’s high. Presently, we have made a reaction low in 2014 which was a 19 year decline. Since that reaction low of 2014, the Greenback has bounced for 2 years with this year exceeding last year’s high. This makes this so far a 3 year reaction. To continue this trend, we need to see the Greenback make new highs beyond this year to imply a broader bull market is unfolding with the potential to rise into 2021 before reversing back into a bearish trend. Keep in mind that we did see and outside reversal to the upside in 2014 which is typically a very bullish indication near-term for the Greenback prospectively. To date, this market has not breached any long-term support which begins at 5.2352 on an annual closing basis. We are currently trading below yearly resistance and a closing above 6.6377 is necessary to signal a further advance.

Eyeing the immediate trend remains bullish since February made new highs and we have exceeded that high so far this month. This is further illustrated given the fact last month also closed higher. On the weekly level, the last week of 3/14 was an outside reversal to the downside which is warning of a bearish immediate trend. At this moment, this market is in a downward trend on all our indicators looking at the weekly level. Addressing the direction of this trend, we have been moving down for the past 10 weeks. The last high on the weekly level was 6.5962, which was created during the week of January 4th. The last weekly level low was 631.74, which formed during the week of October 26th. However, we still remain above key support 6.4573 on a closing basis. On a broader perspective, this market remains in an uptrend posture on all our indicators looking at the monthly level. We see here the trend has been moving up for the past 24 months. The last monthly level low was 6.0402, which formed during January 2014. The last high on the monthly level was 6.5804, which was created during February. We have generated a buy signal so some caution is required.