Many people have written emails to ask if we have a model on Yellowstone National Park’s potential for the largest volcano eruption in history. A new study provides evidence of 12 volcano eruptions in about 3 million years, which suggests that Yellowstone’s super volcano can erupt catastrophically on a much shorter cycle of about every 250,000 years. There is insufficient data to create a quantified model that would be accurate. The same problem exists with California’s earthquakes. Before 1857, nobody was there. We can focus on the normal earthquake cycles and project a rise in intensity, but determining the “big one” requires a longer data series than just three instances. The same problem exists with Yellowstone National Park. We can see that we are entering a period where an eruption becomes more likely. However, to forecast when within a year or so becomes just luck and not science.

Some people can face adversity but others want to hide and pretend nothing is happening. What might seem impossible with respect to political reform to save our future, actually becomes entirely probable. What you have to grasp here is that the news may be negative. However, it is that negativity that finally lights the one remaining match to create an explosion. They say that HOPE is eternal. I tried very hard to make a difference while working from the inside on Capitol Hill, but it is true that I gave up. What I saw led me to believe I was wasting my time and, above all, it was pointless.

If you are walking down the street and a guy comes up to you with a gun and says, “Your money or your life?” do you begin to preach that it is illegal to have a gun without a license? Whatever the rules of law might be, such things are totally irrelevant. He has the gun and you do not.

I laugh at those who think corporations are evil and ignore government. They are typically weak minded and easily influenced by propaganda. I may not be a fan of NY bankers who have engaged in manipulating markets and buying government to stay out of jail, but let’s make no mistake — they do not have the guns and tanks to rob us of our freedom. Only government can oppress the people by sheer force of arms. Nonetheless, politicians always blame the “rich” to get elected.

Our HOPE will be very simple. We have to CRASH AND BURN first. Without that pain, there is no reform or gain. Nobody will change anything before the system fails. It is unrealistic to see this message as BAD to justify hiding in the shadows. The good news, if you understand what is unfolding, and you understand what the game is about, then you can help in our time of need. We do not need someone hiding their head in the sand. If they do not comprehend how we have reached this point, then they will blindly hand more rights to those who have created this nightmare. Therefore, what seems impossible (political reform) becomes possible only when the majority opens their eyes.

QUESTION:  You wrote the Socrates site on 3/23/2016: “Once the “confidence” in government cracks for the BULK OF THE SILENT MAJORITY who do not listen to money supply and conspiracy theories, then we move into game over. That is when we will see assets rise as confidence shifts from a corrupt government for the majority will no longer trust then and they will turn to the private sector.” Mr. Armstrong can you please name the private assets that will appreciate? and if there are similarities with 1929, where we are now in 2016? Thank you for all your efforts to teach us the world economy.

DS

ANSWER: There is absolutely no correlation with 1929 from the USA perspective. The people who see that nonsense do not know the facts or the history. The 1931 sovereign debt crisis was omitted from the history books. John Kenneth Galbraith blamed corporations in his book “The Great Crash” in which he states they ignored government defaults. There was no “helicopter money” for it was exactly the opposite – massive DEFLATION. There was a shortage of money to the point that hundreds of cities began to issue their own “Depression scrip.”

All of these forecasts projecting hyperinflation are based solely upon a misguided notion of what caused the German hyperinflation. The USA suffered massive DEFLATION because of a contraction in money supply — not inflation — so we are not facing a 1929 scenario. The analysts that claim this event is commingled with the German hyperinflation are creating a hybrid of something that has NEVER taken place in history.

Everything hinges upon the confidence of the silent majority. They are starting to rumble. That is the key to the future. We are watching this begin with Trump, which is precisely in line with out model that calls for political chaos to emerge in 2016.

The number one issue concerning Donald Trump is the misrepresentation that this political unrest is about Trump. We are watching a worldwide uprising against government. This is the West’s version of 1989 that took down communism. We are witnessing opposition to the establishment everywhere from Germany, France, Britain, and even China. The Chinese version of Donald Trump is Ren Zhiquiang, who has defied the Communist Party leader President Xi Jinpeng. Normally, anyone who criticized the head of the party would end up in prison, but things are changing on a global scale. This is what our computer model warned would lie on the other side of 2015.75. What has emerged in China is rather amazing as the sophisticated Chinese people, including scholars, journalists, students, and dissidents have all supported Ren against the Chinese Communist Party. That is quite amazing and unprecedented in modern times.

In many countries, the establishment is refusing to connect the dots. There is a change in the political winds and what is coming is something that takes place about once every 309.6 years. The last change in the political wind produced the American Revolution against the monarchy, which caught on structurally in France and eventually in England. What will the wind blow into town this time? Democracy at last? Or will be it be more oppression from the establishment?

It might surprise many, nonetheless, governments have routinely spent more than they take in from taxes. In ancient times, governments simply minted more coins to fund their operations; they generally did not borrow. Some ancient Greek governments borrowed from the temples to fund wars and defaulted. However, typically, tax revenues amounted to only about 80% of expenditure. Records and dies from which coins were struck have survived. Pictured here is an actual Roman die from the Republic period. Each die was hand carved so we can distinguish between dies. Additionally, we know that the average number of coins produced before a die would break is about 15,000. Here is a coin struck from this issue that this die represents. Since we can catalogue the number of known dies, we then can reasonably estimate the annual production of money in the Roman Republic as well as the Imperial era.

The above chart demonstrates the annual production of coinage during the Roman Republic (155-66 BC). We can differentiate periods of contraction (deflation) from inflation, and can see that some periods were clearly deflationary as a shortage of money occurred at times. The Roman Emperor Tiberius, who followed Augustus in 14 AD, was notoriously frugal. We find private coinage appearing as tokens to make up the difference for such periods of deflation.

The private token issues during the period of Tiberius (14-37 AD) are reminiscent of the Great Depression when hundreds of cities issued Depression scrip. We also find private token coinage produced during the American Civil War. They even issued postage currency whereby stamps were exchanged as money.

Since we can ascertain the annual production of coinage with a reasonable degree of accuracy, adding up those annual production figures will give us a look at the total money supply. We are then able to also reasonably ascertain that the Roman government collected only about 80% of its total expenditure from taxes. The rest was simply produced instead of borrowed.

Consequently, this provides the understanding as to why there would even be the practice of debasement. The fact that tax revenues fell short of expenses explains why about 20% of the annual budget was covered by new mining production. Rarely has there ever been a “balanced” budget based exclusively on tax revenue.

This further explains why coins of someone like Gordian I (238 AD), who reigned only 36 days, have survived and are currently worth around $3,000 instead of hundreds of thousands.

Then there is the coinage of Didius Julianus; his wife and daughter ruled for 66 days in 193 AD. The corruption had reached such levels that it was clear that the decline and fall of the Roman Empire began at this junction in time. The Praetorian Guard actually accepted bids for the position of emperor. There were two rival bidders who presented themselves – Titus Flavius Sulpicianus (father-in-law of Pertinax) and Marcus Didius Julianus. Didius’ bid was 25,000 sestertii per man, which was the highest bid, and he was duly declared emperor. This is why so much coinage has survived for someone who was in office just 66 days.

Today, to cover the shortfall, governments borrow each year with no intention of paying anything back. The Romans did not borrow; they increased the money supply to cover the shortfall in expenditure. This was the common practice and it did not cause runaway inflation. That came during the 3rd century following the capture of Valerian I by the Persians who turned him into a royal slave. When Valerian I died, the Persians stuffed him as a trophy. This resulted in a collapse in the money supply as people hoarded and feared the invasion of barbarians. This is when the wall was built around Rome by Aurelian (270-275AD).

Should we stop the borrowing and just increase the money supply as a finite percent of GDP? This makes sense when up to 70% of the accumulated national debt has simply been interest expenditures.

Private Blog Post Inside Socrates for Gold & Next Week’s Price Action

QUESTION: Marty, in the new Gold report on page 34 you state that the $1309 is the yearly number but you said “Therefore, we have two Weekly Bullish Reversals at 1272 and 1287.50 that may provide the resistance. A failure to close above these numbers the week of March 14, warns that what will not move up, often turns down.” How do you determine the level a market will stop at?

Thanks for the education

HF

ANSWER: Some people expect analysts to be more like gurus, but they are typically fools searching for a bigger fool. The only thing we can do is look at the trend. Those who have not read the “2016 Gold Report” have no idea what this talk of $0.30 cents is even about. Some think this is personally about me, but they are still in their cages and cannot escape. Following some analyst because he is “hot” is stupid, because, like gambling at a casino, sometimes you are hot and sometimes you are not. They are incapable of taking one step forward out of the personal attribution and blame game.

Personally, I cannot forecast markets consistently from a personal opinion. Nobody can. This is about learning how to use the model to understand how the market speaks to us. If you understand this translation game, you will understand how the markets show us the future. If you shed your personal bias and stop searching for the perfect guru, hopefully, you can escape the cage in which society lives. Then you will not need me to interpret what the model says as the markets are yelling, “Hey look at this!” So when someone puts out a forecast on a personal level, I just look at them and realize they are not quite ready to take that step out of the cage in which they live. This is NOT about me; there is a huge difference between what I “think” and what the model is showing us.

The timing and reversals give us the key points in price and time. Which reversal a market stops at is a combination of price and time. Had we hit the Gold Weekly Bullish at $1287.50 back in January or February, then we clearly would have moved to the next at the $1309 level. I gave these targets with time, and stated if we did not close above $1287.50 by the end of the week of March 14, then gold would retest support. This is very black and white. Those who cannot grasp the IF-THEN-ELSE approach are novices. They will always lose because they cannot make that step forward to listen to markets rather than individuals. Institutions never follow opinion, as they must quantify decisions. They cannot justify moving billions because some guy said so. That would be absurd!

The market is the only forecaster whom is always correct. The fools who claim they are right and the market is wrong because someone manipulated it against them are just delusional fools. Only humans makes mistakes; not the markets. The key is to read what the markets are telling us. That cannot be done with emotions. I look at this very unemotionally; I look at one level and then the next. Time always determines the movement from one point to the next. You have a finite amount of time to accomplish a goal, and once you run out of time, well, that’s all she wrote folks.

Forecasting the trend is fairly easy. Forecasting the price level at which something stops cannot be opinion. So understanding how to read what the market is telling us is critical. Nobody can pull a number out of thin air based upon opinion. The numbers are the numbers. That has nothing to do with me personally.

As laid out in the “2016 Gold Report,” we now must focus on the closing for March. This is the third month up from the December low, which is the maximum time we can see for a reaction. Nothing has breached any key levels to imply a reversal of the long-term trend. We will create a video for those who bought the “2016 Gold Report” after the closing for March.

My goal is to help those who are interested in learning how markets move and are willing to listen to what the markets are telling us. This is the blueprint for society as a whole. Those in search of a guru are not interested in becoming a student of market behavior and should not bother reading this blog. If someone expects a guru, good luck on that. This is not a personal opinion model. I simply go by the numbers and time. Once you understand the model, you do not need my interpretation.

Even in politics, society applies the same guru stupidity. If a politician says something then they cannot possibly change positions. Come on. Life is a learning process. Opinions I held 40 years ago are not the same today. Mark Twain said it best, yet society expects guru status.

“When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years.” — Mark Twain

QUESTION: Marty; It seems like government always has some covert agenda. The exposure of the FBI lying about being unable to hack the iPhone Apple is just typical. The global warming issue clearly seems to be a tax agenda. They taxed cigarettes saying they were trying to help society. When revenues declined, they want to tax electronic cigarettes. These people are always after us one way or another. I suppose this will never change will it?

KE

ANSWER: No. I think Tomas Paine, who inspired the American Revolution with his writing entitled “Common Sense,” says it all. Nothing that government does is ever honorable. Even the war on drugs was about targeting the anti-war movement in the 1970s. Government outlawed what was in common use (e.g. marijuana) so that they could lock up users under the drug laws when, in fact, it was for political reasons. John Ehrlichman served 18 months in prison after being convicted of conspiracy and perjury for his role in the Watergate scandal. Before he died, he gave an interview and stated bluntly that the war on drugs was really against political activists. We are still facing upheaval over marijuana and countless people are imprisoned for weed at a tremendous cost to society. These laws are a detriment to those people who try to move into the mainstream even for employment.

I have written about Coxley’s Army that marched on Washington following the Panic of 1893. How did they end the political march? They arrested Coxley for walking on the grass. This is government. They can arrest you for countless laws at any time. A friend was driving to Florida from New Jersey. In Virginia, the police pulled him over and gave him a ticket because the frame on his license plate had the dealer’s name, which 99% of new cars have. They have a law that nothing can obstruct the view of the plate. Of course, they do not arrest people for walking on the grass, but do something like exercise your First Amendment right to free speech or freedom of assembly and they will arrest you for some other reason and deny it is political.

There is no honor in government and no justice in federal court. It is impossible when former prosecutors become judges as politicians appoint them. Just look at the chaos over appointing a justice to the Supreme Court. Everyone wants someone who will interpret the Constitution unfairly and skew it to what they want it to mean. The legal professionals should be the only ones to nominate judges — not the government. Anyone who has been a former prosecutor should be disqualified. Further proof that government is always dishonorable is the fact that judges will throw you in prison on contempt if you do not bow to them and refer to them as “Your Honor.” Anyone who demands to be called “honorable” has never earned such a title.

QUESTION: Mr. Armstrong; Is it true that the central banks have been lying to us to create a false sense of confidence in order to reverse the economy? Is this part of their agenda?

Thank you

UB

ANSWER: It has always been a confidence game. Those in power are constantly trying to boost the confidence of the people in order to stabilize their control over society. Above is a Roman coin from the tetrarchy period of Diocletian & Maximinus. The term meant “leadership of four” whereas there had been a chaotic period that spanned across 20 emperors whereby they came to power only to be overthrown by another. There was no political stability. The Emperor Diocletian sought to create political stability and established the tetrarchy where there were two emperors and two “Caesars” who were like vice presidents in waiting. The power of governing the empire was split and marked the end of the crisis of the third century. Diocletian and Maximianus were the first and only emperors to retire.

The most common coin minted during this period displayed Genius on the reverse holding a patera, which was a bowl into which you poured wine and said a prayer. This practice extended back to the Bronze Age and remains with us today as many say a prayer before eating a meal of thanks as we celebrate even on Thanksgiving. This was clearly an attempt to invoke the confidence of the people.

In Roman religion, Genius was the spirit of a general divine nature that is present within every individual person, place, or thing. Today, we call this our guardian angel. This was a Roman belief adopted by Christianity. The Genius was thus a guardian angel who followed each man from the hour of his birth until his death. The spirit Juno accompanied each woman. This concept of a guardian angel even predated Romans, for the Greeks called their guardian angels “daemons.”

So here, the coins are trying to invoke confidence that the Genius of the Roman people was there to protect them with prayers in one hand and the promise of the good old days in the other with the cornucopia. Today, we call someone smart a genius, someone possessed with evil motives has a demon inside them, and the rest of us are watched over by guardian angels. These are very old concepts that were meant to provide trust and confidence in life.

Today is Good Friday which is a Christian religious holiday commemorating the crucifixion of Jesus Christ and his death at Calvary. For those that haven’t thought about it the Crucifixion happened just after Passover. Jesus had come to Jerusalem for Passover. The last supper is believed to have a Passover connection. I was fortunate enough to have visited Jerusalem for the convergence of Easter and Passover during the very early 1980s. Since the two holidays are related obviously they will eventually come together at the same weekend. The year 2015 is one example whereas the previous time was in 2012. We will have three years, in succession, beginning in 2018. The last sequence of 3 years converging was 1998-2000.

The Church of the Holy Sepulchre was amazing, but also an example that there will never be full agreement in any group of people. Today the Church of the Holy Sepulchre is shared among several Christian denominations which have never been able to agree how to finish the interior in certain sections. So here we have a church constructed during the 4th century AD, and there is still no full agreement.

According to Eusebius of Caesarea, the Roman emperor Hadrian during the 2nd century AD built a temple dedicated to the goddess Aphrodite over the tomb in which Jesus had been buried to discourage the cult. Constantine the Great, ordered in 325/326AD that the pagan temple be replaced by a church. It was at that time during the construction of the Church, Helena, Constantine’s mother, is believed to have rediscovered the “True Cross”. Socrates Scholasticus (born c. 380), in his Ecclesiastical History, gives a full description of the discovery. It is claimed that Helena found three crosses at the site and she tested each by having it held over a corpse. As the account goes, when the corpse rose up under one cross from the dead, she proclaimed that was the true cross and tomb.

See, I use to have hair (No that is not my ex-wife)

Happy Easter