QUESTION: Marty, do you think Hillary will just wipe us out when social security goes bust next year?

ANSWER: Absolutely. I cannot think of anyone I regard as more dangerous for the economy than Hillary. She is a greedy socialist who applies Marxism to everyone but herself and friends. She says that government creates job; not the private sector. Would the NY bankers support her if she stood against them? Goldman Sachs has publicly called Sanders dangerous, not Hillary. That proves the entire point. Hillary is a very astute politician. There are fewer women in politics because it is too much trouble to put makeup on two faces. Hillary has mastered that accomplishment. She is amazing. She can get votes from the rich and the poor by pretending to protect both from the other when speaking privately with a smile and a wink. Hillary is too smart to be a criminal. She figured out that politics earns much more and you can never be prosecuted.

Hillary will never release transcripts of her Goldman Sachs speeches because she sounded like a managing director of the firm (according to inside sources) and they clearly show how indebted she is to Goldman. She has had a 20+ year relationship with Goldman Sachs.

There has been a major political uprising in Germany. For the first time, the Green Party has beaten the establishment in Baden-Württemberg. I have been warning that Trump is not some freak show. This is a global uprising we are watching in politics as we head into  2017 – the year from political hell. We are, indeed, only four major elections away from perhaps the revision of NATO, the fall of the European Union, and the end of the socialist world order as we have known it. We have not just the U.S. election, but we also have Germany and France.

Then we have the British exit vote this June, which is actually the first. If Britain votes to leave then the EU is finished. If they vote to stay, Britain is finished and going down with the EU as the Muslim refugees pour in for free healthcare and welfare, and perhaps a few good looking girls as a bonus. This is like two guys walking in the field in the Rockies. Suddenly, they see a mountain lion. One quietly slips on his running shoes. The other looks at him and asks, “Do you really think you can outrun him?” His friend replies, “No. I just have to outrun you.”

.

​

Question: Hello Martin,

I saw a couple of days ago that Canada seems to have sold all its gold.

http://www.fin.gc.ca/n16/16-030-eng.asp

Is it just a way to find short-term easy money?

Or is it part of a global process to sell any tangible asset that the government could have ?

I personally don’t think this to be a smart move, as in my opinion a government should mix between tangible and non tangible assets. After all, they’re using OUR money…

Thank you.

R

REPLY: You have to look at this from their perspective. They are moving to electronic money. Gold is a throwback to an ancient economy to them. We should expect other countries to follow Canada. They see no use for gold, and they are dead broke. George III was broke and began charging people with any petty crime, right down to stealing an apple. He then used that as the excuse to sell citizens to farmers in the United States as an indentured servant for their time of sentence. The historian Charles Hibbert recorded the sentence handed down by a judge on this issue in his classic work “Roots of Evil”:

Because you have committed this offence, the sentence of the court is that you shall no longer be burdened with the support of your wife and family. You shall be immediately removed from a very bad climate and a country overburdened with people to one of the finest regions of the earth where demand for human labour is every hour increasing and where it is highly probable you may ultimately regain your character and improve your future. (Roots of Evil, 145)

Above is an instructional video on Benchmark Cycles and how they differ from normal cyclical calculations.

For future reference, this video can be found under our “Models” section.

Above is a short instructional video on the 1% rule with our reversal system model.

For future reference, this video can be found under our “Models” section.

The central bankers are simply crazy, not evil. They are trying to steer the economy by utilizing this simpleton theory that if you make something cheaper, someone will buy it. Japanese and German cars managed to get a major foothold in the U.S. because the quality of U.S. manufacturers collapsed, thanks to unions. The socialist battle against corporations forgot something important – the ultimate decision maker is the consumer. The last American car I bought in the 1970s simply caught on fire while parked in my driveway. Another friend bought a brand-new American car and there was a terrible rattle. When they took the door panel off, there was an empty bottle of Coke inside. Cheaper does not always cut it. Gee, shall we cheer if the stock market goes down by 90%? It would be a lot cheaper. Why does the same theory not apply?

Then we have the trading public. If the central bankers have gone crazy with this whole negative interest rate theory, then the public is simply out of their minds. The euro rallied because Draghi cut rates further, extended the stimulus another year, increased the amount by another 33%, and then declared rates would stay there for years to come. And these insane traders cheer. Unbelievable! They are celebrating the public admission of Draghi that all his efforts to date have failed, so let’s do even more of the same. And they love this nonsense? Negative interest rates have become simply a tax on saving money and the stupid traders and media writers love it. The Fed tries to raise rates and they say – NO! This is a stunning combination of admission and stupidity that one would expect from a pretty but clueless girl and her drunk college boyfriend who can’t say no to any girl:

“I asked John if he slept with Karen and got his admittal!”

“I told him, Oh that’s cool, I think it’s probably about time you stopped drinking.”

All they see is that lower interest rates “should” stimulate but ignore the fact that they never do. They are too stupid to grasp the fact that raising taxes cannot be offset by lower interest rates. People judge everything by the bottom-line and not some crazy theory that’s just stupid. A simple correlation study by a high school student in math class would prove this theory does not correlate to the expected outcome. And we cheer this insanity confirming our own overall stupidity and one is left wondering who is crazier? I suppose it is just that central bankers are crazy and the public, as well as the media, are just out of their minds.

It reminds me of the old TV commercial by Wendys:

Ever since the Cologne sexual assaults by the refugees, things have gotten far worse in Germany. The press tends to still hide the crisis. Nevertheless, drawing only from German media reports which have made it to the public, a list documenting more than 160 instances of rape and sexual assault committed by refugees in train stations, swimming pools and other public places against victims as young as seven have been eye-opening to say the least. This is going to have a profound impact in the German elections next year but it is also tearing Europe apart and pressure builds to close borders to prevent these people from spreading out from Germany to the rest of Europe.

The New York-based conservative think tank Gatestone Institute has compiled a shocking list of sexual assaults and rapes by migrants in Germany in just the first two months of the year. This is stunning to put it mildly. Merkel does not appear to be able to survive this crisis.

Then nearly everyday some knife attacks among refugees are reported in the Austrian press. We have Africans against Arabs and those from Chechnya are against Afghanistan. In Austria, the general public is becoming terrified to even walk outside in many areas.

While the markets have cheered the public admission that the central banks have completely failed in their quantitative easing and they will now buy more for longer, the technical profile is not as buoyant as it might appear on the surface. We have at least begun to enter the resistance area, but we have still NOT ELECTED any Weekly Bullish Reversal which stands at 17750.50. We have also not broken above the standard downtrend line on the weekly level. We have a turning point due next week. The general view in the USA is that the Fed should now raise rates since the market has recovered. If the Fed does not separate from the ECB and begins to focus on the US domestic policy objectives, then the future will be far worse.

We have the Federal Open Market Committee (FOMC) meeting this week. It looks like we also have a Direction Change the week of 03/28 with an important turning point. There is no question that in Europe the ECB is confirming that the Eurozone is doomed. They have been unable to blend the divergent economies. The ECB will use the authority to expand to buy corporate bonds as a way to buy the balance sheets of banks and place a bid in the market so the banks will be willing to lend if they know they can turn around and hand-off any position to the ECB. Unfortunately, without fiscal reform, there is little hope of saving Europe now. The Sovereign Debt Crisis continues to unfold with no end in sight before 2020. There is no market for the the ECB to ever sell everything they have bought. This will all catch up to us with a bang in 2017 – the year from political hell.

I cannot personally remember any moment as dramatic as this post-Cuban Missile Crisis when we were on the brink of war. Right now, we are amazingly just two or three bad elections away from 
the end of NATO, the end of the European Union, and maybe the end of the socialist order as we have known it our entire lives. Negative interest rates amounts to simply a tax on any money on what was left over.

Asia performed across the board with gains of between +0.5% to +1.1%. We have seen that carried forward into US trading with futures adding 1.5% to the cash closes. I want to move-on quickly to Europe today as this is where we are receiving many questions. The first thing we need to highlight is the why stock markets in Europe are so well bid; the implication of the ECB buying corporate bonds. You will have also seen the performance of the peripheral bond markets yesterday and today. European bank shares have been the best performing sector today because the ECB is about to buy most of their balance sheet. The rally in BTP’s (Italian Gov’t Bonds) and SPGB (Spanish Gov’t Bonds) is a combination of a guaranteed buyer (not price sensitive) and being paid to take the trade on (and passing it on – due to the guaranteed monthly buyer!). Italian bank shares (Unicredit and Sanpaolo) were both up over 6% higher today. This move towards credit also sends a signal to the FX market, that it could be the short-term end to the currency wars seen recently. DAX, CAC, and IBEX were all up over 3% today with financials leading the way. FTSE closed 1.6% higher.

The ECB will be expanding its balance sheet in the same way that the FED implemented TARP. The net result was that the FED doubled its balance sheet. The result will be the ECB paying the banks to lend money. You could say that if the ECB is running the banks, then do the banks really need to pay expensive staff – which is probably why Deutsche Bank told their staff today that your peers in other houses could well be paid more – having just declared an 11% reduction in the bonus pool. This approach also answers the fears surrounding the CoCo (Contingency Convertible) market earlier this year! Conveniently, the ECB’s new route also leaves the road clear for the FED next week to play its own game and worry about domestic rather than international affairs.

The US DOW, S+P and NASDAQ all closed on strong form with +1.5% gains across the board. Volumes were better also which bodes well ahead of the Fed and other central bank plays next week.

The Bond markets reaction is a clear signal the divide between Europe and the US has just shifted gears. As the US 10yr note heads towards 2% (currently 1.98%) while the 10yr Bund remains unchanged at 0.30% (+168bp). US 2/10 curve closed +102bp.

Italy 10yr note tightened again today but only small to close 1.43%,  Greece 8.98%, Turkey 9.91% (-4bp) and UK Gilt 1.57%.

Above is an instructional video example explaining slingshot moves and their timing

For future reference, this video can be found under our “Models” section.