Money Flow Trading Method along with Risk Management

https://nftrh.com/2019/03/22/yield-c...crack-up-boom/

https://i1.wp.com/nftrh.com/wp-conte...19%2C130&ssl=1
YIELD CURVES, 2YR YIELD, SPX (AND A CRACK UP BOOM?)

March 22, 2019 Gary Federal Reserve, Inflation & Deflation, Interest Rates Comments Offon Yield Curves, 2yr Yield, SPX (and a Crack Up Boom?)
While the 30-5 year yield curve does this, implying some inflationary issues…
https://i0.wp.com/nftrh.com/wp-conte...00%2C300&ssl=1

The more commonly watched 10-2 year does this, implying ongoing Goldilocks…
https://i0.wp.com/nftrh.com/wp-conte...00%2C300&ssl=1

While the nominal 2 year yield does this, implying “ruh roh!”…
https://i2.wp.com/nftrh.com/wp-conte...00%2C300&ssl=1

This last chart is ugly, isn’t it? As I’ve banged you over the head about since Q4 2018, this chart is surely out front in the signals that the Fed takes for its Fed Funds rate direction. The highly technical term for the state of the above daily chart is that it sucks. The less technical term is that it is on a breakdown.
Yesterday the stock market got happy and who knows, maybe we are on the great Armstrongian “slingshot” (what I would call the verge of a von Misesian “Crackup Boom” to include many other asset markets). But the chart above sucks as long as the yield resides below those crossed moving averages as it establishes a downtrend.

Never one to shy away from a shtick in my writing, we place ole’ “Dove Eye” strategically in this part of the post. The thing directly above is a dove maker and the thing directly below saw the light at the end of Q4.
https://i1.wp.com/nftrh.com/wp-conte...70%2C177&ssl=1

Now let’s journey through daily, weekly and monthly time frames that tie in the 2yr yield, the Fed Funds rate and the S&P 500. The daily chart asks what thing used to be in positive correlation with another thing but no longer is? That would the 2 year yield, heading down while SPX heads up. And that would be the product of a bullish view, as noted on FOMC day, that the Fed has returned the punch bowl to the party, with fresh mixer and double spiked.

The stock market is rallying as the Fed rate will go flat (at best) in 2019.
https://i1.wp.com/nftrh.com/wp-conte...00%2C400&ssl=1

The weekly chart shows how the Bernanke Fed maintained an outrageously accommodative stance (plus QEs 1-3 and the yield curve flattening Op/Twist) despite a stock bull market and an economy that we (NFTRH) began gauging for positive traction as far back as Q1 2013 (ref. a then-fledgling Semi Equipment cycle).

https://i1.wp.com/nftrh.com/wp-conte...00%2C400&ssl=1

I want to go off on Bernanke for the 1000th time because I think he was a perpetrator of evil, but I am going to keep this post buttoned down and proceed on. Suffice it to say that the Fed stuck its beak in the market and diddled it for years after the bond market had begun signaling “time to hike”. And so the Fed finally did as the bond market wished in late 2015.

But that was right into the correction of 2015-2016, a time where technical parameters broke on the stock market and there seemed a chance for an actual bear market. Stocks dropped and then the 2 year formed an ugly pattern and briefly turned down before that bear potential was erased in a giant swoosh of over-bearish sentiment in and around the BREXIT hysteria of the time. The Good Ship Lollypop broke out, set sail for higher levels and then got a reflationary afterburner with the Trump election.

And here we find ourselves, with an ugly pattern on weekly SPX and a divergence to the 2 year yield. Traditionally this is bearish as you can see by the monthly chart. The 2016 event turned out to be a hyper-bullish precursor. But traditionally at least, we are at a caution point.
https://i1.wp.com/nftrh.com/wp-conte...00%2C400&ssl=1

But the Bernanke Fed blew up ‘tradition’ as it searched out and destroyed every bear (and sound economic thinker) on the planet in service to asset price appreciation (AKA the effects of ongoing inflation operations, and here again we hat tip Keith Weiner for putting it so well in his expose of father of all economic and social evil, John Maynard Keyes).

Flipping over our usual view of the Continuum (the monthly view of the 30yr yield and its monthly EMA 100 AKA the “limiter”) we note that every inflationary near-death experience has held at the 30 year bond’s monthly EMA 100. Currently, we are back at peace with sweet lullabies echoing in the ears of comfy bulls.

But the breakdown in the bond in H2 2018 may have been a shot across the bow. The bond has recovered but the Fed, with its newly dovish pivot, is now aggressively wooing inflation. It needs the declining 2 year yield for permission to do so.
https://i0.wp.com/nftrh.com/wp-conte...00%2C400&ssl=1

Pending a potential deflationary event* (as indicated by currently dropping bond yields) if the Fed succeeds in wooing inflation yet again (the system runs on inflation and credit, after all) the next breakdown in the bond above (break up in the Continuum below) could happen in tandem with the next big global macro inflation trade (and eventual “Crack Up Boom”) before the thing ultimately falls apart at some point out in the future.
https://i1.wp.com/nftrh.com/wp-conte...00%2C400&ssl=1

* They do tend to be merely events after all, with the Fed always on the job and ready to inflate when given permission by dropping yields.
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Risk Comes From NOT Knowing What You Are Doing. Warren Buffett.

http://www.whatdoesitmean.com/index2821.htm


March 22, 2019

British Military Leaders Flee To Nuclear Bunker As Trump Shows World True Horror Of Socialism

By: Sorcha Faal, and as reported to her Western Subscribers

A sardonically (grimly mocking) worded new Security Council (SC) report circulating in the Kremlin today noting British Minister of Defence Gavin Williamson declaring last month that he was placing both Russia and China on notice and his vowing “I'm not joking”—with it being further noted that while Britain going to war with Russia and China might work as a video game, the real thing would be an exceedingly bad idea, most particularly because the American military’s own World War III simulations show them being crushed into oblivion by Russia and China—states that Defense Minister Williamson, along with his top military leaders, fled earlier this morning into their nuclear-proof bunker, called Pindar, deep underground beneath the British Defense Ministry’s main building in Whitehall—but not for their preparing for war against any outside power, but to protect themselves and their socialist government from its own citizens who demanded freedom from the tyrannically socialist-led European Union—and is a protection they surely need as President Trump continues exposing the true horror of socialism for all the world to see. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

http://www.whatdoesitmean.com/socat1.jpg

According to this report, socialist-communism is the failed political ideology that between the years 1917-2017 killed 100 million people—whose power behind was able to be wielded by socialist leaders who are able to divide their nation’s citizens apart from each other (Identity Politics) while controlling every word their citizens say (Political Correctness)—and whose historical main enemies are religious institutions these socialists have led an all-out battle to destroy throughout the West.

As Soviet-Russian socialist leaders quickly learned, though, this report continues, the wholesale destruction of religious institutions could never be accomplished without giving people another existential (concerned with existence) reason for functioning in a society—and whose answer for saw these socialist leaders keeping their peoples in continuous fear of the West.

Likewise in the West, this report details, its socialist leaders used unremitting fear of Soviet-Russia and World War III to begin the destruction of their religious institutions—but by the late 1980’s, saw socialists the world over cringing in fear as the Soviet Union began its implosion to collapse.

http://www.whatdoesitmean.com/socat2.jpg

Knowing that Russia could never belong to them again, as after the collapse of the Soviet Union, Christianity became the foundation upon which the Russian state is founded, this report states, Westernsocialist leaders began a frantic search for another existential prison they could herd like sheep their peoples into—and that, on 30 June 1989, they revealed as being a new and totally made up science called “Global Warming”—and whose revelation to the world direly reported by the socialist-led and controlled United Nations gravely warned:
A senior U.N. environmental official says entire nations could be wiped off the face of the Earth by rising sea levels if the global warming trend is not reversed by the year 2000.

Coastal flooding and crop failures would create an exodus of ″eco-refugees,′ ′ threatening political chaos, said Noel Brown, director of the New York office of the U.N. Environment Program, or UNEP.

He said governments have a 10-year window of opportunity to solve the greenhouse effect before it goes beyond human control.

As the warming melts polar icecaps, ocean levels will rise by up to three feet, enough to cover the Maldives and other flat island nations.

Coastal regions will be inundated; one-sixth of Bangladesh could be flooded, displacing a fourth of its 90 million people.

A fifth of Egypt’s arable land in the Nile Delta would be flooded, cutting off its food supply, according to a joint UNEP and U.S. Environmental Protection Agency study.
″Ecological refugees will become a major concern, and what’s worse is you may find that people can move to drier ground, but the soils and the natural resources may not support life. Africa doesn’t have to worry about land, but would you want to live in the Sahara?″ he said.

UNEP estimates it would cost the United States at least $100 billion to protect its east coast alone.

http://www.whatdoesitmean.com/socat3.jpg

With 30-years of history showing how provable the socialists “Global Warming” lies were, as not a single one of their dire predictions even came close to being true, this report continues, President Trumpbegan to expose these socialists for the power mad maniacs they truly are—that they retaliated against him for by launching a fairy tale Russian collusion plot to throw him from power with, but that today sees one of its main instigators of, former FBI Director James Comey, declaring that he doesn’t even know if Trump colluded with Russia, and his beyond comically claiming he doesn’t even care.

In further attacking Trump, this report notes, his socialist Democrat Party enemies, also, began hysterically proclaiming that he was singlehandedly threatening all the norms that have made the US Constitution work for nearly 200-years—a beyond laughable claim as it’s these Democrats who, in fact, have begun a sustained attack against the US Constitution’s over two-centuries old provisions regarding the Electoral College and Supreme Court.
Going from outright lunacy to downright hallucinating idiocy, though, this report further notes, these socialists then decided they’d slam Trump over the head with yet another “Global Warming” threat—and as exactly like they did 30-years ago in 1989, saw the socialist-led United Nations gravely warning that our world now only has 12-years left before an unstoppable catastrophe is upon us all.

http://www.whatdoesitmean.com/socat4.jpg

Quickly seizing upon this latest dire UN hoax warming, this report further details, was socialist Democrat Party US Congresswomen Alexandria Ocasio-Cortez—who unveiled before the Americanpeople her socialist manifesto named the “Green New Deal”—that would place every single US citizen, every building and every business under complete government control forever—a despotic and tyrannical style of government Ocasio-Cortez champions as evidenced by her lavish praise of socialist New Zealand Prime Minister Jacinda Ardern—who after seizing all of the guns from her citizens, saw Ocasio-Cortez proclaiming “this is what leadership looks like”—a proclamation quickly joined by socialist leader Hillary Clinton, likewise, praising Ardern for seizing her citizens’ guns—and, in turn, was praised by socialist leader Bernie Sanders, too.

With socialist leaders Ocasio-Cortez, Clinton and Sanders falling all over themselves in praising Prime Minister Ardern’s seizing all of her citizens’ guns, this report says, it’s important to note that the guns being seized are semi-automatic rifles that are comically being called “weapons of war”—a claim that stands in opposition to the fact that any military commander, in any army, sending his troops into battle with these weapons would immediately be tried for treason as all of his soliders would meet quick and certain deaths from real “weapons of war”—they, also, are tearing down all US Constitutionalnorms as it pertains to their nation’s citizens rights to have these guns as enshrined in its Second Amendment—which President Trump, of course, is defending as he’s sworn an oath to do.

http://www.whatdoesitmean.com/socat5.jpg

Watching as President Trump not only took on these socialist maniacs, but destroyed them, too, this report explains, were the once free peoples of Britain—and who, on 23 June 2016, voted to separate themselves from the socialist tyranny imposed on them by the European Union—but whose elite socialist government leaders, most particularly Prime Minister Theresa May, have created a deliberate travesty of this UK-EU divorce process—and whose purpose of doing so is their hidden master plan to revoke Article 50 (the part of the British withdrawal law that governs the Brexit process) in what history will record as the greatest betrayal of the British people.

With Christian churches throughout the socialist European Union nation of France being reported vandalized, set on fire, and smeared with excrement today, while at the same time the still socialistEuropean Union controlled Britain has just banned a Christian refugee from Iran because they say “Christianity Is Not Peaceful”, but did allow back into their nation over 400 barbaric radical Islamic ISIS fighters, and for good measure now sees Britain, also, criminally prosecuting a Christian reporter because she dared to call a “transgender” person what he actually is, a boy, this report concludes, being lost to these socialist maniacs peril is how far President Trump is actually prepared to go to keep his vow that socialism will never be allowed in the United States—and as beyond all doubt evidenced this past September-2018 when Republican Party US Senator Lindsey Graham rushed from the White House to the hearing room where US Federal Judge Brett Kavanaugh was enduring a vile and vicious socialist-led onslaught—and during a barely 3-minute back and forth discussion between Lindsey and Kavanaugh, established the grim facts to these socialists that:
1.) The United States is still in an active “State of War”
2.) All US citizens are now under the jurisdiction of both US Criminal Law and US Military Law
3.) US citizens attempting to overthrow the US Constitution can be charged with sedition and/or treason
4.) US citizens committing sedition and/or treason fall under the jurisdiction of US Military Law—the ultimate penalty of which is death.


March 22, 2019 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the manybucatastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human beings right to know the truth. Due to our missions conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]

[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]

[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]
Hillary Clinton May Talk With Spirit Of Eleanor Roosevelt—But Longest Serving First Lady In History Rises From Grave To Protect Trump
The Epistle of Saint Helena: Why German Scientists Are Sounding Grave New Alarm
War Has Just Been Declared On Me, On Me Personally—Now I Am Alone, On Enemy Territory

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https://www.zerohedge.com/news/2019-...ops+to+zero%29

https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=LY4e264-


by Tyler Durden

Fri, 03/22/2019 - 14:59

It's official: whether it wanted to or not, the Fed's doubling-down on dovishness this Wednesday is now seen by the market as a major policy error, perhaps the biggest in Fed history.


While equities have yet to determine if terrible news is good news (we already knew that "bad news is good news" until today), the continuation of devastating economic data in combination with the Fed's capitulatory response has sparked a selloff in what is arguably the most important asset class of all, if only for the Fed: inflation expectations.


And looking at the 5Y-5Y Forward breakevens, which are derived from market-based inflation expectations between 5 and 10 years into the future, i.e. a testament to whether the Fed will be successful in reflating the economy over the medium to longer run, we are seeing the biggest drop in this series since July 2017. But what is far more concerning, is that today's violent drop took place after the most powerful dovish surprise by the Fed in recent history: in other words, for the Fed to surprise even more - and spark higher inflation hopes - it would have to either cut rates or launch QE.

https://zh-prod-1cc738ca-7d3b-4a72-b...breakevens.jpg


Here is BMO's Jon Hill explaining, in very clear terms, why the Fed has not only made a policy error, but - as Jeff Gundlach warned - may be on the road to losing all credibility:
A classic dovish fed should push real yields lower and breakevens wider (more accommodative Fed = more economic activity and thus more inflationary pressure); we saw exactly that play out after the January FOMC as well as in the immediate aftermath to Wednesday's meeting.


However, today, we’re seeing both real yields and breakevens fall which is better described as a negative growth shock. We’d point to weak data out of Germany out overnight and the ongoing recalibration of global growth expectations.

As Hill concludes, "It’s been a key question as to whether the FOMC’s dovish pivot could avert a global synchronized slowdown" and according to the market today, the answer is now a resounding no.

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The Fed Officially Joins Loose Global Monetary Policy Posture

David Erfle
Friday March 22, 2019
Kitco Commentaries | Opinions, Ideas and Markets Talk
(Kitco News) - Earlier this week, the market was surprised by an overtly dovish FOMC monetary policy statement by Federal Reserve Chairman, Jerome Powell. Although the U.S. central bank left interest rates unchanged with its current range between 2.25% and 2.50%, the Fed dramatically downgraded its expected rate path to signal that no rate hikes are likely to take place in 2019.
The Fed mentioned the reasons behind the decision being slower economic growth and a number of geopolitical uncertainties, including Brexit and the ongoing U.S.-China trade talks. Just after the release, the market priced in a 40% chance of a cut this year and a 50% chance of a cut by January 2020. This news is bullish for the gold complex and other U. S. dollar sensitive assets such as industrial commodities.
Before the announcement, both Gold and its miners had been consolidating recent gains with decreasing volume since peaking on February 20th. However, computer-based algorithm buy-orders in both the GLD and the GDX were triggered once the speech was released to the market immediately at 2:00pm EST on Wednesday. The rush of buying saw the gold backed ETF, along with the global miner ETF, make strong upside reversals from their respective 50-day moving averages by the close of trade.
Another bullish factor for the precious metals complex is the positive divergence between gold and gold stocks, as the GDX/GLD ratio continues to trend higher from the low made in GDX last September. Also, keep an eye on the Gold/Silver ratio, which may have begun to roll over after the Fed speech this week. I feel this important ratio needs to be below 80-1 before we see a full-fledged precious metal bull market.

Although both gold and its miners were bid up sharply after the FOMC monetary policy announcement, the U.S. equity market ended with the broad averages largely unchanged. Most observers had expected the central bank to be much less dovish, so Powell’s latest utterance should have produced a reaction of at least mild relief. Many gold sector analysts believe the last remaining factor for gold to morph into a full- fledged bull market will be the gold complex making a higher high relative to the stock market, which has yet to take place.

The U.S dollar was hit hard on the news and sliced through its 200-day moving average after back-testing its 50-day moving average before the speech was released. The world’s reserve currency closed lower on its ninth consecutive session, less than two weeks removed from closing at a nearly two-year high.

The greenback’s decent can also be attributed to growing de-dollarization according to the latest research from Bank of America Merrill Lynch (BoAML), who said Monday that although the U.S. dollar remains the dominant reserve currency, its status in the world is beginning to slow. The influence of the dollar is waning, providing some support for gold.

“Even though USD still accounts for 39.9% of international payments according to SWIFT, its market share has declined, as the global economy has become less U.S. and USD-centric,” the analysts said. “We believe that de-dollarization is an important factor behind the addition of gold to central bank gold reserves.”

After a strong over-sold bounce took place in the USD Cash Settle Index yesterday, many analysts believe further dollar weakness is an essential factor for allowing gold to break out of its multi-week trading range. But safe-haven gold demand has been the one constant holding up the metal’s price since last October, even as the dollar’s value has fluctuated.

At the beginning of Q4 last year, the greenback was priced around relatively the same region it is trading in today, while gold is priced over $100 higher. This is the result of both the U.S. dollar and gold being accumulated as a safe-haven by investors globally, depending on which currency one uses in commerce. Gold is now bullish in most major currencies but needs a monthly close above $1362 in the world’s reserve currency before the safe haven metal can technically be considered being in a bull market.

Gold has also greatly benefitted from the complete failure of the ECB, which has destroyed the European bond market, turning the people of Europe into collateral damage. Increased taxation, which has lowered disposable income in the Eurozone, is responsible for the riots we have witnessed outside the USA with the rise of the Yellow Vest movement.

Last Saturday, in the 18th straight weekend of French demonstrations against President Emmanuel Macron, Paris saw a second major uprising of Yellow Vest protests. Many are now arguing that the rioting on the Champs-Elysees has been instigated by extremists that have infiltrated the movement to further a second French Revolution. It appears as though the people are fed up with the diminishing standard of living in the name of endless socialism that justifies ever increasing taxation.

Meanwhile, Britain could leave the European Union without a Brexit deal on April 12 if lawmakers fail next week to back Prime Minister Theresa May’s agreement with Brussels, EU leaders said after a crisis summit in Brussels yesterday. May said that if the deal falls by April 12, “we would either leave with no deal, or put forward an alternative plan” that involved participating in EU Parliament elections.

The EU is fighting for its survival and if the British exit from the European Union remains chaotic, they could use this against Italy or anyone else who dares to consider leaving. The elections for the European Parliament are coming up in May, so we could be looking at the makings of a political crisis building in Europe, which would keep gold’s safe-haven component well bid.

With the Fed now joining central banks around the world creating what amounts to a synchronized loose monetary policy, combined with the aforementioned geo-political issues possibly coming to a head in May, we should expect gold to remain well bid above $1280 per ounce. I will now be focusing on these developments possibly beginning to form the handle of a cup & handle pattern on the weekly gold chart.

Continuing to concentrate on accumulation of the best in breed juniors during this consolidation in the gold complex is recommended. While the GDX is consolidating its recent gains, deep value opportunities remain in the sub-$500M market cap growth-oriented producers, high-margin project developer/explorers, and cashed-up, early stage micro-cap juniors. If you require assistance in choosing the best quality juniors to invest, please stop by my website and check out the subscription service at http://juniorminerjunky.com/

By David Erfle Contributor to Kitco News
[email protected]

Here is the link to the original Kitco post:

https://www.kitco.com/commentaries/2019-03-22/The-Fed-Officially-Joins-Loose-Global-Monetary-Policy-Posture.html

Junior Miner Junky Subscription Information:

http://www.juniorminerjunky.com/subscribe

https://www.grnewsletters.com/archiv...ml?e=&s=hY67OP

Good day,

Roger Nelson, founder of the Global Consciousness Project (GCP), which provided scientific validation and a theoretical framework for our many global consciousness events over the last 20 years, has written a book called “Connected: The Emergence of Global Consciousness.”

I strongly recommend you read it

It is available from Amazon

or Barnes and Noble

Roger covers the GCP in depth, including its history and sources, descriptions of technology and examples of results. He gives technical and analytical detail, as well as interpretation and implications of the results. He addresses the subject through science, art, and poetry.

Of course, many of Common Passion friends participated in the events that became part of the analysis and body of work Roger describes. It is encouraging to read the history, results, and implications as we navigate, witness, and help evolve the global consciousness…the “Noosphere,” according to Teilhard de Chardin.

The Noosphere was Roger’s primary inspiration for the GCP, and mine as well, in the founding of Common Passion and its predecessor in 1998, www.InfinityAffinity.org.

Get the book!

Two upcoming events of interest:

The Next Level of Meditation: Discover an Accelerated Path of Awakening & How to Navigate Common Pitfalls of the Advanced Seeker, Free Online Event. Discover how to welcome the leading edge of meditation in your everyday life. Thomas’s gentle, yet profound teachings help you integrate light and shadow, ascent and embodiment, inner exploration with full outer engagement and solo time with spiritual community — in one coherent dance of awakening.
Click here to learn more and register for this free online event.

Wednesday March 27th, 2019, 4 Powers of Intuition for Sensitives & Empaths: Open New Doorways of Perception Through Your Chakras, Free Online Event.Wendy De Rosa will show you how to tune into your body’s chakras and open to ALL of your intuitive gifts — clairvoyant, clairsentient, clairaudient, claircognizant — so you can fully empower yourself as a sensitive or an empath. By understanding how your body receives intuitive information and energy, you can consciously open to the full range of your clairvoyant, clairsentient, claircognizant, and clairaudient powers.
Click here to learn more and register for this free online event.

These virtual events are free to attend. If you choose to join any paid subsequent programs, Common Passion will receive a thank-you commission.

Have a great day.

All the best,
Joseph Giove and the Common Passion Core Team
www.CommonPassion.org

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by Peter Brimelow via The Unz Review,

James Fulford writes:
The Mueller Report, which was supposed to be about alleged “Russian collusion” with Trump, is due out, and many people in the Democrat/Media conglomerate are hoping for a rerun of Watergate, which they think of as a victory for the Rule of Law. It wasn’t, and we need to have one of those famous “conversations” about what it was, and why it mustn’t happen again.

In 1972, Richard Nixon was reelected with 520 electoral votes. He was running on winning the Vietnam War and also fighting a War on Crime. His opponent, George McGovern (17 electoral votes) was running on a plan to lose the Vietnam War, and surrender on the War on Crime.

But by August 1974, Nixon was removed from office, and in April 1975, Vietnamese Communist troops occupied Saigon. What finished off South Vietnam was the “Watergate Congress” which voted to cut off all supplies. For details see James Webb’s Peace? Defeat? What Did the Vietnam War Protesters Want?

American Enterprise Institute, May/June 1997.
Who did this? Well, the Democrat-controlled Senate investigated the hell out of a break-and-enter committed by Republicans, which they never did when LBJ, JFK, Truman, and FDR engaged in similar activities. See It Didn’t Start With Watergate , [PDF]by Victor Lasky, published in 1977. On the Senate investigative staff was a young, far-Left Wellesley graduate named Hillary Clinton.

The Democratic media, which hated Nixon with the same kind of hate they now display towards Trump, did the same thing, led by the famous Woodward and Bernstein, who probably get too much “credit” for this.

Finally, in something that VDARE.com Editor Peter Brimelow speculated about in his 1981 Policy Review article reposted below, the secret figure of “Deep Throat” (Woodward and Bernstein’s name for an source inside the Government) turned out to Mark Felt, second in command of the FBI. [The Myth of Deep Throat | Mark Felt wasn’t out to protect American democracy and the rule of law; he was out to get a promotion, by Max Holland September 10, 2017]
Peter Brimelow described this phenomenon of using lawfare to overturn elections by trying to criminalize the victors in his post Manafort, Marlborough, And Robert E. Lee: Criminalizing Policy/ Personnel, Differences— U.S. Politics Regressing To The Primitive.

Once again, the Establishment is trying, as they did during Watergate, to overturn the results of an election with the aid of a Deep State, and the “foreign policy” establishment. “Deep Throat” Felt thought Nixon was interfering with the “independence” of the FBI, which he thought should be immune to interference by the President of the United States, and apparently James Comey feels the same way.

If this coup succeeds, instead of the Republic of South Vietnam being overrun by foreign invaders and destroyed, the victim will be the Historic American Nation.

https://zh-prod-1cc738ca-7d3b-4a72-b...nWatergate.jpg

Machiavelli Redux
By Peter Brimelow, Policy Review,Winter 1981
GO QUIETLY . . . OR ELSE. By Spiro T. Agnew. (Wm. Morrow, New York, 1980)
THE TERRORS OF JUSTICE. By Maurice Stans. (New York, Everest House, 1978)
WILL: THE AUTOBIOGRAPHY OF G. GORDON LIDDY. By G. Gordon Liddy. (St. Martins Press, New York, 1980)
Machiavelli concluded The Prince by quoting Petrarch in an attempt to inspire the rulers of Italy:
For th’ old Romane valour is not dead
Nor in th’ Italians brests extinguished.

Reading these three books by survivors of the Nixon disaster brings home how totally that Administration, which more than any other in recent history would have welcomed comparisons with Machiavelli, departed from his prescription. The reason was not exactly lack of patriotism, but rather a failure to understand the humane, even idealistic spark that animated Machiavelli’s ironic realism. Indeed, the books raise the broader question of whether American society itself is going through the kind of degeneration Machiavelli decried in Italy, so that it no longer supports what might loosely be called the “Roman” or “military” virtues: courage, loyalty, and personal integrity.

These reflections may seem odd, given that all three authors fought losing bouts with the law. Spiro Agnew resigned the Vice-Presidency and entered a plea of nolo contendere to a charge that he received payments in 1967 which were not expended for political purposes and which were therefore subject to income tax. The prosecution’s statement included forty pages about Mr. Agnew’s alleged bribe-taking while he was Governor of Maryland; Mr. Agnew issued a one-page denial. The judge said, accurately, that both were irrelevant to the case before him, and fined Mr. Agnew $10,000. Maurice Stans, Nixon’s 1972 Finance Chairman, pleaded guilty to two charges of unknowingly accepting illegal contributions and three charges of reporting contributions tardily. He was fined $5,000. Previously Mr. Stans had been found innocent, along with John Mitchell, on ten counts of conspiracy, obstruction of justice, and perjury relating to an alleged attempt by financier Robert Vesco to buy protection from the Securities and Exchange Commission. Gordon Liddy was sentenced to twenty years in prison and fined $40,000 for the Watergate burglary, a year and a half for refusing to talk to the Watergate grand jury, and a (suspended) year for contempt of Congress.

With the exception of Mr. Liddy, who merits separate examination, it will immediately be seen that the infractions that were actually proved were basically technical. The connection between them was a hysterical illusion, and the punishments unusually harsh. This is particularly true for Maurice Stans, who was dealing with a complex law which changed in the course of the campaign, and who was also the victim of a quantum jump in public standards. Mr. Stans makes a convincing case that his CREEP stewardship was at least as respectable as the work of his contemporaries in other campaigns. They too had (less publicized) legal difficulties; Edmund Muskie’s fundraiser even volunteered to testify for Mr. Stans at the Vesco trail.

If Mr. Agnew did accept rake-offs, as the prosecutors claimed, it should be asked in all fairness whether his conduct varied substantially from accepted Maryland standards—particularly since there is no evidence that the money influenced his decisions. As always where Watergate is concerned, the real question becomes: Why did such practices excite such abnormal attention under Nixon, when Congress and press have shrugged off similar standards before and since? The many disparate Nixonian problems combined to produce a mixture that makes free-base cocaine look safe as chewing gum in comparison, under the influence of mysterious forces similar to those that produced the Grande Peur, or Salem’s witch trials. An instructive parallel might well be Britain’s 1962-63 Profumo crisis, which likewise enabled hostile opinion to l ink wildly unrelated charges, and incinerated an unpopular government.
As Mr. Agnew has repeatedly pointed out, of course, allegation is not conviction, although it has been treated as such by the media and the IRS, whose demands for back taxes on bribes Mr. Agnew denied taking caused him a cash-flow crisis from which he was rescued by the remarkable generosity of Frank Sinatra. But the irreducible fact of his resignation overshadows any attempted defense. Mr. Agnew ascribes his surrender to the impossibility of receiving a fair trial because of prejudicial publicity, overheated politics, implacably ambitious prosecutors, and impossible costs; and to his own exhaustion and bitterness at his abandonment by Nixon.


Mr. Agnew also says that Alexander Haig implied he might be killed if he did not “go quietly.” However, this may be the token sensational revelation all Watergate memoirs require, like H.R. Haldeman’ s claim of a mooted partition of China, Gordon Liddy’s contemplated assassinations of Jack Anderson and Howard Hunt, and John Dean’s insinuation that Nixon faked Alger Hiss’ typewriter. Other regular features of this new literary form are dramatic opening scenes, followed by flashbacks; and copious direct speech. On the whole, the results have compared very favorably with other native American genres like Westerns and Perry Mason.

Mr. Agnew’s story rings sincere when he writes of “the emotional reaction that made me physically ill” on reviewing the prosecutors’ files on his case (obtained years later), or of his wife’s dead faint when he told her he was capitulating. But even after that, he assured conservatives he would fight to the end, although his lawyers were already negotiating terms. This unedifying betrayal of his loyal supporters renders consideration of his guilt or innocence ultimately irrelevant.
On the other hand, Mr. Agnew had hardly been given a good example by the Nixon White House. Incredibly, President Nixon apparently hoped to induce Mr. Agnew to resign without even discussing the subject face to face. The picture of Mr. Agnew and his staff waiting in his office until 9 p.m. after Attorney General Richardson had revealed the charges to them—hoping desperately for a call from the President or a summons to Camp David (whence, it emerged, he had fled)—is infinitely pathetic. What they got was a meeting with General Haig and Bryce Harlow, who announced that they thought that the President felt that he should resign. Loyalty to Nixon was a one-way proposition. The White House staff was quick to pounce on any of their number who suffered political injury.
This cult of toughness was naive to the point of stupidity. Even elementary precautions like funding the Watergate burglars’ families were reneged on. It is hardly surprising that the front-line troops mutinied, whereupon the whole structure disintegrated. Machiavelli in a famous passage urged rulers to ensure that the interests of their lieutenants were advanced along with their own; this promoted mutual confidence. This seemingly obvious advice was never more needed. In fact, one of the Administration’s subsequent rationales for its detente policies—that Americans were too engrossed in current gratifications to finance any alternative—can probably best be explained as merely a projection of the leaders’ own short-sighted selfishness.


All three books make the point that the guarantees of equal justice, due process, and presumption of innocence—generally thought to be intrinsic to our system of justice—are simply not operative in a modern bureaucratic state. Mr. Stans spent $400,000 to defend himself against the Vesco charges. The prosecution probably spent over $1 million, but that was taxpayers’ money. That both Mr. Stans and Mr. Agnew could afford no more defense at that price is quite plausible. The IRS even threatened to have Mr. Agnew’s passport revoked if he attempted to resist their demands—an unbreakable hold on a man forced to earn his living in international business because of his Untouchable status at home. The three books also establish that there are few real checks on the legal bureaucracy once it is determined to bring home a conviction. Judge Sirica’s excesses in Mr. Liddy’s trial featured his seating of a juror who could not understand English—a mistake arising because Judge Sirica truncated the voir dire to prevent defense questions about pretrial publicity. (Judge Sirica used his powe r to seal the record about that incident, which remained a secret.) Mr. Liddy was amused: “I really had to hand it to the old goat; neither of us ever hesitated to use power.”

Less amusing were the lengths to which the prosecutors went in the Stans and Agnew cases to induce potential witnesses to co-operate. It should be a matter of some concern that Mr. Agnew was brought down by the testimony of men who themselves were guilty of serious crimes, the consequences of which seem to have been palliated by their cooperation. One witness actually had his conviction overthrown because he was able to show that his guilty plea was induced by illegal promises of leniency, which the trial judges chose to ignore. Having indicted Mr. Stans on the basis of two grand jury appearances—which he made after being assured he was not under investigation—the prosecutors launched an incredible nationwide search for evidence. They hauled President Nixon’s brother in from the West Coast ten times, for example, to “review” his testimony on the single point of whether Mr. Stans had asked for Vesco’s contribution in cash. (Answer: No.)

Worst of all were the constant leaks to the press, from Justice Department and grand jury alike.Maurice Stans found that newspapers routinely printed as fact allegations against him that had been disproved, and that major media outlets like Time refused to carry retractions even when caught in indisputable error. Mr. Stans, whose book is a model of reason and comprehensiveness, suggests thoughtfully that maybe the U.S. media should follow the British system of restricting publicity after indictment, and also that the Supreme Court’s Sullivan ruling went too far in depriving public figures of the means to protect their reputation. He even permits himself to wonder why the media should not (voluntarily) retract untruths in the same way that the Federal Trade Commission compels corporations to correct unsupported advertising claims.

This is the problem in a nutshell. All three books make it depressingly clear that, yes, there is a New Class. And that class makes its own rules in the struggle with rival powers like corporations and elected officials—of either party; previous attorney generals would not have been defeated in attempts to suppress Billygate.

Gordon Liddy’s beautifully written book adds a cultural dimension to this struggle within America, although his factual contribution to the Watergate saga appears limited. Mr. Liddy confines himself narrowly to what he personally saw. He says that he waited until the statute of limitations had expired before speaking, to protect his colleagues. (Actually, he is probably still protecting them.) Although he does reveal that the Nixon administration had CIA technical assistance in some operations, he generally supports the thesis that Watergate was after all a second-rate burglary, not a set-up, as some have speculated. The order came from above, he says, and he believes that the purpose was to find out what derogatory material the Democrats had on their opponents. This version is not likely to satisfy everyone. On closer examination, moreover, Mr. Liddy’s account does leave some questions carefully open. Some of these relate to the details of the burglary; others to the extraordinary circumstances that led to the creation of the White House “Plumbers” unit in the first place: the withdrawal (by J. Edgar Hoover) of the FBI cooperation upon which all previous administrations had relied. Mr. Liddy had been proud to be an FBI agent, and stresses his admiration for Mr. Hoover. But he also prints a memo he wrote in late 1971 urging that Mr. Hoover be removed as Director by the end of the year. Mr. Liddy notes laconically that the President praised the memo, but Mr. Hoover survived. As usual, one is left with an eerie feeling that the Watergate affair has a secret history, untold despite the millions of words.

Mr. Liddy is obviously a cultured man, but his preoccupation with matters of honor, strength, and courage—matters that have been traditional male concerns in almost every society except our own—has rendered him about as comprehensible to the average book reviewer as a Martian. Hence he is ridiculed (by Larry L. King in theNew York Times) or ignored (by the Wall Street Journal, the leading conservative newspaper, which has not reviewed his book—or Mr. Stans’s either, for that matter). The situation is complicated because Mr. Liddy is a cultist, one of the tiny minority of conservatives (and others) who are fascinated by the Third Reich. It is hard to know how serious he is about this. Some of his hints are so blatant (he named the Plumbers group ODESSA, after “a World War II German veterans organization belonged to by some acquaintances of mine”—i.e., the Waffen SS) as to recall his celebrated hand-in-the-flame exhibitions of willpower. Professor Alan Dershowitz of Harvard picked up all these hints, and wrote an angry review in The New Republicasking how a card-carrying Nazi went so far in anyone’s White House. But in fact cultism often has about as much relevance to contemporary politics as transvestism, which it rather resembles. Mr. Liddy supported the liberal Republican who beat him in the New York 25th district primary in 1968, to the chagrin of the Conservative Party, which had nominated him on its own line.

His White House career showed a similar pragmatism, except perhaps when his G-man instincts were engaged. And Mr. Liddy obviously liked the blacks he met in prison, finding their harsh society a satisfying substitute for the Korean War he missed through illness, and possibly a rest after the Nixon White House. He quietly but systematically supplies much other evidence of lack of prejudice.

However repellant Mr. Liddy’s code may be, it has some strengths, notably his evident pride in his handsome family. Men like Mr. Liddy are the falcons of society, to be kept hooded until needed. James E. Mahon, who became Eli Hazeev and died training his gun on the Palestinians ambushing Meir Kahane’s followers in Hebron, was reportedly another example. Both found no place in modern America. We need look no further to explain the fiasco at Desert One.

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Via CaseyResearch.com,
It’s “Totally Incorrect” week here at Casey Research...

We’ve shared Doug Casey’s uncensored insights – on topics ranging from the climate change hoax to the next 9/11-type event.
But today’s essay may be the most controversial one yet…

Doug says a disaster of historic proportions is on the menu for 2019.
And it’s critical to understand what’s happening.

https://zh-prod-1cc738ca-7d3b-4a72-b...3_11-21-31.jpg


Read on for four specific predictions about what lies ahead. Some of these predictions may seem outlandish... but you owe it to yourself to hear what he has to say...


Prediction 1: The End of Retirement
The average American can forget about retirement. We’ve all heard these stories about how the average American couldn’t lay his hands on $1,000 to save his life. His expenses aren’t going away, however, even if his income does.

It seems like things have reached a critical mass. And if the economy slows down there are going to be a lot of people losing their homes again. They’ll be unable to pay their credit card bills, their car payments, their student loans, or anything else. They aren’t going to be able to buy anything. They wound up in breadlines in the ’30s. But today 40 million Americans have SNAP cards to take away the hunger pains and embarrassment of being penniless. There could be 100 million in a few years.

I know this sounds outrageous because right now everything is running fairly smoothly. The standard of living of the average middle-class American has degraded slowly over decades but hasn’t yet totally collapsed. But that’s the way it is a day before a volcano explodes, or a day before an earthquake, or minutes before an avalanche starts coming down.

This isn’t a theoretical discussion. Most retirement plans are in serious jeopardy. Many pension funds are already seriously underwater, even after a very long boom.

The situation is likely to deteriorate. The stock market is in a bubble. The bond market is in a hyper bubble. A lot of value could disappear very quickly. By the time this depression bottoms, in today’s dollars – I don’t know what the dollars are going to be worth – the Dow could trade at 5,000, or less. We’re going to see interest rates exceed what we saw in the early 1980s, when the U.S. government was paying 15%.

From a retiree’s point of view, things are not going to improve. It’s going to get worse, not better. His savings, if he has any, are going to be attacked from several angles. I don’t see any way out of this. Unless friendly aliens land on the roof of the White House and present Trump with some kind of magic technology.


Prediction 2: A White Male Privilege Tax, and Other Radical Tax Hikes
You’ve got to remember that the prime directive of any organism, whether it’s an amoeba, a person, a corporation, or a government, is to survive. Bankrupt governments – and they’re all bankrupt because of welfare state policies – are going to fight to survive. The only way that they can survive is to tax more and print more money. And that’s exactly what they’re going to do. Of course, don’t discount a war; these fools actually believe that would stimulate the economy – the way only turning lots of cities into smoking ruins can.

I suspect they’ll try to make white males bear most of the burden. That’s partly because they still have most of the money. And partly because it’s become fashionable to hate white males in particular. It’s natural to want to hurt people that they think are the problem – what Marxists would say are the “class enemy.”

We’re going to see much higher taxes, among other unsavory things. There’s no other way to pay for welfare state programs, except sell more debt to the Fed – which they’ll also do, by necessity. Inflation will get out of control as a result.

Of course, you’ve got to remember that as recently as the Eisenhower administration the top marginal tax rate was theoretically 91%. The average person didn’t pay anywhere remotely near that because it was a steeply progressive tax rate. Nobody did, frankly, especially the rich, because there were loads of tax shelters, which no longer exist. Hiding money offshore, among other things, was easy. Now these things are out of the question.

Now there’s no place to hide from the State. And envy is rampant. How bad could it get? In Sweden during the 1970s, the marginal tax rate, including their wealth tax, was something like 102%. So, almost anything is possible.

Of course they’ll raise taxes radically. It’s time to eat the rich.

Prediction 3: Like Venezuela, Socialism Will Conquer the U.S.
Its ideas already have. First, we should define what socialism is: it’s State ownership of the means of production. It was supposed to be a passing stage on the road to communism. Communism is communal ownership of private goods – houses, cars, shops, and consumer items – as well as capital goods. Nobody even talks about that anymore, since capitalism has given most people so much stuff that they don’t even have room to store it all.

Socialism in the U.S. is unlikely. Governments have found it’s much more efficient to simply have the State control capital, as opposed to owning and operating it. It’s so much easier to just take as much as they want of the profits, then blame the capitalists if something goes wrong with delivery of the goods.

Forgetting about North Korea and Cuba, there are no socialist states anywhere in the world. What we have instead are welfare states – where the government provides some degree of free schooling, free medical care, free housing, free food, and so forth. If not free, then subsidized. The next step is a guaranteed annual income.

The word “socialism” today is actually just shorthand for a welfare state, which is what Boobus americanus, the hoi polloi, really want. They don’t really care who owns the factories, the fields, and the mines. What they care about is that somebody gives them a soft life.

When you give people the ability to vote themselves free stuff at somebody else’s expense they’ll do it. But – much worse – they now actually think it’s the right thing to do. Why? Mainly because of the propaganda that they’ve absorbed through college, and the media, the entertainment world, and numerous other places. There’s no question about the fact that the U.S. will turn into a full-fledged welfare state.

Socialism is basically about the forceful control of other people’s lives and property. It isn’t just an intellectual failing. It’s actually a moral failing. Although – perversely – it’s sold as being moral. People buy it because they like to believe they’re doing the right thing.

It will end with an economic collapse. Then a political and – most importantly – a cultural collapse.

Prediction 4: A New 9/11-Type Event – Real or a Contrived False Flag
It’s entirely possible. It’s still completely undetermined what actually happened on 9/11, and who was actually behind it. Notwithstanding that, considering how the U.S. government continues to provoke people all over the world, there’s certainly some group, most likely Mohammedans, who’ll decide to strike out against the great Satan.

And as 9/11 showed, regardless of who was actually responsible, a very small number of people can have a very large effect on things. Especially when the system itself is critically unstable, which it is today.

They might do something like Mumbai in 2008. It took only two dozen fanatics with ordinary guns. They turned the whole city totally on its head for days. That was extremely cheap, low-tech, and easy. Warfare has always been a matter of economics; cheap trumps expensive. There are scores of ways to severely disrupt an advanced society for a trivial investment. On the other hand, it’s extremely expensive to disrupt a primitive society, as the U.S. is discovering in Afghanistan.

Anyway, “terrorism” is an extremely low-cost method of warfare. It will have a gigantic effect, when someone decides to use it in the U.S. 9/11 was just an amuse bouche. You can plan your life around something like that happening again.

The world is evolving at the rate of Moore’s Law in many regards. Let me emphasize that military technology is changing too. Aircraft carriers, B2s, F35s, M1 tanks, and so forth are basically junk. Great for fighting the Soviet Union, which no longer exists. They serve no useful purpose in the kind of battles that are likely in the future.

If someone wants to attack the U.S., they’re not going to use an ICBM; they’re extremely expensive, clunky, and you can see where they come from, guaranteeing retaliation. It’s total idiocy that even a maniac wouldn’t bother with. Not when you can deliver a backpack nuke by FedEx, cheap and on time. Or you could use any commercial aircraft, container ship, or truck.

If you want to blame Iran – and really whip up the U.S. population – there would be nothing like a small nuclear or radiological attack to do it. It’s a pity, since they’re a distant regional power with a failing economy, who present about zero threat to the U.S.


If I were to attempt putting my finger on exactly when the U.S. will go over the edge, I would think the real catalyst might be the next 9/11-type event. I don’t doubt it’s going to happen.

How are we any different than the Germans in the 1920s? They were one of the most civilized, best-educated countries in Europe and they fell into the abyss.

Good Morning

The WORLD does NOT KNOW what it is doing and WHY it is doing what it is doing instead of doing the RIGHT THING...


Benjamin

https://www.armstrongeconomics.com/i...bckOE.facebook

https://www.zerohedge.com/news/2019-...jW3hkd3gb4ujW4

Doug Casey On The Year The World Falls Apart
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=LY4e264-


by Tyler Durden

Sat, 03/23/2019 - 19:40


Via CaseyResearch.com,

It’s “Totally Incorrect” week here at Casey Research...

We’ve shared Doug Casey’s uncensored insights – on topics ranging from the climate change hoax to the next 9/11-type event.
But today’s essay may be the most controversial one yet…

Doug says a disaster of historic proportions is on the menu for 2019.
And it’s critical to understand what’s happening.

https://zh-prod-1cc738ca-7d3b-4a72-b...3_11-21-31.jpg


Read on for four specific predictions about what lies ahead. Some of these predictions may seem outlandish... but you owe it to yourself to hear what he has to say...

Prediction 1: The End of Retirement
The average American can forget about retirement. We’ve all heard these stories about how the average American couldn’t lay his hands on $1,000 to save his life. His expenses aren’t going away, however, even if his income does.

It seems like things have reached a critical mass. And if the economy slows down there are going to be a lot of people losing their homes again. They’ll be unable to pay their credit card bills, their car payments, their student loans, or anything else. They aren’t going to be able to buy anything. They wound up in breadlines in the ’30s. But today 40 million Americans have SNAP cards to take away the hunger pains and embarrassment of being penniless. There could be 100 million in a few years.

I know this sounds outrageous because right now everything is running fairly smoothly. The standard of living of the average middle-class American has degraded slowly over decades but hasn’t yet totally collapsed. But that’s the way it is a day before a volcano explodes, or a day before an earthquake, or minutes before an avalanche starts coming down.

This isn’t a theoretical discussion. Most retirement plans are in serious jeopardy. Many pension funds are already seriously underwater, even after a very long boom.

The situation is likely to deteriorate. The stock market is in a bubble. The bond market is in a hyper bubble. A lot of value could disappear very quickly. By the time this depression bottoms, in today’s dollars – I don’t know what the dollars are going to be worth – the Dow could trade at 5,000, or less. We’re going to see interest rates exceed what we saw in the early 1980s, when the U.S. government was paying 15%.

From a retiree’s point of view, things are not going to improve. It’s going to get worse, not better. His savings, if he has any, are going to be attacked from several angles. I don’t see any way out of this. Unless friendly aliens land on the roof of the White House and present Trump with some kind of magic technology.


Prediction 2: A White Male Privilege Tax, and Other Radical Tax Hikes
You’ve got to remember that the prime directive of any organism, whether it’s an amoeba, a person, a corporation, or a government, is to survive. Bankrupt governments – and they’re all bankrupt because of welfare state policies – are going to fight to survive. The only way that they can survive is to tax more and print more money. And that’s exactly what they’re going to do. Of course, don’t discount a war; these fools actually believe that would stimulate the economy – the way only turning lots of cities into smoking ruins can.

I suspect they’ll try to make white males bear most of the burden. That’s partly because they still have most of the money. And partly because it’s become fashionable to hate white males in particular. It’s natural to want to hurt people that they think are the problem – what Marxists would say are the “class enemy.”

We’re going to see much higher taxes, among other unsavory things. There’s no other way to pay for welfare state programs, except sell more debt to the Fed – which they’ll also do, by necessity. Inflation will get out of control as a result.

Of course, you’ve got to remember that as recently as the Eisenhower administration the top marginal tax rate was theoretically 91%. The average person didn’t pay anywhere remotely near that because it was a steeply progressive tax rate. Nobody did, frankly, especially the rich, because there were loads of tax shelters, which no longer exist. Hiding money offshore, among other things, was easy. Now these things are out of the question.

Now there’s no place to hide from the State. And envy is rampant. How bad could it get? In Sweden during the 1970s, the marginal tax rate, including their wealth tax, was something like 102%. So, almost anything is possible.

Of course they’ll raise taxes radically. It’s time to eat the rich.

Prediction 3: Like Venezuela, Socialism Will Conquer the U.S.
Its ideas already have. First, we should define what socialism is: it’s State ownership of the means of production. It was supposed to be a passing stage on the road to communism. Communism is communal ownership of private goods – houses, cars, shops, and consumer items – as well as capital goods. Nobody even talks about that anymore, since capitalism has given most people so much stuff that they don’t even have room to store it all.

Socialism in the U.S. is unlikely. Governments have found it’s much more efficient to simply have the State control capital, as opposed to owning and operating it. It’s so much easier to just take as much as they want of the profits, then blame the capitalists if something goes wrong with delivery of the goods.

Forgetting about North Korea and Cuba, there are no socialist states anywhere in the world. What we have instead are welfare states – where the government provides some degree of free schooling, free medical care, free housing, free food, and so forth. If not free, then subsidized. The next step is a guaranteed annual income.

The word “socialism” today is actually just shorthand for a welfare state, which is what Boobus americanus, the hoi polloi, really want. They don’t really care who owns the factories, the fields, and the mines. What they care about is that somebody gives them a soft life.

When you give people the ability to vote themselves free stuff at somebody else’s expense they’ll do it. But – much worse – they now actually think it’s the right thing to do. Why? Mainly because of the propaganda that they’ve absorbed through college, and the media, the entertainment world, and numerous other places. There’s no question about the fact that the U.S. will turn into a full-fledged welfare state.

Socialism is basically about the forceful control of other people’s lives and property. It isn’t just an intellectual failing. It’s actually a moral failing. Although – perversely – it’s sold as being moral. People buy it because they like to believe they’re doing the right thing.

It will end with an economic collapse. Then a political and – most importantly – a cultural collapse.


Prediction 4: A New 9/11-Type Event – Real or a Contrived False Flag
It’s entirely possible. It’s still completely undetermined what actually happened on 9/11, and who was actually behind it. Notwithstanding that, considering how the U.S. government continues to provoke people all over the world, there’s certainly some group, most likely Mohammedans, who’ll decide to strike out against the great Satan.

And as 9/11 showed, regardless of who was actually responsible, a very small number of people can have a very large effect on things. Especially when the system itself is critically unstable, which it is today.

They might do something like Mumbai in 2008. It took only two dozen fanatics with ordinary guns. They turned the whole city totally on its head for days. That was extremely cheap, low-tech, and easy. Warfare has always been a matter of economics; cheap trumps expensive. There are scores of ways to severely disrupt an advanced society for a trivial investment. On the other hand, it’s extremely expensive to disrupt a primitive society, as the U.S. is discovering in Afghanistan.

Anyway, “terrorism” is an extremely low-cost method of warfare. It will have a gigantic effect, when someone decides to use it in the U.S. 9/11 was just an amuse bouche. You can plan your life around something like that happening again.

The world is evolving at the rate of Moore’s Law in many regards. Let me emphasize that military technology is changing too. Aircraft carriers, B2s, F35s, M1 tanks, and so forth are basically junk. Great for fighting the Soviet Union, which no longer exists. They serve no useful purpose in the kind of battles that are likely in the future.

If someone wants to attack the U.S., they’re not going to use an ICBM; they’re extremely expensive, clunky, and you can see where they come from, guaranteeing retaliation. It’s total idiocy that even a maniac wouldn’t bother with. Not when you can deliver a backpack nuke by FedEx, cheap and on time. Or you could use any commercial aircraft, container ship, or truck.

If you want to blame Iran – and really whip up the U.S. population – there would be nothing like a small nuclear or radiological attack to do it. It’s a pity, since they’re a distant regional power with a failing economy, who present about zero threat to the U.S.

If I were to attempt putting my finger on exactly when the U.S. will go over the edge, I would think the real catalyst might be the next 9/11-type event. I don’t doubt it’s going to happen.

How are we any different than the Germans in the 1920s? They were one of the most civilized, best-educated countries in Europe and they fell into the abyss.

1. Post 6,224
2. Cleanup
3. Quote
4. Mar 16, 2019 4:43pm | Edited at 6:14pm

1. https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 5,299 Posts | Online Now

https://goldswitzerland.com/3-dozen-...-to-hold-gold/

3 DOZEN REASONS TO HOLD GOLD

March 14, 2019

by Egon von Greyerz

The world financial system has been in a euphoric state since 2009. It seems that the Keynesians, like Krugman or the Modern Money Theorists (MMT) are right after all. All asset markets are near the highs and show little sign of changing direction. As Treasury Secretary Mellon said in September 1929: “There is no cause to worry. The high tide of prosperity will continue.” All that is required is more of the same medicine, more credit, more money printing to make a virtuous circle of eternal prosperity.

Clearly the Cassandras are all wrong with their pessimistic forecasts that never happen. The Greek Princess had the ability to forecast the future but her curse was that nobody believed her accurate predictions. (Cassandra article)

We modern Cassandras are in the same position. We are certain that the theories based on spending and borrowing yourself out of the biggest debt bubble in history are totally fallacious. We know that a debt problem cannot be solved by more debt. No one defined it more succinctly than Albert Einstein: “We cannot solve our problems with the same level of thinking that created them.”

THE PARTY IS OVER
But sadly for the world, Cassandra will be right this time also since the party is over. The Time Bomb below says it all. Contained in the red bomb are all the explosive elements that will change the history of the world. Any single one of these risks is sufficient to trigger a collapse of the world economy. The combined explosive nature of all the risks will not only disprove MMT but create a world which will be a lot less pleasant to live in.
http://goldswitzerland.com/wp-conten...19/03/bomb.jpg


This cleansing of a sick financial system and a morally decadent world will be totally necessary to create new green shoots based on real, sustainable values.

But the transition will create great suffering for the whole world.

THE WORLD NEEDS STATESMEN
In the final stages of a major super cycle, there is normally a total lack of clarity in the thinking of world leaders. But not only that, there is also a total lack of leadership. Right now this is exactly what we have. Countries normally get the leaders they deserve. The world is in desperate need of statesmen who can take uncomfortable decisions to get the world out of the mess it is in.

But looking around the world, there is no statesman in any country. There are countries with strong leaders like Putin in Russia and Orban in Hungary but real statesmanship does not exist anywhere.

Look at France where Macron becomes more unpopular by the day. Soon every Frenchman will wear a yellow vest and it is already spreading to other countries. The French economy and financial system are weakening and the inequality between the rich and the poor has the seeds of yet another French Revolution.

Germany has been the biggest beneficiary of a weak Euro but in spite of that, the German economy is now deteriorating rapidly. Merkel’s socialist policies will have disastrous effects on the German economy in coming years, exacerbated by an immigration policy which will create a major economic and social disaster.

When Deutsche Bank (DB) collapses, which is probable, that will have repercussions not only for German banks but for the global banking system. DB’s derivative book of EUR 50 trillion is 15x German GDP. When counterparty fails, the Bundesbank and the ECB will need to print more Euros than during the hyperinflationary Weimar Republic. In addition, the Bundesbank and the German financial system are the biggest guarantors of the ECB and the Target2 lending to Southern European countries which are all likely to default on their commitments.

The UK leadership is extremely weak. Theresa May’s government is irresolute and divisive. They have spent 2 years solely trying to extricate itself from the EU. This issue has totally dominated UK politics at the expense of the economy. With 2 weeks left to Brexit-day, the UK is nowhere nearer an agreement with the Brussels elite who have consistently frustrated the process.

The US is bankrupt with a currency which is living on borrowed time. Trump had good intentions but has been shackled by the Deep State.

When the biggest economy in the world collapses, it will have major repercussions on the world.

Every major country or continent in the world has got problems of a magnitude that will bring the country down. In addition to the above nations, this includes Japan, China, South America and many more.


FINAL SECONDS OF A GLOBAL MEGA BUBBLE
We must understand that the world has never faced risk of this magnitude ever. We are now in the very final seconds of the global mega bubble, the likes of which the world has never seen before. What will happen next will be worse than the fall of the Roman Empire, much worse than the South Sea and Mississippi Bubbles and will create a disaster that will dwarf the 1930s Depression.


GLOBAL DEBT UP 3X SINCE 2000
The problem is simple to define and is all based around debts and liabilities. At the beginning of this century, global debt was $80 trillion. When the Great Financial Crisis started in 2006, global debt had gone up by 56% to $125 trillion. Today it is $250 trillion.
http://goldswitzerland.com/wp-conten...19/03/debt.jpg


Thus, in this century global debt has more than trebled. So far MMT seems to work. Just print and borrow more money and the economy will take care of itself. Einstein said it won’t work and the laws of nature also tell us that this is a saga that will have an unhappy ending.


PROTECTION IS CRITICAL
Rather than trying to figure out what the exact trigger will be, it is much more important to focus on how to protect yourself financially.

Gold has throughout history been the solution to a mismanaged economy based on deficits, debts and money printing. But it must be physical gold, stored outside the financial system in the safest jurisdictions and vaults. It is essential to have direct ownership of the gold and direct access.

ETFs, futures, or part ownership of bars are not proper wealth preservation.


$30,000 GOLD AND $3,000 SILVER
The Krugmans and MMT fans will now get more than they ever asked for. Because the world will soon start the biggest money printing bonanza in history.

Bearing in mind that total debt and liabilities, including derivatives are over $2 quadrillion, we could easily see similar or higher amounts of money printing. A recent KWN article by Lundeen projects $3,000 silver and $30,000 gold. Those are not unrealistic targets and are probably based on normal inflation. With hyperinflation, the future gold price is likely to have many more zeroes.


We must remember that we are holding gold primarily to preserve wealth since it is the best store of value and represents stable purchasing power. But gold is likely to do better than to maintain purchasing power for the simple reason that there will be a massive shortage of physical gold when the gold paper market blows up. This is why it is critical to hold physical gold, bars or coins.

I wrote about the Gold Maginot Line a few weeks ago which is at $1,350. This line has stopped gold since 2013. After a first attempt to break through 3 weeks ago, we are now in a small correction and gold is building momentum to break through the Line. Once through, it will go very quickly all the way through the old high of $1,920. Remember that this high has already been broken in many currencies, so it is not a major hurdle to clear.


3 DOZEN REASONS TO HOLD GOLD AS INSURANCE
For anyone who doesn’t understand the necessity of owning gold, just go through the list of risks in the Time Bomb. And once you have gone through it, go through it again and again and again. The list includes 3 dozen reasons why you need to hold physical gold as protection or insurance against unprecedented global risk.


Anyone who doesn’t own gold today mustn’t wait for the next move up to take place. That could be too late. Once the real move starts, it will be very difficult to get hold of gold at any price. At some point there will no physical gold on offer. The paper gold positions of banks and futures exchanges will see to that.


Central banks will also have major problems. Most of them have covertly sold their official holdings. And most of what they have left, they have leased to the market. That gold has gone to China, India and Russia and all the central banks have left is an IOU from a bullion bank that won’t be honoured.


CHINA’S INSATIABLE APPETITE FOR GOLD
http://goldswitzerland.com/wp-conten...9/03/china.jpg

With a guaranteed absolute mess in the world financial system, resulting panic in the gold market now is the very last chance to be protected.

Gold is today as cheap as it was in 1970 at $35 and in 2000 at $270:
http://goldswitzerland.com/wp-conten...3/usd_gold.jpg


Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management
Zurich, Switzerland
Phone: +41 44 213 62 45

Matterhorn Asset Management’s global client base strategically stores an important part of their wealth in Switzerland in physical gold and silver outside the banking system. Matterhorn Asset Management is pleased to deliver a unique and exceptional service to our highly esteemed wealth preservation clientele in over 60 countries.

GoldSwitzerland.com

Contact Us

Articles may be republished if full credits are given with a link to GoldSwitzerland.com.


COMMENTS FROM BENJAMIN: Additional Research


Brian Maher

BY BRIAN MAHER

POSTED
MARCH 15, 2019

The Government’s Greatest Con Job

Yesterday we documented our personal frustrations with contemporary technology.
Today we file a protest against contemporary money.

We begin with the “evolution” of United States currency…
We refer you to this $10 bank note, dated 1928:
10 Dollar Bill

In those antique days, a fellow could march into a bank, hand the clerk a slip of paper as illustrated above and demand the denominated amount in gold coin.
The system imposed a hard discipline upon banks… and held inflation in checkmate.

Federal Reserve banks were required to keep a 35% reserve of “gold or lawful money” on hand, lest they make a liar of the United States Treasury secretary — in this case the Hon. Andrew William Mellon.

In effect, the private citizen bound the banking system in golden handcuffs.

But one Great Depression, one New Deal and one world war later… we come now to a 1950 $10 bank note:
10 Dollar Bill

In appearance it is nearly a perfect twin to the 1928 model — with one infinitely telling exception.
Can you sniff it out?

The 1928 note bears this inscription:
“Redeemable in gold on demand at the United States Treasury or in gold or lawful money at any Federal Reserve Bank.”

But reads the 1950 version:
“This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank.”
The fine print disguises a vast swindle: The gold provision was stricken from the record.

The bankers had broken free of their golden handcuffs… and no longer could a private citizen bring them to honest account.

But what about “lawful money”? What is it?

In 1947, a certain gentleman — A.F. Davis by name — dispatched the following note to the United States Treasury, accompanied by a $10 note:
I am sending you herewith via registered mail one $10 Federal Reserve note. On this note is inscribed the following:
“This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve bank.”
In accordance with this statement, will you send me $10.00 in lawful money?

The acting treasurer, M.E. Slindee, responded after this fashion:

Dear Mr. Davis,
Receipt is acknowledged of your letter of Dec. 9 with enclosure of one ten-dollar ($10.) Federal Reserve note.

In compliance with your request, two five-dollar United States notes are transmitted herewith.
And so Mr. Slindee began chasing his tail — what the logicians call circular reasoning.


In exchange for his $10 note, Mr. Davis was mailed two $5 bills bearing the same pledge to redeem in lawful money.
But this Davis fellow would not be so easily shooed away.

He returned one of the $5 bills, once again demanding lawful money in exchange:
Finally Mr. Slindee threw up the sponge:

Dear Mr. Davis:
… You are advised that the term “lawful money” has not been defined in federal legislation. It first came to use prior to 1933 when some United States currency was not legal tender but could be held by national banking associations as lawful money reserves.

Since the act of May 12, 1933, as amended by the Joint Resolution of June 5, 1933, makes all coins and currency of the United States legal tender and the Joint Resolution of Aug. 27, 1935, provides for the exchange of United States coin or currency for other types of such coin or currency, the term “lawful money” no longer has such special significance.

The $5 United States note received with your letter of Dec. 23 is returned herewith.
Beginning in 1963, all promises to redeem in lawful money were stricken from United States currency.

Here, in graphic detail, the devolution of American money:
Money
Say what you will of paper money. But in one sense it is redeemable — if you’ll forgive the expression in the present context.

It in tangible. You can hold it in your hand, in your wallet, in your mattress.

It cannot be erased at the stroke of a key.

It is also anonymous. Once out of your hands, it leaves no trace.

None of these happy virtues apply to digital money…
Digital money has no tangible existence. It can disappear at a keystroke. The bank can freeze you out of it. And every transaction goes on your permanent record.

What is more, digital money removes all natural checks.

Even paper money files a claim on Earth’s resources — it is constituted of cotton and linen.


Meantime…
Digital money is the type of money bound to get itself into trouble.

Wispy as fog, slippery as oil, it is conjured into existence… as if by the magician’s wand.

And it can get around the world at electronic speeds.

It is also the ideal money for a government swollen to ghastly dimensions — its issue being unlimited in theory.

If paper money invites abuse… what about digital money?

Thus we speak our piece for lawful money — even paper money.

Regards,
Brian Maher
Managing editor, The Daily Reckoning

LINK WITH PICTURES PLEASE READ AGAIN

https://dailyreckoning.com/the-gover...NRMsKAfNc_xYpk

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https://seekingalpha.com/article/424...ilocks-warning

Summary
Over the last couple of weeks, we discussed the "wild swings" in the market in terms of price movements from overbought, to oversold, and now back again.
Lately, there has been an awful lot of talk about a "Goldilocks economy" here in the U.S.

The problem of suggesting that we have once again evolved into a "Goldilocks economy" is that such an environment of slower growth is not conducive to supporting corporate profit growth at a level to justify high valuations.

This idea was discussed in more depth with members of my private investing community,Real Investment Advice PRO.

Market Review & Recap
Over the last couple of weeks, we discussed the "wild swings" in the market in terms of price movements from overbought, to oversold, and now back again. The quote below is from two week's ago but is apropos again this week.

"Despite the underlying economic and fundamental data, the markets have surged back to extremely overbought, extended, and deviated levels. On virtually every measure, markets are suggesting the fuel for an additional leg higher in assets prices is extremely limited."

Just for visual sake, the chart below compares the last three weeks of wild gyrations.
https://static.seekingalpha.com/uplo...son_thumb1.png

The chart below also shows the short-term reversal of the market as well. Note how in just a few days the market went from overbought, to oversold, back to overbought.
https://static.seekingalpha.com/uplo...519_thumb1.png

Importantly, as I specifically noted last week:
"This short-term oversold condition, and holding of minor support, does set the market up for a bounce next week which could get the market back above the 200-dma. The challenge, at least in the short term, remains the resistance level building at 2,800."

On that analysis, we did increase equity exposure early last week in both our ETF and Equity Portfolios. In the RIA PRO version of this letter, we gave specific recommendations to add exposure, particularly to Healthcare due to the recent sell-off over concerns of "Medicare for all."

Despite the rally, the bounce is still largely at risk for the three following reasons:
1) As noted previously, the market has not reversed to levels which normally signals short-term bottoms. The red lines in the bottom four panels denote periods where taking profits, and reducing risk, has been ideal. The green lines have been prime opportunities to increase exposure. As you will note, these indicators tend to swing from extremes and once a correction process has started, it is usually not completed until the lower bound is reached.

Important Note: This does not mean the market will decline sharply in price. The current overbought conditions can also be resolved by continued consolidation within a range as we have seen over the last two weeks.
https://static.seekingalpha.com/uplo...519_thumb1.png

2) The divergence between stocks and bonds still signals that "smart money" continues to seek "safety" over "risk." Historically, the bond market generally has it right.
https://static.seekingalpha.com/uplo...519_thumb1.png

3) As discussed in "Will The Next Decade Be As Good As The Last," the weekly chart below shows the S&P 500 hitting an all-time high last September before falling nearly 20% into the end of 2018. While the first two months of 2019 has seen an impressive surge back to its November highs, the market is starting to build a pattern of lower highs, and lower bottoms. More importantly, both relative strength and the MACD indicators are trending lower and negatively diverging from the market's price action.

https://static.seekingalpha.com/uplo...9-2_thumb1.png

As John Murphy noted last week for StockCharts:

 

1. The bull market that ended in March 2000 preceded an economic downturn by a year.
2. The October 2007 stock market peak preceded the December economic peak by two months.
3. The March 2009 stock upturn led the June economic upturn by three months.
4. Historically, stocks usually peak from six to nine months ahead of the economy. Which is why we look for possible stock market peaks to alert us to potential peaks in the economy that usually follow. And we may be looking at one.

If you are a longer-term investor, these issues should be weighted into your investment strategy. While we did add exposure to our portfolios early last week, we are still overweight cash and fixed income.

1. In the RIA PRO Equity Model - we bought Boeing (NYSE:BA) on the initial plunge, and added positions in JPMorgan (NYSE:JPM), Apple (NASDAQ:AAPL) and PPL (NYSE:PPL).
2. In the RIA PRO ETF Model - we added Healthcare (NYSEARCA:XLV), Energy (NYSEARCA:XLE) and Gold (NYSEARCA:IAU).

As always, we start with trading positions which have very tight stop-loss parameters. If our thesis on the position is proved correct, the position size is increased and is moved into a longer-term holding status with widened safety protocols.

This is how we approach linking longer-term views to short-term opportunities. Managing a portfolio of investments is simply measuring risk and reward and placing bets when reward outweighs the potential risk. Tweaking exposure to "risk" over time improves performance tremendously over the long term.


The Goldilocks Warning
Lately, there has been an awful lot of talk about a "Goldilocks economy" here in the U.S. Despite a rather severe slowdown globally, it is believed currently the domestic economy is going to continue to chug along with not enough inflation to push the Fed into hiking rates, but also won't fall into recession. It is a "just right" economy which will allow corporate profits to grow at a strong enough rate for stocks to continue to rise at 8-10% per year. Every year… into eternity.

Does that really make any sense?

Particularly, as we are looking at the longest expansion cycle in the history of the U.S. The problem is in the rush to come up with a "bullish thesis"as to why stocks should continue to elevate in the future, they have forgotten the last time the U.S. entered into such a state of "economic bliss."
You might remember this:
"The Fed's official forecast, an average of forecasts by Fed governors and the Fed's district banks, essentially portrays a 'Goldilocks' economy that is neither too hot, with inflation, nor too cold, with rising unemployment." - WSJ Feb 15, 2007

Of course, it was just 10 months later that the U.S. entered into a recession followed by the worst financial crisis since the "Great Depression."

The problem with this "oft-repeated monument to trite" is that it's absolute nonsense. As John Tamny once penned:

A "Goldilocks Economy," one that is "not too hot and not too cold," is very much the fashionable explanation at the moment for all that's allegedly good. "Goldilocks" presumes economic uniformity where there is none, as though there's no difference between Sausalito and Stockton, New York City and Newark. But there is, and that's what's so silly about commentary that lionizes the Fed for allegedly engineering "Goldilocks," "soft landings," and other laughable concepts that could only be dreamed up by the economics profession and the witless pundits who promote the profession's mysticism.

What this tells us is that the Fed can't engineer the falsehood that is Goldilocks, rather the Fed's meddling is what some call Goldilocks, and sometimes worse.

Not too hot and not too cold isn't something sane minds aspire to, rather it's the mediocrity we can expect so long as we presume that central bankers allocating the credit of others is the source of our prosperity."


John is correct. An economy that is growing at 2%, inflation near zero, and central banks globally required to continue dumping trillions of dollars into the financial system just to keep it afloat is not an economy we should be aspiring to. But despite commentary the financial system has been "put back together again," why are central banks acting? Via Bloomberg:

"Led by the Fed, many central banks have either held back on tightening monetary policy or introduced fresh stimulus, soothing investor fears of a slowdown.

Fed Chairman Jerome Powell says he and colleagues will be patient on raising interest rates again, while European Central Bank President Mario Draghi has ruled out doing so this year and unveiled a new batch of cheap loans for banks.

Elsewhere, authorities in Australia, Canada and the U.K. are among those to have adopted a wait-and-see approach. China, at its National People's Congress this month, signaled a willingness to ease monetary and fiscal policies to support expansion."
https://static.seekingalpha.com/uplo...oad_620x-1.png


Unfortunately, today's "Goldilocks" economy is more akin to what we saw in 2007 than most would like to admit.

Job growth is slowing down.
https://static.seekingalpha.com/uplo...h-1_thumb1.png

Along with economic growth.
https://static.seekingalpha.com/uplo...519_thumb1.png

And recession risks are rising sharply.
https://static.seekingalpha.com/uplo...ike_thumb1.jpg

However, it isn't just the economy that is reminiscent of the 2007 landscape. As noted above, the markets also reflect the same. Here are a couple of charts worth reminding you of.

Notice that at the peaks of both previous bull markets, the market corrected, broke important support levels and then rallied to new highs, leading investors to believe the bull market was intact. However, the weekly "sell signal" never confirmed that rally as the "unseen bear market" had already started.
https://static.seekingalpha.com/uplo...9-2_thumb1.png

Currently, relative strength, as measured by RSI on a weekly basis, has continued to deteriorate. Not only was such deterioration a hallmark of the market topping process in 2007 but also in 2000.
https://static.seekingalpha.com/uplo...9-1_thumb1.png


The problem of suggesting that we have once again evolved into a "Goldilocks economy" is that such an environment of slower growth is not conducive to supporting corporate profit growth at a level to justify high valuations.

It is true that the bears didn't eat Goldilocks at the end of the story… but then again, there never was a sequel.

Simple Actions To Take Now, You Will Appreciate Later

1. Trim positions that are big winners in your portfolio back to their original portfolio weightings. (i.e., take profits)
2. Sell underperforming positions. If a position hasn't performed during the rally over the last three months, it is weak for a reason and will likely lead the decline on the way down.
3. Positions that performed with the market should also be reduced back to original portfolio weights. Hang with the leaders.
4. Move trailing stop losses up to new levels.
5. Review your portfolio allocation relative to your risk tolerance. If you are aggressively weighted in equities at this point of the market cycle, you may want to try and recall how you felt during 2008. Raise cash levels and increase fixed income accordingly to reduce relative market exposure.

How you personally manage your investments is up to you. I am only suggesting a few guidelines to rebalance portfolio risk accordingly. Therefore, use this information at your own discretion.

See you next week.

COMMENTS FROM BENJAMIN: This is the technical view and the Risk Management View from one of the best analysts that comment on the markets.

In my next post you will see and hear the fundamental reasons that we have reached this point in our World History. It has to do with the breakdown of the social and moral fabric of the world and it's need for POWER and CONTROL over the masses. Please listen to the whole video interview of Mark Farber.

Your life may depend on it.

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Prof. Václav Klaus, former President of the Czech Republic (2003-13), slammed the European Union as being worse than the Soviet Union's Council for Mutual Economic Assistance (Comecon) that ruled over the economies of EasternEurope between 1949 and 1991. Having lived under communism for 40 years, Klaus said, he has the experience to make such a criticism.
On March 12 Klaus was the featured speaker at the Presidential Lecture Series of the Center for Financial Studies,Goethe University Frankfurt, under the auspices of its President, Prof. Otmar Issing. In his presentation, entitled, "The EU Is Not Europe," Klaus laid out several key policies which have made the EU a most undemocratic union.

First he slammed its environmentalist policies at a time when not one environmentalist party in Europe could come anywhere close to winning an election. He particularly slammed, by name, the Club of Rome. Second, he slammed the climate-change policy as entirely unproven and now promoting a Malthusian agenda. Third, he attacked the so-called information society in which Europe's universities are graduating unemployable degree holders. Fourth, he attacked the euro single currency as having generated mass inequality throughout Europe. He charged that the Eurozone, through the European Central Bank's Target 2 real-time gross settlement (RTGS) system, is already a transfer union but has notbenefitted any of its members. After its 20 years of existence, it has proven to be a failure.

The fifth point he made was a passionate defense of the nation-state and national sovereignty as the only basis fordefending the political and economic rights of the people. He pointed out that a "democracy," by definition, requires a"demos," but it is only the sovereign nation-state, not "Europe," that fulfills the requirements of a demos. The text of hisremarks is posted to his English website,https://www.klaus.cz/clanky/4374.

Given that the city of Frankfurt now considers itself a "European city" and is the headquarters of the European Central Bank, the audience was polite and respectful, but nonetheless hostile, which showed in their questions, which Klaus handled quite well. Asked to comment on Brexit, he expressed the shock at the way the EU dealt with it. He recalled how he, as Prime Minister (1993-97), oversaw the split between Czechia and Slovakia. Although he disagreed with the division of Czechoslovakia, he did implement it, since the Slovaks insisted. The division took only six months and was carried out in the most cooperative and friendly manner; whereas with the Brexit, he said, while the British could have been more clever, the way the EU addressed it was outrageous. He also admitted that, when the Brexit vote occurred, 'we uncorked the champagne bottles.'

When the question of so-called "populism" in Europe came up, he replied that the term is meaningless, and is being used simply to put on a derogatory label on those who disagree with EU policy.
To the last question, asking him to comment on what he believes the future holds for Europe, he referred to a famous Marlon Brando movie, in which Brando's character asks a fortune teller what the cards hold for his future. The fortune teller looks at the cards, and tells him, "You have no future." He said he expected that the EU will collapse after some painful muddling through.

It should be noted that Klaus's economic policy, on which he did not really elaborate in his presentation, is well known to be very free-market-oriented. The hostile atmosphere was so strong, that when asked, after his presentation, about the Belt and Road policy, he thought it was a hostile question and answered that he did not want to get into China-bashing and that the entire topic would take a much longer discussion. When asked by a Chinese journalist about Chinese "investment," he pointed out when he had been in government and met with the Chinese, he had told them that his country did not need investments but wanted to trade with China. It should be noted that he was the first CzechPresident to visit China, making more than one official visit, and he defended his China policy in the face of phony human rights activists.

Prof. Issing, former chief economist and member of the board of the European Central Bank, and a critic of the Eurozone policies, told this author that he had invited his good friend Prof. Klaus in order to bring another view into the debate. He said he felt there would have been more voices in support of Klaus, if not for the tremendous social pressure created by the Europeanists and environmentalists.

On March 11, Klaus gave a very similar, polemical speech at the meeting of the energy firm E.ON, held in Prague, also posted on his English webpage. [DEA]


Václav Klaus: EU is not Europe

ENGLISH PAGES, 13. 3. 2019
Many thanks for the invitation and for the opportunity to address this very distinguished audience. My thanks go especially to Otmar Issing, the President of the Center for Financial Studies, who asked me to deliver this year´s CFS Presidential Lecture. Thank you. It is a great honour for me.

When I looked at the list of the past speakers in this series, I was not at all sure if someone like me who spent the last thirty years in the political arena actually deserves it. Even though I have been all that time an active Professor of Finance at the Prague School of Economics, even though I continued teaching and writing economic texts even during my Presidential era, I am fully aware of the fact that my engagement in politics didn´t allow me to be fully involved in the academic activity and to follow the events in the economic science on every day basis. Nevertheless, I believe in the general validity of the law of diminishing marginal returns even as regards the returns of the new contributions to the economic science. I am, therefore, convinced that the old proven pillars of economics are still there and that most of the new, sometimes very promising, highly appraised, allegedly revolutionary ideas in the economic theory don´t look so great as they pretend to be.

As a side remark, I should say that I am not that often in Frankfurt, in this “bastion” of banking, in this very modern and flourishing city. The wealth of the city is not surprising. The high purchasing power of the bankers who work here and spend their huge incomes in this city is no doubt the main reason behind its prosperity.

We are here at the gathering of economists or of people from the economic, financial and banking community but I will not confine my talk to the narrow field of economics. The topic of my today´s speech is not strictly an economic one. In addition to it, we, the economists, should admit that the economic discourse ceased to be the main and the most relevant issue of the current highly controversial and ideologically divided era. Whether we like it or not, the people in our countries don´t pay that much attention to us[1]. This is partly because the people reflect their relative very high level of affluence and partly because the era of charismatic exponent of freedom and of free markets is over.

In the communist era, travel to the West was almost impossible for someone like me in Czechoslovakia and as a result, it was not until January 1990 that I was allowed to come here for the first time. It was two months after the fall of communism in my country and I was a newly appointed Minister of Finance in the first non-communist government. I was invited by Karl Otto Pöhl to have lunch with the board of the Bundesbank. It gave me a fascinating opportunity to discuss the challenges of the post-communist transition in Central and Eastern Europe, as well as the economic aspects of the forthcoming German unification (Wiedervereinigung) with this highly distinguished group of people.

I remember our very close views as regards the topic of the day, which was the search for the appropriate exchange rate between the two German currencies in case of unification. As some of you remember, the German politicians of that era didn´t listen sufficiently to what the economists had to say. They chose the exchange rate which was neither in conformity with reality, nor with the majority view of German economists. The politicians were, as it is often the case, wrong. I am, however, not sure that the economists used all their arguments and presented them in a strongly enough way.

Let me say that I allowed myself to explicitly warn the German politicians and economists already in January 1990 that the German unification shouldn’t be done as a substitute for the fundamental systemic transformation of the East German society and economy. Based on my strong belief in the economic theory, I was convinced already at that time thatunification without transformation would be very costly and for many East Germans extremely frustrating. I can use many convincing arguments in this respect but let me remind you that the annualfiscal transfers from the West to the East of Germany in the 1990s reached on the average the level of the Czech GDP at that time (in some years were higher)! Many times I found out that not even many German economists are aware of the magnitude of these transfers.[2]

As I said, my first visit to Frankfurt took place still in the Velvet Revolution era. I dare say that some of us in the ex-communist countries were prepared for what happened. We spent decades in the irrational and oppressive communist economic and political system but we tried to use this time at least partly efficiently. Some of us – instead of only criticising the reality – spent these years studying contemporary economics and especially the literature in the field of comparative economic systems.

We also learned a lot by living in such an irrational and inefficient system. We were frustrated by seeing the tragic consequences of the absence of the autonomy of economic thinking and economic decision-making in our part of the world. The politics dictated the topics and principally predetermined the answers to all kinds of economic questions and issues. Due to it, one of our first tasks after the fall of communism was to get rid of the dominance of politics and to establish the autonomy of economic decision-making. Only in such a situation it is possible to think clearly and without understatements. The political compromises are, of course, necessary – but only ex-post, not ex-ante. The thinking has to be done without compromises.

This idea should be repeated again and again because this problem has become relevant in the current era again. These days, in the “brave new world” of the European Union and of political correctness, even more. In my country we were aware of the relevance of this idea since the very beginning and succeeded in making a radical change in this respect very soon. We see now, however, that we have been losing this favourable state of affairs once again.

I would like to be very explicit by stressing that I don´t have in mind the former communist countries in Central and Eastern Europe only or mostly but the whole Western Europe and America. This time, the politicization of economic life has not been organized by the communist apparatchiks or by the emissaries from Moscow. It has arisen from inside, it is a home-made problem.These shifts have been relatively silently, slowly and incrementally growing inside the contemporary Western society during the last decades, especially after the fall of communism.The threat of communism blocked the emergence, the expansion and the dissemination of such views and ideas. The change has come from the West itself this time. It has not been imported (neither officially imported, nor illegally smuggled) from the East now. It is different now.

It hasn´t been accidental. We live in the era of a new authoritarianism of illiberal elites, of neomarxists of the Frankfurter Schule, of so called “experts”, of bureaucrats of international organizations, of IT protagonists and lobbyists[3], of loud and noisy exponents of political NGOs. As a result of it, we are the witnesses of an important institutional change, of a shift in power from elected representatives to permanent functionaries, from local councils to central bureaucracies, from legislators to executives, from national parliaments to Brussels and Strasbourg, from the citizen to the state. The form and substance of political discourse have changed substantially as a result.

Let me once again mention the name of Otmar Issing, one of the most distinguished German economists and bankers whom I have been privileged to repeatedly meet on many occasions at different places of the world in the last thirty years. We sometimes held and expressed similar views on various economic issues but – not to undermine his reputation in the politically correct world of current Germany – I want to say very loudly that he has always been much more pro-European and much more pro-establishment than myself.
In spite of that, the title of my today´s speech – EU is not Europe – was suggested by him. I only accepted it, but I did it with a great pleasure, because the title has a meaning. It sends a very clear message to all those who see these two terms as perfect substitutes. It is a message to the European political elites, to the uncritical admirers of the EU in politics, media and academia as well as to the EU huge and permanently growing nomenclature. All of them behave as if these two terms were identical.

They are wrong, but I understand why – they have a vested interest in pretending the EU and Europe are identical. They want to be the owners of Europe. They want to be recognized as the authentic heirs of all European historic events and achievements. They believe they have a right to authoritatively interpret current events and to decide whether they are European or un- or anti-European. For them the EU is the personification of Europe.

This is, of course, untenable. All democrats should oppose this way of thinking. Europe is a historically evolved cultural and civilizational entity (with more or less widely accepted geographical borders), whereas the EU is a man-made constructwhich has its well-defined beginning and will have – undoubtedly – its glorious or not so glorious end.
The only superficial attention to the European issues leads to the underestimation of the fact that the EU is not a constant structure. It is a moving and variable entity[4]. Every EU summit redefines its substance – some of them only marginally, some fundamentally. The changes go, however, all in one direction. The well-known ratchet effect functions in this field as well as in many others: every treaty or summit takes Europe closer to a centralised European state. This is not surprising because the main goal of the European political elites (and their fellow-travellers) is the dislocation of national sovereignty and the overcoming of the state. These people consider the sovereign nation-state as an obsolete historical anachronism which should be defeated.

Last decades were characterized by the consequences of two such fundamental systemic and institutional restructurings. Both the Maastricht Treaty and the Lisbon Treaty brought about significant changes in the EU (originally EC) arrangements. I have to say quite resolutely that I see it as a very negative development.

We were not yet members of the EU in the moment of the Maastricht Treaty and had no “voice” in European debates then. We couldn´t express our disapproval or disagreement. However, as it is well known, I was the last President of all EU member-states who – under tremendous pressure both at home and abroad – capitulated and signed the Lisbon Treaty. I remember that even Otmar Issing wrote several years ago that “the Maastricht Treaty was the triumph of political ambitions over economic reservations”.[5] This is also my position but I stress the political reservations as well.

Both of these treaties – neither of which was fully democratically approved and implemented – were in my opinion historic mistakes. They transformed the original concept of integration into something else, into unification. They pushed the heterogeneous community of sovereign European states into a union of subordinated regions and provinces (Länder in German terminology). They substantially augmented the power of the bureaucratic central agency in Brussels. They supressed democracy and turned it into a post-democracy (misleadingly called liberal democracy). I agree with John Laughland that these treaties created “a mechanism which allows governments to pass laws for which they would prefer not to argue in public, safely away from the glare of democratic scrutiny and parliamentary opposition”.[6]

By unifying (by means of averaging) important economic parameters (currency, exchange rates, interests rates, all kinds of obligatory non-economic standards, etc.) these two treaties turned some regions of the EU into the position of winners, some into losers. The level of these parameters was advantageous for some parts of Europe only, especially for the North of the continent. They proved to be detrimental for the European South.

Instead of facilitating the mutually advantageous cooperation of European countries, these – economic realities not respecting – unification measures created deep disparities inside Europe. These disparities asked for the unwanted and unplanned emergence of a transfer union, which exists without authentic solidarity and is based on a non-voluntary redistribution.

Another unification measure, the liquidation of internal borders inside Europe, was supposed to facilitate the movements of the Europeans inside Europe and to create a new European Man, Homo Europeus[7]. It had an important side-effect. It led to the mass migration of non-Europeans who mostly didn´t come to Europe as future Europeans or as a labour force, who don’t intend to be assimilated and who don´t want to accept European culture, religion, values, habits, ways of life[8].

I can continue in the same spirit and extend the briefly stated arguments, but I know that we are in an economic institution and should pay more attention to the economic aspects of these processes. The EU – in its doctrine which I call Europeism – builds its policy on the very debatable non-traditional ideas and doctrines and presents them as “undisputable truths”. To oppose them is considered politically incorrect. I will briefly touch upon some of them:

1) One of the most important (and most detrimental) aprioristic prejudices which have been aggressively pushed forward in the EU is the almost religious belief that the environmental imperatives should be put before any economic considerations. It is not relevant that these ideas never succeeded in winning elections. They are presented as eternal truths. This way of thinking has a long tradition, especially here in Germany, but the decisive breaking point was the formation of the Club of Rome fifty years ago and its aggressive denial of long established fundamental pillars of the economic theory and of the economic way of thinking[9].

I will mention – just as examples, without analysing them – the main pillars which have been undermined – the concept of the non-exhaustibility of economic resources, the understanding of the role of prices in any rational decision-making, the role of economic incentives in human behaviour, the proper dealing with externalities, the seeing of the environmental protection as a luxury good, etc. All of them deserve to be discussed in detail and especially they deserve to be returned to their fundamental place in political and economic discourse where they belong.[10]

2) Not less important and not less detrimental is the almost religious belief in the global warming (or climate change) doctrine and the economic consequences of that belief. This doctrine represents the victory of the non-economic thinking by underestimating the information hidden in politically unmanipulated prices and the decisive impact of the long-term growth of income and of technical progress on the outcomes of economic decision-making. This doctrine set us back two centuries to the old Malthusian fallacies.
The arbitrarily chosen size of the discount rate in climatology (both implicitly in the climatologists´ thinking and explicitly in the climatological modelling) denies the role of time and of opportunity costs as the economists see them. By using a low discount rate, the exponents of these doctrines harm current generations. By claiming to fight for future generations, they pursue only their own political agendas. The war against oil, coal and cars impoverishes millions of people in spite of the fact that there is no measurable effect of human production of carbon dioxide on global temperature. All of that are, however, topics for serious lectures.

3) By claiming that we live in a knowledge economy, in an information economy, in an IT world, the EU apostles misinterpret the true sources of economic growth and development, they disregard the Adam Smith´s theory of the causes of The Wealth of Nations and they deny the fundamental contribution of the genuine creative behaviour of the free, unregulated and unmanipulated people to the economic performance. By adoring the role of formal education (and especially of mass high education), they underestimate the role of the quality of the economic system and – as a side-effect – produce the unemployable army of holders of university degrees in useless disciplines (or produce formally overeducated workers). It reminds me of the way of thinking and the rhetoric of the Leonid Brezhnev´s era.

4) By believing that it is possible to have a common currency in a non-optimal currency area, the EU political elites contribute to the evident economic decline of Europe and to the slow economic growth of the Eurozone countries in the last decades. The recent 20th anniversary of the euro was not used as a basis for a serious debate about the advantages and disadvantages of the European common currency. This is inexcusable, because the already 20 years’ long experience gives us sufficient data. One conclusion is clear: the single currency in Europe needs either an explicit or an implicit transfer union.

The explicit transfer union is not politically feasible (for many of us also undesirable), but the euro hasn´t yet collapsed because of the existence of an implicit transfer union in the form of the ECB´s “target balances”. This “union” was very innovatively described by the first Presidential Lecture speaker Hans-Werner Sinn[11] in many of his writings. It is now well-known that – within the current European monetary system – the governments can finance themselves via the European Central Bank. They cannot, of course, directly print euros but can issue their own government bonds which can be bought by the ECB.[12] This is also a transfer union.

5) My last remark relates to the still existing belief in the idealistic hypothesis of the so called “Great Moderation”, in the doctrine about the possibility to avoid economic fluctuations by clever, technocratically, not politically oriented macroeconomic policies. This idea rather surprisingly survived the undisputable reality of the 2008-2009 crisis. The students of Schumpeter should always remind us of the significance of the process of creative destruction.[13] Thanks to Schumpeter, we know that there is no growth without the previous destruction of obsolete equipment, machines, businesses, the whole industries. We witness it currently in the Czech Republic – the lowest rate of unemployment in Europe is not just a victory. It reveals the rigidity of our economy.


Conclusion: The Never-Ending Struggle for Free Economy and Society
I didn´t come here to start a revolution. I am, nevertheless, convinced that Europe needs to be liberated. To be liberated again. The ingenuity of free people should be made possible to bring fruits. We need a change, wir brauchen eine Wende. The dictate of the status quo is very powerful.

It may sound too ambitious but we shouldn´t capitulate to the intellectual trends of the time. I know that it takes political courage to admit that the eventual change will be slow and painful. I know that it is easier to say that in a position of a retired politician whose oversensitivity stems from his life in communism and who sharply sees the signs of the coming dangers. In a position of someone who knows that the growing politicization of economic life increases rent-seeking and creates low growth equilibrium. In a position of someone who is afraid of the consequences of the end of the malignant quantitative easing.

But the change has to be done.

Václav Klaus, CFS Presidential Lectures, Center for Financial Studies, Goethe University, Frankfurt, March 12, 2019
[1] This is also due to the fact that we economists have stopped focusing on big economic issues, on what people really care about. Our science is focused on very partial, esoteric research.

[2] I discussed this issue on the occasion of receiving the honorary doctorate degree at the Technische Universität Dresden 12 years ago, see my “Komparative Analyse der Transformation im Multavialand und Albisland”, Dresden, 2007, https://www.klaus.cz/clanky/15 The economic decline in the former GDR was much deeper than in my country (the output in the former GDR was for about 25 years roughly at the pre-transition level), unemployment has been all three decades substantially higher, etc.

[3] See my recent speech in Vienna, „Europas wirtschaftliche Zukunft in Zeiten der Digitalisierung und Globalisierung“, Wiener com.sult Kongress, Vienna, January 28, 2018https://www.klaus.cz/clanky/4356

[4] Paradoxically, its protagonists claim that the EU development has always been following the commitment to subsidiarity. This concept is close to the communist concept of “democratic centralism”.

[5] The International Economy, Winter, 2014

[6] John Laughland, „European Integration: A Marxist Utopia?“, The Monist, No. 2, 2009.

[7] I discovered recently that I spoke critically about “Homo Europeus” already in my article in The Economist, September, 1994.

[8] See my book “Völkerwanderung” written together with Jiří Weigl, Manuscriptum Verlagsbuchhandlung, Leipzig, 2016. Its English version has a title „Europe all inclusive“, IVK, Prague, 2017.

[9] I have to claim that I saw this new danger very clearly already in the – in many respects hopeless and frustrating – situation in Czechoslovakia after the Warsaw Pact invasion in August 1968 when we had totally different worries.

[10] I tried to do it in my book ”Blue Planet in Green Shackles“, Competitive Enterprise Institute, Washington, D. C., 2008 (The German version ”Blauer Planet in grünen Fesseln“, Carl Gerold´s Sohn, Vienna, 2007).

[11] H. W. Sinn, „Die reale Seite der Krise und der Rettungsschirm der EZB“, CFS Presidential Lecture, Frankfurt, 26 February 2014. More about it in his book „Die Target-Falle – Gefahren für unser Kinder“, Hanser: München, 2012.

[12] My critical views on the European common currency can be found in ” First Five Years since the Outbreak of the Greek Crisis”, Notes for Le Cercle Washington Meeting, The Fairfax at Embassy Row, Washington, D.C., June 28, 2015, https://www.klaus.cz/clanky/3771.

[13] I consider it very important that even Alan Greenspan in his recent book “Capitalism in Amerika: A History”, Allen Lane, 2018, written together with A. Wooldridge, reminds contemporary readers of this concept and says that “the central mechanism of progress has been creative destruction”. I suppose, however, that the banking community here in Frankfurt doesn´t like his recommendation that the capital/asset ratios should be radically increased.