Tuesday, November 14, 2017

Why Iran is a Major Threat

The Yemeni Civil War is an ongoing conflict that began in 2015 between two factions. Each is claiming to constitute the Yemeni government. This is really a proxy war between Saudi Arabia and Iran. The Houthi forces control the capital Sana’a who are allied with forces loyal to the former president Ali Abdullah Saleh backed by Saudi Arabia. They are opposed by Yemen’s Shiite rebels who are loyal to the religious government of Abdrabbuh Mansur Hadi, based in Aden, supported by Iran.
To grasp what this is all about, one must understand Islam. Saudi Arabia in Sunni that boils down to a separation of church and state. They are fighting the Shiite forces of Iran, which believe that religion should control the state. Therefore, the ballistic missile fired by Yemen’s Shiite rebels toward the Saudi capital was manufactured by Iran as if this should be any surprise given that Iran is their backer.
This conflict in the Middle East is religious based. This is similar to the threat of Russia back in the Cold War days when Nikita Khrushchev ruled Russia and the ideology that Marxism would conquer Capitalism was the entire issue. Here we have Iran which is similarly a threat to the world political structure because this is where religion should rule the state. Christianity went through that where the state was ruled by religion and to circumvent religion, kings appointed their political allies as priests, bishops, and cardinal. That led to the Investiture Controversy which was the major conflict between the Pope Gregory VII and the Holy Roman Emperor Henry IV during the 11th century.
Emperor Henry declared Pope Gregory was no longer pope and the Romans should choose a new pope because of political disputes. When Pope Gregory heard of this he excommunicated Henry IV, declared he was no longer emperor and absolved his subjects from the oaths they had sworn to him. This was the battle of kings to control the Church for political gain.
Even if we look at England and Henry VII’s break with the Catholic Church, one need only just look before the headline. Henry’s Queen was  Catherine of Aragon (1485–1536) who was the aunt of the Holy Roman Emperor Charles V (1500–1558) and was originally Charles I of Spain. Charles V had imprisoned the Pope Clement VII (1478– 1534) following the Sack of Rome in May 1527. Correct, the Holy Roman Emperor invaded Rome to take control of the Church and imprisoned the Pope. There was no way Charles V would allow Henry VIII to annul the marriage with his aunt. Once again we have evidence of kings controlling religion for political purposes.
What is unfolding in the Middle East is similar to the war between Protestants and Catholics, which was really for political and economic power. The corruption in the Church was not the design of the Pope when it had been the kings who appointed people in their domain to run the Church – not the Pope. Nothing could illustrate this point more than the case of Saint Thomas Becket (c. 1119–1170), who was a personal drinking buddy of the King. When he appointed him as Arch Bishop of Canterbury, he suddenly found religion. He then stood up to the King and he was slain right at the Altar.

This is a similar nature where here it is the religious Shite seeking to take control of the Middle East and overthrow kings. The recent Saudi Arabia incident of shooting down the Iranian missile on November 4th, 2017 near Riyadh’s international airport, illustrates just how confrontational this really is. Why Obama cut any sort of a deal with Iran given their political beliefs, is truly beyond contemplation

China Open Gold Trade in Yuan as Proxy for the Yuan



China keeps moving gradually to open up their economy to international forces. The People’s Republic of China has expanded the trade in gold in yuan and thus the internationalization of the national currency is moving closer. Gold merchants from the industrial metropolis of Shenzhen have been trading their yuan gold at the Hong Kong Stock Exchange since last week. Previously, this was only possible for Hong Kong gold traders. While some immediate claim this is China attacking the dollar, they are completely ignorant of international capital necessities.
This new connection between Shenzhen and Hong Kong follows the Hong Kong-Shanghai agreement reached in July 2015, which allowed Hong Kong dealers to trade gold in mainland China for the first time. Trading gold in yuan has one primary advantage. It is not going to unseat the dollar, it is all about trying to make the currency free-floating on the world market. Because gold can be traded in yuan, the common converter becomes gold between that and the dollar. It is NOT really a gold trade as much as it is an indirect means to trade the currency.
To unseat the dollar requires a place to PARK big money in yuan. That does not exist right now. That day is coming after 2031. This is another step in moving toward a free-floating yuan contract. Essentially, this is a formal proxy for a free-floating yuan and will replace the Bitcoin trading that has been used as the proxy to get money out of China

Thursday, November 9, 2017

Fall of Byzantium resulting in the financial capital of the world moving to India


Interest Rates will Double

QUESTION: Mr. Armstrong; Thank you for an excellent conference. I have been attending since 2011. Each time you deliver a different conference and they are always better than the last. I could not help to notice on Zero Hedge they ran a piece about a Harvard University’s visiting scholar at the Bank of England who claims:
“We trace the use of the dominant risk-free asset over time, starting with sovereign rates in the Italian city states in the 14th and 15th centuries, later switching to long-term rates in Spain, followed by the Province of Holland, since 1703 the UK, subsequently Germany, and finally the US.”
Besides claiming to calculate the 700-year average real rate at 4.78% suggesting that rates will rise sharply when your models are 5,000 years, the two ridiculous statements are a 700-year average as if this really means something in the near-term when rates have been below that for nearly 10 years, and second the statement that he traces “the dominant risk-free asset over time.” You have demonstrated that moving averages are not valid in forecasting and that government routinely defaults.
You forecast at the conference that rates would rise very rapidly as we move into the Monetary Crisis Cycle. When I returned home to Greece, the latest news here is that so many people do not even have the money left to pay taxes. Is this part of the first stone in the water that sets off the waves of the Monetary Crisis Cycle?
ANSWER: It is very nice to trace 700 years and come up with the average of 4.78% by switching to the dominant economy as the financial capital of the world moved. However, starting the study in the 14th century skips the crazy part. There was the Great Financial Crisis of 1092 in Byzantium. This was really a watermark event that set in motion the decline thereafter. This study of moving from Spain to Holland, UK, Germany, and then the USA, is interesting, but regionally biased.
The fall of Byzantium resulting in the financial capital of the world moving to India – not Spain. That is why Columbus set sail trying to get to India, which was the financial capital of the world after Byzantium.
We hit a 5,000 year low. The Reversals we provided at the conference show we are looking at a near doubling in rates when we cross that number.

Monday, November 6, 2017

No government should be allowed to fine people PERIOD! You should be ordered to pay to a charity of your choice


Ferguson Riots Have Another Face – Police Raise 23% of Revenue in Fines


The town of Ferguson made headlines as riots appeared. Who will not forget the police with military gear acting like an invading army. Many supported the police and much of the Black Lives Matter movement began there. The story nobody wanted to tell was that the police of Ferguson have a real attitude problem that sparked the riot. That is because they are trained to raise money for the town. Ferguson uses police and the Courts to prey on its residents to raise money and 23% of its entire budget is based upon writing tickets and handing out the maximum fines. They then jail people who can’t pay.
Ferguson expects to raise $3.09 million of projected $13.26 in revenue from fines and fees. They use the police to raise money. For example, an unmowed lawn in Ferguson will be fined between $77 and $102, though in some other cities it’s a $5 offense. Take a 2-week vacation, and you have a ticket when you come home.
This is the entire problem. No government should be allowed to fine people PERIOD! You should be ordered to pay to a charity of your choice – but not to the government. Remove the “money” from their incentive and we will return the rule of law to what it should be – justice.

Thursday, November 2, 2017

Trump’s Tax Reform



These days, US President Donald Trump is pushing his number one agenda of his term in office – major tax reform. Trump has been meeting with some of his own party senators seeking approval for the planned tax reform he is hoping will be signed by the end of December at the latest for a Christmas present. The negotiations on the details are in the final stages. If the reform is very real indeed, and make no mistake about it, this would be a tremendous triumph for Trump and for the nation as a whole. Trump has the potential to take the United States counter-cyclical (cycle inversion) that would actually put a tremendous amount of pressure on the rest of the world.
There are some who are concerned about removing the tax deduction for state income taxes. Deducting state income taxes from your Federal taxes has been quietly talked about behind the curtain for some time. It was also one factor in my own relocate out of New Jersey to Florida. The elimination of the deduction for state and local taxes will be a major death blow for the high taxed states like California, New York, New Jersey, Connecticut etc..
The states have been effectively double-dipping. I remember when the New Jersey state income tax was put in. The politicians said it would cost you nothing because you could deduct it from your federal taxes. Essentially, it was the way for the state to covertly get more money that they were not accountable for. That game is coming to an end. If Trump eliminates that deduction, then and ONLY then will the people start to hold the states accountable for the first time EVER! Repealing it would increase federal revenue by $1.3 trillion over the decade
Deductions would remain for mortgage interest and charitable contributions. Additionally, the standard deduction would nearly double to $12,000 for individuals and $24,000 for married couples

Tuesday, October 31, 2017

The Rising Separatist Movements in Europe-Eastern Europe


There are many in Spain who just outright disagree with any right of Catalonia to be independent. History, culture, language, nothing really matters. Some have said it is the Spanish Constitution and all of Spain should vote to let Catalonia leave or stay. All of that said if Madrid had just allowed a fair referendum then whatever the vote was should have stood.
This is all about saving the EU and not Spain. It was the oppression that probably made others vote to leave. All of Spain cannot vote against one region. London did not vote on Scotland and neither did Toronto against Quebec. California has people pushing to separate and that is not a right to be decided by me in Florida.
Separatist movements are now rising throughout Europe. We see Northern Ireland, Scotland, and Wales in the UK all have separatist movements. There is even talk in Bavaria among friends I have there and Prussia wants more autonomy. Then there is Normandy and Brittany in France. There is a long list starting with Moravia, Lombardy, Insubria, South Tyrol, Carinthis, Friule-Venezia, Hungarian minorities, Savoy, Liguria, Corsica, Sardinia, Sicily, Rijeka Istria, Veneto, Padania, Croatian Republic of Herzeg-Bosnia, Sandzak, Serbian Republic, Vojvodina, Szekely Land, Gagauzia, Transnistria, Donbass, Crimea. Latgale, Ingria, Skameland, Samogita, Bornolm, and don’t forget Northen Cyprus. Some of these are asking for full independence and other more autonomy.
It is the economic issues intermixed with the refugee crisis that is sparking these movements today.

Monday, October 30, 2017

My bet is on cultivation came first and food became money.

What Came First? Cultivation or Cities?


QUESTION: Mr. Armstrong; I read you One-World-Currency report. It was truly fascinating. From an academic perspective, what came first in the formation of civilization; agriculture or cities? Where does money fit into this historical perspective?
Thank you;
FD
ANSWER: There has been a fair amount of assumption that went into the history we were all taught in school. What has emerged since is a different perspective, to say the least! There are megaliths atGöbekli Tepe which were erected by hunter-gatherers around 9000 BC or about 3,000 years before history starts to be recorded. Göbekli Tepe is a stone-age mountain sanctuary. It has turned everything upside down insofar as it was assumed that the city came first and then agriculture. It appears that agriculture came first which enable people to create cities.
Göbekli Tepe proves that there was a shift from animism, a belief that attributes a soul to plants, inanimate objects, and natural phenomena inasmuch as there is some supernatural power that organizes and animates the material universe, to centralized religion. In other words, there was a shift from an egalitarian society all people are equal to a hierarchical society arranged in order of rank. Clearly, there had to be a profound economic change and yes there would have to be some sort of monetary reward in the form of some resource to create such a shift from an egalitarian to a hierarchical society.
Göbekli Tepe is extremely important despite its obscure purpose and meaning. It is not the meaning that we need argue over. The incredible fact is that such a monument was constructed in the first place 9000BC. The simple fact of its existence proves historical assumption dead wrong. It matters not whether these pillars that are carved were some religious rite or just a decoration. More than 200 pillars in about 20 circles are currently known and only 5% of the site has been excavated. The astonishing fact is economic. Producing more than 200 pillars took a lot of man-hours. That means the workers needed a stable food supply and therefore agricultural cultivate MUST have been existence BEFORE cities were carved out of stone.
The construction of Göbekli Tepe would also have required some division of labor among overseers, technicians, and workers and management. Therefore, this required a hierarchical society. Therefore, social development in creating such structures must have precipitated, rather than resulted from, the shift to agriculture.
The assumption was that cities came first and then cultivation. Obviously, you had to feed the people to construct the cities first. My bet is on cultivation came first and food became money. Money moved from food to clothing. We see the first use of metal as money being Bronze imitating a sheepskin, which was the standard of value; i.e. Jason and the Golden Fleece.
Even the early Roman bronze Aes Signatum (5 pounds of bronze) pictures a bull. Cattle were also a main monetary unit of value prior to metal