COMMENT: Well it looks like Putin is doing more than reviewing your film to approve its release in Russia. He is reading your blog. His speech today is offering tax free status for corporations exactly for your 4 year period into 2020. He only talks about the Silk Road joining with China.
REPLY: Yes, the comments are coming in, even from our European staff. I have not advised Putin. Yes, I was told they want to show “The Forecaster” in Moscow, but he has to personally approve since it appears to be about a very big political upheaval in Russia that was a big issue and directly shows how he came to power.
If he is reading the blog and taking a deliberate strategy against the trend in the West, this may be playing directly into what our computer is forecasting. China will become the financial capital of the world, not just the largest economy. There is a difference. China will first surpass the USA in size of GDP, but it still lacks the depth to reach the financial capital of the world. This is why they are now pushing to make the yuan a usable currency that could rise to a semi-reserve status. That takes time and is distinct from just the largest GDP. If they fight the West and take the opposite approach on taxes, retaining physical paper currency, they can beat the West hands down. Why do you think we have opened in China? We follow our own models.
Nevertheless, the way the West is locked into raising taxes, desperately hunting loose change, is a sign that they are self-destructing. We are plagued by lawyers who see the world only through their skill: writing laws. They believe they can dictate to the economy by simply writing a law. It is all about manipulation to them. They DO NOT want to listen to me, who says they have no such power. They prefer people like Rogoff and Buiter who advise that they can grab even more power and FORCE us to perform as they demand. Granted, they keep one eye on what I forecast. I even met with the Swiss and warned the peg would break, but was told no, I was wrong and they could hold it. So, they want to talk and listen, but I do not see anyone doing what I tell them to do in the West. China may be different, but the people I met there in the central bank all had real world TRADING experience. They were neither academics nor lawyers. Expect China to make rational decisions quickly, unlike the West. We have also opened our Russian site and are now publishing in Russian, as well as Chinese.
Our self-destruction in the West is becoming self-evident. They have taken interest rates negative under the stupid theory that this will force people to spend what they do not have or are saving, for they do not trust the future. Negative rates wipes out both the long-term bond markets (as we now see them collapsing from May), as well as pension funds, no less insurance companies, not to forget annuities. Then we have the Lost Generation of youth and their massive unemployment in Europe because taxes are too high which is preventing small business formation. In the States, education has become worthless with 65% of graduates unable to find employment in what they studied. Then the bankers paid-off the politicians to create student loans that cannot be discharged, even in bankruptcy, preventing those who do work from buying homes or starting a family, contributing to the collapse in the birth rate. Then we have Obama, who is completely out of touch with economics, and is intent on following Marxism to the nation’s grave.
Russia and China went down the road of Marxism and they realized it failed. We will see our failure come 26 years AFTER their nightmares. Guess what! 1989.95 plus 26 years brings us to, wow – 2015.95. This is why I warn that 2015.75 (October 1, 2015) is the BEGINNING and not the END. This is the start of a tumultuous period for the next 2 years into 2017.90 and then into January 2020.